Businesses warn on further Tier 2 restrictions

17 Aug 2015 | Posted by Carl Thomas

A number of the UK’s largest businesses are warning the Government that further restricting their ability to employ overseas workers could cause major issues for both the companies and the wider UK economy.

Submissions to the Migration Advisory Committee (MAC), which advises the Government on migration and immigration, have warned the Government that companies may move their UK operations to other countries. Firms including Asda, Siemens, Rolls-Royce and Lloyds Banking Group also told the committee that their costs could increase and graduate schemes could be hit if the Government goes ahead with planned changes to Tier 2 visas.

The Government is keen to change the Tier 2 visa route to reduce the number of non-EU people using it to work in the UK. Hiking the minimum salary requirement is among the options it is considering.

Currently, companies hiring a new employee from a non-EU country must pay a minimum salary of £20,800. This rises to £41,500 when businesses want to bring an international worker to the UK on a long-term intra-company transfer.

However, there are proposals to increase this further. But in a new report on the submissions so far received, the MAC said: “There is little doubt that an immediate introduction of a salary threshold at this level would be strongly opposed by many employers and would cause serious problems in particular sectors.”

Accountancy giant PwC told the MAC that higher salary requirements would push businesses abroad, which would in turn damage UK supply chain companies.

The London First business group also expressed concern about the effect higher salary requirements would have on new firms and the wider economy in the capital.

It said: “If start-ups or small businesses choose to locate elsewhere because of the difficulty of recruiting talent in London, this will have a knock-on effect on London’s creative sector.”