If elected, the Conservatives will make changes to the immigration system by putting limits on the number of workers permitted to enter the UK on intra-company transfers.
With an election looming, any unpopular policy is sure to be seized upon by opposition parties. Intra-company transfers fit this bill.
The intra-company transfers scheme allows staff to apply for a permit to transfer to the UK from an overseas branch of their employer. But there are accusations that the system is being abused by Indian IT service providers. Indian workers are paid far less than their UK equivalents, which is not allowed under intra-company transfer rules. Also, intra-company transfers are only supposed to be permitted when there is a shortage of skilled UK workers to fill posts, which is often not the case.
A recent Freedom of Information (FOI) request made by a Computer Weekly reader revealed the high number of foreign workers entering the UK on intra-company transfers, despite rising unemployment among the resident IT workforce.
The data showed that between December 2009 and December 2010 45,924 intra-company transfers were permitted out of 62,589 requested. A large proportion of intra-company transfers consist of IT staff from India.
The numbers are increasing every year. During the dotcom boom in 2000, 12,726 IT workers entered the UK on intra-company transfers, according to a FOI request made by Association of Professional Staffing Companies (Apsco). Seven Indian companies accounted for 43% of the IT workers entering the UK on intra-company transfers in 2008, according to figures obtained by Apsco.
"It seems extraordinary that at a time when British workers cannot find jobs we are bringing in foreign workers from halfway around the world. This is another sign that Gordon Brown's 'British jobs for British workers' was a meaningless soundbite," says shadow immigration minister Damian Green.
The Tories plan to keep the existing points-based system, which allows IT professionals into the UK if they score highly enough on a range of measures. But the numbers will be capped.
"The one big gap in the points-based system is that there is no overall limit on how many permits can be issued in any one year," says Green.
One industry source dismisses the move as mere electioneering. "This is a fairly blatant attempt to win votes. The reality is that Western European countries have ageing populations, and outsourcing or immigration will be one of the key ways of remaining competitive," he says.
But one IT worker recently displaced as part of an offshoring agreement says, "[The Tory plan] looks good, but the term 'migrants' is a worry. This suggests a long-term stay, when in fact the problem is due to intra-company transfers on a short stay, perhaps a year or so. But it is better than Labour's approach by a mile."
Mark Lewis, partner and head of outsourcing at law firm Berwin Leighton Paisner, also sees the logic behind the move.
He says, "There is no reason to have an infinite number or even such a high number of intra-company transfers issued. So a quota may be the fairest way forward for offshore IT suppliers and UK business."
But the Unite union is against the Conservatives' plan to cap intra-company transfers. Peter Skyte, national officer for IT and communications at Unite, says migrant workers play an important role in the UK economy, although he adds that a better balance is required.
"There is a need to strike the right balance between enabling employers to recruit or transfer skilled people from abroad, providing fair access for UK and overseas migrant workers, and protecting job and career development opportunities for resident workers," he says.
This is necessary to enable UK IT professionals to move up the value chain within their chosen occupations. "We are, however, opposed to the Conservative proposals for an arbitrary cap on migration numbers," says Skyte.
Ann Swain, CEO at Apsco, says there is nothing wrong with the current system, but it is being abused and needs to be better enforced. "There seems to be no appetite to police it," she says.
John Brazier, managing director of the Professional Contractors Group (PCG), believes applying a cap to the number of workers entering the UK on intra-company transfers would be wise. "While intra-company transfer permits clearly have a value, their abuse and overuse is damaging. I hope the annual cap proposed by the Conservatives would be extended to intra-company transfer permits as a way of dealing with the displacement that has affected many contractors."
But he adds that the main issue is not the intra-company transfer permit itself, but the abuse of the system. "What we need is better enforcement of the rules, and a way to ensure the marketplace is as fair as possible. Intra-company transfer workers being paid less than the minimum salary undercut contractors."
An influential source in the outsourcing industry says, "The UK would be terribly handicapped if it closed it borders to talent, no matter where it comes from."
Political change leads to changes in legislation, but many proposals disappear without a trace. The Tory plan to cap intra-company transfers is taking IT industry issues to a high level. But whether the scheme will be changed in the event of a Conservative victory, or whether it needs changing at all, is less certain.
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