Changes To Tier 2 Visas To Impact Small Businesses


The real impact of the Brexit vote won’t be known for years to come, but the impact on ordinary people is already being felt up and down the country. On the run up to the EU referendum, one publisher noted a 400% increase in sales of their UK citizenship textbook. EU citizens settled in the UK were clearly making steps to secure their place in the country should the majority vote in favor of leaving the EU.

The fate of EU citizens settled in the UK, and of British citizens settled across Europe, remains to be seen as Britain and Europe’s member states work to redefine their relationship. These aren’t the only group of people facing uncertainty in the UK. Many people who have built their careers, made friends, fallen in love, started families and bought homes now face uncertainty about their future – and this has nothing to do with Brexit!

Long before she was making headlines as the Prime Minister of the United Kingdom, Theresa May was putting her mark on the role of Home Secretary. During her time responsible for policing, immigration, counter-terrorism and passports, May passed controversial legislation regarding Tier 2 visas. In previous years, non-EU workers who relocated to the UK on a Tier 2, employee-sponsored visa could apply for Indefinite Leave to Remain after five years in the UK. When the changes took effect in 2016, the new rules meant that an individual must be earning £35,000 a year in order to be able to take advantage of this route to settlement.

Despite a petition that gathered the support of over 100,000 people and was debated in parliament, the legislation went ahead. May has defended the move as a way to attract the best and the brightest workers to the UK. With the government under pressure to reduce migration to the UK, it is thought that this move would encourage highly skilled workers to settle in the UK while reducing the number of unskilled workers taking advantage of the path to Indefinite Leave to Remain.

There are exceptions to the new rules, which includes workers on the Skills Shortage Occupation list such as nurses and engineers. Individuals carrying out PhD level research are also exempt, along with those who have been settled in the UK for more than 10 years. Despite these exceptions, this has done little to reduce the concern that many people have about a future skills shortages.

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How Brexit Vote Could Affect Small Business in the UK

Many small business owners are particularly worried about the impact of the changes to Tier 2 visas and the path to Indefinite Leave to Remain. There are concerns that small business owners will be squeezed out of the opportunity to hire non-EU workers – and potentially even EU workers. Foreign workers are essential for some industries, particularly the restaurant industry. Many small restaurants hire highly skilled chefs from around the world who are experts in regional cuisine. They are the lifeblood of the culinary industry, but it may soon become too prohibitive to hire these workers and an important part of the British restaurant scene will be damaged.

Brexit Vote - Changes To Tier 2 Visas To Impact Small Businesses
Image Credit – Fast Company

Startups are also concerned about the increased barriers to entry in the UK. The UK’s startup scene is booming, but the bubble could soon burst if the steps to bringing foreign workers to the UK are made any more laborious. This is discouraging considering that 2015 saw a record number of tech startups launch in the UK. They gave the economy an unmistakable boost; KPMG even noted that the UK tech sector outperformed the rest of the economy in the final quarter of 2014.

The suffocating new rules mean that many small businesses are deterred from investigating the option of hiring overseas workers. Not only is the process complicated, costly and lengthy, but there is also little incentive for the worker to relocate to the UK. Who would relocate if their prospects of staying longer than five years are non-existent unless they can boost their earnings to above £35,000 per year?

By limiting the talent pool available to hiring managers, UK businesses will undoubtedly suffer. Many tech startup bosses are considering their options overseas, where the barriers to employing foreign nationals are far less restrictive. The move towards a points based system of immigration to the UK is intended to reduce the numbers of people coming to the UK. It would seem it has already taken effect, as only 11,790 Tier 2 visas were issued by the Home Office in 2013, despite there being a cap of 20,700. However, we have to ask if the highly restrictive rules might not be detrimental to the future of British businesses.

Author Bio

Rebecca Harper is an aspiring freelance journalist interested in business, law and immigration policy. Since studying English at university, she pursued a career in journalism with a focus on the professional industries, politics and economics.