The work of the MAC Mark Franks Head of secretariat 3 November 2009

The Migration Advisory Committee The MAC: what we do How we do it Results Next steps

Advise Government on skilled occupations where shortages can sensibly be filled by migration Government also ask us to consider other issues in relation to migration Advice independent, evidence-based, published Seven members, supported by secretariat Work in mainly on PBS (but also EU accession) The MAC: what we do Role and work of the MAC

EEA – free movement of labour, with the exceptions of… 2004 “A8” central and eastern European countries - free to work, subject to a worker registration scheme MAC reviewed March Accession of Bulgaria and Romania – need a work permit (although special schemes for agriculture and food processing) MAC reviewed Dec 08 The MAC: what we do Role and work of the MAC

5 Tier 1Highly skilled individuals to contribute to growth and productivity August: Review Tier 2 November: Review Tier 1 August: Economic impact of PBS dependants Regular reviews of shortage occupation list (Tier 2) Tier 2Skilled workers with a job offer to fill gaps in the UK labour force Tier 3Low skilled workers to fill specific temporary labour shortages (suspended) Tier 4Students Tier 5Youth and temporary: people coming to UK to satisfy primarily non-economic objectives The MAC: what we do Work on the Points Based System (PBS)

Is there an economic case for restricting Tier 2 to shortage occupations only (August)? What is the Committee's assessment of the economic contribution made by the dependants of PBS migrants and their role in the labour market (August)? What further changes to the criteria for Tier 1 should there be in 2010/11, given the changing economic circumstances (November)?

The Migration Advisory Committee The MAC: what we do How we do it Results Next steps

How we do it Shortage Occupation Lists Lists for the UK… …and Scotland only ‘Top-down’ … ….and ‘bottom-up’ Skilled, Shortage and Sensible

How we do it Analysis of the PBS Policy: principle and practice (UK and abroad) Context: economy, immigration, current system Experience: old work permit system, Highly Skilled Migrant Programme, international Theory: skilled immigration, economic downturn Impact: contribution to economy, LM outcomes, incentives, enforcement

How we do it Analysis of the Tier 2 Distribution of prospective earnings for jobs under Tier 2 Nov 2008 – May 2009 Note: Summary statistics are rounded to the nearest hundred pounds. Analysis is based on used certificates of sponsorship issued under Tier 2. Prospective earnings are annual, including both the basic salary and allowance. Around 5 per cent of salaries were not stated on an annual basis; assumptions have been made to calculate annual pay, and those with allowances on a non-annual salary are excluded for data quality issues. Where the salary period is not stated (for example contract or performance related pay). These are excluded from the analysis. Chart shows the number of certificates issued for jobs that fall within increments of £5,000. The x axis shows the maximum for each earnings increment. Source: UKBA management information, Nov 2008 – May 2009

Need 75 points: General: age under 28 (20); PhD (50); studied in UK (5) General: age (5); masters (35); £30k (30); earnings in UK (5) General: masters (35); earnings in UK £35k-£40k (40) Post-study: degree or above or PGCE or HND (Scotland) (75) Entrepreneur: £200k; disposable in UK; regulated institution (75) Investor: £1m own money or £2m personal assets + £1m loan (75) Plus 20 points English (10) and maintenance (10) Except investor route How we do it Tier 1 current policy (under review)

The Migration Advisory Committee The MAC: what we do How we do it Results Next steps

Results Analysis of Tier 2 and dependants Tier 2: automatic stabiliser, favours skilled immigration Points: amend to better target skilled labour RLMT: retain, longer advertising duration, certification Intra-company transfers: retain, focus on key personnel and graduate trainees, enforcement Dependants: do not restrict work rights, but poor evidence

Results Analysis of Tier 2 Durations of Jobcentre Plus vacancy outflows by occupational skill level, 2008 Note: Vacancy durations describe the time between a vacancy being opened and closed by JCP. Skill levels defined in the Standard Occupational Classification: level 1 represents the lowest skill level and level 4 the highest. Vacancy outflow includes both those filled by JCP and withdrawn from JCP. These levels are related to, but differ from, the MAC definition of skilled and unskilled. Source: JCP vacancy outflows by 4-digit occupation, 2008 (Nomis, 2009)

Tier 1 general –Earnings thresholds –Qualifications –Salary multipliers Post-study route –Leave durations –Institutions and courses Investors and entrepreneurs –Financial thresholds Results (Forthcoming) analysis of Tier 1

The Migration Advisory Committee The MAC: what we do How we do it Results Next steps

Shortage occupations –Published autumn review 21 October –Reviews in spring & autumn 2010 Review of elements of the PBS –Publish Tier 1 report in November Talk to us… – – Next steps Communication from us, and with us