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UK 'deterring skilled workers' as immigration plans set to be unveiled

Tom Belger
Finance and policy reporter
New figures suggest the salary cap has limited skilled migration. (PA)

The UK government has been warned its migrant salary rules are deterring skilled workers as it prepares to unveil a shakeup of Britain’s immigration system.

Many non-EU migrants who have a job offer in Britain can currently only secure visas if they will earn more than £30,000 a year.

Salary thresholds will also apply to EU migrants from 2021, marking an end to current free movement rules when Britain’s Brexit transition period ends.

The government is expected to unveil further details of Britain’s post-Brexit immigration system after a cabinet meeting on Friday. Home secretary Priti Patel kept her job in Thursday’s reshuffle.

The salary cap is expected to be lowered to £25,600 after pressure from business leaders and advice from experts.

Read more: Experts tell government to lower controversial salary cap

A separate ‘points-based’ system, offering work visas to migrants who meet new criteria for education, language and other skills, will likely be confirmed for those without jobs. No major changes have been announced yet for several other migration routes, such as family member, entrepreneur or study visas.

New research published on Friday by global jobs site Indeed shows significantly more overseas applications for UK jobs offering above £30,000 than below the threshold.

It suggests the wage rule is deterring would-be migrants from trying their luck seeking work in the UK, and could have the same impact on EU migrants in future.

Such an impact was intended and likely to be welcomed by many who want to bring overall migration levels down, which proved a key issue in the EU referendum. Some also hope the threshold will increase pay levels.

But Pawel Adrjan, UK economist at Indeed, warned the cap meant British employers were missing out on global talent for many skilled jobs that pay below £30,000.

Even tighter rules risk compounding a headache for firms caused by existing skills shortages, a low number of UK jobseekers as employment has soared, and a low number of EU jobseekers deterred by Brexit.

Read more: What UK immigration system will look like after Brexit

“There are thousands of roles in vital sectors that require skilled people to do them, but which pay far less than £30,000 - and are suffering from a shortage of domestic talent,” said the economist.

He said finding a formula that ensured firms had access to highly skilled applicants would be a key challenge as Britain negotiates a new relationship with the EU.

Indeed data shows jobs in higher education and tech are particularly popular among EU workers. Such jobs advertised on the site do often offer pay above £30,000, and attract significant number of applications.

But similarly skilled role just below the threshold attract notably less interest from applicants on the jobs site, strongly suggesting the salary cap’s deterrent effect. “What a difference a few thousand pounds makes,” said Adrjan.

Around a quarter of candidates for relatively lucrative roles such as tech developers were applying from overseas, according to Indeed. By contrast chemist roles with average pay of £27,500 saw just 12% of applications from overseas. Researchers, taking home an average of £28,900, had just 7% of applicants from abroad.