Policy Briefing Immigration “The UK could potentially lose out on recruiting the best global talent as a result”
A new permanent limit on the number of non-EU workers entering the United Kingdom will come into effect from April 2011. It will be announced after 12week consultations within the Government and with business. An interim measure will also be implemented to avoid a rush of applications for migrants and ensure that the number of work visas issued stays below 2009 levels. Government Policy The Government believes that Britain can benefit from controlled migration and while recognising the importance of attracting the brightest and the best to ensure strong economic growth, continue to emphasise that unlimited migration could place unacceptable pressure on public services. The new temporary controls will cap the number of visas for the most highly skilled migrants (those that do not need to have a job in Britain before being granted a visa) in Tier 1 at the 2009 level of 5,400 and will raise the number of points needed to qualify from 95 to 100. Tier 2 workers – skilled migrants who fulfil a specific UK job offer – will also be reduced by 1,300 to 18,700 over the next nine months. Tier three comprises of less skilled workers but no-one has ever been granted a UK visa under this tier. Tier four covers temporary workers, ranging from students doing a holiday job to artists coming to the UK for performances. Business Business is concerned that a cap of any sort will deprive them of the competitive advantage of the flexibility which is the hallmark of the UK’s labour market. The healthcare field, hospitality industry and education and technology sectors are expected to be directly affected by the rule changes, as professions on the official shortage list will be included in the restrictions. The UK Border Agency's points-based system lists a range of jobs for which there is a current shortage, with non-EU workers invited to apply. They include civil engineers for major construction projects, as well as electrical, mechanical and chemical engineers, various medicine and health care roles, maths and science teachers and care workers.
The interim measures could affect the ability of some regions of the UK to recruit nurses into the sector – there are already difficulties in areas with a much smaller pool of registered nurses. Lloyd’s pharmacy had successfully lobbied for the return of the pharmacist role to the occupation shortage list in 2009 - a cap is now likely to have a significant impact on recruitment. Of greatest concern, is that it could be the skilled workers who will be caught out by an immigration cap, not the unskilled migrants moving from within the EU; a business that requires an engineer with specialised skills toward the end of the year could see its efforts to grow its business thwarted, if the cap had already been exceeded for that year. It could be that a British person with the same qualifications and levels of skill may not be available for four or five years because it needs to be trained up from scratch, leaving the business with no option but to refuse the order. The UK could potentially lose out on recruiting the best global talent as a result. India News of the UK’s immigration cap has alerted Indian industry leaders, who are worried that that the new rules against non-EU immigration might impact Indian companies who have heavily invested in the UK, as well as those UKbased companies that rely on workers from the South-Asian peninsula, particularly in services sectors such as IT, food and hospitality. There are more than 700 Indian companies with investments in the UK and about two thirds are in the IT and computer software sectors; Indian companies are also the second highest foreign employers in Britain, after the US. Tata, the UK’s largest foreign investor, employs a total workforce of 47,000. The Department for Business, Innovation and Skills (BIS) estimates that bilateral trade with India is worth at least £11bn a year to the UK economy. India’s Minister of Commerce and Industry, Anand Sharma, has raised concerns over the issue with the UK Government, “Though we understand the United Kingdom and European Union regulations, the regime has to be investor friendly and must not come in the way of free movement of investors and professionals.” Over the last few years, Indian giants of the likes of ICICI Bank and Kingfisher Airlines have set up bases in London.
Policy Briefing Immigration “The Government are actively reducing the ability of business to grow the UK out of recession” Some Indian companies like Wipro and IL&FS have even made London their European headquarters; they now fear that these companies will face difficulties getting visas for young Indian talent. Flexibility The results of the consultation on the permanent limit are expected to make fundamental changes in the way workers from outside the European Union will be chosen. When the temporary limit of 24,000 skilled non-EU workers was set back in June, it was decided to exempt the thousands of Indian IT staff working in Britain, while a decision was made as to whether they should be covered by the permanent cap to come into effect next April. This is because they come into Britain under the guise of an "intra-company transfer" - governed by international trade agreements. These require the UK to provide access to the managers and specialist staff employed by non-EU companies when they are posted to a British branch of that business. Indeed the World Trade Organisation's General Agreement on Trade in Services, explicitly states that while conditions – such as qualifications and English language fluency, which are specified under tier two of the points-based immigration rules – can be imposed, the imposition of a numerical limit is banned. However, many of these IT staff are ostensibly working in the British branch of their company but are in actual fact being sub-contracted to work in British firms or doing work out-sourced by British companies. This means it may be possible to cap their numbers despite the international ban. The numbers involved are not marginal; indeed more than 35,400 work permits were issued to foreign IT workers to come to Britain in 2008 and such intra-company transfers make up 45% of all the skilled workers that currently come in under tier two. There is already a ban on unskilled workers being recruited by British companies from outside the EU so controlling the numbers coming in through the skilled and highly skilled routes – tiers one and two of the points based system – is the only method the Prime Minister has if he is to make his limit work.
Limited Options According to the BBC, Britain now exports more to the Irish Republic than it does to Brazil, India, Russia and China combined. With this in mind, it seems logical that if a permanent cap is to be enforced, that intra-company transfers should be excluded, in order to further develop trade relations with nations such as India. Yet this fails to fundamentally address the issues at the heart of the matter. The general perception of immigration in the UK is negative; politicians and the media alike have lent extensive coverage to the topic to reinforce this view, blaming immigrants for problems such as unemployment, housing shortages, classroom overcrowding and excessive demands on the NHS. The proposed introduction of a cap on migration by the new coalition Government as the answer to the perceived threat to the UK labour market, is the political consequence of this negative view. The largest categories of immigrants that enter the UK are EU nationals (who are entitled to come to the UK without a visa because of the UK’s membership of the EU) and relatives of people settled here (because the right to family life is recognised by the European Convention on Human Rights (ECHR), to which the UK is a signatory). Short of taking the UK out of the EU and annulling the UK’s signature to the ECHR, there is nothing that can be done about such migration. Introducing a "cap" — whether temporary or permanent — on tier one and tier two workers, is a nonsense if the end goal is to reduce overall levels of immigration. There were 590,000 migrants to the UK in 2008; within that, the number of tier one workers admitted last year was around 28,000 and the number of tier two workers was around 65,000. The only conceivable impact of the announcement of a cap on immigration numbers, is to reinforce the perception that unemployment and bad housing are caused by immigration. More worrying still, is the fact that through the limits to Tier 1 and Tier 2 immigration, the Government are actively reducing the ability of business to grow the UK out of recession, by depriving them of the competitive advantage offered by the flexibility of the UK’s labour market.