Migrant earnings threshold would leave firms struggling to fill key jobs, business chiefs warn

A report has called for companies to be banned from recruiting non-European staff on salaries less than £30,000

'Tier two' visas are currently issued to skilled migrants from outside the European Economic Area. File photo (Classix/E+/Getty Creative)

Business chiefs have warned they would struggle to fill key jobs under proposals by government advisers to tighten the visa rules for non-European workers and to charge them a “skills tax”.

In moves to cut migration numbers and tackle the undercutting of some British workers’ pay, the Migration Advisory Committee called for companies to be banned from recruiting staff from outside Europe on salaries of less than £30,000.

Its report comes as ministers search for ways of curbing net migration levels – currently more 330,000 a year – without hampering economic growth.

It found evidence that non-EU nurses and doctors were being paid £6,000 less than their British equivalents, while foreign secondary teachers earned £2,000 less.

It urged Theresa May, the Home Secretary, to levy an annual “immigration skills charge” of £1,000 for every skilled non-European worker they hired – a move which would raise £250m a year for training Britons.

In a series of measures which could see the flow of migrants cut by more than 30,000, it also backed tougher restrictions on companies transferring foreign-based staff to the UK.

But the Institute of Directors said the plans would hit thousands of firms and “send a message around the world that the UK is no longer open to international talent”.

Attempts to tighten rules for skilled workers are already proving highly contentious.

Ministers are facing demands to rethink plans to force non-EU migrants to prove they are earning at least £35,000 after five years in the country – or risk being ordered out of Britain.

The committee’s recommendations came in a review into “tier two” visas, which are issued to skilled migrants from outside the European Economic Area. Currently they must be taking up a job with a salary of at least £20,800, although there are higher thresholds from some jobs. In 2014, 151,000 people came to Britain by this route.

The committee called for the threshold to be raised to £30,000, although it said the increase should be phased in to allow employers to adjust recruitment plans.

Prof Sir David Metcalf, the committee’s chairman, suggested it be phased in over three or four years for professions such as nursing to coincide with a drive to train more British nurses.

Nurses have currently been exempted from the cap by Ms May to avoid a recruitment crisis. The committee will report next month on whether the end the temporary exemption.

The advisers said they strongly supported the skills charge to encourage employers to look closer to home to fill jobs vacancies. It suggested a yearly levy of £1,000 for each tier two migrant taken on by a British firm.

Prof Metcalfe said: “Skilled migrant workers make important contributions to boosting productivity and public finances, but this should be balanced against their potential impact on the welfare of existing UK residents.”

The committee also backed tighter restrictions on “intra-company transfers” by raising the minimum salary for visas to £41,500. Indian IT workers are said to account for more than 90 per cent of such migrants.

But Adam Marshall, executive director of policy at the British Chambers of Commerce, said: “With businesses reporting severe recruitment difficulties, especially for highly-skilled and specialised positions, it makes no sense to slap new charges on firms that need to recruit from overseas - often because they are left with little alternative due to skills gaps here at home.”