Post-study work schemes Contents

5Options for improving post-study work routes

51.In the previous chapter we set out the case for making it easier for non-EU international students attending HEIs in Scotland to stay in Scotland to work. This is in line with the cross-party and cross-sector support there is in Scotland for improving post-study work routes.106 In this chapter we consider how current post-study work routes could be revised to improve the post-study work offer in Scotland. We also, in light of the Smith Commission’s recommendation that formal post-study work schemes for Scotland be explored by the UK and Scottish governments, look at how a new scheme for Scotland could operate.

Reforming current post-study work routes

52.We have found that current post-study work routes do not meet the needs of Scotland. We have, however, identified a number of suggestions, ranging from minor changes to a more substantial overhaul, which would improve the current post-study work route so that it better suits the needs of non-EU international students attending Scottish HEIs, and Scottish businesses. Specific changes we have looked at are:

Extending the length of time Tier 4 visa holders have to find a Tier 2 job, or creating a “bridge” visa to give international graduates sufficient time to find a Tier 2 job;
Having regional salary caps for Tier 2 visas, to reflect different wages across the UK; and
Reducing the burden to employers of Tier 2 sponsorship.

We have been told that these reforms could be easily implemented, and would solve many of the challenges that employers and international graduates face.107

53.One of the simplest reforms which could be made would be to allow international students more time to find graduate employment. This was one of the main problems raised in our evidence and was a concern to students and employers. Providing non-EU international students more time at the end of their student visa to find a Tier 2 job would be a minor, easy to administer, change and would immediately resolve one of the key complaints which has been raised in our evidence. Alternatively, a “bridge” visa—possibly along the lines of the old Post-Study Work visa—could be established to grant leave to remain for a defined period of time during which international graduates could seek appropriate employment.

54.The minimum salary thresholds for Tier 2 visas are currently set on a UK-wide basis, and the Migration Advisory Committee has stated that it is “content” that the current thresholds make adequate provision for regional variations in pay.108 However, the evidence we have received makes it clear that current salary thresholds are a barrier to non-EU international students hoping to find graduate level work in Scotland. A system of regionalised salary thresholds would increase the number of jobs in Scotland for which Tier 2 visas could be used, and could therefore make the Tier 2 visa a more suitable post-study work route for Scotland.109 The MAC’s recent review of the Tier 2 visa, which we consider later, has recommended that the minimum salary thresholds be increased, to achieve the Government’s aim of reducing economic migration to the UK.110

55.In response to the significant burdens faced by employers in being sponsors for Tier 2 visas, and the small number of such sponsors in Scotland (in 2013 only 6% of the UK’s Tier 2 sponsors were located in Scotland and Northern Ireland), Humza Yousaf MSP suggested reforming or even abolishing the requirement for employer sponsorship.111 Salary thresholds could still be used to ensure graduates were in appropriate employment but allowing any company with a suitable vacancy to fill it with an international graduate, should they wish, would increase the pool of potential employers for international students in Scotland and reduce the costs to business of employing them.

56.A number of our witnesses have called for a full review of the UK’s post-study work offer. The University of Edinburgh has recommended that the Government should review all current routes relating to post-study work, to improve the attractiveness of the route for employers and SMEs and permit greater flexibility with regards to salary thresholds and the Resident Labour Market Test.112 The Aberdeen and Grampian Chamber of Commerce welcomed a similar recommendation by the Cole Commission’s report on UK exports, which recommended the Government review current post-study work routes with a view to achieving better links between international students and firms looking to export from the UK.113 The UK Government has not responded positively to these recommendations, and the Migration Advisory Committee has not looked at post-study work routes since 2010, prior to the closure of the Post-Study Work visa in 2012.114 Despite the lack of engagement shown by the UK Government thus far, the Secretary of State for Scotland told us he would be happy to take forward any measures which could improve existing arrangements for the benefit of Scotland.115 In the next chapter we consider, in more detail, the UK Government’s engagement with this issue.

57.In order for the Tier 2 (General) visa to be an effective post-study work option for non-EU international students attending Scottish HEIs, it is essential that the current system be reformed. Specific issues which must be addressed are the length of time international graduates have to find Tier 2 employment, the minimum salary thresholds that apply in Scotland, and the burden faced by employers which sponsor Tier 2 jobs. We welcome the Home Affairs Committee’s recommendation that the Government consider how it might devise policies that reduce the barriers for international students to stay in the UK and take up high skilled employment, and the Secretary of State for Scotland’s willingness to take forward the recommendations set out in this Report.

58.We recommend that the Government commission the Migration Advisory Committee to review current provisions for transferring from a Tier 4 (General) student visa to a Tier 2 (General) visa, with a view to making recommendations to better enable highly skilled non-EU international students graduating from further and higher education institutions to remain in the UK and contribute to economic activity for a defined period of time. Options which should be considered include extending the period of time international students have at the end of their student visa and looking at how sponsorship can be made less costly and burdensome for employers. This should be carried out alongside work, which we recommend in the next section, to consider regional salary thresholds for Scotland.

Review of Tier 2 visas

59.The Migration Advisory Committee (MAC) recently conducted a review of Tier 2 visas.116 This was commissioned by the Home Office with “a view to making recommendations about significantly reducing economic migration to the UK”. The MAC’s review, with recommendations to Government, was published on 19 January 2016. Key recommendations were:

That the minimum salary threshold be increased from £20,800 to £30,000 (and £23,000 for new entrants);
That there be an Immigration Skills Charge to employers recruiting workers through the Tier 2 route;
That the number of people moving to Tier 2 visas from other visas (which would include international students) be subject to a limit; and
That the Resident Labour Market Test be applied to all Tier 2 visa applicants (at present applicants transferring from a student visa are not subject to this test).117

60.All of these changes would have significant implications for businesses in Scotland and non-EU international students attending Scottish HEIs. The broad result of implementing the MAC’s recommendations would be to make the process of transferring from a student visa to a work visa, which we have already found to be too restrictive in Scotland, almost prohibitive. It would mean the salary thresholds were far beyond the means of most Scottish businesses, and it would financially penalise businesses for successfully filling a role with a non-EU graduate. The Scottish Government raised concerns about the MAC’s review of Tier 2 visas, stating:

Tier 2 is already too restrictive to enable us to keep the international graduates we need and every indication is that this route will be further tightened.118

61.The proposed changes would be likely to have a disproportionate effect on Scotland, particularly when compared to London and the South East of England. At present, if the monthly cap on Tier 2 visas is reached (something which happened in June, July, August, September and October in 2015) the salaries of individual applicants are used to prioritise which applicants receive a visa and which do not.119 Given the salary differentials across

the UK, extending the Tier 2 cap to transfers from student visas is very likely to result in the limited supply of Tier 2 visas being allocated to investment and finance jobs in London, rather than areas of skills shortage in Scotland.

62.The Minister for Immigration highlighted the exemption of transfers to Tier 2 from Tier 4 from the cap and from the Resident Labour Market Test, as elements of the UK’s “excellent” post-study work offer.120 This implies an understanding that removing these exemptions would have an adverse effect on the attractiveness of the UK’s current post-study work route.

63.We note with great concern the outcome of the Migration Advisory Committee’s recent review of the Tier 2 visa. We strongly oppose any changes to the Tier 2 visa which would restrict the ability of non-EU international students, attending Scottish HEIs, to move from a student to a work visa. We are particularly concerned that the MAC’s findings do not meet the needs of Scotland, and that the implementation of its recommendations would further concentrate post-graduate work, for non-EU international graduates, in London and the South East of England.

64.We recommend that the UK Government delay any decision on implementing the MAC’s recommended changes to the Tier 2 visa until the MAC has provided advice on improving post-study work routes for non-EU international students and, specifically, on how Tier 2 salary thresholds can be made to account for the reality of graduate salaries in Scotland. This advice should then inform the Government’s consideration of how Scottish interests can be reflected in the current visa framework.

Promoting the UK’s current post-study work offer

65.Although we feel that it is necessary to reform the post-study work routes currently available to non-EU international students attending HEIs in Scotland, there is also scope to better promote the UK’s current post-study work offer, and support international students and employers who wish to take advantage of it. Professor Sir Ian Diamond recognised that there were opportunities to do this on a small scale, but warned us that these were limited.121 Humza Yousaf MSP said that he was always open to exploring how international students could be supported within the current system.122

66.When we asked the Minster for Immigration about engagement with the Scottish Government on post-study work routes for Scotland, he told us that he was ready to “underline how I think there is a good offer there and how we can work together to make that offer and underline that benefit.”123 Similarly, the Government’s written evidence stated: “awareness of these provisions can be improved. The UK Government will continue to take every opportunity to explain the excellent post-study work options that already exist, to ensure they are understood by students and universities.”124

67.The UK Government should work with the Scottish Government and Higher Education Institutions (HEIs) in Scotland to ensure that post-study work offers available to non-EU international students attending Scottish HEIs are better promoted to potential and current international students, as well as employers who may want to access international talent. Promoting the UK’s post-study work offer will be much more difficult if the Government implements the Migration Advisory Committee’s recommendations for further restrictions to Tier 2 visas.

A new post-study work scheme for Scotland

68.In addition to looking at how the Tier 4 (General) student visa and Tier 2 (General) visa could be reformed to enhance their efficacy as a post-study work route for non-EU international students, we have also explored how a new post-study work route for Scotland might operate. This follows the recommendation by the Smith Commission that the UK and Scottish governments should work together to explore the possibility of introducing formal schemes to allow international higher education students graduating from Scottish further and higher education institutions to remain in Scotland and contribute to economic activity for a defined period of time.125 We have looked at how such a scheme might work, and what lessons can be learned from previous post-study work routes.

69.The Scottish Government, in light of concerns about the impact to Scotland of closing the Post-Study Work visa, established a Post Study Work Working Group to look at the potential to offer post-study work opportunities in Scotland. This group produced a report in March 2015, which set out some of the key elements which it thought should be included in a post-study work scheme for Scotland.126 These were:

Linking the visa to having had a Tier 4 (General) student visa sponsored by a Scottish institution;
Requiring applicants to have a BA, postgraduate diploma or degree, or Higher National Diploma;
Not restricting eligibility to obtaining employment at a specific skill level, salary level, or subject, discipline or occupation;
Not requiring sponsorship from either an employer or education provider; and
Exemption from the Resident Labour Market Test.

Following publication of the Working Group’s report, the Scottish Government has established a Post Study Work Steering Group, with cross-party and cross-sector membership, to provide detailed recommendations that build on the findings of the Working Group, with a view to coming forward with a specific proposal for a post-study work scheme for Scotland.127 The Scottish Government has told us that it is not firmly committed to a particular model for a new post-study work scheme, and “will be advised by our stakeholders and the Steering Group on how this can best work for Scotland”.128

70.We heard strong and widespread support for the introduction of a post-study work visa similar to the past scheme which operated across the UK. A number of witnesses specifically called for the reintroduction of the old Post-Study Work visa,129 something which also received strong support in the survey conducted by the Scottish Government’s Post Study Work Working Group.130 Other witnesses suggested a new two year scheme which would allow international graduates to secure employment under a Tier 2 visa,131 with one suggestion being that the second year would have to be graduate level work.132 The Aberdeen and Grampian Chamber of Commerce said that it would be important that any new Scottish scheme was in place for a significant period of time so as to build a reputation of reliability among international students.133 Several witnesses suggested that any post-study work scheme should be linked to the rest of the immigration system so that it was clear what routes were available for those wishing to remain in the UK to work for a longer period.134

How a Scotland-only scheme could work

71.We have considered how a “Scotland-only” scheme might work. While the existence of the previous Fresh Talent visa for Scotland shows that it is possible to have particular visa arrangements for certain parts of the UK, a fact noted by several of our witnesses,135 the visa system has been reformed significantly since the Fresh Talent scheme operated.

72.The UK Government has consistently argued that there are significant barriers to having different immigration rules for different parts of the UK. In evidence to the previous Scottish Affairs Committee inquiry into The Student Immigration System in Scotland, in 2011, Damian Green MP, then Minister of State for Immigration, stated:

it is impossible to have separate rules for Scotland in the immigration sphere because there isn’t a border. There is a border but not what the international world would recognise as a border between Scotland and the rest of the UK. If you are trying to exercise immigration control, you can’t have Scottish-specific immigration rules.136

We heard similar concerns from the current Minister for Immigration, who thought it would be “very difficult” to have a post-study work scheme which extended only to Scotland.137

73.The evidence we received from the UK Government was challenged by Professor Robert Wright, Professor of Economics at Strathclyde University, who told us that “a system of visas could be created that allows an international student to stay and work in Scotland, but they have to live in Scotland and they have to work in Scotland”, and pointed

to similar schemes which exist in Canada.138 Mr Yousaf also pointed to international examples of regional immigration systems which could be used as models for a Scotland-only visa.139

74.Stuart McWilliams, an immigration lawyer at Morton Fraser LLP and Deputy Convener of the Law Society for Scotland’s Immigration and Asylum Law Sub-Committee, told us that visas could be endorsed so that the holder was limited to living and working in Scotland.140 His view was that this would be sufficient to prevent visa holders from moving to England, noting that landlords are now required to carry out right to rent checks before entering into tenancy agreements, and that employers have been required for some time to carry out right to work checks for employees. These checks could be used to ensure that international graduates with a Scotland-only visa were not able to live or work elsewhere. It was also suggested that the partial devolution of income tax might provide a mechanism by which to enforce a Scotland-only visa.141

75.We acknowledge the challenges which would be involved in establishing a “Scotland-only” post-study work visa for non-EU international students who have studied at Scottish universities, but we have received compelling evidence that these challenges could be overcome. The requirements for employers to check right to work and landlords to check right to rent would facilitate the existence of a Scotland-specific visa. The Government should not use the need to develop practical details of how such a scheme could be implemented as an excuse for not engaging in discussions about introducing a formal post-study work scheme for Scotland.

Lessons from past schemes

76.To inform the debate about a possible post-study work scheme for Scotland we have looked at lessons which can be learned from past post-study work schemes. In particular, we have looked at issues around the skill level of work taken up by international graduates using post-study work routes, and also successes of past schemes in terms of enabling non-EU international graduates to find graduate level jobs after their studies.

77.The Fresh Talent and Post-Study Work visas have both been criticised for allowing visa holders to take up low-skilled work.142 Although there is a lack of robust data on the Fresh Talent scheme, it is evident that many international graduates taking advantage of previous post-study work schemes did end up in unskilled jobs.143 It should be noted, however, that this in no way implies abuse of these schemes, as these schemes did not restrict holders to skilled or graduate level work. Past experience, therefore, does not prove that a scheme designed to be a route between a student visa and Tier 2 qualifying graduate work could not be effective.

78.We have received conflicting evidence about the success of the Fresh Talent Scheme in terms of retaining international graduates in Scotland, but, again, it must be understood that although the Fresh Talent scheme was intended to attract people to Scotland, the visa did not restrict holders to living or working in Scotland. Evidence from the UK Border Agency to the previous Scottish Affairs Committee’s inquiry into The Student Immigration System in Scotland suggested that after one year about 50% of Fresh Talent students were no longer in Scotland. This figure should not be taken as definitive, as the UKBA official giving evidence admitted that the statistics were “pretty shaky”, and the Scottish Government has told us that the Home Office conceded there was very limited information available in connection with people on Fresh Talent visas.144

79.In response to calls for improvements to post-study work routes, the UK Government has stated that the student migration system was previously too weak, and that thousands of migrants came to the UK on a student visa to work, not study.145 It is important to understand that these concerns relate to the Tier 4 (General) students visa, which has since been reformed, rather than post-study work routes. Jamie Kerr, an immigration lawyer at Thorntons Solicitors and Convenor of the Immigration Law Practitioners’ Association’s Scottish Regional Working Group, told us that the Government had done a lot of work tightening up Tier 4 visa requirements and enforcement, which would ensure that any new post-study work scheme was only available to bona-fide international graduates.146 This indicates that past reforms of the visa system would actually facilitate the introduction of post-study work scheme which was not open to abuse.

80.In terms of the positive lessons which can be taken from past post-study work schemes, we have been told that the primary benefits of past schemes were that they provided an easy means for non-EU international students to use their skills in the economy, and provided time for graduates to find skilled employment.147 Our inquiry shows that this is an area where the system is not functioning effectively.

81.We heard that any new post-study work scheme for Scotland should act as a bridge to allow international students to gain work experience and move on to other work visas.148 There is some evidence that this is something the old Post-Study Work visa achieved well. Between 2011 and 2014 over 20,000 non-EU international graduates moved from a Post-Study Work visa to a Tier 2 visa, compared to just over 12,000 moving directly from a student visa to a Tier 2 visa. This shows that the old Post-Study Work visa acted as an intermediary visa which provided international graduates an opportunity to find skilled employment which qualified for a Tier 2 visa. The University of Edinburgh argued that the same was true of the old Fresh Talent visa, which also enabled international graduates to take on any level of work while looking for graduate level employment.149

Table 7: Numbers of extensions to stay granted under Tier 2 (General)

Previous visa	2011	2012	2013	2014	Total
Post-Study Work	2,370	5,029	8,006	5,328	20,733
Student	1,030	2,136	3,988	5,520	12,674

Source: Immigration statistics, April to June 2015, Home Office

82.One significant change which has been made to the framework for work visas since the Post-Study Work visa was closed to new applicants is the closure of the Tier 1 (General) visa. When the Post-Study Work visa was previously in operation it was possible for people to transfer to a Tier 1 (General) visa provided they had adequate income, irrespective of the skill level of their employment or the number of jobs they held to reach the necessary level of income. Now the Tier 1 (General) visa has been closed, former students would need to find skilled work in order to move to a Tier 2 skilled work visa, or else have to leave the country.150 This would mean there was a much greater incentive for international graduates to find skilled work, as that would be the only means for remaining in the UK in the long-term.

83.The Scottish Government told us that it remained committed to working with the UK Government on finding a solution that addresses concerns about the operation of past post-study work schemes, including looking at a scheme which ensured international graduates were retained to Scotland.151

84.There are several lessons which can be learned from past post-study work schemes. These include the effectiveness of past post-study work schemes in enabling international graduates to find skilled employment, and also the risks that if such schemes are not structured to lead people into graduate level work they can result in international graduates staying in the UK and taking up unskilled work. We hope that the lessons we have identified will inform proposals for a post-study work scheme for Scotland.

106 Scottish Government, Post Study Work Working Group: Report to Ministers, March 2015

107 Q79 [Humza Yousaf MSP], Q111 [Jamie Kerr], Million+ (PSW0006) para 24

108 Migration Advisory Committee, Review of Tier 2: Analysis of Salary Thresholds, July 2015, para 6.33

109 Q126 [Jamie Kerr]

110 Migration Advisory Committee, Balancing migrant selectivity, investment in skills and impacts on UK productivity and competitiveness, January 2016, para 4.26

111 Q79

112 University of Edinburgh (PSW0016) para 33

113 Aberdeen and Grampian Chamber of Commerce (PSW0017)

114 Migration Advisory Committee, Limits on Tier 1 and Tier 2 for 2011/12 and supporting policies, November 2010

115 Q217

116 Migration Advisory Committee, Call for evidence: Review of Tier 2, July 2015

117 Migration Advisory Committee, Balancing migrant selectivity, investment in skills and impacts on UK productivity and competitiveness, January 2016