Government must make Intra Company Transfers cost more if it doesn't want to cap them

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I was at the launch of the Migration Advisory Committee's (MAC) report into the level the government should set the cap on immigration.

Perhaps the most interesting part, particularly for the IT sector, is the fact that the MAC thinks that Intra Company Transfers (ICTs) should be included in the cap. Unlike David Cameron who recently said they will not be included. The report was completed before Cameron announced this.

MAC chair, David Metcalf said if the government is going to achieve its target of reducing non EU immigration to the UK to tens of thousands a year by the end of this parliament, it will have to reduce the number of ICT visas granted. This is because they make up a huge proportion of total long term immigration to the UK which stood at 196,000 people in 2009.

In the absense of a cap on ICTs the government will have to find other ways. So rather than manipulating the quantity of ICTs allowed, the government will have to make it more expensive for businesses to use the ICT scheme to bring workers in.

The options include:

Raising the minimum salary level for ICTs, which the government is apparently considering.

Increase the charge on companies getting certificates of sponsorship

Stopping companies including expenses in total pay calculation. This allows them to bring in cheap labour.

So in effect the market will decide. Indian suppliers might have to increase their prices.

Think tank Migrationwatch gave us its take on ICTs yesterday. It has similar vioews to those expressed by Metcalf today.

4 Comments

Very very disappointed in the MAC's report.

Someone explain to me that when
1. unemployment rate for IT grads is 17% compared to an ave of 9 %
2. when every single recruitment agency talks of a 'glut' of candidates and a decrease in recruitment.
3. when the rates that contractors are earning has gone down by 10% in the past year alone.
4. how bring in 20k of IT professionals a year isn't displacing British workers.
5. How many British nationals did TCS hire in 2010, the same year it brought in 3,000 of its employees from India?
6. Look at the report published by MAC. The median salary for ICT for the IT sector is £37k - is this really highly skilled? Keep in mind that most IT professionals end up in the south east. The median salary should be in the mid £40k.

Even the £37k is flawed as it includes tax free allowances/expenses and not the true salary. It is also based on "exaggerated" salary data that the major users gave in 2009:
http://www.financialexpress.com/news/uk-immigration-norms-to-shoot-up-cost-of-ites-firms/705190/

They claim to have stopped making up the "exaggerated" salaries
between April and June this year. It would be interesting to see the actual median for July to September, as it would probably be at least £5k less.

If you take of the allownaces as well then it would probably drop to below £20k.

On the plus side, the report does recognise that the contribution of allowances should be scaled down and ICTs should have their share of the cut in numbers.

It should also be remembered that this is the first year of four years of planned cuts to reach the governments goals; and there is also a suggestion that IT workers take up too high a percentage of ICT visas and there should be sector restrictions to rebalance this.

£26k per year net - what TCS pay an analyst with 5 - 6 years experience. TCS pay the guy's income tax, no idea how that works and he doesn't care, £2266 a month net.

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This page contains a single entry by Karl Flinders published on November 18, 2010 2:52 PM.

The abuse of ICT visas in the IT sector explained by think tank was the previous entry in this blog.

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