The Migration Advisory Committee’s (MACs) latest report on the immigration cap has revealed a steep rise in the use of Intra Company Transfers by UK businesses, bringing workers into the UK from non-EU locations.
In respect to ICTs the latest report says “….it is possible that the UK economy is benefitting in aggregate terms while at the same time some displacement of British workers is occurring.”
ICTs allow multi-national businesses that have a UK operation to bring workers to the UK. This route is used by IT suppliers to bring lower cost staff to the UK. About 80% on non-EU workers in the UK are on ICTs and a large proportion of these are IT professionals from India. Despite this ICTs were not included in the cap.
I wrote a blog post last week which asked: Have Tory immigration policies helped UK IT professionals?
And the answer is no.
In 2009, the last full year analysis before the immigration cap, there were 22,000 ICTs, according figures from the MAC. For the 12 months up to September 2011, the first 12 months following the immigration cap, the MAC has reported an increase to 29,700 workers in the UK on ICTs.
Although ICTs weren’t included in the immigration cap the government did introduce a minimum pay threshold for ICT workers of £40,000 to try and make it less attractive from a cost perspective for suppliers to bring staff in from offshore.
There is a way for suppliers to be less impacted by the raised minimum pay threshold. Expenses can be included within the pay and tax does not have to be paid on it.
One reader said of the latest publication: “A very disappointing report, I thought the MAC had some backbone as the previous year they recommended that allowances should be excluded from the definition of pay to ensure resident workers were not undercut and because of the loss of tax revenue. They don’t actually mention why in this report their position has changed 180 degrees in 12 months.”
See this video explaining how the use of ICTs to bring IT workers to the UK.
Read this blog post, which contains a series of blogs, to see how the ICT loophole impacted one IT worker.
See this post for all the figures on the number of overseas workers in the UK between 1997 and 2008 and what they are doing.
Please give me your views on how outsourcing is impacting UK IT skills