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At a glance: The Points Based Immigration System and North East business


It's been a little while now since the Points Based System for future immigration was released, let's take a look back at some of the main concerns for the North East.

After months of speculation and amid growing concern from the business community, some details of the UK’s new points-based immigration system were finally unveiled. From the 1st January 2020 UK borders will be closed to “non-skilled” workers, whilst “skilled” workers will be required to meet stringent conditions in order to qualify for a UK Visa.

At its core individuals will need to score a total of 70 points in the new system in order to qualify for a UK Visa. There are three non-negotiable conditions which must be met however, which cannot be “traded” for other characteristics.

Firstly, individuals must have a job offer from an approved sponsor - an organisation already vetted by the Home Office. Second, this employment must be of an A-Level skill level at a minimum. Finally, applicants must be able to speak English to the required level. Meeting these base-line conditions will earn applicants 50 points. They then must earn the remaining 20 points necessary to work in the UK, which is where the system starts to get slightly more complex.

The easiest way to accrue these points is by earning over £25,600 per year. Nevertheless, if individuals earn less - but above the minimum salary of £20,480 - they can “trade” other characteristics against their lower salary band; such as having a PHD in Science, Technology, Engineering or Maths and relevant to their occupation or holding a job offer in a profession with staff shortages.

What the new system means for businesses in the North East is sure to be on many of our members’ minds. One concern is the quick turnaround of this policy’s implementation. With just eight months until the UK’s borders become much tighter, businesses will have to get to grips with the new system quickly. Becoming recognized sponsors in order to hire individuals from outside the UK will likely be on many businesses’ to-do lists in the coming months.

The cost of doing so, however, will likely be a concern for small businesses. Under the current system,it is estimated that the overall cost of a Tier 2 sponsorship could exceed £3000 (FSB). The complexity of this system could also pose a problem for SMEs with little experience of visa sponsorship.UK-wide, 95% of small businesses have no experience of using the sponsorship system (FSB).

The drop in the salary cap from £30,000 to £25,600 is a positive move by Government, and one which the Chamber called for in its submission to the Migration Advisory Committee. However, the one-size-fits-all approach to the cap, and the policy’s lack of regional focus could be concerning for North Eastern business interests. Salaries in the North East are generally lower than in other regions which could hinder our region’s ability to attract and retain the best global talent. It is important that the new system does not hinder skills retention in the North East.

The chamber will continue to push the Home Office for more detail of the incoming system and to consult with businesses on this policy’s implementation.