Government stops businesses importing labour to cut costs

The government is tightening immigration rules to prevent businesses favouring cheap imported labour over British workers.

The government is tightening immigration rules to prevent businesses favouring cheap imported labour over British workers.

The Migration Advisory Committee (MAC) last month made recommendations for changes to the Intra-Company Transfer rule which allows workers to be brought in on the premise that they are transferring within a company. The scheme is being used in the IT sector much more than any other.

But the government said today that from next year all jobs must be advertised to British workers for four weeks, rather than the current two weeks, before companies can seek to employ individuals from outside Europe.

The government is also extending the qualifying period for all overseas workers who want to transfer to the UK base of their company to at least a year, rather than six months.

The minimum salary that will allow an individual to qualify as a skilled worker and be eligible to work in the UK will also rise from £17,000 to £20,000.

"These changes will ensure that businesses can recruit the skilled foreign workers that the economy needs, but not at the expense of British workers, nor as a cheaper alternative to investing in the skills of the existing workforce," said home secretary Alan Johnson.

The MAC said it wants the Intra-Company Transfer route for immigrants to be retained because, "It is an important in terms of ensuring the UK remains globally competitive and continues to attract high levels of inward investment."

According to data obtained by the Association of Professional Staffing Companies from the Home Office under the Freedom of Information Act, 35,430 non-EU IT workers came to work in the UK last year. Despite the recession, this is significantly higher than the 12,726 who came to the UK during the dotcom boom in 2000.

The MAC also recommended:

  • Intra-company transfers should not lead to a right to permanent residence.
  • A separate scheme should be created for graduates only, requiring three months' prior experience with the company, but with a maximum stay in the UK of 12 months.
  • The government should "give consideration to whether the level of resource currently being devoted to the enforcement of intra-company transfers is sufficient, and whether the degree of transparency around enforcement of the system could be increased".

Mark Lewis, partner and head of outsourcing at law firm Berwin Leighton Paisner, said the changes are balanced. "I do not think these changes will have a massive impact on the flow of staff but the government is undoubtedly tightening up the rules but is a way that is quite balanced. This will help UK businesses and control more carefully the way the system is used."

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