In this innovative paper, Duncan McClements (King’s College London Mathematics School) and ASI Fellow Dr Bryan Cheang (Assistant Director and Research Fellow at the Centre for the Study of Governance & Society at King’s College London) explore the application of a visa auction model in the UK.
Executive Summary
The current UK visa system is complicated and inefficient, contributing to anaemic growth, stagnant living standards, and a rising tax burden;
Employers should be allowed to buy visas for prospective workers from overseas by auction, selecting the immigrants who will bring the greatest benefit to Britain;
Work visa auctions are the most efficient way of admitting any given level of immigration, but some visas could be reserved for professions with high social value, small businesses or particular regions if deemed necessary, and separate routes would be left open for students and family.
This could hold the overall level of immigration constant while raising £59 billion in direct government revenue (equivalent to a 11p in the pound reduction in the basic rate of income tax) and an additional £27.4 billion in additional tax revenue that would compound for each year the scheme was implemented;
We also suggest the Tier 1 visa be revived in auction form. We find the revenue maximising quantity of visas to auction to be 338, leading to forecast annual revenue of £73.5 million;
Finally, we put forth a novel proposal to trial issuing 1000 visas every year by exam to boost innovation and productivity;
All of these policy proposals are modular – and could be implemented separately or in conjunction.