India won't miss UK aid because intra company transfers are as charitable as can be.

The UK will stop donating money to India in 2015. It is hard to believe that the UK still gives India about £200m a year when the country has a space programme.

But when it comes to being charitable to India many believe the UK government’s immigration policy, which allows Indian IT firms to undercut UK workers, is more than enough.

India has a massive IT services industry and UK businesses are big customers.

Because these companies can use staff in India on lower salaries as their UK equivalents, it is difficult for UK IT workers to compete. Intra Company Transfers (ICTs) are workers that are brought to the UK from overseas to work on projects. They do not require a visa because the employer has a UK office.

There are rules on how much ICTs should be paid but the figures are set far too low. For example according to government figures an IT director can earn as little as £25,000.  See this blog for more information. The accusation is that because of the ICT loophole UK IT workers are losing their jobs. As a result less tax is being paid and the UK is losing its IT skills pipeline.

And as the public sector looks to operate on a much lower budget the prospect of outsourcing en masse to offshore suppliers becomes ever more possible.

See this for details of the number of ICTs brought to the UK every year between 1997 and 2008. It shows the numbers by occupation and it clearly shows how IT workers, for which there are a few groups, are by far and away the biggest ICT users. The figures also reveal that India accounted for a massive chunk of ICTs in the period. See table below.

Work permits granted between 1997 and 2008 for certain IT roles.

Other IT occupation – 104,070
Computer engineer – 3,720
Computer programmer –  8,610
Software engineer – 62,165
System analyst –  26,800
Total 1,568,235

Of this over 300,000 were Intra Company Transfers and half were IT workers. 

Intra Company Transfers in the UK between 1997 and 2008 by nationality

India -166,410
USA – 61,845
Japan – 20,625
Australia -12,570

Also see this link for lots of b log posts on the subject.

What do you think?



Should the UK government to more to protect IT professionals from low cost offshore labour?