Shortage occupation list 2018: call for evidence - our response

2. Increasing Scotland’s Input Into UK Immigration Decision-Making

15. Immigration is reserved to the UK government under the Scotland Act 1998 and Scotland currently has no influence over UK decision-making on migration flows. Within the current UK immigration rules, the SOL is the only element of the Points Based System (PBS) where there is any attempt to consider the different occupational needs of Scotland relative to the rest of the UK. 

16. However, the SOL is not a devolved competence – the Scottish Government has no formal role in determining what occupations are considered in shortage in Scotland. Scottish Ministers cannot currently commission the MAC to consider changes to the Scottish SOL and the Scottish Government is only able to contribute to MAC calls for evidence as a stakeholder in the same way as any other individual or body can respond. 

17. The White Paper reaffirms the UK Government’s intention to end free movement and the unworkable commitment to cut net migration to ‘tens of thousands’ has exacerbated the urgency to mitigate the impact on Scotland.   

18. As outlined in our submission to the MAC on the contribution of EEA citizens to Scotland^[6] and our discussion paper Scotland’s Place in  Europe: People, Jobs & Investment^[7], the UK Government’s drastic migration reduction strategies have the potential to seriously harm Scotland's prosperity. The contribution of migration to Scotland's economy and demographic profile is crucial, and relatively more important than it is to other parts of the UK. Recent data published by the National Records of Scotland (NRS) shows that 7% of Scotland’s population is made up of non-UK nationals^[8], many of whom fulfil vital roles in sectors integral to Scotland’s economy, including the NHS.

19. It is increasingly clear the UK Government’s immigration policy does not address our economic, demographic and social needs and our 2018 discussion paper Scotland's population needs and migration policy^[9] outlines how differentiation within the current framework could mitigate some of the impact. A key recommendation in that paper was to give Scottish Ministers a formal role in deciding on the Scottish Shortage Occupation List.

20. The idea of regional differentiation on migration within the UK framework is not novel. In the first years of the new Scottish Parliament immigration being a reserved power did not stop a cross-party consensus emerging that, because the migration needs of Scotland were distinct from those of the rest of the UK, the policy solutions for Scotland should be distinct as well. This difference led to the Scottish Executive of the time working to introduce Fresh Talent[10]^[10], a post-study work visa scheme that allowed international students to stay in Scotland after they had completed their studies in order to seek work and make a contribution to Scotland’s economy. This differentiation of migration policy for Scotland was intended to both support economic growth and mitigate demographic pressure. Fresh Talent recognised that different parts of the UK had different needs and expectations of migration. 

21. Whilst the current Scotland SOL has also attempted to allow for differentiation, it is insufficient in its current form to fully accommodate Scotland’s distinct labour-market needs. To address this failing, a collaborative assessment and restructuring of the current mechanism and scope of the list is urgently required to be more accurate and responsive to Scotland’s distinct needs.

22. In 2008 the MAC produced a report titled ‘Skilled, Shortage, Sensible: The recommended shortage occupation lists for the UK and Scotland’^[11]. Chapter 11 of this report, titled The Scotland List, outlined the request for a Scottish specific SOL and referenced the UK Border Agency’s (UKBA) consultation document on the Points Based System (2005) which set out Scotland’s specific need for managed migration.

23. The UKBA report cited a need for Scotland to address its predicted population decline and change its demographic profile for reasons of economic growth and social development. They highlighted Scotland’s ageing population and shrinking working age population as detrimental for public services as well as long term economic development. 

24. The MAC report highlighted that, due to the smaller population in Scotland and the resultant difficulties with sample sizes, top down approaches to investigating skills shortages would not be possible, as is undertaken for the UK SOL. They therefore highlighted that bottom up evidence, meeting with stakeholders in Scotland, was necessary. The Scottish Government believes that the period of one day to one week that is spent by the MAC in Scotland during a review period is not adequate to appropriately assess the shortages present across the entire nation. We would therefore propose that a defined role for Scottish Ministers and Scottish Government in the review process would enable a more comprehensive review of need and a stronger evidence base for the SOL and Scottish SOL. 

25. Shortly after the outcome of the EU referendum, the Scottish Parliament’s Committee for Culture, Tourism, Europe and External Affairs commissioned Dr Eve Hepburn to write a paper on the options for differentiating the UK's immigration system^[12]. Dr Hepburn’s independent findings were published in April 2017 and determined that increasing Scotland’s input into UK immigration decision-making would better ensure that the current PBS is taking Scottish labour market and demographic needs into account. 

26. Specifically, the report recommended increasing Scotland’s representation and influence in UK advisory and decision-making bodies. Evaluating case studies on Quebec, Prince Edward Island, South Australia and Vaud, Dr Hepburn determined three areas where Scotland could have a greater ‘voice’ in UK decision-making on immigration:  

• Sub-state representation on the MAC, in order to advise on labour shortages and skills gaps in Scotland (and other regions);
• Revising and expanding the Shortage Occupation List for Scotland, in order to make it more flexible to take account of current and future labour shortages; and,
• Increasing bilateral relations between the Home Office and Scottish Government, for instance through a Joint Ministerial Committee (JMC) on immigration and regular meetings of civil servants. 

27. The Scotland-only SOL is designed to enable Scottish employers facing labour shortages to fill these jobs with skilled third-country nationals. However, this list is currently very short, containing just two additional occupation fields to the UK-list (physical scientists and medical practitioners).

28. There is a strong argument to nuance the SSOL, by adding more jobs to the vacancies list in consultation with Scottish industry stakeholders, to take account of Scotland’s skills shortages and dynamic economy. 

29. The recently published London First report on a fair and managed immigration system fit for the post-Brexit economy^[13] has highlighted the issue of the List’s responsiveness to shifting market requirements. It notes that skills shortages can easily get out of step with real labour market need and are often based on evidence that is one or two years out of date and, inevitably, have a public sector administrative approach rather than an employer-led one. The report’s key recommendations largely align with the Scottish Government’s view that: 

• The SOL should move away from separate occupations and align with key growth areas and sectors as, especially in new sector areas, occupation titles and needs shift quickly;
• It should align with the essential labour needs of the country, taking into account the distinct needs of all four nations, and include medium and lower-skilled roles with a more streamlined and responsive process for adding and removing roles from the list; 
• Current criteria should be reviewed with appropriate exemptions from the salary threshold, such as roles paying under £20,155. Those at RQF3 and 4 should not be subject to the RLMT. Appropriate workers should be given fast-tracked access, recognising their crucial role in the economy;  
• There should be efficient feedback mechanisms for Scottish stakeholders and  businesses to contribute evidence on labour market needs, taking into account Scotland’s unique rurality challenges. 

30. Assessing and improving the current mechanisms of the SSOL is particularly relevant given the UK Government’s intention to commission MAC to compile such a list for Northern Ireland and consider whether the composition of the SOL needs to be different for Wales. Ensuring regional lists are adequately responsive to the needs of each nation, with meaningful and jointly formalised structures for devolved administrations to guide and influence their outcome, will be imperative not only for the prosperity of each nation but for the UK economy as a whole.  

31. In the longer term, there remains a question about whether Shortage Occupation Lists are a helpful measure, or if there is a more systemic way to fix the problems they attempt to address. A substantive review is required to ensure all elements of the immigration system meet Scotland’s needs. Our 2018 discussion paper outlines how concurrent and devolved structures of decision-making on immigration could work to better serve Scotland.  

32. The White Paper outlines the intention for an enhanced role for the MAC. This expanded role includes the potential for an annual report including reviews of the SOL, SSOL and the newly proposed SOLs for Wales and NI. It also outlines the potential for an enhanced role for the chair and a change in the MAC’s composition, status and role. We welcome the UK Government’s commitment towards an evidence based immigration policy but it is important that the changes to the MAC genuinely deliver that aspiration.

33. We would therefore welcome meaningful engagement on the development of this enhanced role. We see this commitment as a valuable opportunity to broaden the expertise represented on the MAC. By enhancing the composition and remit of the MAC, the unique demographic and rural challenges that Scotland faces can be appropriately highlighted, assessed and mitigated. 

Recommendations 

34. The UK Government should review the administrative procedures around the SOL to give a formal role to the Scottish Government in commissioning and determining what occupations are in shortage in Scotland. 

35. The SOL should be revised and expanded in order to make it more flexible to take account of current and future labour shortages by: 

• moving away from separate occupations and aligning with key growth areas and sectors, as especially in new sector areas occupation titles and needs shift quickly;
• aligning with the essential labour needs of the country, taking into account the distinct needs of all four nations, and including medium and lower-skilled roles with a more streamlined and responsive process for adding and removing roles from the list; 
• reviewing current criteria with appropriate exemptions applied;
• Developing efficient feedback mechanisms to allow Scottish industry to contribute evidence on labour market needs. This mechanism should allow for comprehensive and regular review making the SOL responsive to changing and emerging markets. 

36. The UK Government should engage meaningfully with Scotland and the other devolved administrations when considering the enhanced role of the MAC and consider how the expanded composition, status and remit can be structured to maximise their needs.