Prime Minister Andy Burnham has promised a more devolved approach to policymaking. Immigration should form part of that conversation, particularly where the current UK-wide system does not reflect Scotland’s labour market, workforce shortages and demographic needs. Immigration policy remains reserved to Westminster. However, the Scottish Government has already proposed closer working with the UK Government, including tailored visa routes that could operate within the existing immigration system and better support Scottish employers. A more flexible approach could help Scotland attract the international talent needed to grow key sectors such as clean energy, life sciences and digital technology. It could also give smaller businesses and rural employers more realistic options when they are unable to recruit locally. Here are three changes that could make a practical difference:
1. Adapt the Skilled Worker visa for Scotland’s labour market
For most new Skilled Worker visa applicants, salary thresholds for sponsorship outpace salaries in many sectors. They are based on UK-wide data and skewed by the London market — for example, a software engineer must be paid £54,700, but the average salary in Glasgow is about £45,500. Flexible requirements based on respective labour markets would help Scottish businesses to attract talent.
The skills threshold means that only graduate roles can usually be sponsored, creating challenges for sectors experiencing serious recruitment shortages in roles that do not meet the required skill or salary level. UK Hospitality members report chef shortages of more than 20%, and a quarter of small businesses in the Highlands and Islands cutting services due to staff shortages. Allowing these sectors access to international talent would be a lifeline.
2. Pilot new options for international founders and investors
The Tier 1 Investor visa closed to new applicants in February 2022, but a new scheme could be piloted for international investors looking to support priority industries and make a longer-term contribution to Scotland. In addition, existing visa options could be expanded to offer viable options to self-employed businesspeople.
The current Innovator Founder visa route is not a suitable route for the majority of international founders. This is because the key to unlocking the visa pathway is establishing that the business is viable, scalable and innovative There is an exceptionally high bar to demonstrate that a business is innovative, which means that even experienced international founders with a track record of success can fall at this hurdle. A more flexible approach could attract investment in Scotland.
Scotland could pilot a new International Founder (Scotland) Visa, which could replace the "innovation" requirement with a "headquartered in Scotland" requirement. Endorsing bodies could assess this alongside the existing "scalablity" and "viablity" requirements of the business plan.
Scotland has a track record for successful pilots of new visas. Scotland's Fresh Talent Initiative in the early 2000s was so successful in retaining skilled graduates of Scottish universities that it was incorporated into the UK immigration system.
3. Introduce a fairer civil penalty system for small employers
Every UK employer must check that its workers have the legal right to work. Failing to carry out the correct checks can result in a civil penalty. Employing someone without the correct work permission risks a civil penalty starting at £45,000. Right to work rules are incredibly complicated - particularly where an employee has a pending visa application, an appeal or digital immigration status – and an honest mistake can be financially devastating. The present regime treats small family businesses the same as huge corporations with lawyers on call. A more proportionate civil penalty scheme could consider penalties on a sliding scale, and look at:
- the size and resources of the employer,
- whether the breach was deliberate,
- the employer’s previous compliance record,
- the steps taken to complete right to work checks,
- whether there is any evidence of exploitation.
This would allow enforcement action to remain strong while recognising the difference between deliberate non-compliance and a genuine mistake.
Immigration policy should support Scotland’s economic needs
None of these suggested changes are current policy, and each would require agreement and careful planning. However, the move towards greater devolution creates an opportunity to consider how immigration can better support different parts of the UK. Scotland needs an immigration system that protects workers and prevents abuse, while giving responsible employers a realistic way to recruit, invest and grow. In the meantime, businesses should make sure they understand the existing rules. Our specialist immigration team can advise on sponsor licences, Skilled Worker visas, right to work checks and civil penalties. To discuss how immigration rules may affect your organisation, contact Jacqueline Moore or Catriona MacDonald.
