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The Migration Accounts Committee (MAC) has warned the government to be mindful over its plans to raise the minimum salary migrant workers must earn to be granted visas.
In June 2015, the UK government signalled it intends to reduce the number of workers from outside the Europe Union (EU) in the UK when it asked the MAC to look at proposals intending to put the idea in action.
One of the proposals was to increase the minimum salary paid to staff brought to the UK by overseas suppliers on intra-company transfers (ICTs), which could make staff from lower-cost regions a less attractive option for businesses.
The government also said this will be fast-tracked, but the MAC believes this should wait until the organisation has published its full report.
“We urge the government to be cautious in making any significant changes to the salary thresholds at this stage because they should not be considered in isolation.
“Salary thresholds are closely linked with other issues the government has asked the MAC to consider in its wider review, including proposals for an immigration skills charge on migrant workers,” the MAC said.
“Our recommendations on the Tier 2 route will be published after we have fully examined the extensive evidence of the impact of raising pay thresholds on particular companies and organisations,” it added.
Offshore IT services firms use ICT (Tier 2) visas to bring skilled workers into the UK to work on IT services contracts. The low salaries of these staff – mostly from India – enable providers to offer services at a lower cost than onshore competitors, and often in-house IT, but any business model that undercuts the local workforce is inevitably controversial.
UK IT professionals claim ICTs are unfair and that they are undercut by workers from outside the EU.
Read more about IT skills from overseas
- The UK government is making noises about reducing the number of non-EU workers in the UK – and the IT industry could be the focal point for this.
- UK government seeks advice on proposals to reduce the number of workers from outside Europe in the UK, which could change the way Indian IT suppliers operate in the UK.
- The number of overseas workers entering the UK on intra-company transfers (ICTs) has increased since the government introduced its cap on immigration.
According to the figures obtained by contractor service provider SJD Accountancy, 34,229 non-EU IT professionals entered the UK in 2014, compared with 30,189 in 2013. There has been a 56% increase in the number since 2010.
IT workers account for a large proportion of the ICT numbers. According to figures from campaign group Back the MAC in December 2013, there were more than 12,000 IT software professionals, nearly 6,000 programmers and software development professionals and just under 5,000 IT business analysts, architects and system designers in the UK on ICTs.
But a recent court case where a man claimed he was unfairly discriminated against by Tata Consultancy Services (TCS) because he was a UK citizen ruled that TCS did not discriminate.
Prashant Sengar, who owns and runs a restaurant called Spicy Affair frequented by TCS employees, claimed he was discriminated against when seeking employment with TCS at its Leamington Spa office because the company has a policy of recruiting lower-cost staff from India.
In August 2015, a year after the original claim, a tribunal dismissed Sengar’s case. “Following the tribunal judgement, it has been concluded that TCS did not discriminate against Mr Sengar and therefore dismissed his claim,” said a statement from TCS.