The Economist UK - 22.02.2020

22 Britain The EconomistFebruary 22nd 2020

B

ritain needs more ballerinas, bio-

chemists and welders—but only “high

integrity pipe welders” with at least three

years’ experience. These are among the oc-

cupations which appear on the official

“shortage occupation list” (sol), which is

central to the government’s planned new

immigration rules.

The new system will treat migrants

equally, regardless of where they hail from.

Europeans will no longer benefit from free-

dom of movement, but the bar to entry

from the rest of the world will fall: prospec-

tive migrants will require the equivalent of

a-levels, not degrees. The government

claims it will let in more talented folks

while reducing total numbers.

The plan was billed as a “points-based

system”, but it is not as flexible as that im-

plies. Most migrants will need to speak

English and have a job offer with a prospec-

tive salary of more than £25,600 ($33,245).

Exceptions to the threshold will only be

made for brainiacs with phds and those

with jobs on the sol. English-speaking bal-

lerinas with a doctorate are in luck.

Firms have welcomed the removal of a

cap on migrant numbers, the opening up of

routes for skilled workers and the lowering

of the £30,000 salary threshold initially

mooted. But they fret about shortages in

some industries. The unemployment rate

is just 3.8% and there are more than

800,000 unfilled job vacancies in Britain.

Firms worry about cutting off the flow of

lower-skilled European migrants at a time

of what looks like full employment.

A recent report by The ukin a Changing

Europe, a think-tank, estimated that the

combination of nixing freedom of move-

ment and adopting a relatively liberal

scheme for skilled workers would cut over-

all net migration by only around 35,000,

from the current 212,000. Work by the gov-

ernment’s own Migration Advisory Com-

mittee (mac) found that the new rules

would slightly reduce overall gdp but mar-

ginally increase gdpper head. Fewer un-

skilled workers might put some upward

pressure on wages but the minimum wage,

which is now the seventh highest out of the

27 members of the oecdthat have mini-

mum wages, has more effect.

Those who employ a lot of low-paid eu

workers are troubled. The ippr, a think-

tank, reckons that 66% of the current eu

workers in health and social care and 85%

in hotels and hospitality would be ineligi-

ble for visas under the new system. The

government hopes to encourage British

people back into the labour market to meet

the need. Priti Patel, the home secretary, ar-

gues that “we have over 8.45m people in the

ukaged between 16 and 64 who are eco-

nomically inactive”. But most of them are

studying, retired, sick or looking after fam-

ily. Only 1.9m say they want a job.

Britain’s farmers are concerned for next

year’s harvest. Although the government

announced that this year’s seasonal worker

scheme will be expanded from 2,500 to

10,000 places, no commitment has been

given for 2021. Picking soft fruits such as

strawberries is tricky to automate.

But the impact of the changes will

spread beyond low-skilled, low-productiv-

ity sectors. Manufacturing bosses in the

north and the Midlands, where skilled

technicians often earn below the £25,600

threshold, worry that the new rules will

make it easier for firms in the south-east,

where technicians tend to earn over the

threshold, to expand. That is hardly what a

government committed to “levelling up”

wants to see. Businesses also worry about

the costs of becoming registered as em-

ployment-sponsors, which firms that only

employ euworkers are not currently re-

quired to do.

Under the new system an a-level quali-

fied entrant with good English and job offer

at £21,000 would score only 50 points, but

if their role was on the solthey would hit

the required 70. So many businesses are

now likely to start lobbying the macto get

themselves covered. A liberalising mea-

sure risks generating more bureaucracy. 7

The post-Brexit immigration rules worry business

Immigration policy

Points mean prizes

Points-based worker

Battle of the blobs

EU27 trade agreements

Share of total EU27 trade with third countries*, 2018

Inverted scale, %

Source: Eurostat *Imports and exports of goods †Argentina, Brazil, Paraguay and Uruguay

Britain

Japan

S. Korea

Switzerland

Norway

Turkey

Mexico

0

4

8

12

16

← Closest neighbours Approximate distance from EU27, ’000 km Most distant partners →

012345678910

Chile

↑Least trade integrated

↓ Most trade integrated

Circle size=trade volume*

with EU27, €, 2018

Mercosur

countries*

Canada Singapore

Brexit negotiations are all about Canada at the moment. The government says it wants

the kind of free-trade agreement that the euhas with Canada, and accuses the European

Commission of changing its terms by suddenly demanding a level playing-field of rules

on state subsidies and social, environmental, labour and other regulations to prevent

unfair competition—conditions not required of Canada. The commission retorts that

Boris Johnson accepted “robust commitments to ensure a level playing-field” in the

political declaration attached to the Brexit withdrawal agreement. It also tweeted a

slide showing just why Britain is not like Canada: the bigger the trade flows and the

shorter the distance, the more substantial the risk of being undercut by looser rules.

Why Britain isn’t Canada