MAC review recommends abolishing Shortage Occupation List – what does this mean for employers?

3 October 2023

A Government-commissioned review of the UK’s Shortage Occupation List which helps employers hire foreign workers in roles facing dire labour shortages has recommended scrapping the list altogether.

The influential Migration Advisory Committee (MAC) regularly reviews the UK’s Shortage Occupation List (SOL). After inexplicably putting the review on hold in August 2022, the Home Secretary asked the independent committee to hold a public consultation and review the list last February.

Having reviewed submissions from various sectors and employer bodies facing labour shortages, the MAC published conclusions on Tuesday which may disappoint many of the business bodies that responded to the public consultation.

What is the Shortage Occupation List?

The list was designed to make it easier for employers to use the Skilled Worker (SW) visa route to fill vacancies in areas of identified shortage.

If a job is on the SOL, an employer can sponsor a migrant worker on a lower salary threshold than other skilled workers – of either £20,960 (the usual threshold is £26,200) or 80 per cent of the going rate for that occupation (whichever is higher).

Visa fees are reduced too. From 4 October this year, visa fees for Skilled Workers and their dependant family members will range from £719 to £1,500 while fees for SOL workers range from £551 for three years or less to £1,084 for over three years.

What has the Migration Advisory Committee Review of the SOL recommended?

Despite employer bodies lobbying hard for the list to be extended to more occupations, the MAC warned that the list should never have been used for anything more than a temporary fix for labour shortages, insisting that improving training, work conditions and job progression were the only viable long-term solutions to skills shortages.

The committee criticised the current system saying it undercut local workers, drove down wages and left migrants dependent on the employers sponsoring them open to exploitation. The MAC questioned the benefit to the economy and found that as employers still have to pay for bureaucratic costs such as a sponsor licence to hire migrant employees on lower wages, administrative burdens were still too high for many employers.

“We are not convinced that the SOL is an effective tool to address labour shortages across different occupations and sectors,” said the MAC’s chair Brian Bell, a professor of economics at King’s Business School.

The MAC recommended scrapping the SOL altogether and instead suggested it could be asked by the Government to conduct reviews of individual high vacancy sectors or job roles that would allow it to come up with more tailored immigration solutions that would work for each one. Recommendations could include preferential access to the SW route as the SOL currently allows or more tailored, alternative immigration routes, as well as changes to pay and conditions, training and investment in technology for more sustainable solutions.

At present asylum seekers who have been waiting for over 12 months for a decision can request the right to work in shortage occupations. The MAC recommended that they should be able to work in any job going forward, adding that if the Government wanted to restrict the roles asylum seekers could contribute in, they could just be extended to any Skilled Worker role.

The most substantive change was that this review was conducted on the basis of stopping employers using the SOL to pay 20 per cent less than the going rate. This meant most occupations currently on the SOL would be ineligible.

So the only occupations it recommended to stay on the list are now ones which pay low enough that the going rate is below the general salary threshold of £26,200: just eight occupation codes for the whole of the UK and two that are specific only to shortages in Scotland.

For Scotland these were managers and proprietors in forestry, fishing and related services as well as boat and ship builders and repairers.

UK-wide, the only occupations left on the list are lab technicians; pharmaceutical technicians; bricklayers and masons; roofers, roof tilers and slaters; some other construction and building trades; some animal care occupations; senior care workers and care workers and home carers.

Care workers are still the only profession on the SOL where the usual skills criteria have been waived allowing many urgent vacancies to be filled.  – So many that in the year up to June, care and senior care workers together accounted for half of all visas granted to skilled workers.

The MAC stressed that while the Government fails to respond to its repeated warnings about long-term solutions to shortages in the care sector, carers must remain on the SOL, though the committee said it was “increasingly concerned about the serious exploitation issues being reported within the care sector.”

How will the SOL recommendations affect employers?

The committee said it conducted “extensive stakeholder engagement” across the private and public sector. As well as inviting submissions for employers across the country facing difficulties filling vacancies, the MAC met with specific sectors such as construction, engineering, hospitality, fishing, food suppliers and personal care. They met with nationwide industry bodies such as the Confederation of British Industry and British Retail Consortium as well as those particular to Scotland and Northern Ireland.

Many will now be very concerned by Tuesday’s headlines about the MAC’s conclusions, especially with the noises coming from the Conservative Party Conference in Manchester.

At a fringe event organised by the Policy Exchange, Immigration Minister Robert Jenrick said he was actually considering cuts to the number of care visas and family visas being offered to overseas workers, criticising the post-Brexit work immigration rules for allowing too many lower skilled workers. He even suggested ministers were looking at immigration caps and raising the salary threshold at which employers can hire any Skilled Workers.

The committee sent a copy of its report to the Home. Suella Braverman has repeatedly expressed concerns about immigration numbers and is expected to address her party conference amid pressure from the right of the Conservative Party to cap immigration.

The Labour Party has also expressed concerns about UK workers’ salaries being undercut.

Reducing salaries is never going to be a long-term solution to filling a skills shortage as pay and conditions will only be eroded, attracting fewer local workers.

One of the biggest impediments on employers hiring migrants is expense, but the MAC has correctly identified that there are better way of addressing a skills shortage than undercutting the going rate.

So hopefully employers will be able to look forward the MAC identifying more sophisticated ways to remove some of the impediments to hiring from abroad. One example would be to remove the skills charge – which is in effect a tax on employers trying to fill a skills gap.

With over 170,000 asylum seekers and their dependants waiting in limbo the recommendation to  allow them to join the workforce would end a massive drain on the taxpayer and local authority resources as well as being an easy solution to filling many vacancies, with an estimated net gain to the country in tax revenue and GDP in the billions.

However, with a government seemingly intent on fighting an election on appearing to discourage asylum seekers and a Labour Party with limited support for lifting the ban, this seems unlikely.

While many sectors will be disappointed that the SOL hasn’t been expanded to include workers they urgently need, swapping it for more tailored immigration routes may work out a better solution – if the government of the day implements them.

Though hopefully a pragmatic government will take heed of opinion polls which generally show the public is generally supportive of increased immigration to fill roles perceived as short of staff, particularly if this solves hardships – like reducing NHS waiting lists and food supply inflation.

If you would like to discuss the various immigration options for you, your family or employees, please feel free to contact benm@vanessaganguin.com or put some details in the form below.

We can advise on all aspects of personal and employment immigration, as well as how to avoid penalties, sanctions and related adverse consequences by having fully compliant right to work checks and sponsor licence compliance.