7 September 2016

Leaving aside the negotiations with the rest of the EU for a moment, in theory, there are two competing models of immigration policy that countries employ to manage economic immigration.

Point-based systems

  • These admit migrants to the country based on set qualifications and criteria, which often include education, language skills, work experience and age.
  • Traditionally, in Australia or Canada for example, these systems were designed to select permanent migrants – those with a ‘talent for citizenship’.
  • Points-based systems have the advantage of being transparent and the criteria can be adjusted to reflect evolving economic and political circumstances. Can be popular amongst policymakers since it gives the public a sense of control, since criteria are designed to promote economic success and long-term integration.
  • Since employers are often not directly involved, the disadvantage of such a system is that it can mean immigrants arriving without a job offer and there is no guarantee that they will find work at their skill level. Also, points-based systems cannot easily assess ‘soft skills’ that are often just as important to employers. This can lead to unemployment and integration problems.
  • At the same time, many employers will not be able to find the right people for the jobs they need to fill.

Employer-led systems

  • Demand-led, these systems rely on employers to select immigrants directly and can be used for permanent or temporary immigration.
  • Rather than seeking to attract certain people to boost the available labour pool, employer-led systems seek to meet businesses’ skills needs in real time and therefore allow businesses, rather than government, to determine the skills or experience that is most valuable to them.
  • Ensuring immigrants enter the labour market immediately can be better for integration.
  • Employer-led systems are typically accompanied by government regulation that sets the parameters for selection. Immigration rules can be more or less complex or restrictive. They can stipulate language requirements, wage levels or a requirement to demonstrate that a certain job cannot be filled by local workers, for example.
  • Since immigrants arrive to do a certain job, their residence rights can be tied to a specific job and, depending on the details of the system, may be required to leave the country if they lose their job.
  • The criticism of employer-led systems is that they can lead to exploitation of workers if minimum standards are not well enforced or that it can lead to overstaying in the black market if migrants lose their jobs. To counter this, many countries offer probationary periods after which migrants are able to move jobs or acquire permanent residence.

Hybrid in practice

However, in practice and as we noted in our Brexit report, countries employ hybrid systems that combine aspects of both points-based and employer-led systems. Systems that are employer-led can require that workers fulfil a points test, which allows governments to prioritise applications within any limit placed on overall numbers.

On the other hand, Australia, which along with Canada pioneered the points-based system, has shifted the balance of its programme away from ‘independent skilled migrants’, who do not have employment arranged in Australia prior to migrating there, towards ‘sponsored skilled migrants’, who have arranged employment prior to their arrival. Australia also offers temporary routes, which are often used to fill low-skilled jobs – think of British working holidaymakers for example.

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In the UK, under the ‘points system’ for non-EU migrants, almost all migrants are required to be sponsored by an employer. It is therefore also a hybrid system, since immigrants are only able to arrive if their skills are required by an employer, albeit under strict criteria and a cap defined by the Government. The free movement of workers from the EU is one of the reasons the criteria are so strict.

There are of course other types of immigration to consider: high net worth individuals and entrepreneurs, students, family reunification and asylum policy all require different regimes.

The questions that will determine new immigration and integration policy

When it comes to the Government’s policymaking on immigration in the real world, the question is not so much whether it will opt for a points or work permit system. There will be features of both and so far Downing Street has refused to be pinned down, albeit Theresa May made it known she was unconvinced by ‘points-based’ systems. Elements of the existing non-EU migration system could be applied across the board to EU migrants and some areas that have been dormant – such as the Tier 3 visa for low-skilled non-EU migration – may be resurrected.

But, the real questions that Government faces are how much emphasis is placed on the market-based, employer-led approach which would respond more readily to skills needs of business? And how much this is regulated top-down by government regulation – the ‘control’ element – which will determine both the mix and scale of immigration to the UK? How will these new immigration policies interact with the national minimum wage, legislation on employment conditions, and initiatives to equip Brits for jobs they want to do? How does Government ensure that public service provision keeps pace with population change? What will be the route, if any, to permanent residence and British citizenship for new immigrants? It is all these factors that will determine how immigration and integration ‘feel’ to voters in practice over the long-term.

There is of course also the issue of whether the EU will demand some form of preference for EU nationals under the post-Brexit terms and whether the UK would be willing to accept such an arrangement? But that is a subject for another post.