REPORT: BREXIT BEGINS
http://www.insider.co.uk March 2020 INSIDER 29
on labour from other EU countries. Lesley
McLeod, chief executive at the Edinburgh-
based Association for Project Safety,
said that the industry has singularly failed
to invest in the required trades and craft
needed. She said: “Now that pipeline is in
danger of being switched off with few of the
posts attracting a salary sufficient to meet
the government’s proposed salary barriers
for entry to the country after the UK has
exited the European union. This may
signal chaos.
“This isn’t a far-off vision of problems
to come. Projects are struggling to attract
people now. A combination of uncertainty
over the future allied to strengthening
economic conditions back home means
the UK is no longer considered the most
desirable or profitable place to be.”
Elaine McIlroy, an employment and
immigration partner at Brodies, says that
the impacts will really be felt from when
the transition period ends. “At that point
freedom of movement will end and UK
employers will have more limited options
than they do now in terms of recruiting non-
UK workers.
“Those employers likely to be most
impacted by the new rules are those who
currently recruit overseas staff to fill lower
skilled jobs – as there are likely to be limited
visa options available. In addition employers
recruiting into lower paid roles are less likely
to be able to tolerate visa and other costs
associated with hiring overseas workers.”
The Migration Advisory Committee
(MAC), an export body that advises the
UK Government on immigration policy
reported at the end of January with
recommendations on the future skills-based
immigration system which will come into
effect at the end of the transition period. The
government has indicated that it will follow
some of the recommendations but with
some adjustments.
McIlroy says: “The new rules which are
likely to be in effect from 1 January 2021
would mean that jobs with a minimum
salary of £25,600 will be eligible for
sponsorship by employers (subject to some
exceptions). So for employers paying above
that rate, sponsorship will be an option to
consider to replace recruitment of some EU
workers. That salary level is lower than the
current Tier 2 rules so has been welcomed
by some – but that minimum salary
threshold still leaves a ‘gap’ for certain low
skilled jobs which are paid below that rate.
“The MAC recognised in its report that
sectors which primarily employ lower skilled
(lower- paid) staff will be most impacted
by the end of freedom of movement. They
suggested that the UK Government consider
if these impacts could be addressed through
another immigration route – for example
a temporary worker route, or sector-based
schemes which had been mentioned during
the election campaign. These routes may
present some sort of solution for sectors that
employ staff in lower paid jobs, such as food
processing, the care sector and hospitality.
“However, we do not yet have much
detail on what those routes would cover
which is causing uncertainty for employers.
In addition those routes are likely to be
temporary visas which may not allow
staff to stay in the UK in the longer term.
They therefore tend to be less attractive for
employers and employees.
“Even if certain new immigration
categories are opened up for lower skilled
jobs, some employers are concerned about
the increased costs of recruiting overseas
staff in the future. Recruitment of EU
nationals is currently free – whereas in the
future there may be visa costs. The NHS
surcharge (which is a mandatory charge for
the NHS) will apply to EU nationals from
1 January 2021 and will come to around
£12,500 for a family of four coming to the
UK for five years. That might also act as
a disincentive for new workers coming tothe UK for lower skilled jobs in particular.
Therefore, it remains to be seen whether
the new system will properly cater for lower
skilled jobs. There is a concern by many that
the clock is ticking and that time is limited
to plan for what the new system will hold.”
Clive Phillips, partner, land and rural
business at Brodies, says: “One sector
particularly affected by the UK leaving the
EU is undoubtedly agriculture. Agriculture
is on the one hand a relatively low margin
sector, with fewer of the population now
working in it, yet on the other hand, supply
of food and the vast areas of landscape
devoted to it make it particularly significant.
The food and drink sector is undoubtedly a
major component of the UK economy.
“Within the EU, agriculture has relied
heavily on public support under the
Common Agricultural Policy (CAP).
Looking back it’s easy to be critical of the
system but it was designed to provide
affordable food and to sustain rural
communities. Critics of the system argue
that it has distorted the market, it has notIt remains to be seen
whether the new system
will properly cater for lower
skilled jobs. There is a
concern by many that
the clock is ticking
Elaine McIlroy, BrodiesCOMMENT
Charles Livingstone
Partner and constitutional
expert at Brodies LLP
E: charles.livingstone@
brodies.com
W: brodies.comBeyond Brexit: the new UK
Global Tariff and FreeportsNow the UK has left the EU, the UK Government’s focus has
shifted to what comes next. It has launched consultations
on the proposed cornerstones of an independent UK trade
policy: a new UK Global Tariff and the establishment of
UK Freeports.
The Department for International Trade is consulting on
a new UK Global Tariff (UKGT), to replace the EU’s Common
External Tariff at the end of the post-Brexit transition period
(expected to be the end of 2020). It will then generally
apply to imports from any country with which the UK does
not have a free trade agreement. As well as negotiating
an FTA with the EU, the UK is seeking to ‘roll over’ the EU’s
existing FTAs so they continue to apply directly between the
UK and the relevant ‘third country’. New FTAs are also being
considered; the US, Australia and New Zealand included.
The UKGT regime would:
(1) simplify the tariff schedule, including removing tariffs of
less than 2.5% and simplifying the often-complex tariffs on
agricultural and other food and drink products;
(2) remove tariffs on UK manufacturing inputs, across a
wide range of products outlined in extremely detailed lists
including fabrics, plastics and car components;
(3) remove tariffs where the UK has zero or limited domestic
production, including fruits and vegetables not grown in
the UK and oils such as coconut and palm oil, to reduce the
cost of these goods to consumers.
The consultation closes on 5 March.
The Government is also consulting on a Freeports policy.
Freeports are zones where businesses can import goods
from other countries without attracting UK tariffs, which
only become payable if goods then leave the Freeport and
enter the UK market. Re-exported goods are therefore
exempt from UK duty. Raw materials processed into a final
good within a Freeport would also be fully exempt from
UK duties, which are paid only on the final good when it
enters the UK market. The Government aims to create up
to 10 freeports across the UK, to be national hubs for global
trade and investment and to promote regeneration, job
creation and innovation. The consultation seeks views on
appropriate locations.
The policy proposals include some devolved issues (such
as aspects of tax policy), so the establishment of Freeports
in Scotland will require the UK and Scottish Governments to
work together. Scottish businesses interested in Freeports
may therefore want to contact both.
This consultation closes on 20 April.