EU-UK Trade and Cooperation Agreement
76. The UK Government did not seek an extensive mobility framework with the EU which has created barriers to cross-border mobility and exchanges in both directions. As outlined in our submission to the MAC on the contribution of EEA citizens to Scotland, and our discussion paper Scotland's Place in Europe: People, Jobs & Investment, 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. Data published by the National Records of Scotland (NRS) shows that 7% of Scotland's population is made up of non- UK nationals, many of whom fulfil vital roles in sectors integral to Scotland's economy, including the NHS.
77. Already, the impact of Brexit is evident in the low number of work-related visas being applied for by EEA nationals. Recent UK Government Immigration statics relating to the year ending March 2021 highlight that approximately 3,600 visas were granted to EEA nationals, 30% of which were under the Skilled Worker category.. Sponsorship is expensive with onerous compliance requirements and could have acted as a deterrent to some employers creating problems for UK employers in hiring the best European talent.
78. Frontier Worker and Skilled Worker routes made up 80% of all EEA granted work visas. The Frontier Worker category was created as a result of Brexit. It allows EEA nationals who regularly worked in the UK before 11pm on 31 December 2020 but live outside the UK to apply for a document certifying their rights. As this route is particularly attractive for cross border arrangements and flexible working patterns, it is expected to grow in prominence in the next quarter.
79. The mobility provisions outlined in the EU-UK Trade and Cooperation Agreement (TCA) only allow for short term business visits limited to 90 days in any 180-day period (trips for leisure purposes also count towards this total).
80. UK businesses and individuals can continue to undertake some business activity and deliver some services in the EU (and vice versa) albeit subject to greater restrictions than when the UK was a member state. The activities permitted and applicable visa requirements will also vary between EU states. The list of activities permitted on visa-free short term business trips is limited as are the contractual service supplier/independent professional categories of Mode 4 of the General Agreement on Trade in Services (GATS ); some professionals such as musicians, artists, performers and journalists do not benefit from either arrangement.
81. GATS 4 applies to all 164 WTO members with a focus on trade in services– applies to all services supplied on a commercial basis. Generally, GATS mode 4 is seen as covering:
82. persons providing services where a foreign service supplier obtains a contract to supply services to the host country company and sends its employees to provide the services;
83. independent service providers abroad: an individual selling services to a host country company or to an individual;
84. persons employed abroad by foreign companies established in the host country (but excluding nationals of the host country).
85. Companies commented that there are groups of individuals who do not qualify for the Skilled Worker Route. It is common practice for law firms to rotate their trainee solicitors – for example European nationals, with a six month to one year stay in the UK. Following Brexit, EEA nationals no longer have the right of freedom of movement within the UK and this type of quick mobilisation for firms is no longer an option.
86. Often ICTs are about providing a service to a client in the UK, for example to work on the integration of software and tech. Stakeholders have suggested that this could be done through a new service provision model, without the need for a UK sponsor. The EU-UK Trade and Cooperation Agreement represents a missed opportunity for a beneficial services provision across the EU in the form of the Contractual Service Providers option which in the UK still requires a UK sponsor. The UK-EU TCA does however have a review clause for both parties to revisit the list of permitted activities for short-term business visitors.
87. One positive outcome from the EU-UK negotiations is that certain fees such as the Immigration Skills Charge may no longer be levied for ICT applicants transferring to the UK from a European entity from 2022. For a 5-year visa, this could potentially be a saving of £5,000 and we would welcome this development.
88. Engagement with Scottish stakeholders highlighted that the route can be used by sponsors to assist in completing third party client contracts in the UK. This is useful for businesses in the IT, construction and manufacturing sectors for short-term assignments to cover shortages. As many contracts last for less than six months, the company are not subject to the Immigration Health Surcharge or the Immigration Skills Charge.
89. The UK is currently not experiencing the full impact of reduced EU mobility due to the current COVID-19 international travel restrictions. It is anticipated that there will be an increase in similar organisations looking to the ICT route to meet their short term needs where the UK-EU TCA has failed them.
90. The UK Government should reopen discussions with the EU to develop a new comprehensive service provision model, without the need for a UK sponsor. At a minimum list of permitted activities within the visitor route should be reviewed and expanded to meet the short term needs of business and compensate for mobility gaps in the TCA.