What will the UK’s new immigration system mean for Wales?

The UK’s immigration system will change from January 2021 whether the UK leaves the EU with or without a deal. Free movement will end, and a new, single immigration system will be introduced for all EU and non-EU citizens moving to the UK.

Estimated reading time: 5 Minutes

17 January 2020

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

The UK’s immigration system will change from January 2021 whether the UK leaves the EU with or without a deal. Free movement will end, and a new, single immigration system will be introduced for all EU and non-EU citizens moving to the UK.

The UK Government is yet to publish its proposals for the new immigration system. Theresa May’s Government published an immigration White Paper in 2018, but Boris Johnson’s Government intends to bring forward a different plan, based on an ‘Australian-style points-based’ system.

It is not clear how the new system will differ from the UK’s current points-based system for non-EU migrants, which you can read more about in our blog post from September.

What might these changes mean for the 80,000 EU citizens currently living in Wales, and for people who want to move to Wales in the future?

The Assembly’s External Affairs and Additional Legislation (EAAL)  Committee considered these issues last year. Its report was published in November 2019, and the Welsh Government accepted all of its recommendations. The Assembly will debate the report on Wednesday 22 January.

A £30,000 salary threshold could reduce EU migration to Wales by 57% over 10 years

Currently, non-EU migrants need to have a minimum salary of £30,000 to get the most common ‘Tier 2’ points-based visa (with some exemptions for specific groups and jobs).

In 2018 the Migration Advisory Committee (MAC) recommended that the UK’s new immigration system should retain this threshold but to expand the list of eligible jobs. It considered this threshold would help increase wages and raise productivity.

The UK Government commissioned the Migration Advisory Committee (MAC) to explore different options for the threshold, and it will publish its report in January 2020.

Many people highlighted concerns to the EAAL Committee about the retention of a £30,000 salary threshold in the new immigration system. This level is higher than the average salary for full-time workers in Wales, which is around £26,000.

Research by the Wales Centre for Public Policy (WCPP) found almost two-thirds of EU workers currently in Wales would not be eligible for a Tier 2 visa with a £30,000 salary threshold. This could lead to a 57% reduction in EU immigration to Wales over 10 years.

The Welsh Government agreed with the Committee’s findings, and noted that any future salary threshold should be calculated on a pro-rata basis to avoid discrimination against part-time workers, who are predominantly women.

Employers are concerned that the new immigration system will cost more and worsen skills shortages

The Welsh Government notes that some sectors are “particularly vulnerable to future reductions in EU migration”, including social care, health, and manufacturing including agri-food, tourism, hospitality, retail and higher education.

Respondents told the Committee that Welsh employers could face higher costs to recruit non-UK workers from 2021. To employ non-EU nationals in Tier 2 employers currently pay the UK Government an Immigration Skills Charge, which is generally £1,000 a year per worker.

Non-EU workers also have to pay an Immigrant Health Surcharge to be able to use the NHS (which will increase from £400 to £625). The Welsh Government received £14.7 million from the UK Government for the Immigration Health Surcharge in the 2019-20 supplementary budget.

People also told the Committee that the future immigration system must ensure that Wales is a still an attractive place to live, work and study. Employers such as Airbus said the White Paper proposals could “block well-established [recruitment] pipelines and leave gaps in the requirements of Wales which can’t be filled in the short term”.

The Federation of Small Businesses (FSB) highlighted that while many businesses rely on EU workers, the majority have no knowledge of the complex non-EU immigration system of sponsorship and fees.

Wales has the lowest proportion of EU citizens applying to the EU Settlement Scheme

As of December 2019, around 63% of EU citizens in Wales had applied to the Scheme, compared with 84% in England, 67% in Scotland and 69% in Northern Ireland.

If the Withdrawal Agreement Bill passes, the deadline for applying to the Scheme will be 30 June 2021, unless this is extended. It is not clear what will happen to people who miss this deadline.

The lack of document scanning centres in Wales was highlighted by respondents to the Committee. The number of centres has since risen from one to seven. The Committee also found there are no ‘Assisted Digital’ service locations in north west Wales for people who need extra support with their application.

Both the Welsh Government and UK Government told the Committee they are providing extra support to help people apply, including pop-up events and communications campaigns. The Welsh Government will revise its messaging to make sure people are aware of the advice and support provided through its EU Transition Fund.

Community cohesion and proof of settled status

The Committee heard personal accounts from EU citizens living in Wales. Many found the application experience to be stressful, and it made them feel unwelcome in the country in which they live. In November 2019, the First Minister and Counsel General both reiterated their messages of support for EU citizens in Wales.

The Committee again recommended that the Welsh Government should update its community cohesion plan to take account of these new challenges. It already committed to doing this twice before (in 2018 (PDF, 301KB) and in 2017 (PDF, 326KB)), but a new plan was not published.

Many people were concerned about the lack of physical documentation to prove their immigration status. The Home Office told the Committee that the digital status is preferable to physical as it cannot be lost or tampered with. It maintains that EU citizens only need to show their identity to access health services, housing and benefits.

On 15 January, the European Parliament adopted a resolution that highlights a range of concerns about the EU Settlement Scheme, particularly the uncertainty about what will happen to people who do not apply by the deadline, the lack of physical documentation, and the geographical spread of document scanning centres and ‘assisted digital’ services.

On 17 January it was reported that this week the UK Government gave the EU ‘reassurances’ about EU citizens who do not apply by the deadline.

Should there be different immigration rules for Wales?

The Welsh Government states that “if the UK Government’s future immigration policy does not address the economic, demographic and social needs of Wales then we will further explore options for spatially-differentiated immigration policy after Brexit [which] does not necessarily require a devolution of powers over immigration”.

But it also notes that recent research did not find a strong case for regional variations to immigration policy.

Regional salary thresholds

The Welsh Government said that lower salary thresholds for regions with lower average earnings could be problematic, given the decision of the Low Pay Commission to set the National Minimum Wage at a UK level to reduce age inequality. The Welsh Government has also argued against lower pay thresholds for the public sector in Wales.

An ‘Australian style’ regional dispersal system

The Welsh Government’s response notes that an ‘Australian-style’ points system could provide opportunities for regional variations.

The Home Secretary Priti Patel MP reportedly suggested that people could be awarded extra points for working away from London or the south east. This is similar to the Australian regional dispersal approach, where states and territories can nominate workers based on criteria they develop themselves.

Shortage occupation list

The Committee recommended the establishment of a shortage occupation list (SOL) for Wales, as in Scotland. But the Welsh Government notes the minimal impact this could have, given that the occupations on the list are likely to be similar to the UK as a whole. The Scottish list only lists two extra occupations: physical scientists and medical practitioners.

It also says that the SOL might become less effective if the new immigration system abolishes the Tier 2 visa cap and resident labour market test. The only remaining benefits of an occupation being on the SOL is lower salary thresholds and lower visa fees. The Government is concerned this measure could also likely be “portrayed by the UK Government as a significant concession”, but with little impact in practice.

Demographic trends

Following the Committee’s recommendation, the Welsh Government agreed to commission research on the potential effect of lower migration on future demographic trends, particularly the impact on the tax base.

In 2017 the Welsh Government argued that free movement be retained, but with closer links to employment, and with a strengthened approach to tackling worker exploitation and low pay. With the UK Government’s proposals for a new immigration system still in the balance, there are still opportunities to make Wales’s voice heard.

For ease, we refer to EU, European Economic Area (EEA) and Swiss citizens  as ‘EU citizens’ in this article.

Article by Hannah Johnson, Senedd Research, National Assembly for Wales

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