UK: Annual Limit on the Cap of Migrant Workers Announced

Last Updated: 25 November 2010
Article by Caron Pope, Louise Carson and Siobhan Owers

Following on from the MAC report published last  week, Theresa May made a statement in the House of Commons yesterday afternoon regarding the limits to be set for non EEA economic migrants from April 2011. The main points are:

Tier 2

1.    A cap of 21700 on skilled migration from outside the EEA with a cap of 20700 on Tier 2 applicants. This is a rise of over 7000 on the number of Tier 2 (Generals) currently available.

2.    Tier 2 (Intra Company Transfer) (ICT) applicants will not be included in the cap. However, ICT visas will only be granted for over 12 months if the individual is paid over £40,000 in the UK.  It is not clear whether allowances will be taken into account in calculating the salary. Further, a Tier 2 (ICT) migrant's stay will be restricted to 5 years.

3.    Tier 2 will be restricted to graduate occupations.

4.    There will be a pool of Tier 2 (General) CoS to be distributed to businesses on a monthly basis rather than pre allocating as under the interim limit.  However, the applicants "will be competing against other applicants for a visa to enter the UK and in months where the limit is oversubscribed those with the most points will qualify".  

5.    The cap will be reviewed annually.

Tier 1

6.    Tier 1 (General) route to be closed.

7.    Tier 1 (Investor) and Tier 1 (Entrepreneur) to be simplified.  These categories will not be included in the cap.

8.    A new category under Tier 1 ('Exceptional Talent') to be created for scientists, artists and academics who have achieved international recognition.  This is to be limited to 1000 a year.

Tier 4

9.    A consultation on Tier 4 to be launched which will also deal with Tier 1 (Post Study Work) with a view to restricting the number of students coming to study below degree level.  We would expect Tier 1 (Post Study Work) to be abolished.

Tier 5

10.    This Tier was not mentioned.

Settlement

11.    The Home Secretary reiterated that the Government intends to break the link between temporary migration and settlement although no detail yet available.

12.    Confirmation provided that the Government would look at the family route to settlement and are likely to increase the time a person had to spend in the UK in this category from 2 years before they are permitted to setle in the UK.

Reports yesterday morning suggested that Ms May would set the cap at 43700 as recommended by the Migration Advisory Committee ('MAC').  There were approximately 22,000 Tier 2 (ICT)s last year and combining this number with the cap of 21700 on Tier 2 (General) applications, these figures reflect the top end of the MAC's recommendations.

Whilst yesterdays announcement was not as positive as previously hoped, we are pleased that the Home Secretary has responded to businesses concerns and confirmed that Tier 2 (Intra Company Transfers) for those earning over £40K are outside of the cap. However, without full guidance, it is difficult to assess to what extent this will impact UK businesses as ever the devil is in the detail. Most worrying is that in months where the quota is over subscribed (we would envisage most months!), applicants will be awarded a Certificate of Sponsorship only where they are in the top percentage point scorers. This will lead to a lack of certainty regarding whether a company can sponsor a migrant and inconsistency, as the number of points required to obtain a visa will vary on a monthly basis. We await clarity about how these points will be assessed and whether allowances will be taken into consideration in terms of calculating salary and will continue our lobbying activities and involvemnet in policy working groups to try to achieve a solution that works for business.

We are extremely disappointed that Tier 1 (General) has been abolished in its entirety as this provided a neat solution for employers who did not want to advertise a role under Tier 2, or who are not licensed as sponsors.  Despite reports that many Tier 1 (General) migrants have used this category to take low skilled jobs, at the other end of the spectrum, in our experience it has proved invaluable to blue chip employers wishing to bring the most highly skilled workers into the UK. We await confirmation that the scheme will remain open for those already in the UK on HSMP and Tier 1 (General). Whilst the abolition of this category is regrettable, we recognise that the additional Tier 2 (General) Certificate of Sponsorship available may help facilitate the moves of many key personnel into UK business.

Conclusion and Planning for the Future

The flexibility of our immigration system has been significantly curtailed and this message should be fed to managers throughout the business to manage expectations. In particular the following messages should be disseminated:

  • Tier 1 (General) is to be abolished
  • More Tier 2 (General) CoS's will be available but this will necessitate advertising in the Job Centre Plus and by one other method for 4 weeks. If a migrant candidate is identified who requires immigration permission, his application will form part of the monthly quota and will  be assessed against the pool of candidates who apply globally. There are therefore likely to be longer processing times and a certain lack of certainty regarding the ability to employ migrant workers in the UK.
  • Tier 2 (ICT)s are outside of the quota but limited to 12 months if the individual is paid under £40,000.  If the level of allowances that can be taken into account is scaled back, this will cause problems to employers who meet market rates through a combination of salary and allowances.

While it is hard to predict exactly what the immigration landscape will look like in the coming months it is clear that restrictions on immigration will remain a key concern for business. We will publish further updates as soon as details are released.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 24/11/2010.

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