Migration Advisory Committee proposals on changes to Settlement for highly skilled workers

November 11, 2011


Presently, those in some Tier 1 and Tier 2 visa categories and their dependants who have lived in the UK for a certain period of time can apply to settle here permanently. 

The government have questioned this entitlement and earlier in the year requested that the Migration Advisory Committee carry out a consultation on this very topical issue.  The Migration Advisory Committee (or MAC)  were asked to consider what the economic effects would be in ‘restricting or removing’ these settlement rights in Tier 1 and Tier 2 or alternatively limiting leave in the UK to a maximum of 5 years.  In particular they were asked to establish the most suitable criteria that could be used when assessing eligibility for settlement.

MAC took into account that the recent tightening up of immigration requirements would naturally lead to a decline in numbers applying for settlement, however they still felt that measures were necessary to limit leave for some migrants to a maximum of 5 years.

MAC also took the opinion that pay levels are a good measure of skill and that this would also reflect the level of qualification of a worker.  For example, Mr X on £55,000 per annum could reasonably be assumed to be more skilled and qualified than Mr Y earning £25,000 per annum.  

On this basis they concluded that pay would indeed be the criteria applied when deciding which Tier 2 General and Shortage occupation migrants could remain in the UK for over 5 years.  This would automatically capture those earning over £150,000 who would in any event not be affected by the annual limit and who do not have to meet the resident labour market test, advertising requirements.  However, there was lots of discussion as to what the appropriate pay threshold should be?  If the figure was set at £31,000 then 20% of migrants would have been excluded from settling in the UK.  £49,000 would lead to 59% no longer being eligible.  It was therefore agreed that limiting all Tier 1 and Tier 2 from remaining in the UK would lead to ‘notable economic consequences’ and so it was concluded as follows:

  • There should be a pay threshold selection criteria for Tier 2 General (RLMT and shortage occupations).  Only those meeting this threshold could settle in the UK after 5 years.  MAC suggested that the figure could reasonably be set at between £31,000 to £49,000 per year. It was agreed that these figures would not vary regardless of the regional location of the migrant worker.
  • Tier 1 exceptional talent persons will proceed to settle after 5 years but there will be more rigorous checks with the initial application process.
  • The new changes will also affect sportsmen who will also have to meet the Tier 2 pay threshold.
  • The pay threshold will be set at the time of entry and then adjusted for price inflation or changes in average pay according to a set formula.

Whilst we await final feedback from the Government and UKBA in relation to the above proposals, this is clearly an indicator that the entitlement to settlement will now vary for those in Tier 1 and Tier 2 and that the basis of settlement will now be based on actual earnings.  It is therefore worth taking this into account when applying for certificates of sponsorship for new hires, particularly Tier 2 General applicants whereby the above proposals appear to state that the salary at the time of entry to the UK will be the measure used to determine the right to settlement.  Clearly the higher the salary the greater the likelihood of settlement at the end of the pre-requisite period!

We will keep our clients updated on any further news on this matter.