Employee groups and trade unions have voiced their disappointment at recommendations to tighten-up the rules of the permit system being used by businesses to bring-in IT staff from overseas.
The Migration Advisory Committee, a Home Office committee which includes representatives from business and trade unions, last week recommended changes to the Intra-Company Transfer scheme, following claims that it is being overused by UK firms.
The Intra-Company Transfer scheme allows staff to apply for a permit to transfer to the UK from an overseas branch of their employer. Employers need to have a sponsor's licence to use the permit system, and could be at risk of losing their permit if they abuse the system.
Businesses argue that non-European IT skills are vital to the UK economy. But bringing overseas workers to the UK using the onshore/offfshore model to complete UK jobs has proved controversial, particularly when UK IT workers are being made redundant.
The Home Office says the recommendations represent the biggest change in the immigration system for 45 years. "These changes will ensure that those with the skills we need can come to the UK, and help create a fairer Britain with fair treatment for those who play by the rules, but tough action against those who break the law."
"Intra-company transfers are an important part of making the UK an attractive place in which to do business, and therefore keep industry and the economy moving."
The scheme is being used in the IT sector much more than any other. 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.
Employee groups claim that employers are using the Intra-Company Transfer scheme, intended as a means of filling skills gaps, to bring in lower-cost staff.
The UK Borders Agency warned earlier this month, that the scheme "must not be directly replacing a settled worker".
The Migration Advisory Committee says 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."
But it also wants the following changes:
- Intra-company transfers should not lead to a right to permanent residence.
- The qualifying period for individuals to work at an overseas company before they can use the Intra-Company Transfer scheme to come to the UK extended from six to 12 months.
- 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".
George Anastasi, spokesman at the Professional Contractors Group, which represents IT contractors, says the group is disappointed with the Migration Advisory Committee report but supports the government's attempts to tighten the rules.
"We are quite disappointed that the MAC did not go further," he says. "But the government should take on the MAC proposals to strengthen enforcement. This is one of the things we have been calling for."
Ann Swain, CEO at the Association of Professional Staffing Companies (Apsco), which represents IT recruitment agencies, says she is also disappointed by the response from the Migration Advisory Committee.
"Apsco feels it is important that the government gives due consideration to whether it is really necessary for a small number of Indian software companies to populate their UK offices with relatively low-skilled IT imports," she says.
But Mark Lewis, partner and head of outsourcing at law firm Berwin Leighton Paisner, says overall, the Migration Advisory Committee report is "a measured, pro-business, anti-protectionist recommendation".
"It recognises the reality that UK businesses need a range of resourcing and services cost options to stay in business. It is a firm putdown of the increasingly protectionist lobbying from some quarters in the UK."
He welcomed the advice that intra-company transfers should not lead to a right to permanent residence and the recommendation to extend the period a worker has to be with a firm before they can be given a transfer.
Peter Skyte, National Officer at union Unite, says 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," he says.
"We welcome the recognition that the Migration Advisory Committee has given to the evidence submitted by the union in respect of the IT sector in the recommendations to government, although we are disappointed that these don't go further in recommending firmer transparency and enforcement and addressing some of the problems with the Intra-Company Transfer scheme."
Bob McDowall, analyst at Towergroup, says 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."
There is no doubt that overseas skills add value to the UK economy. But UK IT workers are voters and taxpayers, so it is inevitable that the government will have to do something to stem the loss of UK jobs in favour of overseas workers. High emotion is understandable, but the government has to find a balance that protects business and workers.