yossarian6 - Fotolia
MPs are to launch an inquiry into the rules governing immigration of skilled workers from outside the European Union (EU), including software developers and digital experts, after the existing cap was reached for the first time.
IT companies and offshore outsourcing firms commonly use the regulations to be examined – known as the Tier 2 Skilled Workers system – to bring overseas staff to the UK, as well as offering a route for technology startups to recruit skilled employees from outside Europe.
The current cap restricts Tier 2 visas to a maximum of 20,700 per year, for occupations the government identifies as having skills shortages – including engineers, scientists, teachers, doctors and social workers, as well as software developers and digital experts. In June 2015, the monthly cap of 1,650 visas was reached by 11 June – the first time the limit has been reached.
The government has refused to increase the visa cap, and last month asked the Migration Advisory Committee (MAC) to examine proposals to further reduce the number of workers coming into the UK from outside Europe.
Prime minister David Cameron said at the time: “In the past, it has been too easy for businesses to recruit from overseas, undermining those who want to work hard and do the right thing. As part of our one-nation approach – pushed forward by my Immigration Taskforce – we have asked the Migration Advisory Committee to advise on what more can be done to reduce levels of work migration from outside the EU.”
Tier 2 visa scheme under review
But MPs on the Home Affairs Committee, prompted by the number of visa applications in June 2015, launched their own inquiry to examine the effect of the Tier 2 visa cap on employers with skills shortages.
"Reaching the cap limit for the first time last month sparked concerns of skills shortages across the health and care sectors, and among business leaders. It is totally unfair that only those with the highest salaries are granted visas once the cap is reached,” said committee chairman Keith Vaz.
“It is easy to see how this could impact on the services, sectors and small businesses that rely on skilled workers from abroad, and in the longer term impact on the economy. The committee hopes to gain an insight into whether the current system is the best way to achieve the twin aims of controlled immigration that can maintain the level of skilled workers essential to providing the services we all rely on and enjoy."
Offshore IT companies – particularly those in India – often use part of the Tier 2 visa scheme, called intra-company transfers, to bring in staff from outside the EU to work on contracts in the UK. IT staff from India comprise a substantial proportion of such migrants. For example, Tata Consultancy Services (TCS) – the biggest Indian IT services firm – has over 10,000 UK-based staff, but only employs about 4,000 British staff.
UK IT workers and campaigners claim this puts them at a disadvantage, because staff from India are paid less. The UK government sets a minimum pay threshold for migrants to try to ensure UK staff can compete on price, and has said it intends to fast-track measures to increase the minimum salary required.
Recruitment firm Robert Walters published a report earlier in 2015 that found 72% of businesses are affected by severe talent shortages, causing decreased productivity in one in five (18%) companies. The Migration Advisory Committee found startups are struggling to recruit experienced staff with at least five years' work experience, who could train others and lead teams.
A House of Lords committee in February 2015 said the government urgently needs to address the UK’s digital skills shortages. According to the CBI, 52% of companies have difficulty recruiting staff with the necessary science, technology, engineering and maths skills.
Read more about skills shortages
- A CBI/Pearson Education and Skills survey has found the skills shortage is expected to continue as firms struggle to find necessary Stem skills.
- The problem the public sector faces is not how to transform to a digital government, but how to find the people to help do this.
- The European Commission (EC) urges people to learn coding, warning that a lack of coding skills could see Europe facing skills shortage by 2020.