Final immigration cap will not stop offshore IT workers taking UK jobs

| 5 Comments
| More

IT workers from India and other offshore locations will continue to flood into the UK as the government's promised immigration cap looks set to exclude Intra Company Transfers (ICTs).

According to reports, the government is about to disappoint the UK IT profession by excluding ICTs from the cap that replaces the interim cap.

I blogged about the cap yesterday but have since been sent some articles which reveal more than I knew at the time.

In September blogged on whether or not ICTs would be included in the final immigration cap. It seems we have the answer already. And it is no.

According to an article on the BBC website, Prime Minister David Cameron, speaking  in the House of Commons said: "Intra-company transfers shouldn't be included in what we are looking at."

The Financial Times earlier revealed that Ministers are working on plans to exempt many  ICTs from the immigration cap "after fierce lobbying by business."

The ICT scheme allows IT suppliers to bring staff to the UK if they have a UK operation. This rule was initially designed for highly skilled workers with knowledge that couldn't be obtained elsewhere. For example the CEOs of large US companies setting up operations in the UK.

But IT professionals allege that suppliers, particularly those from India, abuse this system and use it to bring in low cost workers to replace UK workers at their customer sites.

About 80% of immigrant workers are in on ICTs with thousands IT workers from India. At the same time there is a high rate of unemployment amongst computer science graduates, which is 17% for those that graduated last year.

The Association of Professional Staffing Companies (APSCo) has already said a cap that excludes ICTs would be nonsensical.

Last month Mark Lewis, a lawyer specialising in outsourcing at Berwin Leighton Paisner, said reaction to the cap from big business has been negative and could influence the government's decision. It seems he was spot on.

Click here for the figures about the number of immigrant workers in the UK, what jobs they are doing and how many are in on ICTs.

5 Comments

It's a tricky situation for legitimate operations. It would probably be better if these ICTs were categorized fairly.

The question of intra company transfers has got little to do with immigration policy and a great deal to do with Corporations gaming the UK tax system. In particular they are exploiting the loophole that allows business to pay the Accommodation, Travel and Subsistence costs of employees brought in from abroad for upto 24 months free of UK tax a privilege which is denied to staff pemanently domiciled in the UK for whom such payments would be taxable benefits liable to PAYE and NIC. By contrast UK based employees have to meet these costs out of their salaries after the deduction of Income Tax and National Insurance. In addition most of the workers brought in from overseas have their salaries remitted to their home country and taxed there. The net result is a substantial loss of tax revenue to the UK Exchequer something it can ill afford at the moment. Most European countries limit this tax holiday to foreign worker brought in on intra company transfers to 6-12 months which is normally plenty long enough for workers to sort out housing and other issues. The UK should do likewise

You have to wonder what bribes were pushed in front of Cable to make him push for a policy which is clearly not in the best interests of either Britain or her people.

If you read the Home Affairs Select Commtt report it states clearly that 30% of all ICT remain in the UK. This increases the number of IT professionals in the UK and causes more problems.

To be honest, there isn't anything anyone can do. I've contacted newspapers, MPs etc and they have no interest in this story.

Karl I think you are doing a great job, and I think people, those who don't work in IT, are starting to understand what is happening. I hope its not too late

It sounds like there will be a new minimum salary for ICTs of £40k. This should be some good news for UK IT workers and for underpaid workers sent to the UK.

I think Karl gets a mention in the evidence section of the Home Affairs Select Committee report.

Leave a comment

Have you entered our awards yet?

About this Entry

This page contains a single entry by Karl Flinders published on November 4, 2010 4:00 AM.

Immigration cap report will be published November 18 was the previous entry in this blog.

2011 set to be IT services M&A frenzy is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

 

-- Advertisement --