Will Intra Company Transfer abuse have long-term damage on UK economy?

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Channel 4 news last night featured a report on how the immigration cap is damaging science in the UK. A talented scientist from outside the EU was interviewed about his rejected visa application. He is heading for the US and it is the UK's loss.

Nobel Prize winner Professor Sir Martin Evans of Cardiff University writes in the Guardian that the "draconian" policy puts Britain's future at risk.

Read it here and see the Channel 4 report.

This could also damage computer science in the UK. Or mabye just change it.

But I can't help thinking that parts of the IT sector are to blame. ICT workers from overseas, many of which are low skilled, are in the UK in their thousands and this scenario has contributed to public opinion  being against immigration full stop.

As a result of this the Tories introduced a cap on non EU workers coming to the UK. Electioneering at its best or is that worst?

I look forward to seeing what the migration advisory committee recommends for the permanent cap that will replace the current temporary cap.

Immigration is always a hot topic. Only last week 5 Live featured a broadcast about ICTs and their detrimental afferct on UK workers. You can find a podcast of the 26 September broadcast here.


 

6 Comments

Intra company transfer visas have not been capped yet, despite them being the easiest abused and the tax avoidance side. As Professor Metcalf said, any cuts in intra company transfers will disproportionately affect IT, but many UK IT workers will welcome that.

The research engineer and scientist issue raised in the last few days is misleading as most people with a PhD and a modest salary (and under 40) would qualify for a tier 1 highly skilled visa. The cap on these has not come close to being reached. So the use of tier 2 skilled visas for highly talented people is a misuse anyway.

The same applies to the highly skilled, highly paid people that PWC and others are complaining that they cannot bring in. They should be considering tier 1 visas (unless the people they want to bring in or extend are not the highly skilled people that they claim).


IT companies prefer intra company transfer scheme. That way they retain control of professional lives of those who they bring in. Employees can't quit because if they do they have to leave the UK. Companies pay them lower then market rates and make them work longer hours.

Government doesn't know this ? Ha .. Govt. knows more than me. They're lowering the IT wages to control inflation and to help British businesses survive the cut-throat global competition.

@Joy: "They're lowering the IT wages to control inflation and to help British businesses survive the cut-throat global competition."

Are you sure about that?

From what I've seen, IT salaries have stagnated over the last 5 or 10 years outside London, and there are thousands of skilled and experienced UK-based IT workers looking for work, so where is the upward pressure on IT wages that might cause inflation?

As for helping British businesses, the last government played a significant role in killing off large parts of the UK-based IT sector, by insisting that all its IT contracts - worth billions - were handed over to the usual cartel of multi-national consultancies, who charge bloated fees and still deliver crap. These consultancies are the same people who have been shipping jobs offshore and shipping Indian Computer Trainees into the UK via the ICT scheme. This has eliminated thousands of IT jobs for UK-based workers, both experienced staff and new graduates, which is precisely why there are so many IT workers looking for jobs, and so many IT graduates cannot find their first jobs in IT.

So if the UK government really wants to help the UK IT industry, they will (a) close this gross abuse by tax-dodging, profiteering, bloated multi-nationals, and (b) ensure that contracts for all future government IT work are offered to UK-based suppliers (SMEs if possible) using UK-based staff. It's our UK taxes that pay for this work after all, so why should we continue subsidising "cut-throat global competition" from the Indian IT industry?

Unless - like me - you suspect that "our" politicians are simply willing puppets for bloated corporations who will ensure that whoever wins an election, these fat cats can still continue to bleed the taxpayer dry and destroy the UK's indigenous IT industry.

@Joy
I am afraid I cannot agree with your comments and want to put across few scenarios in front of you to take the call if you were right when you wrote your comments! I completely agree with Matt who responded you already.
I am an Indian but I can’t accept this non ethical approach or abuse of law!
I have worked in India for 8 years in IT before I moved to UK as highly skilled migrant. When I had to come over to UK, I had to leave my own job in India and come to UK with all my savings to search for a job. I survived somehow in global competitive market. Many of my friends had to leave UK as they could not get a job and could not continue with the expenses. All Tier 1 visa holders pay same taxes as like any British Citizens. That’s the way it should be in my view as have come here to generate wealth and aspirations so we should follow rules.
Whilst Tier 1 visa being so strictly placed, Tier 2 visa's for the same highly skilled migrant is highly abused in many ways. Few questions for you:
1. The net take home of an employee with intra company transfer is much more than a UK pay role employee whilst both have same gross salary. Why this is so? When I ask someone the reason. They say its expense model as they have come to UK temp basis! Can you clarify this? Give me an example of a £1500/month gross salary with tangible numbers and how that works for an intra-company transfer?
2. Most BAU or operational jobs have been moved out of UK anyway. Just few projects level IT works have left behind. If you are working in IT in India, how many times have you worked a role of TDA/TDE or SA! Currently most cases, TDA/TDE or SA jobs in UK are being replaced with such operational background skilled worker. Is that good quality control? I have many examples to show that am not wrong saying this.
3. I have seen very highly skilled British workers have been taken out of job (It’s IT project work which is client facing) and IT people from BAU or operational background been brought over to replace them. Being operational background and small projects background (not end to end client delivery background), none of them could face client here. So they attempted 3rd time. Currently the 3rd guy is trying. This is one simple example of UK’s largest telecom company offshoring from one of the India’s top IT firm.
However the person who lost the job had enough skills and he was doing that for 5 years!
I understand cost matters! Does cost and quality balance the end point client delivery?
It’s not like for like skill replacement, is not it? If you define this is a like for like replacement, then why tax should not be like for like?
4. To survive during recent financial crisis, most of us had to take pay cut or pay freeze. That’s the way UK business survived. So the way you thought, is not really right!
5. With regards to “Companies pay them lower then market rates and make them work longer hours.” What UK IT business lacks is resource availability. Most of the time, we have projects but engineer’s not available. You have to remember, the team is very small in any IT job here. Even team lead or IT manager do engineer’s role to fill the gap of resources.
Due to the resource availability, Indian IT companies say, yes we can do this job. I can give you name of the companies, who do not even know the “Statement of Requirement” of projects but picked up the job with a rate of £200 a day rate (where existing UK pay role rate was £350) Then they send IT engineers here to do the job without any background knowledge. That’s where long working hours matters!
When you say “Work longer hours” , that’s not the right term. You should find an employee’s productivity, not the amount of hours they work! Did you have any tangible evidences! I have many to validate my words though.

Anyway it will go on and on..
If we all become honest and ethical, we should think that, if we are generating wealth from a country, we should pay taxes equally as like other residents of the same country.


I completely agree with you Matt.
I think, if govt apply strict control to benifit system (only people who deserve should get it), we may have more resources available to do the job.
I have my own SME business. It's not cost which triggers this off shore model in UK (in USA it's differnt). A data centre rack is cheaper in Milton Keynes or Hampshire or North East than in Bangalore or Delhi, to be honest.It's resource availibility.Being Indian, I tried off shore model earlier and I had financial loss due to lack of quality control. SMEs dont have enough budget to go for bigger Indian IT companies to off shore. But I found during recession, SMEs here have reduced pricing which looks very good for a good business environment. I think, next year it should be much better.

I’m convinced about the negative effects to both scientific studies and economic status of UK due to the draconinan policy. Since the loss of the highly talented individuals who are willing to work for UK could bring more knowledge and money to our country. Instead, they are going to be an asset of another country instead of UK.

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This page contains a single entry by Karl Flinders published on October 8, 2010 7:42 AM.

Has government IT leadership got its teeth? was the previous entry in this blog.

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