The Migration Advisory Committee (MAC)'s report also recommended that it should be easier for higher-skilled workers to migrate to the UK. It suggested that the government should scrap the limit on highly-skilled workers altogether, which currently stands at 20,700 each year for workers from non-EU countries.
The government said it would ‘carefully consider’ the proposals, while Labour backed the report saying that there should be an 'end to discrimination' against EU migrants.
The report did not rule out offering preferential access to EU citizens in return for favourable terms in other areas of Brexit negotiations such as trade deals. There is no evidence that increased European migration has damaged life in the UK, the report added.
Neil Carberry, chief executive of the Recruitment and Employment Confederation (REC), said that the report is a reminder of the benefits that immigration can bring to economic growth.
“The UK’s economic success depends on ensuring we protect our modern flexible jobs market, which drives growth and prosperity," he said. "This means having an immigration system that allows employers to recruit for roles at all skill levels depending on the needs of the economy.
“Today’s report acknowledges this – though we feel that more sectors will need controlled access to lower-skilled labour and that the government should still seek to secure a comprehensive mobility deal in the EU exit agreement, given how deeply linked our economies are.”
Carberry also said that businesses would welcome the recommendation for the Tier 2 Visa scheme to be scrapped, and that if not discarded it should at least be simplified.
“Significant questions will need to be answered about the practicalities and detail of these reforms to reassure businesses that their needs will be fulfilled in post-Brexit Britain. At the very least a radical simplification of Tier 2 will be needed to ensure all businesses – including the very smallest – can access it,” he said.
Jonathan Beech, managing director of Migrate UK, said that questions remain over how the suggestions in the report could be implemented, calling them a "blast from the past".
“The latest MAC recommendations are questionable over how they will work in practice. It recommends that the framework of the current points-based system for sponsored workers remains but is thoroughly overhauled and is a blast from the past in places, providing options for some migrant workers not seen since April 2012,” he said.
Beech called for an end to the immigration cap for highly-skilled workers, which affects employers' forward planning he said.
“Should free movement end, the MAC does not believe EEA citizens should have any preferential treatment over non-EEA workers. However, the approach for attracting the ‘brightest and the best’ has shifted somewhat. The MAC recommends opening sponsorship to medium- and high-skilled workers and ending the immigration cap, which can completely undermine an employer’s forward planning.
“However, these recommendations are just that and are subject to the final Brexit agreement and whether the UK has the power to formalise its own immigration system," he added.
Ben Willmott, head of public policy for the CIPD, warned that UK employers would struggle with the proposed changes.
“Many UK employers will face significant challenges in accessing the skills and labour they need if the MAC's proposed changes to migration policy are adopted in full or without a significant transition period," he said.
“While the report acknowledges the need for flexibility so employers can access high-skilled workers coming into the UK from the EU, it fails to recognise the balance of skills and labour needed in the UK."
Policymakers should be "cautious" in limiting low-skilled workers, he added. “It’s very disappointing that the report has largely ignored the importance of a route that will enable employers to continue to access low-skilled workers from the EU," he commented. "This will provide significant challenges for UK employers, particularly those in key sectors such as retail, hospitality and social care, which are already struggling to find the people and skills they need.
“The government should be cautious about making significant policy changes that limit low- and medium-skilled labour when the very modest potential gains are more than likely going to be offset by making it harder for employers to recruit the labour they need and, as the MAC acknowledges, may have unintended consequences for the recruitment of higher-skilled labour.”