In a series of recent announcements, the coalition government has set out its plan to comprehensively review the British immigration system with a view to achieving a substantial reduction in net migration figures to tens of thousands per year.

Which Aspects of the Immigration System will be Reviewed?

Public consultations on permanent caps for Tier 1 (General) and Tier 2 of the points based system closed for contributions from stakeholders earlier this month, with the resultant policies due to be announced at the end of the year. The Tier 1 (Entrepreneur) and Tier 1 (Investor) categories are also being reviewed as part of this process, with a view to attracting more entrepreneurs and investors to the UK.

The Government plans to review the student route as a matter of priority, following the release of immigration figures for the year to June 2010 showing an increase of 35% in the number of visas issued under the student route, to 362,015. The Government has promised to take steps to reduce student numbers, which it believes are currently at unsustainable levels. The review will also seek to identify which institutions and courses are 'genuinely valuable' and where abuse currently exists.

The Tier 1 (Post Study Work) route will be included within the scope of the student review. One option under consideration is to allow only those studying specified courses at particular institutions to qualify for the scheme. Such a proposal could have a significant negative impact on the international student enrolment rates for excluded institutions and in turn their revenues.

The question of how migrants come to settle in the UK has also been raised. The Government has recently commissioned and published a research report The Migrant Journey to analyse the behavior of migrants granted leave to enter in 2004, and those granted settlement in 2009. The report found that of those individuals granted settlement in 2009, 34% entered via the family route, 15% entered in direct settlement categories, 32% entered in a work route leading to settlement, 4% entered in a work route not leading to settlement (mainly switching to the family route prior to settlement) and 13 % entered as students.

The Government has indicated a desire to study how and why those who initially enter the UK in immigration routes that do not lead to settlement are able to change immigration route and/or settle permanently. In view of the Government's overall policy of slowing population increase and lowering net migration, it seems likely that serious consideration will be given to withdrawing the rule enabling settlement on the basis of 10 years continuous legal residence. Mechanisms to discourage migrants from extending their leave and/or settling permanently in the UK are also expected to find favour.

Reviews of the family and asylum routes are also expected. Due to the human rights aspects of these routes, the focus is likely to be primarily on minimizing fraud/abuse and encouraging integration.

Finally, the Government has confirmed it will impose transitional controls on the free movement of workers from countries joining the EU in the future, as a matter of course.

Will the Resultant Policy Changes Meet the Government's Net Migration Target?

Business and education sector leaders are already making their opposition to the introduction of arbitrary caps clear. Since the Government must consult with stakeholders and take their views of stakeholders into account when formulating policy, concessions will have to be made in order to avoid damage to business competitiveness and revenues from international student fees.

It is also impossible to predict what effect squeezing the number of migrants allowed to enter and remain under the immigration rules will have on EEA related migration to the UK. For example, a multinational employer may choose to send an EEA national employee to work in the UK where it is not possible to send an employee who is a non-EEA national, or a non-EEA national who has an EEA family member may choose to come to the UK under European law provisions rather than the immigration rules.

The drivers of immigration flows are complex. In concentrating on the bottom line net migration figures as a policy objective, the Government has made a promise it may find impossible to keep.

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