News Analysis

Government immigration cap gets mixed response

Government plans to cap the number of overseas workers entering the UK have survived the coalition negotiations with the Liberal Democrats. As a result, businesses might have to change their IT cost-cutting strategies.

Home Secretary Theresa May announced a temporary cap on immigration of workers while the government put together a longer-term plan. The government said it will reduce the number of non-EU residents entering the UK to work by 5%.

The Conservatives plan to keep the existing points-based system, which allows IT professionals into the UK if they score highly enough on a range of measures. But the numbers will be capped. This could mean thousands fewer overseas IT professionals working in the UK.

The cap on skilled worker immigration was a key policy for the Tories during the election campaign.

Responding to questions put to him from Computer Weekly in February, then shadow immigration minister Damian Green, said: "The one big gap in the points-based system is that there is no overall limit on how many permits can be issued in any one year."

"This is why the public has a lack of confidence in the immigration system, which people regard as being out of control. This is why a Conservative government would introduce an annual limit, so that Britain can continue to attract those who will help our economy without putting too much pressure on our essential public services."

The limit was not defined and the Tories plan one that can be moved up and down to an appropriate level.

"It seems extraordinary that, when British workers can't find jobs, we are bringing foreign workers from halfway round the world. This is another sign that Gordon Brown's 'British jobs for British workers' was a meaningless sound bite," said Damian Green.

One IT worker believes the problem only exists because companies get away with paying overseas workers less. This contravenes current rules and businesses are using the Intra-Company Transfer (ICT) rule to overcome this.

ICTs allow businesses to bring workers to their UK operations. Seven Indian companies accounted for 43% of IT workers entering the UK on ICTs last year, according to figures obtained by the Association of Professional Staffing Companies (Apsco).The total number of IT workers coming in on ICTs was 29,240, with 12,573 working for Indian firms.

"The use of the ICT system to bring in large numbers of IT workers to work at third-party client sites is purely about paying less for foreign workers who are tied to their sponsors and avoiding taxes. The workers need more protection to ensure they are not underpaid and discriminated against. And permanent migrants, residents and UK businesses need a level playing field to compete against companies that take advantage of lax rules around intra-company transfers," said a campaigner against the alleged biases of the ICT system

He says the Liberal Democrat idea of a work permit surcharge - which would go to training UK workers - is interesting. He also thinks LibDem plans to introduce regional policies would make it more difficult to bring in workers in over-populated areas.

The view from the sharp end     
A senior IT professional at a large UK company from overseas The UK could lose high level IT skills if a policy is introduced that caps the number of skilled workers entering the UK. "Cameron will now go ahead with his plans to put a cap on immigration, but I'm not intimidated. There are many immigrants in my department and even though we are paid less money, we bring a significant contribution. Speaking for myself, I am a lot more skilled and produce a lot more compared to colleagues of about the same age."
Mark Lewis, partner and head of outsourcing at law firm Berwin Leighton Paisner There needs to be a limit on the numbers of migrant workers but warns that the cap should not be set too low. "I see no reason to have a totally open-ended number of IT visas granted every year. Limiting the number at a sensible level for UK businesses is fine. But the government would be crazy to restrict the inflow of highly skilled migrants."
Peter Skyte, National Officer at union Unite There is a need for balanced rules that do not damage UK businesses and do not disadvantage UK workers. "The points-based migration system and in particular use of the Intra-Company Transfer route in the IT sector is open to misuse or abuse by employers with the potential to undercut pay rates and displace skilled resident workers as currently operated."
Bob McDowall, analyst at Towergroup If the government tightens the scheme, big businesses will have challenges resourcing for IT. "This will be especially the case in the financial services sector."

 


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