Report of the Home Affairs Select Committee into Immigration skills shortages

This Committee has carried out a review into immigration skills shortages, international students and their ability to stay on to work after they have finished their studies and the balance between training a UK workforce and importing skills. Their report has just been published. The Government is likely to introduce changes to the immigration rules from April 2016.

Background

The Government has two numerical immigration limits. The first is the ambition to reduce immigration to the “tens of thousands”. The second is the cap on Tier 2 (General) visas—for high skilled workers to come and work in the UK if they have a definite offer of a job.

Shortly after the May 2015 general election, the Government asked the Migration Advisory Committee to advise on further changes to restrict the numbers of Tier 2 migrants. This followed from a commitment in the 2015 Conservative party manifesto to “maintain our cap at 20,700 during the next Parliament. This will ensure that we only grant visas to those who have the skills we really need in our economy”.

The number of visas issued in 2014 for each route were:

Remember that EU migration to the UK for work has no limit so long as the UK remains part of the EU.

While the cap for Tier 2 General is for an annual figure, the limit is applied on a monthly basis: 2,550 places are available in the first month of the financial year (April) and 1,650 in each following month. In February 2015, the number of applications was 2,454. The cap did not apply straight away because spare certificates of sponsorships had carried over from previous months, but the limit was over-subscribed in June, and again in July and August 2015. This caused problems for employers, who had done all that was asked of them, and who had fulfilled the same criteria as those applying in the previous month. They were unable to bring in skilled workers who had a definite offer of a job.

Conclusions and recommendations

The flavour of the Committee’s recommendations is to want to encourage foreign students and skilled foreign workers to come to the UK in order to increase tax revenues, bolster and respond to the needs of the economy.

It recognised the significant rise in those using the Intra Company Transfer route (Tier 2 (ICT)) to come to work in the UK. They noted that these are highly paid, highly skilled people who tend to come to the UK for a limited time to work on a particular project. When the cap was introduced on Tier 2 visas, a decision was made to keep the Tier 2 (ICT) visa outside the cap. If the cap is to remain, the Committee supports the continued exclusion from it of Tier 2 (ICT) visas.

The recycling of unused certificates in relation to Tier 2 General was announced in September 2015, several months after the cap was reached. The Committee considers it is common sense and that it has helped to reduce the pressure that had been building up in the system.

If the Government were to raise the minimum salary requirements for Tier 2 visas, this may ease pressure on the cap, but the Committee considers this would not meet the needs of those employers who want to bring in particular skills but are unable to pay the higher salary required.

The Committee has recommended that the Government look again at the timetable it allows for graduates to search for and secure posts in graduate level work and training schemes. It urges the Government to look again at the value of international students to the UK, economically, intellectually and culturally, and consider how it might devise policies that reduce the barriers for international students to stay in the UK and take up high skilled employment. It recommend that the Government exempts Certificates of Sponsorship for graduate training schemes from the cap.

The Committee says the argument is made that employing migrant labour militates against training UK domestic workers, particularly in high-skilled sectors. However, the evidence given to the Committee suggested that UK employers who employ skilled foreign workers also train their own workforce, rather than simply relying on employing non-UK workers. It found little evidence that the Tier 2 cap was the lever that incentivised improvements in training to meet UK skill needs. The motivation to recruit from abroad seemed to be more a desire to get the best person for the job, and the need to respond flexibly to the needs of the economy within the appropriate timescale.

We now wait to see what changes the Government proposes to introduce. These should be published before the Spring.

Tom Redfern