Have Tory immigration policies helped UK IT professionals?

I haven’t written much recently about the unpopularity of offshoring amongst IT professionals in the UK. Businesses using lower cost workers from offshore locations such as India is not popular. Political parties can see this and use it as to try and win votes.

Before the last UK general election the Tories played the immigration card.  The Tories promised a cap on immigration. When they got into power they capped immigration and raised the pay threshold on intra-company transfers (ICTs). ICTs are used to bypass the need for visas and account for a massive proportion of offshore IT workers in the UK.

I was reading an article on an Indian website, The Economic Times, about US president Obama’s proposed tax on foreign earnings. This is aimed at discouraging large firms to ship jobs offshore. The plan would also incentivise firms to bring work back to the US. Here is the article.

This is not a surprise given that it is election year in the US and Obama has a fight on his hands, despite the chronically under qualified opposition. There is high unemployment in the US.

The Tories used it as a tool to win votes and introduced a cap and although not capping ICTs they did change the rules to try and limit its use as an immigration loophole.

But have any of these changes had any positive impact for UK IT professionals? Comments welcome, so tell me what you think?

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I do not believe the Tory immigration policy or any other policy has restricted immigration or more importantly helped any local employment. The government can show statistical numbers, but then they would be just number crunching tricks as usually to show a success of their policy. The problems of unemployment still exist and companies are continuing to ship work outside or get it done through overseas consultants.

Neither I believe Obama's policy to introduce this new tax legislation will work. In fact I have feeling that it will backfire in number of ways. At present these US companies are not paying any tax in the outsourced countries for the services they get from there and nor they are paying much tax in US. But if forced to pay tax in US by this legislation, they would then rather start paying some tax in the outsourced countries too and get a US tax credit on this tax paid. The reason for this is because most of these outsourced countries have aggressive development policy, and country like India would offer more sops and benefits to these companies to part a proportion of their tax in their country in exchange of other or future benefits.

Now obviously, a more tax means less profit to shareholders. Therefore there may be then some companies who opt to move their headquarters and registered offices out from US to some other country. Also the venture capitalist and other technology evangelist may not be so keen to promote businesses in US even thought they would like to operate in US. What matters to them is quality of talent and ideas, which unfortunately is not coming up from domestic markets. Ask any investor and for him the ROI on what he invests matters the most then any patriotic feeling. The one who claims otherwise, I have a serious doubt on them or they are trying to play a difficult juggling act.

I believe the governments are busy trying to address the political sentiments of the masses in the respective countries rather than addressing the root cause of the problem, which lies in local social disintegration, poor education, high inflation and uncontrolled per capita expenditure. This is all leading to high cost of local resources compared to rest of the world. This high cost or local resource in many instances is being justified as a requirement to high standards of living, which unfortunately does not exist anymore. With social infrastructure like NHS, Policing, Pensions etc. in peril due to mismanagement thru highly paid either corrupt or inefficient civil servants, the problems of the local masses will continue to exist.

Finally, immigrants and the immigration policies are the scapegoats of the major failures of government and civil servants in key development areas. If this view on immigration as scapegoat is carried out for few more years, then there will be even more widespread and irreversible damages to local economies and social fabric of society.