Special Report: UK Immigration Cap Consultation


In the run up to the General Election the Conservative Government included in their election manifesto plans for an Immigration Cap that world ‘reduce net migration to the level of the 1990s – tens of thousands, not hundreds of thousands’. Under the previous Labour Government inward migration had increased significantly driven mainly by economic growth & the enlargement of the European Union.

The policy was a hit with the electorate and helped propel the Conservatives into power. However, since the Conservatives were unable to secure an overall majority they were forced to form a Coalition Government with the Liberal Democrats. During the General Election the Liberal Democrats campaigned against the Immigration Cap however upon agreeing a Coalition with the Conservatives the party agreed to support the Immigration Cap proposals. The influence of the Liberal Democrats in the cabinet may help to water down some of the more aggressive future Immigration.

Prior to the General Election the Cross Party Group on Balanced Migration also called on the future Government to reduce the levels of Immigration to the UK in order to protect public services and the UK’s stretched infrastructure. Protecting public services is one of the key drivers behind the Immigration Cap.

The Consultation & the Temporary Immigration Cap

The Consultation document published yesterday seeks views from the business community on how the Immigration Cap should work in practice. The Consultation will run until the 17th September and the Government intend to give notice of final decisions on implementation mechanisms and the level of the limit by the end of the year. In the meantime a temporary Immigration Cap has been put in place that caps Tier 1 General (formerly HSMP) & Tier 2 General (formerly UK Work Permit) at 24,100 until next April, a figure which is 5% down on last year.

The Government also wants to consider further how the operation of the limit should go hand in hand with further measures to make the migration system more selective so that those who have the most to offer are attracted and welcomed to the UK. Proposals for changes to Tier 1 General and Tier 2 General have been included in the document and those changes are outlined below.

Although the Government is seeking opinions on how the cap should be operated from the business community the Migration Advisory Committee (MAC) has been given the job of advising on what limits should be set for the first full year of operation. Yesterday the Government commissioned the MAC to advise on the levels with guidance to be provided by the end of September this year.

The Government’s Consultation has two main thrusts:

  1. How the Immigration Cap should be implemented: What mechanism and what additional actions should be taken to find alternatives to taking on migrant labour?
  2. At what level the Immigration Cap should be implemented: The limit will take into account the Government’s overall policy objective and the balance between economic, social and public service impacts of migration. The government has commissioned the independent Migration Advisory Committee to offer it advice on this crucial question

Immigration Cap Coverage

The Permanent Immigration Cap will not affect:

  • Tier 5 Migrants: Tier 5 includes Youth Mobility Workers, previously known as Working Holidaymakers. The Government does not intend to apply an annual limit to those who come to the UK as temporary workers under Tier 5, and in any event Tier 5 visa holders are already subject to restrictions on numbers
  • Tier 1 Investors & Entrepreneurs: Less than 1,000 migrants came to the UK as Investors or Entrepreneurs in 2009. The government believes that migrants who meet the criteria to enter as Investors and Entrepreneurs have the most to offer in terms of driving economic growth. It is therefore the government’s view that these two routes should not be limited. Indeed, it is the government’s view that more can and should be done to identify and reach out to high net worth individuals and those who will drive economic growth so that the UK becomes more competitive in the fight for global talent. The Government may actually make it easier for Tier 1 Entrepreneur & Investor applicants to qualify in the future by changing the current investment threshold (£200,000), setting thresholds for individual sectors, allowing for entry when an entrepreneur has secured staged funding & considering the jobs created requirement (two UK jobs)
  • Non Points Based System Employment Categories: Non Points Based System categories will not be included in the Immigration Cap. The cap only applies to certain PBS categories
  • Ministers of Religion & Elite Sportspeople: Premier League football teams will breath sign of relief that the Immigration Cap will not affect professional sport

As yet it is not known whether the Immigration Cap will affect:

  • Tier 2 Intra Company Transfers: Tier 2 Intra Company Transfers have not been included in the temporary cap however they may be included in the Permanent Cap (see below for further information)
  • Tier 1 Post Study Workers: Tier 1 Post Study Worker Visas allow foreign students the opportunity to benefit from open access to the UK labour market for a period of 2 years following their graduation from a UK institution. The government will be publishing proposals for reform of the student route later in the year therefore the Post Study Work category is currently outside the scope of the consultation. This subcategory of Tier 1 may be changed significantly from its current state, with restrictions on work in areas aside from those considered to be in shortage in the UK (e.g. Healthcare & Engineering)

Tier 1 General – Application Pool

The Government is likely to introduce an application pool for Tier 1 General, as is currently used in New Zealand. Under such an arrangement, migrants wishing to be considered for entry to the UK would undertake a points test, as now. Those who passed the points test would be able to make an “Expression of Interest” by entering a pool of potential candidates. Individuals entering the pool would receive an immigration employment document which would confirm that they were in the pool. They would be expected to pay a fee to enter the pool and receive this document. The UK Border Agency would, at pre–determined intervals, invite the relevant number of candidates from the pool to apply for entry to the UK. Those candidates invited to apply would be the candidates with the highest point’s scores. Candidates not selected to be invited to make a full application over a period of six months would be removed from the pool. This system would ensure that the migrants with the most to contribute to the UK economy would be selected, with the fairest outcomes overall.

Tier 2 General – First Come First Served

With Tier 2 General the Government is likely to implement a first come first served system, as it currently in place in the United States. Under such as system a specified number of visas would be released on a quarterly basis and applications would be accepted against that quarterly quota. The existing Tier 2 points table, or a slightly revised version thereof, would be applied. It is the government’s view that this transparent and regular process would provide businesses with the greatest certainty.

Tier 1 General Points Increase

The Government is expected to increase the Tier 1 General requirement, with an initial increase expected on the 16th July 2010. Applicants will need to score 80 points for attributes rather than the current 75 points.

In the future the Government may raise the qualifications or previous earnings thresholds for Tier 1. Arguments for doing so would be that it would reduce intake of applications over and above the numerical limit. Those that met the minimum criteria might be able to apply with a greater expectation of success. They could also require that Tier 1 migrants score a higher number of points in order to qualify but offer additional, or more graded, criteria against which points could be scored. These could be linked to indicators of labour market success (such as English language) or other policy objectives (such as minimising the likelihood that migrants will access public funds and services). Areas include:

  • Higher level English language ability
  • Skilled Dependants
  • UK Experience
  • Shortage Skills
  • Health Insurance

Tier 2 General – Intra Company Transfers

At the moment the Government is undecided on whether Intra Company Transfers should be included under the limit at all. However, Intra–Company Transfers account for around 45% of all Tier 2 entry clearance visas, a significant proportion and those who come to the UK for an extended period will inevitably draw on public services.

Where the transferee is coming to the UK for a matter of months rather than years, there is a certainly a case to say that they should be exempted from the limit but that case diminishes the longer the transferee is in the UK potentially drawing on the UK’s public services. One option the Government will look at is to exempt Intra Company Transfers from annual Limits, but only to offer Intra–Company Transferees periods of leave of less than 12 months. Another arguably more balanced option would be to include the Intra Company Transfer route in general within the limit, but to exempt any Intra Company Transferee coming to the UK for a period less than 12 months.

Tier 1 & Tier 2 Dependents

Dependants may accompany main applicants to the UK under both Tier 1 and Tier 2. In 2009 the Migration Advisory Committee assessed the economic contribution made by the dependants of Points Based System migrants and their role in the labour market. They found that a significant proportion of dependants are skilled and in work. Many of the businesses who responded to the consultation told the MAC that the UK would be a far less attractive destination for investors if there were greater restrictions on working rights for dependants.

While the government has no plans to change existing policy for dependants it will consider whether they should be included or otherwise taken account of under our limit. Not doing so could either undermine the limit’s effectiveness in reducing migration or necessitate setting lower levels for Tier 1 and Tier 2.

Tier 2: Combing Skill Shortage & Advertising

The most controversial point within the Consultation may well be merging the Shortage Occupation & Resident Labour Market test routes so that only occupations considered to be in shortage will be approved. At present a fair number of roles are considered to be in shortage however these are within specific areas, such as healthcare and engineering.

Currently, migrants may enter through Tier 2 where they have a job offer which either passes the Resident Labour Market Test (where an employer has been unable to find a suitable resident worker) or is in an occupation which is in national shortage (as signified by its inclusion on the Shortage Occupation List). This means that, where an occupation is in national shortage, the local labour market does not have to be tested even though there may be British workers available locally to fill the vacancy. It also means that employers may bring in migrants even where an occupation is not in national shortage, rather than doing more to encourage British workers to apply for the vacancy, for example by tackling barriers to re–location.

The government believes that migrants should only be brought in where every reasonable avenue to recruit a resident worker has been exhausted. The Government will therefore push to combine the tests so that in future employers can only bring in migrants where the occupation is on the UK Border Agency’s Shortage Occupation List and the resident labour market has been tested through JobCentre Plus.

Sponsorship and Employer Responsibility

The concept of ‘Sponsorship’ was introduced along with the Points Based Immigration System. It has been designed so that employers who bring in migrant workers ultimately take greater responsibility for that migrant while he / she is in the United Kingdom. The new Government believe in the concept and wishes to widen employer responsibilities in two areas:

  1. Up Skilling British Workers: The Government believes that sponsors should be required to demonstrate a practical commitment to up-skilling British workers, for example by supporting national or local apprenticeship and other similar schemes, AND
  2. Greater Responsibility with Regard to Public Services: The Government also believes that sponsors should do more to ensure that migrants and their dependants do not place undue burden on local public services. The proposal here is to require employers to maintain health insurance for their employees

Overall the Government believes that sponsors should work closer with local providers and job centres to source the training provision and staff that meet their recruitment needs. This is likely to require a higher level of investment, or co–investment, from employers to meet training needs.

Tier 2 English Language

At the moment the Tier 2 English Language requirement is fairly basic. The Government proposes to increase the English Language requirement for Tier 2 General, possibly in line with the current Tier 1 General requirement. Economic migrants without a passport from a majority English speaking country or a degree fully taught in English need to pass an approved English Language Test. Migrants normally take the International English Language Testing Scheme (IELTS) test in order to validate the Tier 1 requirement. Economic migrants under Tier 2 may need to pass a similar test in the future.

Final Immigration Cap Policies

The Government is expected to announce final Immigration Cap and visa requirement policies by the end of this year. If the Government introduces all of the points details below the effects will be profound for the UK Economy, British Businesses and Skilled / Highly Skilled Migrant Workers. Some believe that a ‘watered down’ system will be put in place, however even if this is the case the number of workers coming to the UK will be vastly reduced.

Commonwealth Contractors

Commonwealth Contractors is a collection of highly skilled professionals from the Commonwealth and beyond. We partner with OISC Registered Immigration Partners capable of professionally representing a Tier 1 Visa Application / Extension and Tier 2 Licensed Consultancy & Associated Trust Partners who may be prepared, where required, to sponsor a doctor on a Tier 2 Visa (formerly UK Work Permit).

To find out more call Commonwealth Contractors now on 0330 390 9021 or Submit your details now and we will get right back to you. Please be prepared to send a copy of a recent CV so that we can pass to interested partners.