Immigration

United Kingdom | Migration Advisory Committee review of the IT and Engineering sectors published

Summary

In August 2024, the UK Government commissioned the Migration Advisory Committee (MAC) to review the use of the immigration system by firms recruiting Information Technology (IT) and Engineering professionals. The MAC has now published its findings. This review does not make formal recommendations, cautioning against system wide changes based on the review of two occupational sectors but offers a number of observations and suggestions that the government may wish to take into account in future decision-making.

The detail

Overall, the review found that neither sectors are reliant on international recruitment with usage of the immigration system being broadly proportionate to the size of the IT and Engineering sectors and the vast majority of new hires in both sectors coming from the resident workforce and international recruitment serving to address domestic skill shortages and access to top talent.

In addition, the MAC has observed that migrant workers in both occupation groups make a significantly positive net fiscal contribution, driven both by their higher-than-average wages, and their reduced reliance and access to public services and benefits.

Specific key findings and suggestions include:

• The IT profession is one of the top users of the migration system in terms of the number of visas and has substantially higher visa usage than Engineering (and 3% of all Skilled Worker visas, respectively). Yet both are substantially below other (often largely publicly funded) groups such as nursing and other health professionals.
• For IT professionals, visa utilisation is driven by large (often Indian multinational) firms based in London. Large firms and London-based professions are less dominant for Engineering professionals on visas.
• Usage of the immigration system is broadly proportionate to the size of the IT and Engineering sectors.
• Global Business Mobility route: the review highlights clear evidence of bunching around the pay threshold for IT professionals demonstrating that this route appears not to be being used in the way that the policy originally intended and is not for specialists at the top of the wage distribution.
• The MAC have again raised issues around the government’s intention to link immigration and skills policy, emphasising that increasing domestic skills does not guarantee reduced migration, as migrant and domestic workers are not perfect substitutes. It does not however recommend the reintroduction of the Resident Labour Market Test (RLMT), citing its ineffectiveness and administrative burden.
• It also supports the removal of the Immigration Salary List (ISL), noting that its impact on IT and Engineering occupations was limited.
• The review welcomes the government’s intention to commission it to undertake a review of salary thresholds, including the occupation-specific thresholds, which were raised to the 50th percentile in April 2024. The review notes that these thresholds may hinder the recruitment of recent graduates and workers in lower-paying regions and also that the new entrant discount is now discounting a much higher salary and may no longer be fit for purpose.
• The review highlights concerns about whether Immigration Skills Charge (ISC) revenue is fully reinvested in skills training and requests greater transparency and alignment of ISC funds with their intended purpose of addressing skills gaps.

What this means

The MAC have specifically mentioned that no formal recommendations are being made as a result of their review. However a number of important observations and suggestions have been made. The review will have no immediate impact on employers and migrants, however the observations and suggestions may well have an impact on the way the UK immigration system is shaped, particularly in light of the ongoing consultations/proposals set out in the Government’s recent white paper.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Andrea Als
UK Director and Solicitor

Lyudmyla Davies
UK Partner and Solicitor

Ian Robinson
UK Partner

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