Following its departure from the European Union, the UK introduced a new Points-Based Immigration System. This policy ended the free movement of labour from the EU, treating EU and non-EU citizens equally. Under the new regime, visa applicants must meet strict criteria—such as securing a job offer at a specific skill level, demonstrating English language proficiency, and meeting a minimum salary threshold—to qualify for a skilled-worker visa.
Supporters of the points-based system claimed it would empower the UK to attract global talent while reducing the economy's reliance on low-skilled, low-wage foreign labour. They argued this shift would incentivise domestic firms to invest in capital equipment, technological innovation, and training for local workers, ultimately boosting UK productivity. Some commentators also suggested that restricting the supply of cheap migrant labour would drive up wages and improve working conditions for domestic workers in traditionally lower-paid positions.
Conversely, business groups warned that the sudden loss of access to European Economic Area (EEA) workers would create critical structural bottlenecks. Industry bodies in social care, hospitality, distribution, and agriculture highlighted severe recruitment challenges, as many of these roles fail to meet the skilled visa salary and qualification thresholds. Critics argue that these labour shortages restrict business expansion, drive up operating costs—thereby fuelling inflationary pressures—and threaten to depress the UK's long-run aggregate supply (LRAS) and overall economic growth.
Evaluate, using the information in Extract B, the impact on the UK labour market and the wider economy of transitioning from the free movement of labour to a points-based immigration system.
11 exam-style questions on OCR A Level Economics Supply of labour. Each one has a worked solution and a mark scheme showing where the marks go.