A survey for the Social Market Foundation of more than 2,000 HR managers revealed that 19% said their organisation hired at least one Ukrainian national in 2022. 12% said they had employed a Hong Kong British national, and the same proportion had hired a refugee.
The survey was carried out for an SMF report (see notes) on immigration and employment that proposes significant simplification to Britain’s migration system, granting work visas simply on the basis of wage levels, not occupation groups.
The SMF report on migration and labour shortages in the UK economy was sponsored by Fragomen. The SMF retained full editorial independence.
The latest official migration statistics show there were more than 154,000 arrivals from Ukraine last year, and 52,000 with British nationals status from Hong Kong. Around 6,000 refugees are resettled in the UK each year.
The SMF said the results of the survey – conducted by YouGov on behalf of the Chartered Institute of Personnel and Development – demonstrated Britain’s openness to economically integrating new arrivals through whatever immigration route they have come, but also made the case for a new approach to migration and work.
Jonathan Thomas, Senior Fellow at the Social Market Foundation, said, “Britain has taken in significant numbers of people from Ukraine, Hong Kong and elsewhere, and employers have smoothly integrated them into the labour market. That shows how well this country deals with migration, in a way that benefits the country and people coming here from elsewhere. These people didn’t come here looking for work, but they are now working and filling labour gaps that hold back the economy.”
The SMF report also proposed a significant change in the way employers are permitted to bring foreign workers to the UK.
The current system grants work visas to people who paid a required minimum salary level, usually £26,200 per year, but is also restricted to only certain occupations. Added to this system are certain “shortage occupations” where entry requirements are lowered because the country needs more workers in them. For example, in social care, where almost 60,000 new workers arrived in 2022/23 after it was designated a shortage occupation.
Some occupations though – such as HGV drivers – are not allowed to employ overseas workers no matter how much they are paid, so cannot simply fill shortages that way by paying more. The SMF said that the current visa system should be replaced with a simpler rule that granted entry to anyone who met the salary threshold. This would mean that any employer who was willing to pay enough for a foreign worker would be able to bring them to the UK.
The aim should be to use the immigration system to fill shortages that cannot be otherwise filled, by employers paying more, not less, to attract foreign workers.
The current system can work particularly poorly for low-income parts of the UK because it “risks institutionalising regional wage differences by allowing wages to be lowered to fill vacancies, rather than increased to attract applicants”, the SMF said.
Jonathan Thomas said: “The current shortage occupation list system which allows filling labour shortages with foreign workers in the UK can put downward pressure on wages in places that need higher incomes.”
“Allowing wage levels alone to decide who can get a visa would allow businesses in areas of the country experiencing particular labour shortages to be able to access overseas labour provided that they were willing to pay salaries at or above the required salary threshold.”
The report also makes recommendations including reducing the cost of sponsoring work visas in in targeted areas and for small and medium sized companies
The SMF also challenged ministers to make proper use of the Immigration Skills Charge (ISC) levied on employers, or scrap the scheme outright.
The government raises £350 million annually from the ISC paid by employers for hiring overseas labour. That money is supposed to fund the training of the local workforce but the SMF said there is “no transparency or accountability for how the proceeds of the charge are spent or credit given to employers for funding this.”
Jonathan Thomas said, “Either the charge should be dropped, or its usage clearly publicised, and scrutinised, which would help build public trust that the gains from immigration are being more equitably shared and sensibly reinvested for the benefit of all.”
Nadine Goldfoot, the Managing Partner of Fragomen’s UK Practice, said, “Fragomen is proud to sponsor SMF’s latest contribution to the public discourse on UK labour immigration policy. The comprehensive report provides a full audit of the UK’s current immigration system and offers some counsel on how to increase the country’s competitiveness and meet the demands of its workforce.
“We agree with the report’s critical premise: though short-term access to overseas labour is not the only solution to domestic labour shortages, it is nevertheless a very important and constant part of the solution and needs also to be at the heart of long-term policies targeted at developing the domestic pool of labour.”
