The self-employed Polish plumber will be a thing of the past. Uber taxis in Britain’s big cities could be harder to come by. Anybody who wants to hire a Lithuanian nanny will have to pay them £500 a week – and make sure the taxman knows about it.
Welcome to the government’s new points-based immigration system, which will administer the biggest structural change to the UK labour market in decades when it comes into force next year.
The new policy represents a break with the past and is highly interventionist. As a member of the European Union, the government was only able to limit migration from non-EU countries. Under the new approach, the UK will be open to highly skilled workers from anywhere in the world, but the door to those with low skills will be closed.
Absent from the government’s new strategy document is the idea that migration will be reduced to the tens of thousands, the target Theresa May tried and failed to achieve first as home secretary under David Cameron and then as prime minister herself.
Instead, workers from overseas will be welcomed provided they can clear the high bar set for them by the new immigration rules. To be eligible to apply to come to the UK, an overseas citizen will need to secure 70 points and for that they will require a job offer (20 points), be applying for a skilled job (20 points), be able to speak English (10 points) and – in most cases – be enjoying a salary of £25,600 or above (20 points).
The thinking behind the strategy is that the UK’s economic model needs to change. Real wages – earnings adjusted for the impact of inflation – have only just topped the level they were at when Britain slid into recession in 2008. Employment is at record levels but investment and productivity have been exceptionally weak. Ministers think employers would rather employ cheap workers from eastern Europe than invest in the new equipment that would make them more efficient.
Employers are not going to like the government’s new policy blueprint for creating “a high-wage, high-skill, high-productivity economy”. Lobby groups will say that the more stringent approach will affect everything from fruit-picking to distribution centres, from retailing to the care sector. There have already been warnings that the upshot of the new approach will be labour shortages, less good care for the elderly and higher prices for consumers.
And the government’s response?
“UK businesses will need to adapt and adjust to the end of free movement, and we will not seek to recreate the outcomes from free movement within the points-based system,” the policy document says.
“As such, it is important that employers move away from a reliance on the UK’s immigration system as an alternative to investment in staff retention, productivity and wider investment in technology and automation.”
Suck it up, in other words.
The squeeze on living standards since the financial crisis has made migration a much more potent issue and was one of the main factors behind the leave vote in the 2016 referendum.
The new points-based immigration approach recognises the need to address those concerns, making it clear that the political motivation for the radical change is to deliver on the Conservative party’s manifesto commitment to “take back control of our borders” following the UK’s departure from the EU.
But taking back control is not the same as pulling up the drawbridge. Ministers believe voters do not object to immigration as such; they merely want the government to be able to regulate the numbers.
