MAC recommends abolishing the Shortage Occupation List

The Migration Advisory Committee (MAC) has published a new report after conducting a major review of the UK’s Shortage Occupation List (SOL). This is the first review undertaken since September 2020, and uses the latest available evidence to assess current labour shortages in a post-pandemic economic climate.

The MAC is an independent body which advises the Home Office on migration related issues. The government first commissioned the SOL review in August 2022, but asked the MAC to pause its work pending clarification on the government’s priorities surrounding the Skilled Worker route. Work on the review recommenced in March 2023 with extensive stakeholder engagement across all sectors of the economy and the constituent nations of the UK. The final report was published and presented to the Home Office on 3 October.

In the report, the MAC sets out a series of policy recommendations relating to the role of the SOL in the immigration system. The headline recommendation is that the SOL should be abolished going forward, as it increases the risk of exploitation, undercuts wages, and has high administrative burdens.

In a covering letter to the Home Secretary, Chair of the MAC Professor Brian Bell wrote: “The risk of exploitation in low-wage jobs, the likelihood that low-wage migrants will lead to a net fiscal cost for the UK, and the administrative burden the Skilled Worker route places upon low-wage employers, mean that we are not convinced the SOL provides a sensible immigration solution to shortage issues in low wage sectors and so we recommend that it should be abolished going forward.”

The report provides an alternative approach that the government may wish to consider if it accepts the recommendation to abolish the SOL, as well as recommendations for future reviews if the government wishes to retain the SOL in its current form. The Home Office will now consider the recommendations and provide a response in due course.

What is the Shortage Occupation List?

The SOL lists occupations where employers face a shortage of suitable labour and where the MAC judges that migration is a sensible response to that shortage. Occupations on the list are given some dispensations within the immigration rules, designed to make it easier for employers to access migrant labour to fill vacancies in those areas of identified shortage. Occupations on the list can be paid a salary that’s 80% of the ‘going rate’ – offering employers a 20% discount.

The MAC review argues that the SOL in its current form serves a ‘relatively minor function’ in immigration policy and is intended to complement the Skilled Worker route, not to support other government policies.

Crucially, the committee condemns the idea of employers being able to pay below the ‘going rate’ for shortage occupations, and recommends that this policy is scrapped.

The committee also suggests the SOL can be a misleading name, as some employers and government departments interpret it as purely a list of all occupations in the UK that are currently in shortage.

Key recommendations

The most substantive change compared to previous reviews is that the MAC has conducted this review on the basis of their recommendation that no employer should be able to pay below the “going rate” regardless of whether they are experiencing shortage.

The going rate helps to protect resident workers from undercutting and reduces the potential exploitation of migrants. This recommendation results in a large number of occupations being made ineligible for consideration. In addition, as the only significant benefit of inclusion on the SOL is a salary threshold reduction, national pay scale occupations have also been excluded from consideration.

To summarise, the key recommendations the MAC put forward in the report are as follows:

• The MAC’s preference is for the government to abolish the SOL, as it is not convinced that the current system provides a sensible immigration solution to shortage issues in low-wage sectors. Instead, the MAC suggests that in future the committee could be commissioned to examine individual occupations or sectors where labour market issues seem particularly acute, possibly in collaboration with other bodies.
• In the interim, the MAC has recommended including only 8 occupations on the SOL and a further two occupations on the Scotland-only SOL.
• The MAC has also recommended that care workers and senior care workers remain on the SOL, given their recent inclusion and the government’s continued failure to respond to the committee’s April 2022 report on the sector. The MAC is increasingly concerned about the serious exploitation issues being reported within the care sector and therefore plans to closely monitor the use of the immigration system by care work occupations, and the health and social care sector more broadly, and will provide further comment on this area in its 2023 Annual Report in December.
• While the SOL continues, the MAC recommends that the going rate discount for occupations on the list should be removed; that asylum seekers be given the right to work in any job, not just in occupations on the SOL; and that the Creative Worker (CW) visa route be opened up to any occupation without a labour market test.
• The MAC recommends that, if the SOL is retained, the government changes the name of the list to the Immigration Salary Discount List (ISDL) to correctly reflect its function in the immigration system.

Next steps

Following the report’s publication, the government will now consider which recommendations to take forward. Should the Home Office decide to accept the MAC’s recommendation to abolish the SOL, this will mark major changes for employers recruiting workers in shortage occupations.

Smith Stone Walters will continue to monitor the situation and will provide an update in due course. To keep up to date with all the latest UK and global immigration news, please sign up to our free news service here.