Ministers should think twice before raising the minimum salary requirements for skilled migrant workers from outside the EU, an expert committee said yesterday.
The news comes after Techworld recently revealed the government turned away over 1,000 skilled migrant workers in June this year.
The Migration Advisory Committee (MAC), which advises the Home Office on migration issues, believes there is very little evidence of migrant workers undercutting the wages of skilled workers in the UK.
Prime minister David Cameron said it was “frankly too easy” for businesses to hire people from overseas.
Technology giants such as Google and Facebook bring in skilled workers (including engineers and sales people) to their UK offices from Silicon Valley and beyond, as do many digital startups.
One UK-based Google employee from outside the EU told Techworld she’s concerned about David Cameron’s immigration policies.
Doctors, nurses, solicitors and accountants are among the other professionals also fast-tracked into the UK from outside Europe on the visa.
They do so for a number of reasons but the most commonly cited issue is a lack of skilled workers in the UK, particularly those with a background in science, technology, engineering and maths (STEM).
The current minimum salary for skilled immigrants come to the UK under the so-called Tier 2 visa is £20,800 for new hires and £41,500 for long-term intra-company transfers.
Current legislation means the government can give out up to 20,700 Tier 2 visas to skilled workers that come to the UK from outside the European Economic Area (EEA).
The committee was tasked by Home Secretary Theresa May with investigating the impact of raising minimum salary levels.
The committee said this could lead to "bottlenecks constraining the growth of individual firms", adding this is "to some extent already the case".
The report said: "Overall, a number of firms said that increases in thresholds could lead to increases in the cost of their services, prevent expansion of business and thus possibly cause certain business areas to grow elsewhere in the world at the expense of the UK."
Committee chairman Professor Sir David Metcalf said: "We urge the government to be cautious in making any significant changes to the salary thresholds at this stage because they should not be considered in isolation."
The London First business group told the MAC that startups would be hit "very hard", adding: "If startups or small businesses choose to locate elsewhere because of the difficulty of recruiting talent in London, this will have a knock-on effect on London’s creative sector.”
Startup supporting organisation Coadec, which advocates for policies that support the U.K.’s digital economy, launched the "Save Skilled Migration" campaign last month to ensure UK tech firms can hire the most talented technologists from around the world.
Some of the biggest businesses operating in Britain also told the MAC what they believed the impact would be if the minimum salary threshold was increased.
Tata Consultancy Services, an Indian IT services giant that employs hundreds of people in the UK, said higher salary thresholds would likely force it to cut costs by providing “off-the-shelf”, rather than customised, solutions for its clients.
PwC told the MAC that increasing salary requirements would force firms to set up and expand in other parts of the world.
Chancellor George Osborne proposed a new "skills levy" on employers giving jobs to foreign workers in his emergency summer budget last month.
The MAC is expected to publish a wider review, taking into account the impact of a skills levy, in December.