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Home Affairs Select Committee Is Undertaking an Inquiry Into the Cap on Non-EU Economic Migration

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Home Affairs Select Committee Is Undertaking an Inquiry Into the Cap on Non-EU Economic Migration House of Commons Home Affairs Committee Immigration Cap First Report of Session 2010–11 Report, together with formal minutes, oral and written evidence Ordered by the House of Commons to be printed 25 October 2010 HC 361 Published on 3 November 2010 by authority of the House of Commons London: The Stationery Office Limited £0.00 The Home Affairs Committee The Home Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Home Office and its associated public bodies. Current membership Rt Hon Keith Vaz MP (Labour, Leicester East) (Chair) Nicola Blackwood MP (Conservative, Oxford West and Abington) Mr Aidan Burley MP (Conservative, Cannock Chase) Lorraine Fullbrook MP (Conservative, South Ribble) Dr Julian Huppert MP (Liberal Democrat, Cambridge) Mary Macleod MP (Conservative, Brentford and Isleworth) Steve MaCabe MP (Labour, Birmingham Selly Oak) Rt Hon Alun Michael MP (Labour & Co-operative, Cardiff South and Penarth) Bridget Phillipson MP (Labour, Houghton and Sunderland South) Mark Reckless MP (Conservative, Rochester and Strood) Mr David Winnick MP (Labour, Walsall North) Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/homeaffairscom. Committee staff The current staff of the Committee are Elizabeth Flood (Clerk), Elisabeth Bates (Committee Specialist), Sarah Petit (Committee Specialist), Darren Hackett (Senior Committee Assistant), Sheryl Dinsdale (Committee Assistant), Ian Blair (Committee Assistant) and Alex Paterson (Select Committee Media Officer). Contacts All correspondence should be addressed to the Clerk of the Home Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3276; the Committee’s email address is [email protected]. Immigration Cap 1 Contents Report Page Key facts 3 1 Introduction 5 The Government’s immigration policy 5 Scope of the Committee’s inquiry 7 2 Immigration figures 8 Migration data 8 The Government’s figures: net long term immigration 8 Gross long-term immigration 11 Non-work routes 13 3 Whom will the cap affect? 14 Inflow and outflow 14 Cap will not affect EEA immigrants 14 Proportion of immigrants affected by cap 15 4 Impact on business and services 17 Highly skilled migrants 17 Recruiting needed skills 19 Location factors for businesses 20 Tax and investment 21 Public sector jobs 22 Merging Tier 2 routes 23 Exempting intra-company transfers? 24 5 Dependants 29 6 Level of the cap 31 7 Students 34 8 Administering the cap 36 Raising the points requirement 36 Allocating visas 37 First come, first served 38 Pooling system 38 Auction 39 Timing of application 41 Parliamentary scrutiny 42 Conclusions and recommendations 44 2 Immigration Cap Formal Minutes 50 Witnesses 52 List of written evidence from oral witnesses 52 List of additional written evidence 53 List of Reports from the Committee during the last Parliament 54 Immigration Cap 3 Key facts • Estimated net long-term immigration to the UK comprises estimated gross long-term immigration (those entering the UK) minus estimated gross long-term emigration (those leaving the UK), and totalled 196,000 in 2009. The figure includes British, EEA and non-EEA citizens coming to the UK for 12 months or more. • The estimated gross long-term immigration figure allows a breakdown by nationality and reason for migration for all immigrants entering the country. Estimated gross long- term immigration totalled 538,000 in 2008,1 of which 52% (278,000) were non-EEA citizens. British citizens accounted for 15% of estimated gross long-term immigration to the UK, and EEA citizens 33%. • The Government has announced that it intends to reduce estimated net long-term immigration to ‘tens of thousands each year, not hundreds of thousands’ and that the non-EEA economic immigrant cap is a first step in this process. • EEA nationals are not subject to UK immigration control and the UK Government cannot influence the granting of citizenship rights by other EEA countries. • In 2008, non-EEA citizens coming to work in the UK accounted for 12% of all gross long-term immigration. Non-EEA citizens coming to study and to join family members accounted for 23% and 11% respectively. • Only non-EEA citizens are subject to immigration control, under the Points Based System. Tiers 1 and 2 cover economic migration, and Tier 4 students. Family reunification is covered under separate rules. • There are approximately the same number of non-EEA main applicants to dependants under Tiers 1 and 2, a ratio of 5:4. • The Government has implemented an interim cap on new non-EEA economic migrants under Tiers 1 and 2. Between July 2010 and March 2011 there will be a limit of 24,100 migrants, amounting to a 5% reduction on the previous year. • A permanent cap on non-EEA economic migrants will be implemented from April 2011, administered through the Points Based System. The level of the cap has not yet been set, but will be announced by the end of 2010. In 2009, intra-company transfers accounted for 60% of all Tier 2 visas and 40% of Tiers 1 and 2 combined. 1 The latest year for which a breakdown by reason for migration is available. Immigration Cap 5 1 Introduction The Government’s immigration policy 1. The Government announced in May 2010 its intention to implement an annual limit—a cap—on net immigration to the UK. In a statement to the House on 28 June, the Home Secretary said: It is this Government’s aim to reduce the level of net migration back down to the levels of the 1990s—tens of thousands each year, not hundreds of thousands. Of course, it is necessary to attract the world’s very best talent to come to the UK to drive strong economic growth, but unlimited migration has placed unacceptable pressure on public services and, worse, severely damaged public confidence in our immigration system...It is important that the Government take full account of the views of business and other interested sectors. We want to ensure that we can properly weigh the economic considerations against the wider social and public service implications.2 As a first step, the Government proposed to introduce an annual limit on the number of non-EEA economic migrants coming to the UK to live and work. The Home Secretary announced that a permanent cap on numbers would be implemented from April 2011, with an interim temporary cap in place from 19 July 2010.3 2. The Home Office launched two simultaneous public consultations to inform the permanent cap. One, run by the UK Border Agency (UKBA), to consider mechanisms for implementing the cap (with a deadline of 17 September); the other, run by the Migration Advisory Committee (MAC), to advise on the level at which the cap should be set for the first year of its operation (with a deadline of 7 September). The Government intended to publish its confirmed plans for the permanent cap “as soon as possible thereafter and certainly by the end of the calendar year”.4 3. Non-EEA migration is currently controlled through the Points Based System (PBS), under which those wishing to work or study in the UK must gain points for certain attributes in order to qualify for entry. The PBS was phased into operation by the previous Government between February 2008 and March 2009, and consists of five tiers (only four of which are currently in operation), each of which represents a possible route for non- EEA nationals to enter the UK to work, train or study, as follows: Tier 1: Highly-skilled migrants Tier 2: Skilled workers with a job offer Tier 3: Low skilled workers (indefinitely suspended) 2 HC Deb, 28 June 2010, Col 585–6 3 Ibid. 4 Ibid. 6 Immigration Cap Tier 4: Students Tier 5: Temporary Workers and Youth Mobility (primarily non-economic routes) 4. Points are allocated according to specified attributes, with a different number of points required for each tier. Tiers 3 and 5 are temporary routes, and immigrants are not allowed to switch out of them once in the UK. Tier 1, 2 and 4 immigrants are eligible to switch between tiers, provided they meet the requirements of the tier they switch into. Dependents are allowed under all four tiers in operation. Tiers 1 and 2 can currently lead to settlement, but Tiers 3, 4 and 5 do not do so directly. 5. Both the temporary and permanent cap will apply to economic immigrants only, those in Tiers 1 and 2. Tier 1 (General) is for highly-skilled immigrants only—they must achieve 100 points based on specific criteria relating to age, previous earnings and qualifications, as well as general criteria relating to savings and English language skills. Tier 2 (General) is for skilled immigrants who hold a job offer in the UK and are sponsored by their employer. Applicants must have a job offer—which has previously been advertised to the Resident Labour Market or is listed as a national Shortage Occupation—from an employer registered with the UK Border Agency, and meet points criteria relating to savings and English language. 6. The temporary cap, introduced by the present Government, was set at 24,100 for non- EEA economic immigrants under Tiers 1 and 2 of the Points Based System. It consisted of three measures: • An interim limit on the number of out-of-country main applicants to Tier 1 (General), held flat at the level of the equivalent period of July 2009 to March 2010.5 This meant the cap would only come into effect if the volume of applications between July 2010 and March 2011 exceeded that in the same period of July 2009 to March 2010, which was 5,400 visa approvals.
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