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].
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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
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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
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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.
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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.
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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. Tier 1 routes for investors, entrepreneurs and post-study routes were not affected.
• Raising the Tier 1 (General) pass mark by five points for all new applicants (from 95 to 100 points).
• A reduction of 1,300 non-EEA economic immigrants who could be offered jobs by sponsor employers through Tier 2 (General). This entailed a 5% reduction from 20,000 Tier 2 visas issued between July 2009 and March 2010, to some 18,700 in the equivalent period in 2010–11. Tier 2 routes for intra-company transfers, ministers of religion and elite sportspeople would not be affected.
The temporary cap did not apply to dependents in either Tier, and excluded those who extended a Tier 1 visa in-country or who switched into Tier 1 from another Tier.
5 The period of July 2009 to March 2010 was chosen to mirror the months of the year that the temporary cap would be in operation: the temporary cap came into force in July 2010 and will run until the implementation of the proposed permanent cap, at the start of April 2011.
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Scope of the Committee’s inquiry 7. On 29 July 2010 we announced our intention to conduct a short inquiry into the Government’s proposals for a permanent cap on non-EEA economic immigrants. In particular, we wished to investigate:
• The impact a cap on non-EEA economic migration would have on the ability of UK business and industries to recruit the skills and staff they require;
• The numbers of skilled and non-skilled migrants likely to be affected by a cap on Tiers 1 and 2;
• The impact and effectiveness of a ‘first come, first served’ or a pool system for highly skilled migrants under Tier 1; and of a ‘first come, first served’, a pool, or an auction, system for skilled migrants under Tier 2;
• Whether and how intra-company transfers should be included in a cap;
• The implications of merging the Resident Labour Market Test and Shortage Occupation Lists;
• Whether dependents should be included in the cap, and the effect of including them.6
8. We recognise that the concept of an immigration cap is a vexed and contentious one. However, our intention in conducting this inquiry was not to review the policy basis for applying a cap, but to scrutinise to what degree the Government’s proposals might achieve its aim of reducing overall migration, what impact a cap might have on business and services, and how any cap could most fairly and effectively be administered.
9. We took oral evidence on three occasions in July and September 2010, and received 41 written memoranda. A full list of those who gave evidence is annexed. We thank all those who gave evidence for their assistance in our deliberations.
6 Immigration Cap—Terms of Reference, Home Affairs Committee Press Notice, 29 July 2010, www.parliament.uk/homeaffairscom
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2 Immigration figures
Migration data 10. There is no single source of migration data in the UK. Migration is measured in several different ways, which are not directly comparable. Until exit checks are implemented across the UK (in the form of e-Borders), it will not possible to count individuals out of the country, and so figures on the inflow and outflow of migrants cannot be matched. Currently, the principal sources of migration data are: a) International Passenger Survey (IPS) data. Published quarterly by the Office for National Statistics, it counts the number of passengers arriving at and departing from UK ports and surveys passengers about their reasons for migration. It measures only those coming to the UK for 12 months or longer.7 b) Long-Term International Migration (LTIM) data. Published quarterly by the Office for National Statistics, it uses International Passenger Survey data, plus a number of other sources: the Labour Force Survey, Home Office data on asylum seekers, and international migration data relating to Northern Ireland.
IPS and LTIM migration figures are similar, but IPS data allow more detailed analysis, including breakdown of immigrant numbers by characteristics like ‘reason for migration’. Both sets of data include British citizens as well as EEA citizens and non-EEA citizens. c) Control of Immigration data. Published quarterly by the Home Office, these cover Border Control, Asylum, Enforcement & Compliance, and Managed Migration figures (including visas issued under the Points Based System). They do not include British or EEA citizens.8
The Government’s figures: net long term immigration 11. In discussing immigration, the Government has been using the Long-Term International Migration data (b, above) published by the Office for National Statistics (see Table 1a and Chart 1a). International Passenger Survey data (a, above) gives a further breakdown of net migration by citizenship, allowing comparisons to be made between the numbers of British, EEA and non-EEA migrants which make up the net migration figure (see Table 1b). Table 1c shows total inflows and outflows of non-EEA economic migrants for the six years from 2003–08. In the current context, it is noteworthy that in 2008—the last year for which data were available—there was a new outflow of non-EEA economic migrants. However, it is important not to place too much emphasis on a single year’s figures.
7 Defined as “those who have entered or left the UK for an actual (or intended) period of at least 12 months” 8 Except in relation to the number of passenger journey arrivals
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Table 1a: Long Term Migration to the UK, 1991–2009 (thousands)9
Year Inflow Outflow Total 1991 329 285 +44 1992 268 281 -13 1993 266 266 -1 1994 315 238 +77 1995 312 236 +76 1996 318 264 +55 1997 327 279 +48 1998 391 251 +140 1999 454 291 +163 2000 479 321 +158 2001 481 309 +171 2002 516 363 +153 2003 511 363 +148 2004 589 344 +245 2005 567 361 +206 2006 596 398 +198 2007 574 341 +233 2008 590 427 +163 2009 567 371 +196
Chart 1a: Long Term Migration to the UK, 1991-200910
700 600 500 400 Net total 300 Inflow 200 Outflow 100
Migration (thousands) Migration 0 -100 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Calendar year
9 Office for National Statistics (ONS) Long Term International Migration (LTIM) tables: 1991-latest: Provisional estimates of Long-term international migration, year ending December 2009, 2-series (LTIM Calendar Year), Table 2.03 LTIM Country of Birth 1991-2008. Data are calculated on a rolling basis at the end of the calendar year. 1991 is the latest year for which comparative figures are available. Figures include British, EU and non-EU citizens. http://www.statistics.gov.uk/statbase/Product.asp?vlnk=15053 . Accessed 26 October 2010. 10 See Table 1a for data and source.
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Table 1b: International Passenger Survey net Long Term Migration by citizenship, 2000–2009 (thousands)11
Year British EEA Non-EEA All citizenships 2000 -47 +13 +111 +77 2001 -21 +13 +129 +122 2002 -65 +19 +134 +87 2003 -66 +16 +163 +112 2004 -99 +80 +233 +214 2005 -80 +78 +174 +172 2006 -127 +81 +205 +159 2007 -87 +126 +181 +219 2008 -90 +51 +169 +129 2009 -36 +43 +184 +191
Table 1c: International Passenger Survey net Long Term Migration: Inflows and outflows of non-EEA economic migrants, 2003-08 (thousands)12
Year Inflow Outflow 2003 85 63 2004 113 65 2005 93 74 2006 100 79 2007 73 63 2008 66 74
12. There is no single source of migration data in the UK. Until exit checks are implemented in the form of e-Borders, it is not possible to count individuals out of the country, and so figures on the inflow and outflow of migrants cannot be matched. Migration is currently measured in several different ways, which are not directly comparable one to another. This can obscure and complicate the public policy debate on immigration, a difficulty which was highlighted by the use of varying sets of figures by different witnesses, and exemplified by the fact that the Government itself is using one set of data for its immigration target (net long-term immigration) but is acting on another set (entry clearance visas issued) to implement a cap. We urge the Government to implement exit checks as soon as possible to ensure that immigrants leaving the country can be matched with those entering it.
13. The figure of ‘hundreds of thousands’ of immigrants cited by the Government in respect of its immigration policy objective (see paragraph 1) comes from Long-Term International Migration data and relates to the net number of immigrants entering the UK for a year or longer (immigrants minus emigrants), and includes British and EEA citizens. The latest data show that 196,000 net immigrants entered the UK in 2009. Net long-term migration peaked in 2004 at 245,000 and continued at an annual rate of about 200,000 in the five years to 2009. Data from the International Passenger Survey show that non-EEA citizens consistently make up the majority of net immigrants, but that the overall rise in 2009 was accounted for by a decrease in the number of British citizens emigrating.
11 Office for National Statistics (ONS) International Passenger Survey estimates of long-term international migration, year ending December 2009: http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=15240. Accessed 4 October 2010. 12 Data taken from International Passenger Survey annual data, and reported by the UK Statistics Authority in response to a Written Parliamentary Question: HC Deb 28 July 2010, Col 450W–452W.
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Gross long-term immigration 14. The migrants who make up the net long-term immigration figure cited by the Government (196,000 in 2009) fall into three broad groups, and three immigration routes: British, EEA, non-EEA; and work, study, family. The only group subject to immigration control are the non-EEA nationals, and the Government’s proposed cap will therefore apply to non-EEA nationals entering for work only, under Tiers 1 and 2 of the PBS.13
15. The gross long-term immigration figure in 2008—the latest year for which a breakdown by reason for migration is available—was 538,000. In 2009 there were 567,000 gross long-term immigrants, but the figure is not yet broken down. 14 The International Passenger Survey provides a breakdown of this figure by group and reason for migration, giving a picture of the proportion of non-EEA migrants, as compared to British and EEA migrants, immigrating for work purposes (see table 2).
Table 2: International Passenger Survey data (2008): Citizenship by main reason for migration to UK (thousands)15
Main reason for All citizenships British EEA Non-EEA migration All reasons 538 82 178 278 Definite job 137 23 70 44 Looking for work 70 18 29 23 Accompany/join 87 71961 Formal study 172 6 40 126 Other 34 8620 No reason stated 39 19 15 5
16. Table 2 shows that in 2008, according to the International Passenger Survey, non-EEA migrants accounted for 52% of all gross long-term immigrants (British, EEA and non-EEA citizens). However, non-EEA immigrants giving ‘having a definite job’ or ‘looking for work’ as their reason for immigration accounted for only 12% of all gross long-term immigrants. Amongst non-EEA migrants, economic migration accounted for 24% of those entering the UK in 2008, whereas formal study was the biggest single reason for immigration amongst this group (45%).
17. The Home Office Control of Immigration bulletin reports the number of visas actually issued to individuals under the Points Based System (and pre-PBS equivalent routes), thus
13 Tier 5 is also a work-related route, but is limited to temporary work, such as Working Holidaymaker schemes, and has no link with settlement. 14 Office for National Statistics (ONS), Long-Term International Migration, estimates from the International Passenger Survey: annual data 2008. Table 3.08: Citizenship by main reason for migration. www.statistics.gov.uk. Accessed 4 October 2010. The ONS published provisional total figures for year ending December 2009 (in August 2010), which show that gross long-term immigration was 567,000, but a breakdown of this total by reason for migration will not be available until November 2010. For the purposes of discussing reason for migration we therefore use the 2008 figures. IPS figures are not directly comparable with the Long Term Migration figures (from where the 196,000 figure comes) but are close, with IPS forming the principal data source for LTM. 15 Office for National Statistics (ONS), Long-Term International Migration, estimates from the International Passenger Survey: annual data 2008. Table 3.08: Citizenship by main reason for migration. www.statistics.gov.uk. Accessed 4 October 2010.
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also giving a breakdown by purpose for migration (see table 3).16 Although these data are not directly comparable with overall Long-Term International Migration or International Passenger Survey data, they are the numbers through which a cap will be operated.
Table 3: Non-EEA migrants issued entry clearance visas for work, study and family reunification, 2007–200917
2007 2008 2009
Tier 1: Highly- Main applicants 10,055 15,515 18,780 skilled & equivalent Dependants 6,285 8,200 15,010
Tier 2: Skilled Main applicants 68,355 59,115 36,490 with job offer & equivalent Dependants 30,150 22,055 26,985
Total Main applicants 78,410 74,630 55,270 (employment, leading to settlement)
Dependants 36,440 30,255 41,995
TOTAL (main 114,850 104,885 97,265 applicant & dependants)
2007 2008 2009
Students (PBS Main applicants 229,415 250,950 311,135 Tier 4 and student Dependants (tier 19,295 24,200 30,170 visitors) 4 only)
Total 248,710 275,150 341,305
Family Main applicants 49,035 44,620 38,335 reunification Dependants 20,545 20,895 10,730
Total 69,580 65,515 49,065
16 Figures are not comparable between the two sources, since the International Passenger Survey measures journeys, and Control of Immigration visas issued. A cap will be administered through the Points Based System and would apply to the number of Entry Clearance visas issued under Tiers 1 and 2. 17 Home Office Control of Immigration : Statistics United Kingdom 2009, Bulletin 15/10, August 2010. Table 1;1: Entry Clearance Visas to the United Kingdom issues by category. http://rds.homeoffice.gov.uk/rds/pdfs10/hosb1510.pdf . Accessed 4 October 2010.
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Non-work routes 18. The Home Secretary’s statement on 28 June said:
Our commitment to reduce net migration will require action ... beyond the economic routes. I tell the House now that I will be reviewing other immigration routes in due course and will be bringing forward further proposals for consideration by the House.18
That the Government also intended to consider changes to non-economic routes was confirmed by the Immigration Minister, Damian Green MP, in oral evidence to us:
We are looking at every route as you would expect. The asylum numbers are really very small compared with what they were previously, but one can always make improvements. We are looking at the student and educational route which just in terms of sheer numbers is the biggest single route within the points-based system. We are also looking at family reunification and rights of settlement.19
19. International Passenger Survey data (see table 2) shows that in 2008, some 45% (126,000) of all non-EEA long-term immigrants to the UK stated on their arrival that they had come to study; and some 22% (61,000) similarly stated that they came to accompany or join a family member.
18 HC Deb, 28 June 2010, Col 585–6 19 Q 50
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3 Whom will the cap affect?
20. As set out in the previous chapter, in 2009 net long-term international immigration totalled 196,000, and gross inward migration was 567,000. In the same year a total of 97,265 visas were issued to long term non-EEA immigrants under Tiers 1 and 2 (55,270 main applicants and 41,995 dependants).20
Inflow and outflow 21. Professor David Metcalf, Chair of the Migration Advisory Committee, explained that, in terms of the migration figures “you’ve got three routes in: you’ve got work, study and family. You’ve got three groups: British, EU, non-EU. So you’ve got nine cells and we’re only dealing with one of those cells”.21 He told us that, in addition to measures to reduce numbers in these nine ‘cells’ of immigrants entering the country, changes could also be made to increase the ‘outflow’—the number of migrants leaving the country—to contribute to a reduction in net immigration. This would involve changing the duration of time immigrants are able to stay in the country, for instance by “weakening the link between work and settlement; possibly on the post study work route–making that more selective, for example”.22 However, he explained that, any such changes, even if introduced now, would not take effect until 2013–14. He acknowledged that in order to reach the Government’s proposed goals, there would need to be some limits on immigration through the economic route.23
Cap will not affect EEA immigrants 22. As can be seen from Table 2, in 2008 non-EEA nationals accounted for 52% of overall gross long-term immigration, whilst EEA nationals accounted for 33% and British citizens for 15%. Under EU law, any limits on immigration can only apply to non-EEA nationals since the Government has no control over the immigration of British and EEA nationals. However, the Government’s target figure for reducing net immigration also includes British and EEA citizens. The Minister explained that it was vital to control “the rate of change of population so that our public services and attitudes can cope with a controlled change in population”.24 He also made the point that, as British and EEA citizens returning after long periods away also contributed to increased pressure on public services, it was reasonable to include them in the net immigration figure the Government was trying to reduce.
23. During our inquiry a media report emerged claiming that three EU countries were issuing passports to individuals outside the EU, highlighting the importance of the issue of transitional controls in any future EU enlargements. The media report stated that Romania had issued 120,000 passports to Moldovans with ethnic Romanian backgrounds, with a
20 See Table 3. 21 Q 142 22 Q 146 23 Q 145 24 Q 31
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further 800,000 eligible to apply, Bulgaria had issued around 60,000 to Macedonians, and Hungary had implemented a similar policy regarding hundreds of thousands of ethnic Hungarians across Eastern Europe.25 The Minister pointed out that two of the stated countries, Romania and Bulgaria, were still subject to transitional arrangements and those transitional arrangements, which currently run until 2011, could be extended until 2013. The Minister stated a range of factors would need to be taken into account before the Government decided whether or not to relax them in 2011.26
Proportion of immigrants affected by cap 24. International Passenger Survey data show that non-EEA economic immigrants—the only immigrants covered by the cap—accounted for 12% of gross long-term immigration in 2008, and in 2009 the number of visas issued to non-EEA economic immigrants and their dependants under the Points Based System accounted for 17% of gross long-term immigration (see Tables 2 and 3).
25. Professor Metcalf considered that, given the relatively small proportion of immigrants accounted for by non-EEA economic immigrants, to successfully reduce net immigration to the tens of thousands the Government would have to significantly reduce numbers of immigrants in the other routes:
On the assumption that the Coalition Government agreement is to go for the tens of thousands, then work has to play its part in this. But I would have to emphasise that so has students, and so has family as well, because if students and family don’t take their proportionate share then work, which is itself the smallest of the three fractions, will have to take a more than proportionate share.27
26. The Minister stated that a limit on non-EEA economic immigration was only the first step to limiting overall immigration:
What I want to see is steady downward pressure on the net immigration level. I cannot emphasise enough that the economic route and the limit on it is only one part of that. There are many other routes of immigration and we shall be looking at all of them. This is a vital part of it and a first step but that is what it is.28
27. The net immigration figure—which the Government intends to reduce to ‘tens of thousands’—is affected by inflows and outflows of British, EEA and non-EEA citizens. In 2008, British citizens accounted for 15% of gross long-term immigrants, EEA citizens for 33% and non-EEA citizens for 52%. Under EU law the Government cannot limit numbers of British or EEA citizens entering the UK, and consequently can only influence the numbers of non-EEA migrants entering and leaving the country, whilst expecting that natural patterns of British and EEA migration will stabilise over the long term as we have seen with patterns of migration from and back to Spain and Portugal when they joined the
25 ‘Romania opens back door for thousands of Moldovans to claim benefits in Britain’, Daily Telegraph, 18 July 2010 26 Q 44 27 Q 145 28 Q 33
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EU,29 and as we are now observing with the A8.30 The Minister further stated that the impact of any future EU enlargement would be mitigated by transitional arrangements.31 We recommend that the Government commissions a programme of research better to understand the likely path of British and EEA migration.
28. As the Government pursues its aim to reduce overall immigration to the UK, it is important that it does not underestimate the impact of immigration routes which it cannot control. We urge the Government not to treat the routes it can control too stringently in order to compensate for the routes it cannot control.
29. It is possible the Government will need to act to increase the outflow of non-EEA citizens as well as the inflow, probably through policy changes to break the link between certain immigration routes and settlement. However, we note Professor Metcalf’s comments that any changes to length of stay, to influence the outflow, would not take effect until 2013–14, and so for the Government to make an immediate impact the inflow is key.
30. Two different, albeit imperfect, measures of immigration suggest that non-EEA economic immigrants account for less than 20% of overall gross immigration. International Passenger Survey data show that they accounted for 12% of gross long-term immigrants in 2008, and in 2009 the number of visas issued to Tier 1 and 2 immigrants and their dependants under the Points Based System accounted for 17% of the gross long- term immigration total. If Tiers 1 and 2 were to be suspended altogether, this would reduce gross immigration by 17%; and if the cap were implemented at the 5% reduction rate introduced in the temporary cap, the reduction in overall gross immigration would amount to 0.9%.
31. It is therefore clear from the figures that the proposed cap—unless it is set close to 100%—will have little significant impact on overall immigration levels. Our witnesses, including the Minister himself, acknowledged that the current measures were only a first step in achieving the reduction in overall immigration sought by the Government, and that other immigration routes would also need to be examined.
29 Q 43 30 Q 244 31 Q 42
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4 Impact on business and services
32. Immigration has an effect on business and services. Public and private sector employers hire immigrants to perform key tasks in the economy, but some immigrants also create an added demand for public services, and a failure to manage migration can create significant tension in and between communities. In her statement of 28 June (see paragraph 1), the Home Secretary noted that the Government wanted “to ensure that we can properly weigh the economic considerations against the wider social and public service implications”.
33. It emerged in evidence from Mr Keith Sharp, Marketing Director of Tata Consulting Services, and Mr Som Mittal, President of the Indian National Association of Software and Services Companies, that the temporary immigration cap had had ‘very little effect’ on their businesses, since intra-company transfers had been excluded from the temporary cap.32
34. However, since the Government announced its intention to implement a cap, some business and service leaders have publicly raised concerns about the economic impact of a cap. The Immigration Law Practitioners’ Association (ILPA), which represents 900 immigration lawyers and firms, wrote to us that:
The view overwhelmingly expressed by members’ clients is that the imposition of an immigration cap will stifle economic growth, result in greater burdens on employers and affect the delivery of key public services.33
35. The Federation of Small Businesses also stated their concerns that any cap on non-EEA economic immigration “would have an adverse effect and would act as a barrier to economic growth and competitiveness”.34 A number of other organisations expressed similar concerns. A contrasting view given by the Confederation of British Industry (CBI), which represents some 240,000 businesses which together represent around a third of the private sector workforce, stated its members’ belief that the “economic migration system should efficiently balance the needs of employers for access to skilled workers from abroad and the undoubted weight that migration can place on the social fabric of local communities”. On this basis, the CBI stated that its members had no objection to the Government’s proposals for an annual limit to migration, provided that “the system that is rolled out is one that businesses are able to work within”.35
Highly skilled migrants 36. Witnesses stated that the cap would curb only skilled immigrants, most needed by businesses. The City of London Corporation argued:
The City fears that this cap, coupled with other changes to the domestic tax and regulatory environment, could exclude those individuals who typically bring tangible
32 Q 184 33 Ev 52, para 5 34 Ev 45, para 1 35 Ev 64, para 3–4
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benefits to the UK, do not displace existing British workers, and whose talents are mobile and welcome in many other centres. These individuals could be investors, entrepreneurs, or key staff for the many international firms situated in the UK.36
37. Universities were extremely concerned by the impact on their academic staff. Universities UK told us that 10% of the academic workforce comprised non-EEA nationals, particularly in science, technology, engineering and mathematics subject areas. The top five nationalities were American, Chinese, Indian, Australian and Canadian. Universities UK did not want to lose the ability to compete internationally for top academic staff.37
38. A number of high-profile figures have publicly argued that the cap would prevent top- class international professionals from coming to the UK. Eight Nobel prize-winners in science, in an open letter submitted as evidence to us, wrote that they believed that the cap would “damage [the UK’s] ability to recruit the brightest young talent, as well as distinguished scientists, into our universities and industries”, and underlined that “the UK produces nearly 10 per cent of the world’s scientific output with only 1 per cent of its population: we punch above our weight because we can engage with excellence wherever it occurs”. They highlighted the exemption from the cap for international sportspeople, commenting that “it is a sad reflection of our priorities as a nation if we cannot afford the same recognition for elite scientists and engineers”.38
39. Research commissioned and published by the Confederation of British Industry (CBI) in May 2010 found that demand for highly-skilled people would intensify during the economic recovery, and employers feared they would not be able to find people with the skills they needed to fill high-level jobs. The report concluded:
Half of employers (51%) are concerned they will not be able to fill posts requiring the right graduate level or higher skills in the coming years, and a third (32%) don’t believe it will be possible to fill intermediate level jobs, requiring skills equivalent to A–level. A third (30%) of employers predict the need for lower-level skills will decrease, while just 17% say it will increase.
Despite the recession, nearly half of employers (45%) say they are already having difficulty recruiting staff with skills in science, technology, engineering and maths (STEM), with manufacturers and science-related businesses having the most difficulty finding highly-skilled people to fill their posts. Even more companies (59%) expect to have difficulty finding STEM-skilled people in the next 3 years.39
40. However, we note that there are varying views throughout the business community. For instance, research published by the Institute of Directors in 2007 found that “80 per
36 Ev w26, paras 2, 3 and 4. Ev 69, para 4.7 37 Ev w14, para 3 38 Letter from Nobel laureates, submitted to Committee 39 Confederation of British Industry (CBI), Ready to grow: business priorities for education and skills, May 2010: http://www.cbi.org.uk/ndbs/content.nsf/802737AED3E3420580256706005390AE/C4393B860D00478E802576C6003B06 79 . Accessed 4 October 2010.
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cent of IoD members support some form of limit on migrants from outside the EU”40 and that “42 per cent thought [the current level of immigration] was too high relative [to skill shortages], whereas only 11 per cent thought it was too low”.41 The effect that the non-EEA economic immigrant cap would have on these employers is unclear, especially considering the fact that, according to the Chartered Institute for Personnel and Development, more than 73 per cent of migrants recruited between December 2009 and March 2010 were already UK-based, and only 27 per cent were recruited directly from overseas.42
Recruiting needed skills 41. Both the British Chambers of Commerce (BCC) and the Federation of Small Businesses (FSB) argued that they needed to be able to recruit some migrant workers. In addition, businesses highlighted the fact that many small businesses struggled to train for highly specialist roles themselves, and in other cases training existed but was inadequate or took too long when business needs were pressing.43
42. While the Immigration Minister cited a Report from the House of Lords Select Committee on Economic Affairs in April 2008, which argued that net immigration was not indispensible in order to fill labour and skills shortages, both he and the Home Secretary recognised in evidence to us that there would continue to be a need for migrants to fill jobs which could not be filled from the resident labour market. During the course of our inquiry it became evident that ensuring businesses were able to recruit the workforce they needed in order to remain competitive was about more than just getting immigration policy right. Both the British Chambers of Commerce and the Federation of Small Businesses emphasised the need for both Government and business to improve training and education opportunities to address problems which businesses encountered in recruiting from the resident workforce. The Federation of Small Businesses told us that small businesses found training expensive. However, written evidence from the British Chambers of Commerce pointed out that “employers are happy to play their part in up- skilling domestic workers, but the Government must take a long-term, strategic look at the UK’s skills shortages, and act to find solutions to them”.44 The Government has also suggested, in the UK Border Agency consultation, that businesses be required to prove a shortage in both local and national labour markets before a Tier 2 visa can be issued. The Federation of Small Businesses appeared to be unconvinced that small businesses would be able to meet this requirement:
The FSB does not want a cap. There is a certain immediacy when we have vacancies and we believe a cap could prevent us getting the right persons for the right jobs as soon as possible.45
40 Institute of Directors (IoD), The Immigration—the business perspective, January 2007, p 9: http://www.iod.com/MainWebsite/Resources/Document/policy_paper_immigration_business_perspective.pdf 41 Ibid., p 8 42 Ev w23 43 Qq 9–11, 14–16 44 Ev 64 45 Q1
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43. This was echoed by the Law Society, which argued that “City law firms advise on complex matters spanning multiple jurisdictions ... the economic impact of restricting the ability of law firms to recruit the best legal talent from the global market will be felt well beyond the current recession and may impede the recovery of the legal sector and the City more broadly”.46 The British Chambers of Commerce seemed to be more optimistic, but believed the Government needed to act immediately to up-skill workers to address occupations on the shortage occupation list, and that employers “should not be responsible for strategic skills planning and identifying the skills gap and knowledge across the whole economy”.47
44. We also received evidence from the information technology and communications sector emphasising that their business needs were primarily for temporary immigrants which they catered for by using intra-company transfers (ICTs). Intra-company transfers of less than 12 months’ duration were not included in the net long-term immigration figures cited by the Government, as these only included stays of over 12 months. Som Mittal, President of the Indian National Association of Software and Services Companies, told us:
I just endorse the view that people come here for temporary purposes. It’s determined by business and trade. It’s not intended to be [permanent] migration, and I think the [intra-company transfer] provisions today do not allow people to apply for [permanent] migration either. So I think we have seen the trend in the last few years; it goes up and down with business and in more recent years, particularly in the [information and communications technology] sector, we have seen a lot of investment coming in.48
Location factors for businesses 45. We heard evidence that the UK had a strong record of attracting international business, which would be threatened if the ability of businesses to recruit the skills they needed was curbed too sharply. Dr Marshall, representing the British Chambers of Commerce, noted that “50% of European headquarters are in the UK. There have been 469 headquarters projects over the past decade compared with 86 in Germany, and that is on the strength of the UK’s business environment”.49 The Chartered Institute of Personnel and Development told us that their research showed that 9% of private sector companies planned to relocate jobs overseas in the 12 months to June 2011, principally to India, China and Eastern Europe.50 However, the CIPD further noted that business decisions to locate UK jobs offshore was “a phenomenon which may spread further, irrespective of the policy outcome of the cap”.51
46 Ev w43, para 15 47 Ev 66 48 Q 185 49 Q 2 50 Ev w24 51 Ibid.
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46. The Immigration Law Practitioners’ Association (ILPA) told us that “migrants with a choice of destination will go to other countries, while multinationals will give serious consideration to leaving the UK to set up their European headquarters elsewhere, pulling out existing investment in the UK”.52 Sophie Barrett Brown, Chair of ILPA, gave an example from the United States of how a cap on economic immigrants could affect whether multinationals would come to the UK:
There was a notable example a couple of years ago when Microsoft was having such difficulty with the H-1B cap that they relocated one of their centres to Canada, where they now employ over 1,000 Canadians, and the US lost those jobs.53
47. The Indian National Association of Software and Service Companies (NASSCOM) pointed out, however, that during the period the cap was in place in the US, its economy did very well. But NASSCOM went on to say that, in the specific case of intra-company transfers, which are discussed in further detail later in this Report, its members “would be driven to explore the possibility of locating elsewhere in Europe, particularly in light of moves to introduce a Schengen-wide work permit”.54 Dr Marshall from the British Chambers of Commerce believed that the impact of the non-EEA economic migrant cap would have on businesses was difficult to assess, telling us:
I do not believe a cap would mean that somehow Britain was closed to business. It would not give that signal, but it might make some businesses’ immediate recruitment needs very difficult and that could have knock-on impacts on employment, recovery and tax revenues to the Exchequer”.55
Keith Sharp, Marketing Director of Tata Consulting Services (TCS), agreed, but noted that his company was well-established in the UK and was therefore unlikely to leave: even though a cap would be “disruptive”, the company would “adapt and figure things out”.56
Tax and investment 48. Several witnesses noted that, while Tier 1 and 2 immigrants used public services, they also contributed via taxes and spending income domestically. The Law Society noted that “migrant employees are high-earning individuals who also contribute to the domestic economy by spending their income in the UK. Partners and employees pay income tax. Individuals relocated from abroad typically receive a generous relocation package, funded by firms”.57 The City of London Corporation claimed that:
These individuals will also pay higher rates of tax, to the benefit of public purse. These individuals also benefit the UK economy by being here. They are likely to be trained in skills that will be passed on through training and education to British workers and businesses and, on the whole, are less reliant on public services such as
52 Ev 52, para 6 53 Q 211 54 Ev 69, para 4.7 55 Q 2 56 Q 198 57 Ev w43, para 19
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education or the health service. Their spending on goods and services in the UK also benefits the wider economy.58
49. The Office for Budget Responsibility has said that, if GDP is to grow by the projected 2.3% in 2011, about a third of that growth will have to come from increases in business investment.59 Professor Metcalf said that a cap on economic migration would reduce foreign direct investment productivity but that “the macro consequences are probably not large”60 and that in the longer term “it would be possible to upskill our own people and that can in due course provide a substitute for immigration”.61
50. The British Chambers of Commerce stated that it was important that the UK work to increase the number of migrant investors and entrepreneurs coming to the UK.62 The Government appears to agree with this view and has indicated in its consultation that it believes the distinct migrant routes for investors and entrepreneurs should be expanded and encouraged.
Public sector jobs 51. Our predecessor Committee in the last Parliament conducted an inquiry into the Points Based System in 2009 which found high numbers of hard-to-fill posts in the care sector, many of which were being filled by non-EEA immigrants.63 In September 2008 the Migration Advisory Committee reported to the Government that it had received evidence from the care sector that “over 70,000 vacancies for care assistants and home carers were notified to Jobcentres in the first six months of 2007 (i.e. about 12,000 per month)”.64
52. We were told that the problem was significant in the public sector. In evidence to us Professor Metcalf suggested that social care and education might be the two sectors most likely to be adversely affected by the proposed cap.65 The British Association of Social Workers (BASW) reported that acute shortages of qualified social workers, the inadequacies of some training, and the difficulties in retention of experienced staff because of high workloads and low public esteem for the profession, had led employers to recruit internationally.66 Hilton Dawson, Chief Executive of BASW, noted that “there is a lack of confidence in some of the social workers graduating from some British universities, with good reason ... but the huge issue is about retention and the terrible fact is that we burn out very newly qualified social workers, by exposing them without enough support to the rigours of child protection work”.67 In light of the fact that social workers played such an
58 Ev w26, paras 2, 3 and 4. See also Ev 69, para 4.7 59 Office for Budget Reform (OBR), Budget Forecast June 2010, Table C3 Contributions to GDP growth, p 85 60 Q 182 61 Q 183 62 Ev 64 63 Home Affairs Committee, Thirteenth Report of Session 2008–09, Managing Migration: The Points Based System, HC 217-I, para 209. 64 Migration Advisory Committee (MAC), Skilled, Shortage, Sensible: The recommended shortage occupation lists for the UK and Scotland, September 2008, p 155. 65 Q 164 66 Ev 59 67 Q 191
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important role in supporting families and protecting children, it was extremely important that the need to recruit non-EEA social workers was taken into account in the design of the cap. He further stated that the Government and the sector needed to provide better training and more support for social workers so that the sector could “work towards a reduction of social workers coming from abroad”.68 Mr Dawson emphasised that with an immigration cap there would be a greater need to recruit UK residents into the social work force and “to train them well”.69
53. It should be noted that the Committee did not receive evidence from generally recognised public services such as education, housing and local Government in the limited time available to our inquiry.
Merging Tier 2 routes 54. There are currently three routes by which a sponsoring employer can bring in a skilled immigrant under Tier 2: by first advertising the job to the resident labour market, by employing an immigrant for an occupation on a national shortage list, or by intra- company transfer (ICT). The UK Border Agency consultation asked whether the first two routes should be merged, so that both tests be applied to every vacancy before an immigrant could be recruited.70 The two routes were reviewed by the Migration Advisory Committee in August 2009, which concluded that it “did not see an economic case for restricting Tier 2 to the shortage occupation list only”.71 Professor Metcalf argued in evidence to us that:
The shortage occupation route is a very important one...it provides a good safety valve, particularly in a time of limits. The resident labour market test is really a very important one, particularly as it happens for health and education where there’s no national shortage but maybe there’s a shortage of teachers in London, health care workers or nurses in a particular area ... speaking personally and on behalf of the Committee, we don’t think the proposal to merge those two routes is something we would be in favour of.72
55. Several witnesses agreed with this position. The British Medical Association (BMA) pointed out that the resident labour market test allowed employers to account for regional shortages, whereas the shortage occupation list only measured national shortages. It was concerned that a merger would exacerbate regional shortages.73 On the whole, businesses were against the proposal to merge the routes. The Confederation of British Industry, for instance, told us:
68 Q 193 69 Ibid. 70 UK Border Agency, Limits on non-EU economic migration: a consultation, June 2010, p 7 71 Migration Advisory Committee, Analysis of the Points Based System, Tier 2 and Dependants, August 2009, p 152 72 Q 147 73 Ev w9, para 16
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The merging of the two routes creates the possibility of a firm being unable to hire domestically—and being able to demonstrate this—but still not having access to a work permit as the Shortage Occupation List has not yet been updated.74
56. There does not seem to be strong argument in favour of merging the resident labour market and shortage occupation list routes under Tier 2. They serve separate and distinct purposes, the former being a tool to fill specific or regional shortages, the latter a mechanism for recruiting skills in national shortage.
Exempting intra-company transfers? 57. Under a specific route in Tier 2, international firms can bring company workers into the UK for temporary periods under an intra-company transfer (ICT). The UK Border Agency consultation asked whether intra-company transfers should be included within the cap.75 In 2009, the number of non-EEA immigrants76 issued with visas under the various Tier 2 routes were as follows:
Table 4: Tier 2 visas, by route, in 2009 (thousands)77
Visa type Main applicants Dependants
Work permit holders (pre-PBS) 5,160 11,485
Tier 2 General 8,555 -
Tier 2 ICTs 22,030 -
Tier 2 Ministers of Religion 370 -
Tier 2 Elite Sportspeople 265 -
Dependants (all Tier 2) 15,505
Tier 2 total 36,490 26,985
58. In 2009 intra-company transfers accounted for 60% of all Tier 2 visas, up from 45% in 2008, meaning that 22,000 of the total 36,000 Tier 2 main applicant visas were accounted for by intra-company transferees. By contrast, the resident labour market test and shortage occupation routes combined accounted for 23% of all Tier 2 main applicants. The intra- company transfer route is heavily used by the IT and telecommunications sector, which accounted for 66% of all intra-company transfers issued in the first quarter of 2009.78 Following a review by the Migration Advisory Committee in 2009, intra-company
74 Ev w13, para 8.iv 75 UK Border Agency, Limits on non-EU economic migration: a consultation, June 2010, p 9 76 Dependants are given for Tier 2 General (11,485 total in 2009), but as an aggregate for the other three routes (15,505 in total) 77 Home Office Control of Immigration : Statistics United Kingdom 2009, Bulletin 15/10, August 2010. Table 1;1: Entry Clearance Visas to the United Kingdom issues by category. http://rds.homeoffice.gov.uk/rds/pdfs10/hosb1510.pdf . Accessed 4 October 2010. 78 Migration Advisory Committee, Analysis of the Points Based System, Tier 2 and Dependants, August 2009, p 106
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transferees can now apply for a maximum initial stay of three years, extendable by two years, but cannot apply for indefinite leave to remain.79
59. The UK Border Agency consultation suggested the option of excluding intra-company transfers from the cap only if transfers were for less than 12 months’ duration—in order to ensure that migrants were only temporary—or the option of limiting the entire route to 12 months. Some witnesses argued vigorously in favour of excluding intra-company transfers from the cap. As well as making general points about intra-company transfers enabling companies to access specific skill sets not available in the UK, the Indian National Association of Software and Services Companies (NASSCOM) and Tata Consultancy Services emphasised that the intra-company transfer route only allowed temporary migration and did not lead to settlement, although a third of those entering under the intra-company transfer route did remain in the UK via other routes.80 Research by NASSCOM had revealed that its member companies tended to apply for about 40% more entry clearance visas than they actually used (so that they could move people around quickly and flexibly). NASSCOM argued that where quotas had been implemented in other jurisdictions for intra-company transfer type schemes, it had led to hoarding, increased costs, inflated figures and a distortion of the system.81 The British Chambers of Commerce stated that “it is of critical importance to the economy that the ICT route is not included in the cap—if there are restrictions on this route then global companies will reduce their investment, jobs and number of transactions in the UK”.82 In the engineering sector, IChemE (representing chemical, biological and process engineering firms) argued that intra-company transfers were “absolutely vital” to international businesses.83
60. Mr Sharpe of Tata Consultancy Services (TCS) and Mr Mittal, President of the Indian National Association of Software and Services Companies (NASSCOM), emphasised that the intra-company transfer route was a key one for IT companies in particular. TCS had 3,150 employees in the UK on intra-company transfers as of 31 March 2010.84 Mr Mittal told us that “the UK is the headquarters for the majority of [NASSCOM’s] companies when they work pan Europe [and] a quota system ... will be quite detrimental to business here because then we would need to look at those places where the movement of people is not a consideration”.85 Mr Sharp agreed that intra-company transfers were determined by “economically driven supply and demand”, noting that TCS had a net outflow of IT workers in the year to 31 March 2010, due to a reduction in demand from UK corporations.86
61. The Confederation of British Industry (CBI) drew lessons from the United States’ H1-B work visa system, which was subject to variable annual limits set by the government. It was set at 65,000 per year with an additional 20,000 visas reserved for holders of advanced
79 Migration Advisory Committee, Analysis of the Points Based System, Tier 2 and Dependants, August 2009, p 114 80 Q 185 81 Ev 68–69, paras 4.2, 4.4 and 4.6 82 Ev 67, para 9 83 Ev w10 84 Q 185 85 Ibid. 86 Ibid.
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degrees.87 The CBI noted that intra company transfers to the US were exempted under the H1-B quota, which had “improved the business experience of the H1-B by ensuring that genuinely temporary migration—with no route to settlement—is not subject to restriction”.88 It warned that the US system risked annual quotas being snapped up as soon as the allocation opened:
In 2007, for example, the quota expired within a week, leaving firms with a “closed” period of over a year until further permits could be issued through the H1-B tier”.89
62. In opposition to these arguments, some witnesses maintained that companies were using the intra-company transfer route to bring workers from overseas to do jobs that could be filled by qualified UK-based workers, and criticised the route for having no requirement to check that a resident worker could not do the job.90 The Professional Contractors’ Group (PCG), a professional membership association representing 1.4 million freelance workers, stated that “freelance consultants and contractors in the IT industry have regularly contacted PCG alleging displacement or replacement by ICT workers”.91 Migration Watch agreed:
[The ICT] was originally intended to allow international companies to move their senior staff in and out of the UK. This is a key attribute that must be maintained. Unfortunately, the scheme has been used in recent years to post tens of thousands of, at best, middle ranking IT workers to the UK, often from India. Their purpose is to become familiar with particular IT functions in the UK so that the work can be offshored.92
63. There was disagreement over the cost-effectiveness to business of employing immigrants on intra-company transfers. The Professional Contractors Group argued that “a non-EEA worker is likely to cost less than a UK worker”.93 However, a report by the Migration Advisory Committee found that for most companies the cost of bringing an intra-company transferee to the UK was higher than hiring an EEA national.94 Gary Burgess, an individual with personal experience of the intra-company transfer route, considered that they should be included in the cap, and suggested that the salary level for workers on intra-company transfers should be increased.95 He pointed out that the US had recently introduced legislation to increase charges for companies more than half of whose workforce were on migrant visas.96 The Professional Contractors Group suggested that a
87 Ev w12 88 Ev w12 89 Ibid. 90 Ev w17 and Ev w20 91 Ev w20 92 Ev 50 93 Ev w21 94 Migration Advisory Committee, Analysis of the Points Based System, Tier 2 and Dependants, August 2009, pp 118– 121 95 Ev w17 96 Ev w18, para 11
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“sliding scale” of charges could be introduced to make certificates of sponsorship increasingly more expensive for companies the more they used.97
64. The proposed cap on Tiers 1 and 2 will by definition only affect skilled workers. Tier 1 consists of very highly skilled individuals, likely to make a significant contribution not only to the UK’s skills, but also directly to its economy through tax and income spending; and Tier 2 is driven by the business requirements of employers across a range of private and public sector skills shortages. Both private sector businesses and public sector services made compelling arguments—many of which have been well-rehearsed in public debate— about the negative impact a cap on Tiers 1 and 2 will have on their ability to operate, leaving vacancies unfilled unless it is properly designed with business needs in mind. However, we also agree with the evidence given by many employers, that the country should be better training the skilled people we need to reduce the need for immigration in the future, and we believe there is an important role for Government in providing a strategy to ensure that occurs. We note the concerns, expressed to us by eight Nobel prize- winners in science, about the potentially negative effect of the cap on the UK’s position of international excellence in science and engineering. We consider it totally illogical that professional sportspeople should be exempted from the cap but elite international scientists are not.
65. Despite agreement that a cap set too low would have an adverse impact on businesses— both international companies such as Tata Consultancy Services, and the UK companies which utilised their services—it remains unclear what the extent of that impact would be. Several witnesses told us that companies might seek to establish headquarters elsewhere, but others were well-established in the UK and unlikely to leave. The level of the cap will be key in determining the effect it will have on this kind of business decision. It is hard to assess whether disruption would be of sufficient magnitude to force businesses to relocate overseas—they may not be in a position themselves to answer this question before the details of a cap are set out.
66. Although we note the Minister’s evidence about wider social and public policy concerns, the evidence we received from businesses alerted us to the possible negative impacts the non-EEA economic migrant cap could have on business investment in the UK, and on tax revenues from high-earning immigrants. We emphasise that the Government must closely study the recruitment needs of businesses when determining the level at which the cap is set, as it has promised to do. This will be relevant to the UK’s economic recovery, especially if, as has been said by the Office for Budget Responsibility, one-third of the economic growth needed in the next year must come from business investment. However, we were told that the macroeconomic effects may be small. We are pleased that the Government is planning not only to protect the migrant route for investors and entrepreneurs, but also to encourage high net worth individuals to come to the UK to drive economic growth.
97 Ev w22
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67. The Government must decide whether or not to exclude intra-company transfers from the cap. Whilst it is meant to be a temporary immigration route, migrants on intra- company transfers can remain for up to five years, and we heard that a third stay in the country permanently, having transferred to another visa route. There is significant pressure from some businesses not to cap the route. However, to make any significant reduction in non-EEA economic immigration, a cap would have to include intra-company transfers, which in 2009 accounted for 60% of all Tier 2 visas and 40% of Tier 1 and 2 combined. We recommend that intra-company transfers under 2 years’ duration should be excluded from the cap.
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5 Dependants
68. Under Tiers 1 and 2 immigrants are able to bring spouses and dependant children to the UK. The UK Border Agency consultation asked whether the cap should apply to dependants as well as main applicants, although it further stated that the Government has no current plans to change existing policy for dependants.98 The ratio of main applicants to dependants under Tiers 1 and 2 has been in the order of 5:4, meaning that dependants account for almost half of non-EEA economic immigrant visas (see table 4). Migration Watch argued that dependants should be included in the cap: its Chairman, Sir Andrew Green, told us “we’re talking population so we have to include dependants, but you have to set the cap knowing that you’ve included dependants”.99 Professor Metcalf agreed that dependants would have to be included in some form:
to reach the tens of thousands from the hundreds of thousands, you’ve got to be thinking about dependants. You cannot leave them out of the equation. When you do your cap, you can do it on the main people and assume that the ratio will be five main and four dependants, or you can do it in total and include the dependants...If you have 20,000 main people and 18,000 dependants, you can operate the cap 20,000 main or 38,000 total.100
69. However, other witnesses argued that it could be economically unsound as well as unfair in principle to include dependants in the cap. The Immigration Law Practitioners’ Association argued against their inclusion, on the grounds that “measuring the effects of the cap and adjusting it to the needs of the economy becomes complex if not impossible if some included in the limit are skilled workers and others babies”. It suggested that the inclusion of dependants would risk discrimination on the grounds of age and gender. It also noted that treating migrants differently on the grounds of marital status or having children might risk engaging Articles 8 and 12, read with Article 14, of the European Convention of Human Rights and the Human Rights Act 1998, which protected the rights to respect for family and private life, and to marry and found a family.101 Professor Metcalf told us:
We’ve agonised about this issue because by definition in a cap world a dependant displaces a worker and, therefore, it raises very delicate issues. I don’t think one wants to be saying to people, “well, you can’t bring dependants”. Indeed, it would almost certainly not be lawful.102
70. The British Hospitality Association raised the question of whether dependants who joined an immigrant at a later stage would contribute towards the cap for the period in which they arrived, subsequent to the period of the main applicant. This could raise
98 UK Border Agency, Limits on non-EU economic migration: a consultation, June 2010, p 10 99 Q 270 and Ev 50 100 Q 157 101 Ev 56 102 Q 156
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awkward questions about dependants ‘taking away’ visa allocation from skilled immigrants in a later period. 103
71. Under Tiers 1 and 2 there have been approximately the same number of main applicants and dependants, a ratio of 5:4. The immigration figures cited by the Government include dependants, indicating that, if it is to meet its target of reducing immigration to ‘tens of thousands’, dependants will have to be accounted for in some form. As Professor Metcalf set out, a cap could either be applied to main applicants— with the assumption that there will be approximately the same number again of dependants—or to the combined total of main applicants and dependants.
72. The evidence we received argued against applying the cap directly to dependants, since a dependant might displace a main applicant whose skills were needed, and we are pleased that the Government has stated it has no plans to change the policy towards dependants. We therefore recommend that Tier 1 and 2 limits should apply to main applicants only, and we recognise that the cap will consequently only represent half of the total number of immigrants being issued with visas. The Government must make explicit the way in which dependants will be counted in contributing to the overall reduction in immigrants, and make its policy clear to the public.
103 Ev w29
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6 Level of the cap
73. The Migration Advisory Committee has been asked to recommend the level at which the limit should be set for the first year of operation of the permanent cap, 2011–12 only. The Minister confirmed that “the annual limit will be changed, as it is in America or Australia”.104 The Government has asked the Migration Advisory Committee to take into account “the overall policy objective of reducing net migration to the tens of thousands over the lifetime of this Parliament” and “the balance between the economic, social and public service impacts of migration”.105 The Migration Advisory Committee consultation noted that:
If the Government wishes to be able to report that the official measure of net migration is within the “tens of thousands” range by the end of the Parliament, that will need to be demonstrated by reference to figures available at that point. Under current reporting schedules, LTIM [long-term international migration] data available at the end of the current Parliament in May 2015 will refer to the calendar year 2013. This may have consequences for our consideration of the objectives and trajectories for net migration and annual flows through the [Points Based System].106
We wrote to the Immigration Minister to clarify whether it was his understanding that the Government’s aim in practice was to bring the level of net immigration down to the tens of thousands within three years (2011–13).107 The Minister replied “that is not the Government’s objective”.108
74. The criteria used by the Migration Advisory Committee in reaching a recommended limit will be:
• Economic impacts including those on GDP per head, productivity growth, accumulation of human capital, inflation and such labour market impacts as employment, unemployment and earnings:
• Public service impacts on both the supply of public services (through the labour of and taxes paid by migrants) and the demand for them (through migrant use);
• Social impacts including congestion, crime, the housing market and social cohesion; and
• The time, cost and policy implications of accelerating any required up-skilling of UK workers to replace migrants, and the feasibility of other alternatives to migrant labour,
104 Q 46 105 Consultation by the Migration Advisory Committee on the level of an annual limit on economic migration to the UK, July 2010, para 1.3 106 Ibid., para 3.15 107 Ev 74 108 Ev 75
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including paying higher wages to some workers, increased mechanisation and the use of new technology.109
75. Professor Metcalf explained that, whilst the Migration Advisory Committee had been asked to “suggest a given reduction in the numbers coming in under Tier 1 and Tier 2”, it did not know “at this stage how the UKBA will decide to allocate the remaining visas and therefore where the reduction falls”.110 The UK Border Agency was consulting in parallel about whether groups such as dependants and intra-company transfers should be included in the cap. Professor Metcalf said there was not a good way to assess the impact on different sectors of the economy and different regions until the cap was in place and its impact could be assessed. The Government will be reviewing the cap from year to year to evaluate its effects on sectors and regions and make necessary adjustments.
76. Since its consultation was still underway during our inquiry, the Migration Advisory Committee was unable to indicate the level at which the permanent cap on non-EEA economic migration might be set, and consequently we were not able to examine the implications of specific numbers. We did, however, receive representations concerning the effects caused by the temporary cap—set at a 5% reduction to Tiers 1 and 2 on the previous year—and discuss these by way of illustration.
77. If the Government is to be judged on its success or otherwise in reducing net immigration to within the ‘tens of thousands’ within this Parliament, given the current basis of compilation the figures on which it will be assessed in May 2015 will be an extrapolation from data available for the calendar year 2013. We recommend that the Government make explicit the basis on which it will calculate this extrapolation.
78. Giving evidence in July, the Minister was of the view that “the temporary cap will not have very much effect. We have deliberately set it so that it will not cause any damage”.111 However, witnesses told us that the way in which the level of the temporary cap had been determined had caused difficulties for some businesses, and hampered fledgling business growth. Although the actual limit set was only a little below the previous year’s total (a 5% reduction), it had been set by comparison with a period of recession and “during the summer months when recruitment is often at a low”.112 The Law Society was critical that “the interim limits have caused chaos for City legal businesses. The interim limits were set just below immigration usage levels during the recession. Businesses now seeking to regenerate are unable to recruit the staff they need to compete for international work”.113
79. Ms Barrett-Brown of the Immigration Law Practitioners’ Association told us that 50% of small sponsors of Tier 2 visas had been given a zero allocation under the interim cap,
109 Consultation by the Migration Advisory Committee on the level of an annual limit on economic migration to the UK, July 2010, paras 3.2–3.4 110 Q 168 111 Q 45 112 Ev 52 113 Ev w43
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and “those employers who use quite a number of certificates of sponsorship have had a 5% to 50% reduction”.114 She added:
From 19 July my firm [was] inundated with panicked phone calls from sponsors who had suddenly received letters saying that they were having their entire allocation withdrawn.115
However, Tata stated that the temporary cap had not had a negative effect on its business,116 whilst the Chartered Institute for Personnel and Development stated that the temporary cap had had an impact on only “a small minority” of its members.117 In both cases this was because intra-company transfers were excluded from the temporary cap.
80. The 5% reduction imposed under the temporary cap seems to have had an unpredictable effect across various sectors, hitting small businesses particularly hard. Our witnesses argued that the limit had been based on a figure taken during the previous year’s recession, and had been applied with little notice. We caution that these difficulties should be mitigated in setting the level of the permanent cap, and the limits should be calculated on the basis of a considered assessment of need as well as prior use of certificates of sponsorship.
81. The Migration Advisory Committee has been asked to propose the numerical limit for the permanent cap before the Government has determined which groups will be included in the cap and how limits will be applied to different sectors of the economy. This has reduced the Migration Advisory Committee’s ability to predict the effects of the cuts on different economic sectors and geographical regions, although Professor Metcalf stated that it would still be able to note in its report what some of the potential consequences would be for different sectors and regions. He also noted that the Migration Advisory Committee would review the cap and its effects each year to improve its operation.118 It is important that the Migration Advisory Committee provides different options for what may emerge from the UK Border Agency consultation so that the Government can tailor the figures of the final design of the permanent cap. We await the publication of the results of both consultations, and urge the Government to ensure that the limit is delivered in a joined-up way.
114 Q 202 and Q 208 115 Q 203 116 Q 184 117 Ev w23, para 8 118 Qq 164–172
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7 Students
82. The proposed cap applies only to non-EEA economic immigrants. However, a number of witnesses raised with us the fact that, to reduce overall immigration, the Government will have to make significant changes to the other two main routes of entry—students and family reunification. We intend to return to these areas in more depth when the Government brings forward specific proposals. However, we note here some of the key points made in evidence about students, since this was raised by several witnesses as a particular concern.
83. Some 51% of all non-EEA immigrants in 2008 came to the UK for formal study—23% of the total number of 538,000 gross long-term immigrants (see table 2). Professor Metcalf told us that it would be vital to review the student route in meeting the Government’s target:
You simply can’t do that unless you also look at the student route. It is impossible. If you close down tiers 1 and 2, you still wouldn’t get to the tens of thousands.119
84. Witnesses underlined that the UK’s universities were a major international asset. The Campaign for Science and Engineering (CaSE) noted that four of the world’s top ten universities were in the UK,120 and the London School of Business and Finance that the UK held the second largest market share of international students after the United States.121
85. The Minister told us in evidence that the Government had “not come to a firm conclusion about what to do” about students, but that it intended to look at the route”.122 Our predecessor Committee in the last Parliament conducted an inquiry into abuse of the student route in the light of concerns about ‘bogus’ colleges, in particular English language schools. It concluded that insufficient quality assurance procedures for private educational establishments had allowed bogus colleges to bring foreign nationals—possibly tens of thousands—into the UK on fraudulently-obtained student visas. However, it considered that new arrangements for issuing student visas under the Points Based System would help combat bogus colleges. It recommended that the UK Border Agency increase the number of unannounced inspections on educational establishments, since advance notice had been given in 85% of inspections; and that the Government use the Companies Act 2006 to restrict use of the term “college” to properly accredited institutions.123 The Minister stated that the Home Office would be closely examining the issue of bogus colleges as part of the Department’s overall efforts.
86. We wrote to the Minister as part of our inquiry to ask how many bogus colleges had been closed down since our predecessors’ report, the number of foreign students affected by closures of such colleges, and how many unannounced inspections had taken place. Mr
119 Q 176 120 Ev w28 121 Ev w48 122 Q 53 123 Home Affairs Committee, Bogus Colleges, Eleventh Report of Session 2008–09, HC 595, 21 July 2009
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Green wrote to us on 20 September that “the UK Border Agency now has a requirement that at least 50% of standard post-licence visits must be unannounced and this requirement is being met by all regional visit teams. Additionally further visits are commissioned by the Tier 4 sponsor investigations team all of which are unannounced”. He told us that the licences of 214 Tier 4 sponsors had been suspended and 48 licences revoked since the Committee’s report in July 2009. The number of non-EU students affected by closures or restrictions was 43,000. 124
87. It is quite clear that, to achieve the reductions it is seeking, the Government will have to make significant changes to student immigration routes. As the Government is currently reviewing student visas it has not yet made any detailed proposals to effect such changes. We intend to return to this issue once the Government brings forward firm proposals for action. In the meantime, however, we underline the continuing importance of international students to UK educational institutions and the UK economy, and echo the conclusions drawn by our predecessor Committee, which said that efforts would be far better directed towards tackling bogus colleges and those who overstay their visas in order to seek employment, than penalising legitimate students. We also warn against constraining the activities of teaching in both the public sector and private sector, which are highly regarded internationally and make a significant contribution to the British economy.
124 Ev 73
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8 Administering the cap
Raising the points requirement 88. It seems the Government intends to implement the cap through the architecture of the existing Points Based System. The advantage of the PBS is that it allows quotas to be applied differently to the individual tiers, and possibly to different sectors within those tiers. The Business Secretary has recently argued for the cap to be applied flexibly so that it can be moved up or down in line with economic circumstances.125 This was echoed in evidence to us from the Confederation of British Industry, which proposed that:
[The Migration Advisory Committee] recommend to government both an appropriate level at which annual limits should be set for the economic tiers and how the points requirements of the PBS should be altered to ensure these limits were met but not exceeded. In practice the limits would act more like targets, with flexibility provided for the MAC and UKBA to adjust the pass mark upwards or downwards in line with demand for permits.126
89. The Points Based System removed discretion from the visa-issuing process through the implementation of a transparent points system—if an applicant met specific, objective criteria relating to earnings, qualifications and skills, then they acquired the necessary points and a visa was granted. Applicants could check their eligibility via an online calculator, which told them instantly whether they would meet the criteria. One consequence of this process was the removal of a right of appeal against visa refusals, which the previous Government argued was unnecessary given the lack of discretion in decision- making. Our predecessor Committee in the last Parliament welcomed the “aim of transparency and the introduction of objective criteria” in its report into the Points Based System in 2008.127
90. We support the administration of the cap through the structure of the existing Points Based System. This would allow limits to be applied flexibly—as the Business Secretary has called for—and thus bear some relation to industry demand and sectors where shortages are. Given that there is no right of appeal under the Points Based System, it is also important that decision-making should be as open and transparent as possible. Currently, a visa is issued when an immigrant meets specific, objective criteria, which are publicly available, and applicants can check their eligibility against an online calculator. We caution that, in determining how the cap will be administered, care must be taken not to lose this transparency.
125 BBC News 17 September 2010, Vince Cable criticises temporary immigration cap. Accessed 20 September 2010. 126 Ev w13 127 Home Affairs Committee, Thirteenth Report of Session 2008–09, Managing Migration: The Points Based System, HC 217-I, para 111
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Allocating visas 91. The UK Border Agency consultation proposed several options for how the cap could be administered, which can be summarised as follows:
‘First come, first served’ (operated in Australia and the US)
For Tier 1: Under these systems applications are considered in order of receipt and would succeed if they met the baseline criteria for qualification under the tier until the limit was reached. Once the limit was reached the tier would close to new applications. We believe that such a system does not necessarily lend itself well to applications from highly skilled individuals without a job offer as it is not the most selective.
For Tier 2: 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, could be applied.
Pooling system (operated in New Zealand)
For Tier 1: 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. 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 points scores.
For Tier 2: A pool could also be applied to migrant workers with a job offer who enter through Tier 2. A specified number of visas would be made available on a quarterly basis and applications would be accepted against that quarterly quota.
Auction
For Tier 2 only, the consultation also proposed a quarterly visa auction, under which employers could make a ‘bid’ for an allocation of certificates of sponsorship and the limit would be filled by those “willing to pay the highest fee”. 128
92. The consultation stated “it is the government’s view that the fairest approach will be to operate a pool system for highly skilled migrants entering through Tier 1 ... [and] a first come, first served system for skilled migrants entering through Tier 2”.129
128 UK Border Agency, Limits on non-EU economic migration: a consultation, June 2010, p 7: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/aboutus/consultations/limits-on-non-eu- migration/limits-on-non-eu-migration.pdf?view=Binary. Accessed 4 October 2010. 129 Ibid., pp 7–8
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First come, first served 93. Some witnesses were opposed to a first come, first served system—the Government’s stated preference for Tier 2—for a range of reasons. Mr Mittal pointed out that it was likely certain companies would have the ability to get their applications in faster than others, which would create “distortions in the system”.130 Mr Sharp agreed, commenting that it “sounds like chaos to me”.131 Migration Watch thought that it risked “stimulating a high volume of precautionary applications”,132 and the British Medical Association that “if the allocation is not managed effectively then employers could face significant delays in recruiting staff to the detriment of NHS service delivery”.133 The British Hospitality Association drew a parallel with “online bookings for events such as concerts where the quickest on the button wins … regardless of merit”.134
94. The Immigration Law Practitioners’ Association argued that different visa processing times for UK Border Agency posts around the world—ranging from a day to several weeks—would create bias in favour of certain nationalities. It was “logistically complex and open to charges of operating in a discriminatory manner”.135 The Law Society told us that “allowing sponsors to indicate peak recruitment periods will be essential to ensure that well-established business planning practices are not disrupted”.136 On the other hand, the British Association of Social Workers considered that “if the baseline criteria are right, a first come, first served system is transparent, fair and workable”.137
95. Business witnesses were asked about their experiences of a cap administered on a first come, first served basis in other jurisdictions. Mr Mittal noted that in the United States there was a rush of 180,000 applications for the annual quota of 65,000 visas, all of which were made within the first week. Visas were allocated using a lottery system, which was “most ineffective for businesses”.138
Pooling system 96. The Government’s stated preference for Tier 1 met with a more mixed response. Migration Watch considered a pooling system for Tier 1 to be “entirely feasible”, suggesting the limit could be adjusted in the light of other flows.139 The British Medical Association agreed that a pool for Tier 1 “appears to be a workable proposal provided that
130 Q 197 131 Ibid. 132 Ev 50 133 Ev w8, para 13 134 Ev w34 135 Ev 53 136 Ev w34 137 Ev 62 138 Q 196 139 Ev 50
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its structure allows for the identification and prioritisation of individuals with the most sought-after skills at that time”.140
97. On the other hand, the British Chambers of Commerce considered that “although the least worst option ... many businesses expressed concern that the highly skilled, geographically mobile individuals who would qualify for such a pool may decide to approach a country where they will not have to wait around, as their skills are so highly valued”.141 The Immigration Law Practitioners’ Association argued that it was not transparent, since the “points required to qualify are unknown at the time of application” (under the current system candidates can enter their attributes via an online calculator and discover instantly whether they meet the points requirement for a route). It noted that many Tier 1 immigrants, though they did not require a sponsoring employer, nonetheless came to the UK to pursue employment opportunities. Candidates entering the pool would be left there for up to six months “by which time the employment or business opportunity that attracted them to the UK is likely to have passed”.142 The Immigration Law Practitioners’ Association also questioned the fairness of charging an application fee to enter the pool, when immigrants then had no idea whether they would be successful. Nicholas Rollason of ILPA told us that:
It is a myth that Tier 1 is a category where people wonder whether they’d like to come to the UK and live here for some sort of lifestyle change—looking for a job. Most people have a job offer or a business opportunity that they go on to pursue. That is our experience in 99% of cases.143
Auction 98. Witnesses did not argue in favour of this option. The Federation of Small Businesses told us that an auction system would have a particularly adverse effect on the small businesses which, it said, made up 99.3% of all businesses in the UK:
Instead of ploughing profits back into businesses...small business owners would be paying money to Government in order to employ staff who have the skills which the UK education system has failed to deliver.144
99. The British Medical Association was particularly concerned about the ability of the public sector to engage in an auction system:
The concept of organisations bidding for visas with those prepared to pay the largest sums securing the visas at the expense of less wealthy organisations does not constitute an appropriate use of public funds. At a time when huge cuts are being
140 Ev w8 141 Ev 64 142 Ev 53 143 Q 228 144 Ev 46–47
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made in public sector budgets, forcing organisations to use much-needed resources as part of a bidding war for staff does not seem apt.145
Universities UK echoed these fears:
Universities are in receipt of significant public funding which it would be inappropriate to use to increase the cost of certificates of sponsorship.146
100. Mr Rollason told us that “we would have these sort of eBay economics ... if the principle is that the highest payer wins, there will be clear winners who will be the wealthy companies who have no objection to paying £10,000, £20,000 or £30,000 to get a banker to come and work for an investment bank in the UK”.147 Ms Barrett-Brown added that “it’s placing a relative value on the heart surgeon and the investment banker. The investment banking business can clearly afford a much higher premium for an auctioned permit than the NHS”.148
101. The Minister acknowledged that, in relation to an auction:
you need to make safeguards. If everything was auctioned off you can imagine that banks and so on would be the only people who could afford them and so we could not bring in anyone in any other sector. There are clear commonsense constraints which mean that you cannot just operate a completely free market in this area.149
102. We received mixed views on the merits of allocating Tier 1 visas under a pooling system. Several argued that it would be overly bureaucratic and uncertain for highly skilled immigrants who could be held in the pool for up to six months, only to be told that their qualification had expired. There does not seem any reason why, rather than a pooling or other new system, the Tier 1 cap should not be administered simply by raising the points requirements to a sufficient level to match the desired quota. This would allow a limit to be applied whilst ensuring that the most highly skilled were not turned away, nor kept waiting for months on end with no guarantee of a visa at the end.
103. Tier 2 is more complex, since the particular skills and individuals required by companies should be the key determinant of whether a candidate is successful under this route. It is vital that the Government finalises plans for Tier 2 in very close consultation with business and service leaders, to take full account of those needs. We do not consider an auction workable with regard to Tier 2, since it would almost certainly have a disproportionate impact on the skills recruitment to the public sector and small businesses, neither of which could afford to bid large sums. A first come, first served system for Tier 2—the Government’s preferred option—met with multiple objections, including that there would be a high volume of precautionary applications and that releasing visas only at certain times in the year would hamper business planning. Principally, some witnesses felt that such a system took no account of an applicant’s merit. None was, however, able to
145 Ev w9 146 Ev w16 147 Q 217 148 Ibid. 149 Q 57
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propose a preferable alternative. It may be possible to mitigate some of the criticisms of first come, first served by stratifying the cap by Tier 2 sectors, to ensure that some do not dominate to the exclusion of others, that market needs are always recognised, and to release visas at regular intervals during the year.
Timing of application 104. Witnesses were anxious about when in the year visa allocations would be made. Dr Marshall of the British Chambers of Commerce told us:
Our concern is over a company that comes to us and asks: what if it needs an engineer with specialised skills in October or November but the cap for that year has already been exceeded? Does it mean it takes the decision not to expand its business? Does it have other options open to it when it knows that a British person with the same qualifications and levels of skill may not be available for four or five years because it needs to train up the individual from scratch?150
105. Mr Mittal echoed this: “the cap might be filled and that could be detrimental because how do you take demand of what’s required down the line for a year or three months?”151 Universities UK noted that demand was high for academic staff over the summer in preparation for the new academic year:
For the higher education sector people need to start work at certain points in the year and asking employers to apply again in the next period would be unworkable.152
106. The Confederation of British Industry argued strongly for introducing flexibility into the timing of visa allocations, proposing that:
the annual cap is divided into monthly allowances, to ensure that closed periods are avoided. This approach has the benefit of ensuring that the extremely highly skilled will always get a visa, as they will pass the higher points test mark.153
The British Medical Association agreed that a monthly allocation of certificates of sponsorship would be more practical.154
107. The Law Society proposed that “an allocation of certificates of sponsorship be kept separate in each period to deal with exceptional circumstance applications. Sponsors should be required to demonstrate a clear business case for an exception to the quota”.155 Mr Rollason of the Immigration Law Practitioners’ Association noted that, although the temporary cap provided that such exceptional applications could be made, there were “very hazy criteria about how those additional allocations will be given. I can tell you that of all
150 Q 13 151 Q 187 152 Ev w16 153 Ev w13 154 Ev w8 155 Ev w34
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the applications made by all the sponsors in the UK which were considered by the panel on 1 September, none of the non-EU nationals being hired were approved”.156
108. We recommend that the cap should be administered more frequently than annually, particularly given the experiences of businesses under the US system, where annual visa allocations are exhausted within a day or two of opening. This would better meet changes in sector needs over the course of the year, and could be monthly, as the Confederation of British Industry has proposed. We also recommend that a number of visas be held in reserve so that where businesses or services can demonstrate a clear business case for bringing in a migrant outside the usual allocation period, they are able to apply for an emergency visa.
Parliamentary scrutiny 109. The Immigration Act 1971 as amended underpins all UK immigration law. Section 1 (4) of the Act provides the Secretary of State with the power to lay immigration rules before Parliament. A significant number of recent changes to the immigration system, both by the current and previous governments, have been introduced in this way through the Immigration Rules, rather than via primary legislation. Many of these changes have been complex and controversial, and their implementation in this fashion has meant that they were not subject to full parliamentary scrutiny, were rushed through, and consequently attracted judicial review. The Immigration Law Practitioners’ Association told us that:
There have been a number of successful legal challenges to changes in the immigration rules including the cases of HSMP Forum,157 BAPIO,158 Pankina159 and English UK160 amongst others.161 ILPA foresees similar successful challenges to the proposed cap, the methods of implementation and the consultation process.162
ILPA also pointed out that “recent years have seen instances of changes to the immigration rules with almost immediate effect, failing to respect the parliamentary convention of 21 days’ notice”, noting that this had particularly been the case in relation to changes to the Points Based System, and warned that there was “a serious risk that the cap will be the subject of successful legal challenges on basis of vires and rationality”.163
156 Q 204 157 R (HSMP Forum Ltd) v SSHD [2008] EWHC 664 (Admin); R (HSMP Forum (UK) Ltd) v SSHD [2009] EWHC 711 (Admin). See Joint Committee on Human Rights, 20th Report of Session 2006–2007, Highly Skilled Migrants: changes to the immigration rules, HL paper 173, HC 993, 9 August 2007. 158 R (BAPIO Action Ltd) v SSHD [2008] UKHL 27. 159 SSHD v Pankina et ors [2010] ECWA Civ 719. 160 R (English UK) v SSHD [2010] EWHC 1726. 161 See, for example R (Chong Meui Ooi) v SSHD [2007] EWHC 3221 (Admin), Odelola v SSHD [2009] UKHL 25, R (Limbu) v SSHD [2008] EWHC 2261 (Admin). 162 Ev 52, paras 2–3 163 Ev 52, para 4. Recent examples of statements of changes in immigration rules that have come into force the day after they were made include Cm 7929 (parts taking effect 20 August 2010); Cm 382 (parts taking effect 23 July 2010), HC 96 was ordered to be printed on 15 July 2010 and took effect five days later; HC 439 was ordered to be printed on 18 March 2010 and parts took effect on 6 April 2010.
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110. There has been a consistent tendency, under both the current and previous Governments, to rush through complex changes to the immigration system via amendments to the Immigration Rules, and we note that this has caused problems. In many cases changes have been enacted with almost immediate effect, failing to respect the parliamentary convention of 21 days’ notice, and leading to a spate of judicial reviews. Such unnecessary haste leads to poor decision-making which is more likely to be challenged in the courts. We recognise the need to institute a temporary cap to prevent a rush of immigration applications ahead of the creation of a permanent cap. However, the Government must ensure that Parliament be given the opportunity fully to scrutinise all significant changes to the immigration system before they are introduced.
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Conclusions and recommendations
Immigration figures 1. There is no single source of migration data in the UK. Until exit checks are implemented in the form of e-Borders, it is not possible to count individuals out of the country, and so figures on the inflow and outflow of migrants cannot be matched. Migration is currently measured in several different ways, which are not directly comparable one to another. This can obscure and complicate the public policy debate on immigration, a difficulty which was highlighted by the use of varying sets of figures by different witnesses, and exemplified by the fact that the Government itself is using one set of data for its immigration target (net long-term immigration) but is acting on another set (entry clearance visas issued) to implement a cap. We urge the Government to implement exit checks as soon as possible to ensure that immigrants leaving the country can be matched with those entering it. (Paragraph 12)
2. The figure of ‘hundreds of thousands’ of immigrants cited by the Government in respect of its immigration policy objective (see paragraph 1) comes from Long-Term International Migration data and relates to the net number of immigrants entering the UK for a year or longer (immigrants minus emigrants), and includes British and EEA citizens. The latest data show that 196,000 net immigrants entered the UK in 2009. Net long-term migration peaked in 2004 at 245,000 and continued at an annual rate of about 200,000 in the five years to 2009. Data from the International Passenger Survey show that non-EEA citizens consistently make up the majority of net immigrants, but that the overall rise in 2009 was accounted for by a decrease in the number of British citizens emigrating. (Paragraph 13)
3. in 2008, according to the International Passenger Survey, non-EEA migrants accounted for 52% of all gross long-term immigrants (British, EEA and non-EEA citizens). However, non-EEA immigrants giving ‘having a definite job’ or ‘looking for work’ as their reason for immigration accounted for only 12% of all gross long- term immigrants. Amongst non-EEA migrants, economic migration accounted for 24% of those entering the UK in 2008, whereas formal study was the biggest single reason for immigration amongst this group (45%). (Paragraph 16)
4. International Passenger Survey data (see table 2) shows that in 2008, some 45% (126,000) of all non-EEA long-term immigrants to the UK stated on their arrival that they had come to study; and some 22% (61,000) similarly stated that they came to accompany or join a family member. (Paragraph 19)
Whom will the cap affect? 5. The net immigration figure—which the Government intends to reduce to ‘tens of thousands’—is affected by inflows and outflows of British, EEA and non-EEA citizens. In 2008, British citizens accounted for 15% of gross long-term immigrants, EEA citizens for 33% and non-EEA citizens for 52%. Under EU law the Government cannot limit numbers of British or EEA citizens entering the UK, and consequently
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can only influence the numbers of non-EEA migrants entering and leaving the country, whilst expecting that natural patterns of British and EEA migration will stabilise over the long term as we have seen with patterns of migration from and back to Spain and Portugal when they joined the EU,164 and as we are now observing with the A8.165 The Minister further stated that the impact of any future EU enlargement would be mitigated by transitional arrangements.166 We recommend that the Government commissions a programme of research better to understand the likely path of British and EEA migration. (Paragraph 27)
6. As the Government pursues its aim to reduce overall immigration to the UK, it is important that it does not underestimate the impact of immigration routes which it cannot control. We urge the Government not to treat the routes it can control too stringently in order to compensate for the routes it cannot control. (Paragraph 28)
7. It is possible the Government will need to act to increase the outflow of non-EEA citizens as well as the inflow, probably through policy changes to break the link between certain immigration routes and settlement. However, we note Professor Metcalf’s comments that any changes to length of stay, to influence the outflow, would not take effect until 2013–14, and so for the Government to make an immediate impact the inflow is key. (Paragraph 29)
8. Two different, albeit imperfect, measures of immigration suggest that non-EEA economic immigrants account for less than 20% of overall gross immigration. International Passenger Survey data show that they accounted for 12% of gross long- term immigrants in 2008, and in 2009 the number of visas issued to Tier 1 and 2 immigrants and their dependants under the Points Based System accounted for 17% of the gross long-term immigration total. If Tiers 1 and 2 were to be suspended altogether, this would reduce gross immigration by 17%; and if the cap were implemented at the 5% reduction rate introduced in the temporary cap, the reduction in overall gross immigration would amount to 0.9%. (Paragraph 30)
9. It is therefore clear from the figures that the proposed cap—unless it is set close to 100%—will have little significant impact on overall immigration levels. Our witnesses, including the Minister himself, acknowledged that the current measures were only a first step in achieving the reduction in overall immigration sought by the Government, and that other immigration routes would also need to be examined. (Paragraph 31)
Impact on business and services 10. There does not seem to be strong argument in favour of merging the resident labour market and shortage occupation list routes under Tier 2. They serve separate and distinct purposes, the former being a tool to fill specific or regional shortages, the latter a mechanism for recruiting skills in national shortage. (Paragraph 56)
164 Q 43 165 Q 244 166 Qq 42–43 and Q 244
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11. The proposed cap on Tiers 1 and 2 will by definition only affect skilled workers. Tier 1 consists of very highly skilled individuals, likely to make a significant contribution not only to the UK’s skills, but also directly to its economy through tax and income spending; and Tier 2 is driven by the business requirements of employers across a range of private and public sector skills shortages. Both private sector businesses and public sector services made compelling arguments—many of which have been well- rehearsed in public debate—about the negative impact a cap on Tiers 1 and 2 will have on their ability to operate, leaving vacancies unfilled unless it is properly designed with business needs in mind. However, we also agree with the evidence given by many employers, that the country should be better training the skilled people we need to reduce the need for immigration in the future, and we believe there is an important role for Government in providing a strategy to ensure that occurs. We note the concerns, expressed to us by eight Nobel prize-winners in science, about the potentially negative effect of the cap on the UK’s position of international excellence in science and engineering. We consider it totally illogical that professional sportspeople should be exempted from the cap but elite international scientists are not. (Paragraph 64)
12. Despite agreement that a cap set too low would have an adverse impact on businesses—both international companies such as Tata Consultancy Services, and the UK companies which utilised their services—it remains unclear what the extent of that impact would be. Several witnesses told us that companies might seek to establish headquarters elsewhere, but others were well-established in the UK and unlikely to leave. The level of the cap will be key in determining the effect it will have on this kind of business decision. It is hard to assess whether disruption would be of sufficient magnitude to force businesses to relocate overseas—they may not be in a position themselves to answer this question before the details of a cap are set out. (Paragraph 65)
13. Although we note the Minister’s evidence about wider social and public policy concerns, the evidence we received from businesses alerted us to the possible negative impacts the non-EEA economic migrant cap could have on business investment in the UK, and on tax revenues from high-earning immigrants. We emphasise that the Government must closely study the recruitment needs of businesses when determining the level at which the cap is set, as it has promised to do. This will be relevant to the UK’s economic recovery, especially if, as has been said by the Office for Budget Responsibility, one-third of the economic growth needed in the next year must come from business investment. However, we were told that the macroeconomic effects may be small. We are pleased that the Government is planning not only to protect the migrant route for investors and entrepreneurs, but also to encourage high net worth individuals to come to the UK to drive economic growth. (Paragraph 66)
14. The Government must decide whether or not to exclude intra-company transfers from the cap. Whilst it is meant to be a temporary immigration route, migrants on intra-company transfers can remain for up to five years, and we heard that a third stay in the country permanently, having transferred to another visa route. There is significant pressure from some businesses not to cap the route. However, to make any significant reduction in non-EEA economic immigration, a cap would have to
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include intra-company transfers, which in 2009 accounted for 60% of all Tier 2 visas and 40% of Tier 1 and 2 combined. We recommend that intra-company transfers under 2 years’ duration should be excluded from the cap. (Paragraph 67)
Dependants 15. Under Tiers 1 and 2 there have been approximately the same number of main applicants and dependants, a ratio of 5:4. The immigration figures cited by the Government include dependants, indicating that, if it is to meet its target of reducing immigration to ‘tens of thousands’, dependants will have to be accounted for in some form. As Professor Metcalf set out, a cap could either be applied to main applicants— with the assumption that there will be approximately the same number again of dependants—or to the combined total of main applicants and dependants. (Paragraph 71)
16. The evidence we received argued against applying the cap directly to dependants, since a dependant might displace a main applicant whose skills were needed, and we are pleased that the Government has stated it has no plans to change the policy towards dependants. We therefore recommend that Tier 1 and 2 limits should apply to main applicants only, and we recognise that the cap will consequently only represent half of the total number of immigrants being issued with visas. The Government must make explicit the way in which dependants will be counted in contributing to the overall reduction in immigrants, and make its policy clear to the public. (Paragraph 72)
Level of the cap 17. Since its consultation was still underway during our inquiry, the Migration Advisory Committee was unable to indicate the level at which the permanent cap on non-EEA economic migration might be set, and consequently we were not able to examine the implications of specific numbers. We did, however, receive representations concerning the effects caused by the temporary cap—set at a 5% reduction to Tiers 1 and 2 on the previous year—and discuss these by way of illustration. (Paragraph 76)
18. If the Government is to be judged on its success or otherwise in reducing net immigration to within the ‘tens of thousands’ within this Parliament, given the current basis of compilation the figures on which it will be assessed in May 2015 will be an extrapolation from data available for the calendar year 2013. We recommend that the Government make explicit the basis on which it will calculate this extrapolation. (Paragraph 77)
19. The 5% reduction imposed under the temporary cap seems to have had an unpredictable effect across various sectors, hitting small businesses particularly hard. Our witnesses argued that the limit had been based on a figure taken during the previous year’s recession, and had been applied with little notice. We caution that these difficulties should be mitigated in setting the level of the permanent cap, and the limits should be calculated on the basis of a considered assessment of need as well as prior use of certificates of sponsorship. (Paragraph 80)
48 Immigration Cap
20. The Migration Advisory Committee has been asked to propose the numerical limit for the permanent cap before the Government has determined which groups will be included in the cap and how limits will be applied to different sectors of the economy. This has reduced the Migration Advisory Committee’s ability to predict the effects of the cuts on different economic sectors and geographical regions, although Professor Metcalf stated that it would still be able to note in its report what some of the potential consequences would be for different sectors and regions. He also noted that the Migration Advisory Committee would review the cap and its effects each year to improve its operation. It is important that the Migration Advisory Committee provides different options for what may emerge from the UK Border Agency consultation so that the Government can tailor the figures of the final design of the permanent cap. We await the publication of the results of both consultations, and urge the Government to ensure that the limit is delivered in a joined-up way. (Paragraph 81)
Students 21. It is quite clear that, to achieve the reductions it is seeking, the Government will have to make significant changes to student immigration routes. As the Government is currently reviewing student visas it has not yet made any detailed proposals to effect such changes. We intend to return to this issue once the Government brings forward firm proposals for action. In the meantime, however, we underline the continuing importance of international students to UK educational institutions and the UK economy, and echo the conclusions drawn by our predecessor Committee, which said that efforts would be far better directed towards tackling bogus colleges and those who overstay their visas in order to seek employment, than penalising legitimate students. We also warn against constraining the activities of teaching in both the public sector and private sector, which are highly regarded internationally and make a significant contribution to the British economy. (Paragraph 87)
Administering the cap 22. We support the administration of the cap through the structure of the existing Points Based System. This would allow limits to be applied flexibly—as the Business Secretary has called for—and thus bear some relation to industry demand and sectors where shortages are. Given that there is no right of appeal under the Points Based System, it is also important that decision-making should be as open and transparent as possible. Currently, a visa is issued when an immigrant meets specific, objective criteria, which are publicly available, and applicants can check their eligibility against an online calculator. We caution that, in determining how the cap will be administered, care must be taken not to lose this transparency. (Paragraph 90)
23. We received mixed views on the merits of allocating Tier 1 visas under a pooling system. Several argued that it would be overly bureaucratic and uncertain for highly skilled immigrants who could be held in the pool for up to six months, only to be told that their qualification had expired. There does not seem any reason why, rather than a pooling or other new system, the Tier 1 cap should not be administered
Immigration Cap 49
simply by raising the points requirements to a sufficient level to match the desired quota. This would allow a limit to be applied whilst ensuring that the most highly skilled were not turned away, nor kept waiting for months on end with no guarantee of a visa at the end. (Paragraph 102)
24. Tier 2 is more complex, since the particular skills and individuals required by companies should be the key determinant of whether a candidate is successful under this route. It is vital that the Government finalises plans for Tier 2 in very close consultation with business and service leaders, to take full account of those needs. We do not consider an auction workable with regard to Tier 2, since it would almost certainly have a disproportionate impact on the skills recruitment to the public sector and small businesses, neither of which could afford to bid large sums. A first come, first served system for Tier 2—the Government’s preferred option—met with multiple objections, including that there would be a high volume of precautionary applications and that releasing visas only at certain times in the year would hamper business planning. Principally, some witnesses felt that such a system took no account of an applicant’s merit. None was, however, able to propose a preferable alternative. It may be possible to mitigate some of the criticisms of first come, first served by stratifying the cap by Tier 2 sectors, to ensure that some do not dominate to the exclusion of others, that market needs are always recognised, and to release visas at regular intervals during the year. (Paragraph 103)
25. We recommend that the cap should be administered more frequently than annually, particularly given the experiences of businesses under the US system, where annual visa allocations are exhausted within a day or two of opening. This would better meet changes in sector needs over the course of the year, and could be monthly, as the Confederation of British Industry has proposed. We also recommend that a number of visas be held in reserve so that where businesses or services can demonstrate a clear business case for bringing in a migrant outside the usual allocation period, they are able to apply for an emergency visa. (Paragraph 108)
26. There has been a consistent tendency, under both the current and previous Governments, to rush through complex changes to the immigration system via amendments to the Immigration Rules, and we note that this has caused problems. In many cases changes have been enacted with almost immediate effect, failing to respect the parliamentary convention of 21 days’ notice, and leading to a spate of judicial reviews. Such unnecessary haste leads to poor decision-making which is more likely to be challenged in the courts. We recognise the need to institute a temporary cap to prevent a rush of immigration applications ahead of the creation of a permanent cap. However, the Government must ensure that Parliament be given the opportunity fully to scrutinise all significant changes to the immigration system before they are introduced. (Paragraph 110)
50 Immigration Cap
Formal Minutes
Tuesday 25 October 2010
Members present:
Rt Hon Keith Vaz, in the Chair
Nicola Blackwood Rt Hon Alun Michael Mr Aidan Burley Bridget Phillipson Lorraine Fullbrook Mark Reckless Dr Julian Huppert Mr David Winnick Steve McCabe
Draft Report (Immigration Cap), proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 27 read and agreed to.
Paragraph 28 read, as follows:
It is somewhat puzzling that the Government has chosen as the measure of its success the reduction of overall immigration to the UK almost half of which it has no control over whatsoever. The unpredictability of EEA migration is highlighted by the decision, which emerged during our inquiry, of the Bulgarian, Romanian and Hungarian Governments to issue passports to 180,000 nationals of several non-EEA countries, with possibly hundreds of thousands more eligible.
Amendment proposed, to leave out the paragraph.—(Mark Reckless)
Question, That the Amendment be made, put and negative.
Another Amendment proposed, to leave out lines 1 to 6 and insert:
As the Government pursues its aim to reduce overall immigration to the UK, it is important that it does not underestimate the impact of immigration routes which it cannot control. We urge the Government not to treat the routes it can control too stringently in order to compensate for the routes it cannot control. —(Nicola Blackwood)
Question put, That the Amendment be made.
The Committee divided
Ayes, 8 Noes, 1 Nicola Blackwood Mark Reckless Mr Aidan Burley Lorraine Fullbrook Dr Julian Huppert Steve McCabe Rt Hon Alun Michael Bridget Phillipson Mr David Winnick
Paragraphs 29 to 110 read and agreed to.
Immigration Cap 51
Resolved, That the Report, as amended, be the First Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
Written evidence was ordered to be reported to the House for printing with the Report.
Written evidence was ordered to be reported to the House for placing in the Library and Parliamentary Archives.
[Adjourned till Tuesday 26 October at 10.30 am
52 Immigration Cap
Witnesses
Tuesday 20 July 2010 Page
Mr David Ramsden, Employment Committee, Federation of Small Businesses, and Dr Adam Marshall, Director of Policy and External Affairs, British Chambers of Commerce Ev 1
Damian Green MP, Minister of State for Immigration, Home Office, and Ms Lin Homer CB, Chief Executive, UK Border Agency Ev 5
Tuesday 7 September 2010
Professor David Metcalf, Chairman, Migration Advisory Committee Ev 20
Mr Keith Sharp, Marketing Director, Tata Consulting Service, Mr Som Mittal, President, National Association of Software and Services Companies (NASSCOM), and Mr Hilton Dawson, CEO, British Association of Social Workers Ev 28
Tuesday 14 September 2010
Mr Amit Kapadia, Executive Director, Highly Skilled Migrant Programme Forum, Ms Sophie Barrett-Brown, Chair, and Mr Nicolas Rollason, Immigration Law Ev 33 Practitioners Association
Sir Andrew Green, Chairman, and Mr Alper Mehmet, Member, Advisory Ev 39 Council, MigrationWatch
List of written evidence from oral witnesses
1 Federation of Small Businesses Ev 45, 47 2 MigrationWatch Ev 48, 72 3 Immigration Law Practitioners’ Association Ev 51 4 Highly Skilled Migrant Programme Forum Ev 57 5 British Association of Social Workers Ev 59 6 The British Chambers of Commerce Ev 64 7 NASSCOM Ev 67 8 Tata Limited Ev 70 9 Correspondence from the Chair to the Minister for Immigration Ev 73,74 10 Correspondence from the Minister for Immigration to the Chair Ev 73,74
Immigration Cap 53
List of additional written evidence
(Available through the Committee’s website: www.parliament.ukhomeaffairscom)
1 Skills for Care & Development Ev w1 2 Scottish Minister for Culture and External Affairs Ev w2 3 British Medical Association Ev w7 4 IChemE (the Institution of Chemical Engineers) Ev w9 5 CBI Ev w11 6 Universities UK Ev w14 7 Gary Burgess Ev w17 8 PCG Ev w20 9 Chartered Institute of Personnel and Development (CIPD) Ev w23 10 City of London Corporation Ev w25 11 Campaign for Science & Engineering (CaSE) Ev w27, w87 12 National Farmers’ Union Ev w29 13 International Transport Workers’ Federation (ITF) Ev w31 14 British Hospitality Association Ev w33 15 Convention of Scottish Local Authorities (COSLA) Ev w36 16 Dr Nandita Dogra Ev w38 17 The Law Society Ev w41 18 Linda Kaucher Ev w45 19 Public and Commercial Services Union (PCS) Ev w46 20 London School of Business and Finance Ev w48 21 Oil & Gas UK Ev w50 22 Association of the British Pharmaceutical Industry (ABPI) Ev w59 23 Fragomen LLP Ev w62 24 Cancer Research UK Ev w74 25 Kay Minder Ev w76, 78 26 KPMG LLP Ev w81
54 Immigration Cap
List of Reports from the Committee during the last Parliament
The reference number of the Government’s response to each Report is printed in brackets after the HC printing number.
Session 2009–10 First Report The Detention of Children in the Immigration System HC 73 (Cm 7795)
Second Report The work of the UK Border Agency HC 105 (HC 370) Third Report The E-Borders Programme HC 170 Fourth Report Work of the Committee in 2008–09 HC 265 Fifth Report Police Service Strength HC 50 (HC 511) Sixth Report The Home Office’s Response to Terrorist Attacks HC 117 (Cm 7788) Seventh Report The Cocaine Trade HC 74 Eighth Report The National DNA Database HC 222 Ninth Report Counter-Terrorism Measures in British Airports HC 311 (HC 456) Tenth Report The Government’s Approach to Crime Prevention HC 242-I Eleventh Report The work of the Independent Police Complaints Commission HC 366 Twelfth Report UK Border Agency: Follow-up on Asylum Cases and E-Borders HC 406 Programme (HC 457)
Session 2008–09 First Report Monitoring of the UK Border Agency HC 77 (HC 381) Second Report The Police and the Media HC 75 Third Report The Work of the Committee 2007–08 HC 76 Fourth Report Policing Process of Home Office Leaks Inquiry HC 157 (HC 1026) Fifth Report Borders, Immigration and Citizenship Bill [HL] HC 425 Sixth Report Human Trafficking HC 23–I Seventh Report Knife Crime HC 217 Eighth Report Policing of the G20 Protests HC 418 (HC 201) Ninth Report Project CONTEST: The Government’s Counter-Terrorism Strategy HC 212 Tenth Report The cost of policing football matches HC 676 (HC 339) Eleventh Report Bogus Colleges HC 595 (Cm 7766) Twelfth Report Macpherson Report—Ten Years On HC 427 Thirteenth Report Managing Migration: Points-Based System HC 217 (Cm 7767)
Immigration Cap 55
Fourteenth Report The work of the Serious Organised Crime Agency HC 730
Session 2007–08 First Report The Government’s Counter-Terrorism Proposals HC 43 Second Report Bulgarian and Romanian Accession to the EU: Twelve months on HC 59 Third Report Security Industry Authority HC 144 Fourth Report Work of the Committee in 2007 HC 226 Fifth Report A Surveillance Society? HC 58 (HC 1124) Sixth Report Domestic Violence, Forced Marriage and “Honour”-Based Violence HC 263 (HC 1165) Seventh Report Policing in the 21st Century HC 364 Special Report Unauthorised Disclosure of Draft Report HC 196
Session 2006–07 First Report Work of the Committee in 2005–06 HC 296 Second Report Young Black People and the Criminal Justice System HC 181 (Cm 7217) Third Report Justice and Home Affairs Issues at European Union Level HC 76 (HC 1021) Fourth Report Police Funding HC 553 (HC 1092)
Session 2005–06 First Report Draft Corporate Manslaughter Bill (First Joint Report with Work HC 540 and Pensions Committee) (Cm 6755) Second Report Draft Sentencing Guideline: Robbery HC 947 Third Report Draft Sentencing Guidelines—Overarching Principles: Domestic HC 1231 Violence and Breach of a Protective Order Fourth Report Terrorism Detention Powers HC 910 (Cm 6906) Fifth Report Immigration Control HC 947 (Cm 6910) Sixth Report Draft Sentencing Guideline: Sexual Offences Act 2003 HC 1582
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Home Affairs Committee: Evidence Ev 1 Oral evidence
Taken before the Home Affairs Committee on Tuesday 20 July 2010
Members present Keith Vaz, in the Chair
Nicola Blackwood Steve McCabe Mr Aidan Burley Alun Michael Lorraine Fullbrook Bridget Phillipson Dr Julian Huppert Mark Reckless Mary MacLeod Mr David Winnick
Witnesses: Mr David Ramsden, Employment Committee, Federation of Small Businesses, and Dr Adam Marshall, Director of Policy and External Affairs, British Chambers of Commerce, gave evidence.
Q1 Chair: I call the Committee to order for the first difficult and that could have knock-on impacts on evidence session in its inquiry into the immigration employment, recovery and tax revenues to the cap. I formally declare the interests of all Members Exchequer. of the Committee which are shown in the Register of Members’ Interests. My wife is a solicitor and a Q3 Chair: Mr Ramsden, Ministers would argue that partner in charge. I welcome to the dais the two we have a skill base in our country. Why is it not witnesses who are to start off the session, Adam possible for British industry to find those skills Marshall and David Ramsden. I start with a within the United Kingdom? Why do we have to go question to both of you. What effect will the abroad when there are so many people with those immigration cap have on investment in the United skills here? Kingdom, especially its major cities? Mr Ramsden: What you say is absolutely right. We Mr Ramsden: We believe it will have an adverse have a skill base in this country and we have plenty effect. The FSB does not want a cap. There is a of people who could obtain skills. The problem is certain immediacy when we have vacancies and we lack of training and an inability to find the right level believe a cap could prevent us getting the right of training among UK citizens which means that on persons for the right jobs as soon as possible. occasions we have to go abroad. Under the points Dr Marshall: I agree with that in a certain sense. I system jobs must be advertised for a period of time, have in my hand a pamphlet from UK Trade and but if we cannot get anybody from the UK Investment which says that 50% of European workforce we say it is necessary to go abroad to find headquarters are in the UK. There have been 469 those skills. headquarters projects in the UK over the past decade compared with 86 in Germany, and that is on Q4 Chair: Can you tell me about consultation the strength of the UK’s business environment. As between the government and yourselves on this cap? far as the BCC and business community are How much time have you had to adjust to this concerned, we need to keep that business proposal? environment working well and that investment will Mr Ramsden: Speaking personally, I have not been be forthcoming only when we can get the skills we involved but people within the FSB have been. The need for our businesses. FSB’s position is that it does not believe a cap would be advantageous to small businesses. Q2 Chair: But the Prime Minister has made it very Dr Marshall: We are in consultation with both the clear that he wants the country to be seen as open for UK Border Agency and the Migration Advisory business. Are you saying this means that we will be Committee. The timescales are tight and many of closed for business? Do you feel that nothing could our members continue to make representations to us progress, or is this something that will just be on this subject, so we are still collecting evidence temporary? on it. Dr Marshall: I do not think that is the case. The government is in an extremely tricky position here. Q5 Dr Huppert: I want to explore two related aspects We and our member businesses acknowledge that about the effect of the immigration cap. I am there is a strong public desire to control migration in concerned particularly about some of the university terms of absolute numbers and to limit its impacts. issues and high-tech businesses. I represent On the other side we know the government realises Cambridge where both of these are very significant. there is a strong need to ensure business I have evidence from the Campaign for Science and competitiveness. I do not believe a cap would mean Engineering, the Wellcome Trust and other that somehow Britain was closed to business. It organisations which show that from the point of would not give that signal but it might make some view of international working, collaboration and businesses’ immediate recruitment needs very global headquarters this measure could be Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
Ev 2 Home Affairs Committee: Evidence
20 July 2010 Mr David Ramsden and Dr Adam Marshall devastating. I would be grateful for your comments and weekly basis is, “We would love to hire local on that. I also note that the consultations highlight people for jobs but . . .” There is always a “but” at the fact that there would not be any change to the the end of the sentence. Invariably, we get into a rules for ministers of religion and elite sports people. discussion about employability skills—the soft Do you think that the message this country is skills—at the lower end of the labour market that sending by saying we care about ministers of religion makes things difficult for them. They say that they and elite sports people but not scientists, teachers turn to EU labour and in some cases, for example and doctors is the right one? care homes, non-EU labour to try to fill the skills Dr Marshall: To start with the “university” question, gaps they face. I believe there is a strong volition on in part I have personal experience of this because I the part of the business community to respond to arrived in Cambridge as an American student over a those concerns and to do the right thing. decade ago and went through the system myself. I Mr Ramsden: The direct answer is that I do not recall have been on the journey through the system to specific adverts being taken out during the election become a citizen of this country, so I declare that as by the Federation of Small Businesses. However, I a personal interest. Knowing the number of people am quite sure you received a copy of our manifesto, who came into those universities on work permits, as indeed should all candidates, in which there was a skilled occupation permits et cetera and the reference to this.1 importance that that had for collaboration and everything else, we believe it could have a major Q8 Mr Winnick: It is hardly what one would impact, which is why we are concerned about the describe as extensive publicity. It is not that I am mechanisms that might be brought in to deliver the necessarily criticising you—heaven forbid—but I government’s cap. We do not want any kind of just wonder why you did not join in the debate at a business with a skill requirement, be it in the public public level because the accusation was that the or private sector, to face restrictions which country was being flooded and that the previous ultimately could harm UK economic government was responsible for every possible competitiveness. immigration sin. Without taking sides, I would have thought you would have put the point of view you Q6 Alun Michael: I want to probe the question of the have today that restrictions could be against the longer term. When I was Minister of State for national interest. Industry I found this was an issue raised by Mr Ramsden: Equally, I do not believe that the companies when considering investing in the UK in federation has ever kept its information secret. terms of questions like, “Do you think there will be any change in the regulations?” and their wish for Q9 Mary MacLeod: I would like to put a question certainty that they would have flexibility. Do you about the need for skills. Mr Ramsden, you talked believe there is a problem in relation to uncertainty about the lack of training in the UK. I would like to about how the rules might be applied over time? question that a bit further. Is it not the case that we Mr Ramsden: I believe that will cause concern to have companies with great training capabilities in overseas companies thinking of investing in this the UK? We also have universities that produce more country and certainly people who attain skills and students than ever before. What are the skills we lack wish to practise them in the UK. I believe that in the UK for which we must go elsewhere? Do we uncertainty is no friend. not have the capability to train people across the age spectrum in new skills as and when they are needed, Q7 Mr Winnick: I am a little surprised. In all the especially at a time when we are coming out of the publicity and controversy over immigration recession and we also say we shall be tougher in particularly in the months leading to and during the terms of some of the welfare policies? general election undoubtedly it was an issue and one Mr Ramsden: I think you need to understand that that was not by any means confined to extremist the Federation of Small Businesses comprises small groups. It could be argued that one of the parties businesses, often people with fewer than 10 that form the present government made much of employees. Training can be very expensive. In immigration. I am just wondering how far you put particular, if you are running an Indian or your point of view—I may have missed it; I do not Bangladeshi restaurant and need a new chef it is not know—against a cap and the necessity of people likely that the training facility will be available in this being allowed in to work for all the reasons you have country; you will need to go to the particular country given. How far did you try to put your point of to get that trained chef. view—perhaps you did not—by advertisements and Dr Marshall: We need to ask how we address the every other avenue of communication? question of migration in concert with other areas like Dr Marshall: I believe businesses have been the skills base and the benefits system, which we scrupulous in trying to go down every route they can 1 The witness later stated that “In my response to question to advertise jobs and get posts advertised seven I said that we had raised the issue in our 2010 election appropriately before turning to the option of manifesto, which was published towards the end of 2009. On overseas labour. I also believe that businesses up and a detailed reading of our manifesto this is not the case, but I down the country and members of the British would like to stress that the FSB has always played its part in the ongoing debate and that we will continue to do so. As Chambers of Commerce acknowledge the concerns we have repeatedly stated the introduction of any form of that immigration has generated in local cap on Tier One and Tier Two migrants would have a communities. What members say to me on a daily significant impact on small businesses.” Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
Home Affairs Committee: Evidence Ev 3
20 July 2010 Mr David Ramsden and Dr Adam Marshall have not yet mentioned today. The question I would expand its business? Does the company have other put is: do the skills being provided by our universities options open to it when it knows that a British necessarily address the needs of business? To be person with the same qualifications and levels of frank, quite often businesses are good at stamping skill may not be available for four or five years their feet and saying they are not happy with the because it needs to train the individual up from skills offered at the high end and they need to look scratch? Therefore, it is the skilled about whom we elsewhere for them but they are not good are are concerned. articulating directly what their needs are. There is a Mr Ramsden: My understanding is that this cap will need to marry up any changes to the immigration apply to tiers 1 and 2. system with better consultation with employers so we ensure that over the longer term universities and Q14 Steve McCabe: Can you give us some idea of the companies generate the type of training and skills types or levels of qualification or professional that will be taken up immediately. experience we are talking about so we have a fairly good idea of the kind of cap that will be applied and Q10 Mary MacLeod: But what have you been doing the sorts of skills that will be unavailable? to try to make that happen? Strategically, businesses Mr Ramsden: I have already given one example: should be working with education and Indian or Bangladeshi chefs. understanding what they need in future. I find it difficult to understand why this is a new idea and Q15 Steve McCabe: I think that is quite a difficult something you need to do for the future because it one and that is why I pursue it. I am a Birmingham should be happening on an ongoing basis. MP. South Birmingham College is fully kitted out Dr Marshall: To take the example of chambers of with a restaurant and training workshop. The idea commerce, in local areas around the country many that you cannot train a balti chef in Birmingham and are deeply involved in schools through the Young have to bring that person in from Bangladesh Chamber movement, for example, in trying to tackle escapes me. I am curious to know what kinds of real worklessness. They work with local authorities to qualifications and skill levels—things that would not upskill people with bite size sorts of qualifications be easily done at a local FE college—we are that will get people into work so that a business can talking about. opt for local rather than migrant labour et cetera.I Dr Marshall: Tier 1 is talking of the highest levels of believe you will find that business organisations are skills and the sorts of things for which countries engaged on the ground where they have that local around the globe compete and will continue to link, because at the end of the day the local business compete. I think your question is aimed more at tier owners involved in them know that if their 2 which covers such a wide span of potential communities are doing better their businesses will occupations; that is, everything from a specialist do better. engineer right through to a care home worker who is on a shortage occupation list at the moment because Q11 Mary MacLeod: The fact remains that many we cannot get enough care home workers to deal young people who come out of universities cannot with our ageing population. That is perhaps a better find jobs and I think more work needs to be done. example. There are a number of private businesses, Mr Ramsden: That may be right. Perhaps what we many of which are in my membership or perhaps my need to look at are some of the degrees. colleague’s, that struggle to get the trained employees they need. That is something which in a Q12 Chair: It is right that there are people coming relatively short space of time—one to two years— out of universities who cannot find jobs. our further education colleges could upskill local Mr Ramsden: Quite so, Mr Vaz, but I think you need people to do. Business however has an immediate to look at the sorts of degrees they are taking. In need. Therefore, how do you simultaneously ensure small businesses we are talking about specialised that a business can meet its immediate need whilst people. Whenever we can get local labour of course trying to remove that occupation hopefully from we do so and we work with universities and colleges that list and therefore ensure that more local people in an effort to make sure they understand our needs. can get it in the longer term?
Q13 Steve McCabe: In your judgment who will be Q16 Lorraine Fullbrook: Mr Ramsden, you started caught by the cap? Will it be skilled or unskilled by saying you believed a cap would be the wrong people? thing to do because it would mean that the right Dr Marshall: Unfortunately, the worry is that unless person would not be employed in the right job, but the mechanisms are right the cap will catch the you went on to talk about the training aspect of the skilled. If you look at companies in our membership, UK skills base. I suggest that your argument does those that take on unskilled labour, for example, not hold water. Your problem is not with often do so from within the European Union and immigration policy but business skills policy. therefore it is those who cannot be restricted legally Therefore, are you not directing your fire at the by the cap. Our concern is over a company that wrong policy? comes to us and asks: what if it needs an engineer Mr Ramsden: I do not think so. If we can get with specialised skills in October or November but sufficiently trained people from the UK workforce the cap for that year has already been exceeded? that is what we will do. There is no advantage to a Does it mean the company takes the decision not to small business in deliberately trying to get someone Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
Ev 4 Home Affairs Committee: Evidence
20 July 2010 Mr David Ramsden and Dr Adam Marshall from outside, but the fact of the matter is that we Q21 Chair: Since you raised your own work permit, need on occasions to go beyond our own borders to obviously you are now settled here, are you? get certain specialist skills. You have heard of a Dr Marshall: I am a UK citizen, yes. number of examples. Another one is perhaps specialist translators where the level of training in this country is not such that we can get our Q22 Bridget Phillipson: The UK Border Agency employees here. consultation asks whether intra-company transfers should be included in the cap. Do you have a view on that? Q17 Nicola Blackwood: As Member for Oxford West Dr Marshall: Quite a clear one. We do not support and Abingdon I have two excellent sources of skilled the inclusion of intra-company transfers under the labour in my constituency: the University of Oxford cap. If we go back to the question of European and Oxford Brookes. You are very welcome to come and hold a jobs fair there at any time if you are in headquarters destinations, the UK is the place for need of some skilled workers—tier 1 or tier 2. You European headquarters in part because intra- have mentioned a number of times your concern company transfers are permissible and are relatively about the mechanism and how it would work. How easy to do. Therefore, it could affect business do you believe the cap can be fairly administered? location decisions for inward investors and create Do you think it would be better done through the additional cost and process burdens for existing existing points-based system or an alternative sponsors. We are not in favour of it. system of which you are aware? Mr Ramsden: That is the FSB’s view, though it is Mr Ramsden: As far as concerns the FSB the simple outside our remit. answer is that it has no problem with the points system and it being enhanced; it just does not want a cap. Q23 Bridget Phillipson: The concern would be that it is a process open to abuse. Do you think safeguards have been put in place to stop that kind of abuse Q18 Nicola Blackwood: Of any kind? happening or are further ones required? Mr Ramsden: Of any kind. Dr Marshall: We are confident that businesses are using the intra-company transfer route, especially in Q19 Nicola Blackwood: You have no cases of inward investment to the UK, to get the recommendations about the way in which it could right skills into the economy at the right time and work in the midst of problems about how services ultimately the net economic benefit to this country is will cope? significant. Mr Ramsden: Provided the points system is sufficient then we believe that is the right strategy. Q24 Mr Winnick: I want to ask about the possibility of people coming in along the lines we have been Q20 Dr Huppert: I notice that the UKBA’s discussing where businesses should provide private consultation paper on the limits talks about the health care. Is that desirable? relationship between the list of national Mr Ramsden: As far as concerns the federation there occupational shortages and testing the local labour market. It suggests restricting it to cases where there are already enough restrictions. We do not believe is both a shortage and the local market has already that an additional burden of providing private been tested which would represent quite a change. health care should be imposed on us. Do you have any comments on what effect that Dr Marshall: There could also be some perverse might have? consequences. Effectively, you are creating a benefit Dr Marshall: Unfortunately,I believe it would create which could be denied to existing staff in that a new process burden for businesses, especially institution which could give rise to employment law SMEs which often do not have a big HR function to cases brought by UK residents who might want that help put this through. We have to remember that benefit but would not be able to access it. Equally, it businesses are subjected to a huge amount of is a cost to business. We would rather look at the regulation. The question raised earlier about migration impacts fund and perhaps look at ways certainty comes into it. There is employment for businesses that need migrant labour at times of regulation of a variety of different types. When you shortage to make a contribution via that route. start to change the migration tests to which Obviously, I do not want to start creating additional businesses must subject jobs you could create costs for my members, but if there is a need for additional uncertainty for businesses. There is also businesses to contribute to match the migration the problem that many jobs are unique; they may not impacts fund then perhaps that is something that can be on a national shortage list. The job that got me be explored. my first work permit was unique; it featured nowhere. My employer, like other employers, had to go to UKBA with a job description and then test it in Q25 Mark Reckless: It is good to hear that business the labour market. I believe that to create additional is prepared to contribute to the costs and pay barriers to business getting the skills it needs by something in terms of migrants who come to benefit merging those two routes would be a bit of a their companies. 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20 July 2010 Mr David Ramsden and Dr Adam Marshall particular individuals from hiring people, is the Mr Ramsden: It is something new to me and I should alternative not to have an auction system where we like to write to you, if I may. have certificates of sponsorship and if businesses Chair: Mr Ramsden and Dr Marshall, it would be want to bring in someone they can bid against those? very helpful if you could write to us on any issues If they decide it is not worthwhile to bring in that you believe are relevant to this inquiry. The someone that is their decision. consultation period is only 12 weeks and therefore Dr Marshall: We are still consulting members over we have limited time, but if you have specific particular mechanisms. As you might expect, a lot of examples we will be very keen to look at them. them have very strongly-held views. Auctions are an Members may want to be in touch with you during idea I have seen proposed on a number of occasions, the recess if they wish to look at any of your local but I believe they would require a co-ordinated members and visit them to see how this will affect global approach rather than just a UK-only them. Thank you very much for coming this approach for it to work. morning.
Witnesses: Damian Green MP, Minister of State for Immigration, Home Office, and Ms Lin Homer CB, Chief Executive, UK Border Agency, gave evidence.
Q26 Chair: Minister, welcome to this session of they will know they will get a payment and then go evidence on the immigration cap. I see that you have home. There is nothing to stop them coming back, brought Ms Homer with you. We have some specific is there? questions for her about aspects of the Damian Green: There might be. Obviously, that administration, but we should like to concentrate on depends on the French borders and system. I met the you in the first session. We congratulate you on your French immigration minister last week. He is as appointment. It is not very often that we have one of determined as I am to try to strengthen France’s the subjects of our inquiry ending up as a Minister a borders. But the pull that you refer to, the thought few months later. I hope you felt the Home Affairs around the world “Let’s try to get into Britain”—is Select Committee played a part in your rise. Before that the UK has been seen as something of a soft I move on to talk about migration figures, perhaps I touch in terms of both the problems at our borders may raise with you some comments you made over and also the capacity to make a life for oneself, the weekend with specific regard to the Calais possibly illegally, when one is here either by working scheme. The fact is that the British taxpayer is illegally or on benefits. One of the main drivers of the paying up to £4,500 to individuals in Calais to go new government’s immigration policy is to send the home. Do you believe this is a proper use of message around the world that Britain is no longer a taxpayers’ money at a time of economic slowdown? soft touch. Damian Green: I do. The quote I gave at the weekend was that it looked unpalatable but I said, slightly Q28 Chair: You do not think it is a bit of a soft touch illiterately, it was the least worst option for two to allow people to come all the way across Europe to reasons. First, if we can manage voluntary returns the Calais camp, which I and other Members of the that is much better for the taxpayer. The cost of a Committee in the past have visited, and give them a voluntary return is approximately £3,000. If we have handout of £4,500? to remove people the National Audit Office believes Damian Green: To be fair to the French, there is not the cost to be about £11,000, so there is a significant a Calais camp now. Not only have they cleared the advantage to the taxpayer. But also in the particular jungle; they have cleared the trees, as it were. You case of people being returned from Calais of course could not set up a camp in a jungle; there are no trees they have never reached the British system, so all the there. That has been very effective. You can measure other costs that may not be included in the particular the effects. Not only are the number of illegals removal cost are avoided by the British taxpayer. If generally caught in Kent down to about 10% of the we can find a way to encourage them to go back to levels they were 10 years ago but the reception centre their home countries before they have even got here for unaccompanied asylum-seeking children in my it seems to me that it is both a sensible use of own constituency tells me that since the jungle taxpayers’ money and also better for the whole clearance the numbers coming in are one third of immigration system. what they were. That is quite a sensitive indicator of the fact that the French have been effective. I do not believe there is anything like the numbers gathering in Calais that there used to be. Q27 Chair: I do not suggest that the people in Calais will read the Mail on Sunday but this could be an advertisement for people to come from all over the Q29 Chair: As we know from Parliament Square, world to end up in Calais so they can get a handout you do not need trees to make a camp. To move on from the British taxpayer. This is obviously not your to migration figures, is there an optimum figure for policy; you are continuing one that was pursued by the population of this country? Your predecessor felt the previous government of which I believe this there was. Do you believe 70 million is a reasonable Committee was not aware. They will turn up because figure for the population in, say, five years’ time? Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
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Damian Green: I think that in five years’ time that consultation on numbers is being done by the would involve eye-watering population growth and Migration Advisory Committee whose work I that is not going to happen. I believe that for hugely admire and who are independent of government to set a population target would be government. They will come up with a pointless because many of the things that go up to recommendation which will then go to Ministers. make the population are not, and should not be, under the control of government. Government Q33 Chair: We have heard evidence from some cannot control the birth rate. At the other end, we witnesses today; we will hear others in September. If are all living longer lives and remain healthier for they say that it should be a quarter of a million and longer. that is the consensus will you accept that figure? Damian Green: I think it is very unlikely to come up Q30 Chair: You do not have a figure? with that sort of figure because it would be massively Damian Green: I am not going to say our approach out of line with the trends we see. There is a valid is that we are trying to hit a figure of x by year y. But point behind that question which is: what do we what we should do and are doing is to say that there want to see over time? What I want to see is steady are things government can control. It cannot control downward pressure on the net immigration level. I the birth rate but it can control the number of people cannot emphasise enough that the economic route coming here and that is what we seek to do. and the limit on it that you are discussing in this report is only one part of that. There are many other Q31 Chair: Let us turn to migration figures. When routes of immigration and we shall be looking at all the government talks about reducing migration from of them. This is a vital part of it and a first step but hundreds of thousands to tens of thousands it refers that is what it is. to the international passenger survey data which measures all migrants entering the country each Q34 Lorraine Fullbrook: I should like to explore a year. Are you not concerned by the fact that these little further your comments on Sunday. You said figures also include British citizens who are returning that you wanted to “change the perception of the to this country? Is it right to cite figures that refer to UK as a soft touch for illegal immigration”. You people who are in effect settled here? have talked a little about your plans. I would like Damian Green: If they are returning having been you to expand on your plan and how exactly you will abroad for a long time clearly in terms of adding to enforce it moving forward. demand on public services, housing and so on then Damian Green: There are a number of things we need it is fair. To revert to your main point about to do better than we have been doing in the past. Part population growth and levels, what is vital is the rate of it is about internal enforcement. We shall be doing of change of population so that our public services a lot of enforcement over the next few months on and attitudes can cope with a controlled change in sham marriages, bogus colleges and illegal work— population. The lesson of the past 10 years has been all the areas where people either use particular routes that if you have an uncontrolled growth in we know about to evade immigration controls or, population through immigration, which peaked at once they are here, to give themselves a life here nearly 250,000 a few years ago, you get stresses and illegally. It is very important not only that we clamp strains and the rise of extremist politicians and down on all of that but do so very publicly. That is things that everyone on this Committee would part of sending a message. But there is another part deplore. Therefore, the immigration policy is of it of equal importance, namely to counter the designed to reduce that pressure steadily and bring it feeling that you cannot remove people and once they down to tens rather than a couple of hundred are here you cannot get rid of them. It is really thousand that we have seen over the course of the important that we remove people when they have previous Parliament and in doing so to allow our exhausted all their appeal rights. One of the other public services to cope. What I think lies behind your things we have been doing is to return people, even question is: are the statistics perfect, accurate and to difficult countries. Let me pick the most helpful? They are not. The international passenger controversial before the Committee does: Iraq. We survey is clearly not perfect; it is a survey of a have been sending charter flights back to Iraq. In relatively small number, but you have to work with some parts of the media there has been a furore the tools you have. about it saying this is terrible. I believe there was a Guardian lead story on this for three days in a row. I Q32 Chair: If we turn to the cap, we know that the am absolutely unrepentant about returning people temporary one that came into effect yesterday has to Iraq who have no right to be in this country. I was the figure of 24,100. What kind of figure do you have mildly angered by a radio report. in mind? You have just begun the consultation period, but do you have in mind any kind of figure Q35 Chair: Minister, would you focus on the answer as to what the permanent cap will be? Will it be more to Lorraine Fullbrook’s question because we have than that—40,000, 100,000? What is your current lots and lots of questions? thinking on it? Damian Green: Some of the people we are returning. Damian Green: As you say, as we have just started There was one particular case involving a drug consultation it would be perverse and unhelpful for dealer who was not questioned at all. He said he had me to say this is the conclusion at which we will been deported for driving a car which I thought arrive at the end of it, not least because the should have been challenged. But we know there are Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB lots of people in this country who have no right to be is somewhat different from what was said in here and who are doing active harm to the citizens of opposition. Then the emphasis time and time again this country. I think we need to remove them, and was that it would be virtually the end of this country that is what I mean by “sending a message”. if it went over 70 million, so I take it from your answer to the chairman that you are rather relaxed Q36 Dr Huppert: I am concerned that we are moving about it. away from the concept of the UK being a soft touch Damian Green: I do not recognise the to being a very hard touch. We heard from the characterisation of the rhetoric in opposition, not previous witnesses from business their concerns least because I was the opposition spokesman on about the effect on the economy. If I may turn to the immigration for four and a half years. I know what data you mentioned, clearly there is a question as to I was saying then. I have always emphasised and how many non-EU economic migrants there are and believed that it is the rate of change that matters. what the net flow is. I tabled a Written Question about the number of non-EU economic migrants Q40 Mr Winnick: But emphasis was put on the coming into and leaving the country. The Answer figure of 70 million by and large, was it not? came on 28 June. I put the question to the Home Damian Green: It was by some people. In a speech by Office but it was transferred to the Cabinet Office. the Prime Minister in 2006 he made the point that For the last year for which figures are available, obviously population and demographics were 2008, there was a net outflow of non-EU economic hugely important, but very specifically he did not set migrants. It was not a very large figure, but those a population target. I think that would be unhelpful, figures—we will look at more recent ones when they partly because it would be government setting itself are available—suggest that already non-EU a target where it could not control some of the key economic migrants are leaving and a cap would have parameters. I cannot emphasise enough that I think very little effect on it. Presumably, if you wanted to it is rate of change that causes the problem in this cap the net flow there would be no effect at all. area. That is one of the reasons why we set ourselves Damian Green: I do not quite recognise those figures. a specific target on net migration because that is the I remember one slightly arcane dispute on one report best reflection of the rate of change with which as to whether students who come here as students public services can be comfortable. and then say they are leaving to find work tend to be captured in some figures as though they had been Q41 Mr Winnick: I think you accept that whatever here working. Therefore, they become misallocated curbs are now put on immigration which did not in the tables. But the most recent figures we have exist before it is quite likely that the population will show that in 2008 net migration was positive by by natural means go over 70 million? 163,000. The biggest element of that was accounted Damian Green: I do not know. I have seen figures for by non-EU citizens: 187,000. EU citizens from the ONS but they are projections, not accounted for 63,000, and the contribution of British predictions. If you look back on the sequence, they citizens was minus 87,000. That is where you get the are long lines on a graph that go up and down. None 163,000 from. of us sitting round this table has any particular Dr Huppert: I think that is based on the figure for all insight into when and whether the population will go migrants—I also have that figure—rather than over 70 million. specifically economic migrants which is what the cap would address. Perhaps you want to take it away and have a look at the figures. Q42 Lorraine Fullbrook: In terms of those in the UK who have no right to be here, given that under the previous government we had two EU enlargements Q37 Chair: Can we have a copy of those figures? and 10 new Member States, what plans do you have Damian Green: Yes. to return those who have no right to be here? Damian Green: There are two separate issues. In the Q38 Dr Huppert: This was an Answer from Mr Nick case of EU enlargement the government is Hurd, Parliamentary Secretary of the Cabinet committed to the fact that in any future enlargement Office, so one hopes it is reliable. it will impose transitional controls. I believe that Damian Green: Indeed. Trying to say that the cap is during the time of the previous government—this is the only way we will achieve our net migration figure not hindsight; my party said so at a time before I did is simply wrong. There are many routes of this job—it was said we should have imposed immigration and we are looking at each in turn to see transitional controls in 2004 when Poland and the how best we can get to the net figure we seek. There other 8 countries came in. We had some Poles here is not a direct read-across between what is controlled but not as many as we did eventually. I think we are here and that figure. very lucky that by and large the Polish people who came here were hard-working, respectable and Q39 Mr Winnick: I assume you hope there will not contributed a lot to this country. If it had not be a mole in your private office, but you never know happened I think there would have been more what may happen. As to the position about the problems. On the question of returning people, even maximum number resident in the UK, if that is the within the EU, if people commit serious criminal right expression—70 million was put—you told the offences they can be returned. Obviously, by Chairman that it was not up to the government as definition we have good relations with all our EU everyone recognises, but the rhetoric, if I may say so, partners and we would seek to do that. One of the Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB problems is that there are some countries whose numbers coming here and both the interim and, I asylum systems have such severe problems that we hope, the permanent cap that will come in from next are not allowed to return asylum seekers who have April will serve those purposes. come from other countries and under the Dublin convention ought to be returned there. We are Q46 Alun Michael: I appreciate that communicating attempting to help the Greeks in particular to as a Minister on these issues is very difficult, but improve their asylum system. At the moment the when I was industry Minister I was frequently asked courts will not let us return failed asylum seekers about the future by companies that sought there because of the severe difficulties in the Greek reassurance. Before making a decision they wanted asylum system. The same used to be the case with to get a response to fears that the government might Italy but that is no longer so which means we can change the rules due to media pressure and that start to return failed asylum seekers to Italy. might make it more difficult. That can lead to a decision to go elsewhere in Europe rather than the Q43 Chair: The Romanians have decided to issue UK. Do you accept there is a very careful balance to 80,000 passports to Moldavians who think they are be maintained by Ministers if the government wants Romanians and President Basescu of Romania has to maintain the position of the UK as being open for said that another 800,000 passports will be issued by business? that country. I believe the Hungarians have issued Damian Green: Which we do, and we think this 40,000 passports to ethnic Hungarians and the contributes to it. You are right that constant Bulgarians have issued 60,000 passports to the chopping and changing of rules clearly does not Macedonians. What is the point of a cap when we help. That was why it was a general election have unlimited immigration from the EU? commitment. We have moved very fast to implement Damian Green: Even at its peak immigration from it. The interim cap is already in operation as of the EU was a significant but not overwhelming part Monday. We are holding consultations to which I of immigration. As it settles down we are already know business is contributing. We will then set a back down to approximately one third of permanent system. The annual limit will be changed, immigration coming from the EU. All experience as it is in America or Australia. tells us that over time the flows within EU countries tend to equalise. For instance, when Spain and Q47 Alun Michael: But do you accept that fears Portugal first came into the EUthere was an about what that limit might achieve would have enormous influx and that has been reversed over some impact on investment decisions? time. Damian Green: Only if people thought it would be damaging, and we do not think it is. That is one of the reasons we are consulting. Bodies like the CBI Q44 Chair: On this particular point are you doing have accepted the need for interim limits while the anything with the Minister for Europe or others in outcome of the consultation is being considered, so Brussels to say to our EU colleagues there is no point business groups themselves are supportive of the in giving out passports to basically all and sundry? way we are doing it. Damian Green: It is not for me to interfere in the national politics of other countries; it is for me to say that Britain obviously takes seriously the ability to Q48 Mark Reckless: Perhaps I may say how control the numbers coming into this country. In the welcome it is to have a Kent MP as Minister for specific cases of Romania and Bulgaria their entry is Immigration and also the speed with which the still subject to transitional arrangements. Those government is moving to implement what we said in transitional arrangements might end in 2011 or be opposition. I want to follow up the point about EU extended until 2013. Clearly, a range of factors will immigration. Whatever the arrangements we make need to be taken into account before we decide to for non-EU economic migrants, is it not possible relax them in 2011, if we were going to do so. that individuals can short-circuit that system by gaining entry to another EU Member State and gaining citizenship there so they can then move to Q45 Alun Michael: As vice chairman of the All-Party the UK? Group for Moldova I shall resist the temptation to Damian Green: If you are an EU citizen apart from follow up the Chairman’s question. I may take it up the specific examples of the 8 countries you have separately. What assessment have you made of the freedom of movement. That is one of the basics of impact of a temporary cap on business and the EU membership, and that is why the question put by economy? the Chairman is a good one: there is a legitimate Damian Green: I think the temporary cap will not interest in who is being granted EU citizenship. But I have very much effect. We have deliberately set it so think that in terms of the overall numbers experience that it will not cause any damage. We have set it at a tells us that flows equalise. One of the greatest level which is 5% below last year’s figures for tiers 1 exporters of labour throughout the European Union and 2 and we have specifically exempted the sub- is this country. A lot of British people spend part of routes within tier 1 for investors and entrepreneurs. their working lives working in other European I very much believe that Britain should attract its fair countries and a lot of British citizens like to retire— share—preferably more than its fair share—of the or used to—to countries that have considerably brightest and best from around the world, but at the hotter climates than ours. The flows equalise over same time obviously we need to control the overall time. Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
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Q49 Mark Reckless: Initially we saw an influx of perhaps deeper analysis done by the Home Office in labour from Spain following its accession and over terms of what type of people we want in this country time that has been balanced by a flow largely of rather than what the net number is? British retirees to Spain. Do we really expect the Damian Green: That is a really good point. One of same to happen to, say, Poland? the obvious points, intuitively, is that in economic Damian Green: In terms of work, yes. It seems to me terms some people coming as immigrants are more very likely—I cannot put a timescale—that at some valuable than others; indeed, some can be a net drain stage the economy of Poland and the other 8 on the economy. If you look at it purely countries will grow to a level where the mass exodus economically,the trick is to maximise the former and for immediate greater prosperity, if you like, will not minimise the latter. One of the arguments out there happen again. That has been the experience of the in this debate that I believe is most wrong-headed is EU up to now in its first 40 years of existence, and the idea that the higher the level of immigration the there is no reason to believe that will not be the case. higher growth you get. The definitive verdict on that The benefits of wider free markets in goods, capital was given by the Select Committee on Economic and people have been seen and I see no reason why Affairs of the House of Lords in April 2008. That is they should not be seen in the economies of central a report which is well worth studying for those who and eastern Europe as they were in the countries of have not read it. That Committee flatly said it did the southern European periphery that joined the EU not support the claims that net immigration is just after Britain. indispensable to fill labour and skill shortages and found no evidence for the argument that net immigration generated sufficient economic benefits Q50 Mr Burley: You mentioned that it would not for the existing UK population. Not only do we just be the cap that would control immigration. In want to control the numbers for all the reasons I her statement on 28 June the Home Secretary said have explained; we also want a system that that reducing net migration would require action maximises the number of those who are most “beyond the economic routes”. Can you give the beneficial. In a sense I think this is a non-partisan Committee an idea of what other action you are point. People are talking about our limit now. We considering to control immigration? should never forget that the previous government Damian Green: We are looking at every route as you had a limit within the points-based system of would expect. The asylum numbers are really very unskilled workers in tier 3. That limit was zero and small compared with what they were previously, but I believe it was right to do that. one can always make improvements. We are looking at the student and educational route which just in terms of sheer numbers is the biggest single route Q53 Nicola Blackwood: Given that EU students within the points-based system. We are looking also accounted for half of all non-EU migrants last year at family reunification and rights of settlement. It is and that many of our universities depend on fees not simply a question of who is coming here in the paid by international students to maintain their first place because obviously if you are looking long international competitiveness, what do you plan to term it is also a question of who is staying here for do with student migration? Will you cap it? What long periods. This is an all-embracing look at the assessment has been made of the impact that will have on our higher education? immigration system to see how we can establish Damian Green: As I explained, we are looking at the more stability in it. I suspect there will now be a great whole student area partly in terms of numbers but temptation for the Committee to ask: what will we also in terms of the problems experienced by do about x, y and z? We have not got there yet, but legitimate businesses, languages colleges and so on. I can assure the Committee that we are looking at all I and I am sure the hon Member for Cambridge and potential routes. others—anyone in seaside towns—have spoken to them. There is clearly something out of joint, as it Q51 Mr Burley: Do you intend to cap family were, where people feel that legitimate business reunification? interests are being damaged by what has happened. Damian Green: I anticipated that kind of perfectly Nevertheless, we need to look at the long term sheer reasonable question. We have not come to decisions scale of the numbers coming in. One thing I want to yet on the other routes, so there will be a rolling do is differentiate the different types of learning programme of announcements. We wanted to start institution. We tend to talk about students and with the economic routes because they are in the assume we are talking of universities. A significant coalition agreement. Obviously, that was something number of the people who come in are doing sub- we wanted to get on with, but over the coming degree courses, and there is obviously a sub-set months and years we shall move round the system. within that concerned with English language courses. It is important to disentangle all these areas to discover where the problems are and, if you like, Q52 Mr Burley: I ask a wider question in the debate where the scams are. It is quite complex. You can about numbers. It seems that the debate is always have bogus colleges bringing in bogus students; it is about the numbers and what is the net number of a straightforward end-to-end scam to evade migrants coming in. It strikes me that quality is as immigration controls. You can have genuine important as quantity, to coin a phrase,. Other than students who apply to bogus colleges and arrive here the tier 1 and tier 2 analysis, is there any other to find themselves very disappointed and that Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB damages the reputation of Britain as an education Damian Green: I am sorry to provide the same provider; or you can have bogus students fooling answer again, but the details of what we are to genuine academic institutions. The Chairman is announce are, if you like, some way down the line. about to stop me because my answer is going on too I do believe that the rise in grant of settlement and long, but it is doing so precisely so I can illustrate the applications for settlement in the past couple of complexity of it. We have not come to a firm years has been eye-wateringly big. There was conclusion yet about what to do, but be assured that approximately a 58% increase in grants of settlement we are delving into what is a very complex issue. last year and a 24% increase in applications.2 If we carry on like that it will have a serious long-term effect. I do not disagree with the principle underlying Q54 Nicola Blackwood: While you delve what is your the previous government’s thoughts that we need to reaction to the High Court judgment on the English tighten up, but I am looking very hard at the language requirement for tier 4 visas as they relate to methods by which it went about it. Having been English language schools? English language schools opposition spokesman on the Bill that brought that contribute about £1.5 billion to foreign earnings by in, my thoughts are on record. Looking at what I the UK economy. A lot of them are in my said then, I am happy to say that I do not disagree constituency and Dr Huppert’s constituency. We are with it now. It seems to me that things like naturally quite concerned about the interim effect probationary citizenship and various other things while you conduct that review. may well be an over-bureaucratic way of achieving Damian Green: There have been a number of rulings the desirable end, so that is what we are looking at. some of which basically boil down to the fact that things should have been put in the immigration rules Q57 Mark Reckless: The Home Office estimated rather than just immigration guidance. In one case that the new scheme might cost £37 million over five we have laid orders and in another case we are about years, principally in lost revenue from visa to do so in order that they become part of the applications. I was delighted to hear earlier from the immigration rules because the judgment dealt with British Chambers of Commerce that in principle it that narrow point. We have addressed that. had no objection, albeit it preferred a global scheme, Therefore, when the court says we should do to the auctioning of certificates of sponsorship something we do it. within tier 2. Would it not be possible at least to offset the projected revenue loss by considering in Q55 Mary MacLeod: Do you have any plans to addition to the auction within general tier 1 a much work with academic institutions and also the more widespread allocation by price rather than rationing of permits within tier 2? business sector to make sure that in this country we Damian Green: It is one of the matters in the develop the right skills to fit our needs further down consultation so we are in the throes of asking people the line? whether they believe this would work in practice. I Damian Green: Absolutely, and that is another key regret to say that sometimes governments engage in point. The other side of the coin in response to those sham consultation but this is genuine consultation. who say that we do not have the skills in this country We want to hear people’s views on it and we will look is that therefore we need to develop the skills. It at them. You need to make obvious safeguards. For seems to me perfectly obvious that the danger is that instance, if everything was auctioned off you can if we kept immigration policy the way it was before imagine that banks and so on would be the only we would continue to have a cohort of people in this people who could afford them and so we could not country who never engaged with the world of work. bring in anyone in any other sector. There are clear It is often said that there are one million people commonsense constraints which mean that you under the age of 25 who are not working, not being cannot just operate a completely free market in this trained and are not in education. We cannot have area, but it is an interesting idea and that is why we successive cohorts like that; we cannot run a stable have included it in the consultation. society if we do that. There are two bits of work in other parts of government that fit in very much with Q58 Mark Reckless: On my reading of the the immigration limit: one is on skills and training so consultation it appears to be consulting on that we can train up the people we need; the other is specifically on tier 1 but to a degree dismisses it in welfare reform so that if you are able-bodied and terms of tier 2 options. I just wonder whether capable of work you cannot just live your whole life perhaps we might look more closely at the scope for on benefits and say, ‘I’m not doing that job; it’s not this within tier 2 and particularly, given the demands for me.’ If you are capable of working in this country for 25% to 40% cuts, whether there is any scope for you ought to be working, not living your life on seeing this element of policy as a revenue-raising benefits. rather than cost line? Damian Green: There are complex issues about fees and revenue-raising and overall we are not supposed Q56 Alun Michael: You have already made some to do more than recover our costs. There are references to settlement. Accepting that you have Treasury conventions here. not yet reached conclusions in terms of numbers, do you intend to introduce a cap on settlement? Do you 2 The witness later corrected this statement as “. . . a 30% intend to break the link between migration and increase in grants of settlement last year and a 30% increase settlement? in applications.” Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB
Q59 Chair: Is that a yes or no? questions—is how to ensure we can remove people Damian Green: It is genuine consultation. If who do not have the right to be here at the end of it. somebody comes up with a good idea we will seize it. Clearly, any government needs to get that right as well. If we do not my fear is that child trafficking of Q60 Dr Huppert: I want to move on immigration the type you mention will increase. You would know and issues to do with detention. The first question is then there was no effective enforcement if you turned about detention of children for immigration up here with a child which might or might not be purposes. We discussed this in a Westminster Hall your own. It is a point very well made and the need debate. I should be grateful if you would comment to keep those reserve powers has been at the on where things are in thinking about alternatives to forefront of our minds during the alternative to child detention and how interaction with parents will detention review. take place. Alun Michael: When you spoke to Citizens UK in Damian Green: We set up the review which was one Westminster Abbey about the welcome decision to of the first things the new government did. That implement the promise to end the detention of review landed on my desk a couple of weeks ago, so children you gave the further commitment to do that it has been done very quickly and we are very by Christmas. Are you confident that you can grateful to all the NGOs and outside bodies achieve that? particularly the Diana Princess of Wales Memorial Fund which co-chaired some of the sessions. At the Q63 Chair: Westminster Abbey? moment it is on the ministerial desk, if you like, and Damian Green: It was a Christmas party. I suspect we hope to make an announcement very shortly. that as immigration minister it is the only time I will While we have been doing it we have been conscious ever be given a bouquet for that announcement. that people have asked what is happening to children They said that last year they had sent Father in detention. We have already stopped overnight Christmas to parade outside Yarl’s Wood to make detention of children at one of the two places where the point that there were children in there. I made the it happened. I refer to Dungavel in Scotland. The possibly rash commitment that if anyone had to do numbers at Yarl’s Wood are markedly down. I it this year I would dress up as Father Christmas, believe that on the day of the Westminster Hall which I think gives you the answer. I am confident debate the number was three and as of yesterday that we will have this sorted well before Christmas. there were no children in detention.
Q61 Mark Reckless: I look forward to that Q64 Mary MacLeod: I am a London MP who is announcement. On the broader issue of how we concerned about homelessness. Do you believe that detain people, I shall be going to Oakington on both EU and non-EU migrants are probably causing Friday. There have been lots of concerns about how a problem of homelessness in this great city of ours? people are treated there. You will be aware of the If so, do you have any plans to deal with it? death of a gentleman in April in rather unusual Damian Green: We have found it to be a problem circumstances. I note that other people detained with EU migrants particularly for those who came with him were removed the next day. There is also an here and lost their jobs because of the recession. As issue which I have mentioned to you in the past you rightly identify, it is a problem in London and in about serious assault. What steps are being taken to other areas like Peterborough. I have had a meeting ensure we treat people humanely while we detain with my hon friend from Peterborough about this. them? We are taking action on it. We are working with Damian Green: There are lots of safeguards in place. partner agencies and local authorities and trialling Clearly, any death in custody is hugely regrettable this approach in Westminster, Peterborough, and a very detailed investigation takes place. There Southampton, Brent, Lambeth, Oxford, Reading are independent monitoring boards for each of the and Slough where there are particular problems. So centres. HM Inspectorate of Prisons also makes far over 200 rough sleepers have been considered for reports. Obviously, individual incidents give rise to removal under this approach and we are pursuing separate investigations. Just generally,a good deal of removal action in over 100 cases. Eighteen people of training goes on of all those involved because in the a variety of EU nationalities have been removed end you need people who have powers of restraint. since March of this year. It is a problem and we are People occasionally become violent or unco- trying to deal with it. operative and therefore we need to reserve those powers. Q65 Bridget Phillipson: You will be aware of the pilot scheme set up to support destitute victims of Q62 Steve McCabe: Obviously, nobody likes the domestic violence with insecure immigration status idea of children being in detention. I understand and no recourse to public funds. I was involved in there is a problem with people who arrive here that pilot when I managed a women’s refuge and it fraudulently with children who are not their own. was a very welcome step particularly by smaller What can you do about that, and how big a problem voluntary sector organisations that suffer a do you think it is? significant financial strain in supporting people with Damian Green: It is a big problem, and one of the uncertainty about where funding will come from at things that the alternatives to detention review has local level. Does the government have any plans to focused on—because it is one of the most difficult continue that scheme, and where are we with that? Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
Ev 12 Home Affairs Committee: Evidence
20 July 2010 Damian Green MP and Ms Lin Homer CB
Damian Green: You will be aware from having been Damian Green: Yes. involved in what is a good scheme that the pilot was scheduled to run until the end of August of this year. Q70 Chair: Of the total budget of UKBA? We have decided to extend that pilot until March of Damian Green: Of the pay bill of the Home Office. next year. The Home Secretary has made a commitment to find a long-term funding solution to Q71 Chair: We do not know what the amount is? the issue. Clearly, it is an important issue that we Damian Green: I do not know off the top of my head need to address properly. what the Home Office pay bill is. But only 4% of the 8.6% is being spent, so it is less than half.
Q72 Chair: Across the board in the Home Office Q66 Bridget Phillipson: On a similar note, the only 4.3% of the pay bill of the department will be immigration system changed in 2002. Victims of available for bonuses? domestic violence who were married to British Damian Green: Yes, and that is less than half of what nationals could apply for indefinite leave to remain. it could be, which means that average pay for Home I believed that to be a welcome step because there are Office senior civil servants will be cut by 4.6% many vulnerable women in the community. I am because they are getting much smaller bonuses than dealing with a number of cases involving women in last year. a similar position at the moment in my constituency. Because their husbands are not yet British nationals Q73 Chair: Why? Is it because it is regarded as and are often going through that process the only acceptable just to give bonuses as part of salary? option open to them is to seek asylum. There is an When you say “cut”, presumably a bonus is argument that the asylum system does not take something you receive if you do a good job? adequate notice of gender issues. Do you have any Damian Green: Exactly, and not all civil servants thoughts on that? Does the government have any across the Home Office will get bonuses. plans in that area? Damian Green: Perhaps you will let me go away and Q74 Chair: So, it is not a pay cut; it is something they think about that. I have heard the point about will not get if they do not do a good job? gender issues and the asylum system. We are Damian Green: They will get less money this year pondering ways in which we can respond to that so, than last year, so I daresay it feels like a pay cut to if I may, I shall take that away. them. Chair: It is a very odd reading of the situation.
Q75 Mr Burley: I do not understand it. Surely, a Q67 Chair: I am glad you are to stay for the next bonus is not compulsory but discretionary, so if you session which is concerned with the UK Border are not performing and therefore not entitled to a Agency for which you have responsibility. Minister, bonus it does not count as a pay cut? before we turn to Ms Lin Homer I want to ask a Damian Green: It is a point about pay. The amount question about bonuses. I put to the Home Secretary in the bottom right-hand column of the pay slip, as last Thursday that in the previous session the it were, will be less on average this year than it was Committee was concerned that bonuses were given last year. to senior Home Office officials, including obviously Ms Homer and other members of the agency, despite Q76 Chair: For the purposes of Parliament-speak, the fact that the backlog remained in existence and do you accept this is not a pay cut because it is there was dissatisfaction with it. Is it still the policy something people receive if they do a good job, or do of this government to pay bonuses to senior officials you just give out bonuses to anyone who wonders of the UKBA? round to see you? Damian Green: Following consultation with the Damian Green: No. Prime Minister and Cabinet Secretary, for this year the permanent secretary has decided that less than Q77 Chair: It is not a pay cut. The answer to my half of the available provision should be spent, so question is that the amount of money available for bonuses will be paid. Therefore, 8.6% of the pay bill bonuses is being reduced to 4.6% but they will not was set aside for performance bonuses. get the 4.6% unless they do a good job? Damian Green: Yes.
Q78 Chair: That includes your own area, the Q68 Chair: How much is that in terms of money? UKBA? Damian Green: That is a good question to which I do Damian Green: Yes. not have the answer off the top of my head. Dr Huppert: My question relates to both of you and how the points-based system is being operated by UKBA. I am very concerned that in respect of a number of issues a very pedantic line is being taken Q69 Chair: Would somebody be able to tell us before on various matters. For example, last weekend a the end? You say that 8.6% has been set aside for couple came to my surgery. They were both doctors, bonuses? a GP partner and a consultant, who earned rather Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
Home Affairs Committee: Evidence Ev 13
20 July 2010 Damian Green MP and Ms Lin Homer CB more than I do. They had applied for tier 1 visas, as an unreasonable thing to expect people to have a was appropriate, and it was rejected because they did sum of money in their accounts for a period of time. not have evidence that they could financially Its point was simply that that should be clear on the support themselves. Although their main account face of the rules, eg clear in front of Parliament. That normally had in it much more than my account at was the reference the Minister made to us to give one stage they paid a large sum off their mortgage a consideration to how we implemented it in future. couple of days before some money came in and so it dipped below £800 for a few days. Clearly, these Q81 Mark Reckless: Are you contacting applicants people are very wealthy; they are contributing to the who have been unlawfully rejected? UK. The UK is very short of skills in those Ms Homer: We are looking at what we have to do in particular areas. Why is it sensible for us to reject relation to that case and that will go forwards as well them on technicalities like that? Is this how UKBA as backwards. ought to operate? Mark Reckless: If you can update this Committee it would be greatly appreciated. Q79 Chair: Obviously, not all of us will bring our cases to these evidence sessions, but can you tell us Q82 Mr Winnick: I have absolutely no objection to the principle? It is an absolutist set of rules, is it not? relatively low-paid people in UKBA getting extra If you fall below you are out, basically, as Dr money,and I hope that will be the position, but as far Huppert said? as concern the most senior people what bonus are Ms Homer: I am very happy to receive letters about you as chief executive and your deputies due to individual cases. As you say, this is probably not the receive? setting to go into too much detail. The Committee Ms Homer: The bonus judgments for me and my will be aware that we moved on the points-based team are made by the Home Office as a whole system to an objective system whereby there are very relative to the performance of the senior civil service clear criteria for those who apply. We removed some in the department as a whole. fairly large areas of discretion that used to exist for entry clearance and other immigration officers. That Q83 Mr Winnick: What bonus did you get last year? has made for some transitional pain, if I may put it Ms Homer: It is clear from the accounts of the that way, not least it is very important that agency. My salary is published in our accounts. applicants give us all the information we ask for and do not leave us to guess. It is a matter of balance, but Q84 Mr Winnick: In which case, can you tell us since certainly when we consulted the vast majority of you are now before a Committee of the House of people believed that an objective system where one Commons? could test oneself against the rules before applying Ms Homer: I am happy to but I would want to do and did not feel oneself to be at the whim of the that accurately. We have written to you before. individual officer was regarded as preferable. We spent a lot of time over the past 12 months in Q85 Chair: You do not know what your salary is? discussion with individual groups to make sure that Ms Homer: Yes, I do know what my salary is. was understood. Sometimes there are urban myths, if I may call them that, about blockages that do not Q86 Mr Winnick: I do not suggest that you are trying exist. We believe that the objective system is sound to hide it. I ask a simple question. but it is important we have constructive dialogues Ms Homer: Mr Winnick is asking me about the with groups. In the example you give it would figures for 2009 which are published. probably have been sensible for them to make the application at a point when their bank balance was Q87 Chair: I think Mr Winnick spoke over you healthy. That is the kind of help we would like to try because he is getting very excited. Obviously, the to give applicants rather than the feeling of running salaries of civil servants are matters that interest into a brick wall. Members of Parliament. What is your current salary? Q80 Mark Reckless: Is not the issue that where Ms Homer: My salary is £208,000. someone has made an application for a post-student work visa and he or she has £800 in an account Q88 Chair: What was your bonus, approximately, following the leading judgment of Lord Justice for last year, not to the last penny? Sedley in Pankina & Ors your agency has applied a Ms Homer: Last year it was described as being in the requirement without reference to this House region of £10,000 to £15,000. whereby it should be at least £800 for the whole three-month period? Individuals may have applied Q89 Chair: So, you have a salary of £200,000 and within that period and done the right thing and gone last year a bonus of £15,000, or is all of that included home when told to do so. What plans do you have, in the package? if any, to ensure that those people who have been Ms Homer: No; that is on top. unlawfully turned down can have their cases properly considered? Q90 Chair: Let us move to the substance of why you Ms Homer: As the minister said, we would always are here. Thank you very much for the update to the want to comply with what the court tells us to do. Committee. Our problem is that it tends to come The court was very clear that it was not necessarily literally just before a session and we do not have the Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB time to digest the very important information you Ms Homer: You will recall that when we originally give. It would be for the convenience of the shared this information with Parliament we took an Committee if we agreed a timetable and UKBA estimate of the number of cases that required action stuck to it. We would like to read your letter at leisure which we viewed as being between 400,000 and before you come before us but it arrived only 450,000. This was never an absolutely exact size. yesterday.I am glad the Minister has placed the letter in the Library of the House which is extremely Q96 Chair: As of today what do you believe it is? helpful to other members, but in future it would be Ms Homer: We believe that it is in that region. very helpful if we stuck to a timetable. We will let you have a list of dates with which we would like you to comply. Q97 Chair: And you will clear 400,000 to 450,000 by Ms Homer: I am very happy to do that. 31 July 2011? Mr Burley: I understand you assured our Ms Homer: I am confident that we are on target to predecessors that you were on course to meet the do that. We have maintained a level of resource in summer 2011 deadline for dealing with the 400,000 our own team and added the extra team via the to 450,000 files which formed the historic legacy of commercial provider alongside us. The performance the unfinished asylum cases under the previous in the first quarter of this year has improved. It needs government. I also understand that it took nearly to step up a little bit more. Each case worker needs to four years to deal with some 277,000 of those files. do two cases a week more than they have been doing, Can the 2011 deadline be met? If not, what will you which I think is manageable, so we remain very do with the cases still open when that deadline is determined to hit that target. reached? Q98 Mr Burley: If you do not hit that target will you Q91 Chair: Just remind us of the deadline. What is take your bonus—yes or no? the date by which you are supposed to clear the Ms Homer: It will not be for me to decide. entire backlog? You have a date in mind, do you not? Ms Homer: Yes. Several Home Secretaries back, Q99 Mr Burley: You could decide not to take it. John Reid gave a commitment to Parliament that we Ms Homer: Once in the period I have been here I did would finish the legacy backlog by the summer of so voluntarily and that was the year of the foreign 2011. national prisoner. Q92 Chair: Can we take 31 July as the target? Ms Homer: I am assuming the end of July,unless you Q100 Mr Burley: Will you do that again next year? do not have any summer holiday at all next year. Ms Homer: That is very likely.
Q93 Chair: Will you meet the point of Mr Burley’s Q101 Lorraine Fullbrook: I should like to drill down question? a bit more into the clearance of the backlog. Will you Ms Homer: I remain confident that we are on target explain to the Committee the plans that the UK to meet the deadline. When I last appeared before Border Agency has put in place to manage its you we had been undertaking a change in the way we resources to achieve the objectives it has been set and did the work. You had pressed previous Home exactly how it will drive that given budgetary Secretaries to make extra resource available to us. restraints? What plans have you put in place to That was done, but the consequence was that we achieve your objectives? front-loaded the system so that cases reached case Ms Homer: We take a fairly straightforward owners in a more finished and ready way, meaning approach to business planning, so we spend time that the decision makers could then get through looking at the objectives the government gives us, cases more quickly. The consequence of that change ensuring we put the resources in the right place. We is that our performance in the first half of 2009 have given ourselves year-on-year efficiency targets slowed down relative to 2008, but I am pleased to say against which to deliver and we then track that that that has speeded up in the first quarter of this information in a set of management information year. We are now at a level that is 68% more effective which we report both to the permanent secretary of than it was for the remainder of the year, and I am the Home Office and the Minister. We have taken the confident that we can finish by the deadline given to view you have the right to expect us to deliver value Parliament. for money in the past and we can see that ratcheting up in future. For the past four years we have been Q94 Chair: You will know that this Committee in its broadly cash flat, so we have been absorbing our last report asked you to complete the backlog by the own inflation and pressures and increasing the end of this year and you wrote back to say you could amount of work we do for that resource. We would not do it. So, you are giving us an absolute guarantee expect to have to continue to ramp up that approach today that the backlog will be cleared on 31 July next as we go forward. year? We are talking about 277,000 cases. Ms Homer: Which we have completed. Q102 Lorraine Fullbrook: You said that in the past all your plans had been to have the resources in the Q95 Chair: What is left? What is the backlog at the correct place. Do you think they have been in the moment? wrong place until now? Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB
Ms Homer: No, but I think a business must move its Q106 Chair: To this Committee? resources to where they need to be. If I take the Damian Green: Indeed; it was a memorable legacy work in which this Committee has been appearance. My feeling is that it is better than it was, closely involved, on my arrival in the job there was but there is an awfully long way to go. I do not not a team of case workers focusing on those cases. believe Ms Homer would disagree with that analysis. We now have 800 staff dealing with that work. Clearly, there are systems that still need to be Similarly, as some Members know well, in 2006 we improved and performance, not least on backlogs, had 80 people working on foreign national needs to improve. Do I propose wholesale, radical prisoners; we now have over 700. Therefore, a reform of the organisation? Within the context of business must work out what its objectives are in improving its performance and the wider context of conjunction with the people who direct it and then our awareness of the state of public finances we are move resources to those places. We have to do that looking at ways in which performance can be within an overall constrained budget. improved. One of the things I want to avoid doing is to make the mistake that I believe some of my Q103 Mr Winnick: In addition to the backlog legacy predecessors made, namely to discover there is a that is being dealt with today as well as in other crisis and completely refocus all of the agency’s sessions the chief inspector of UKBA said that efforts to solve that immediate problem. I believe another backlog was forming, namely asylum cases. that leads to backlogs building up and areas being He doubts whether that backlog will be cleared under-resourced. within the target of the date given. Is it likely that you will meet the target to complete 90% of asylum Q107 Mr Winnick: You have no plans to reorganise cases within six months? The deadline is December UKBA or bring in another organisation to replace 2011. it? Ms Homer: I think the new asylum model remains Damian Green: We do not intend to replace it with the only one we can find anywhere in the world another organisation, but we are looking at where a country has set itself the target to conclude potentially radical changes to make it more efficient. cases rather than just decide them. I believe I said to the Committee on the last occasion we met that our Q108 Chair: If John Reid’s statement gave it, say, an progress against those ramped-up targets of the E-rating you would say it had improved. Obviously, proportion of cases that we were concluding had it is not the first-class organisation you would like— been slower than we would have wished. However, it you have been there for only eight weeks—but is improving year on year; it is now 10% better than would you give it approximately a C-rating at the it was last year. I am confident that we are still moment? moving in the right direction. The important thing is Damian Green: I try to avoid giving marks out of 10 for us to have some trend improvement. or use an A to E rating for obvious reasons. I think the best phrase I can use is one that will be Q104 Mr Winnick: Will that deadline be met? particularly familiar to Labour Members of the Ms Homer: I am not totally confident because we are Committee, that is, “a lot done, a lot more to do”. in new circumstances that we will absolutely meet Chair: Things can only get better! the 2011 target, but I am very confident that year on year we are concluding more cases. To pick up the Q109 Mary MacLeod: Ms Homer, last autumn you chief inspector’s point about whether there is revealed that 40,000 immigration cases had been another backlog, when the National Audit Office identified where there was no formal record of looked at the asylum system in 2009 it correctly whether or not the applicant had left the country. directed that we should put resources into finishing Are those cases included within your estimate of out-of-time cases and not put all of our resources 400,000 to 450,000, and do you still think you will be into simply meeting the six-month deadline. We have able to get those done within the deadline of July done that over the past year. It is one of the things next year? that has contributed to our being a bit slower about Ms Homer: They are not included but we have in-time cases, but the number of cases going outside agreed that we would aim to finish them at our service standard is now stabilising and we expect approximately the same time. We have taken an it to go down in future, so we do not believe we are initial look and they are all being checked for building up a backlog to replace the one we are criminality. Our view is that probably in order of finishing off. priority they fit at the end of that cohort of cases, but we are confident we can finish those within the same Q105 Mr Winnick: Minister, I know that you have period, in part because quite a lot of them are been in office for only two months. Leaving aside all administrative and it is a matter of finishing off cases questions of personalities, are you satisfied that the rather than anything substantive. A couple of cases UKBA, which came into operation in April 2008, is I looked at recently included a young woman who doing the job it should be doing, or do you have in was a three year-old in 1990 and whose case for some mind changes, substantial or otherwise? reason was not determined when her mother’s was. Damian Green: My overall view is that the agency That was a really easy one where subsequently we started from a relatively low base. John Reid recognise we should make a grant and conclude it, famously said in 2006 that it was not fit for purpose, but there are other cases where it is as simple as just and he was clearly right. updating the records. We do intend to go through Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
Ev 16 Home Affairs Committee: Evidence
20 July 2010 Damian Green MP and Ms Lin Homer CB them and resolve every case with the case resolution Q113 Mark Reckless: My second question about directorate staff as they come to the end of the table 1.1 which relates to the comparison between historic asylum legacy on which they have been main applicants and dependants. I note that of the focusing. main applicants about one third, ignoring the “others” category, have been removed but for Q110 Mary MacLeod: So, that is a definite July dependents the proportion is barely one in 20. I just deadline? wonder whether one possible conclusion is that your Ms Homer: Yes. chance of being granted leave to remain does not Chair: We shall write it in stone. reflect so much your history of persecution or otherwise but whether or not you present yourself Q111 Alun Michael: I am sure you are relieved when with dependents. you find the odd case that is as easy as you have just Ms Homer: Not necessarily. What it actually reflects described. Can you give an indication of what is that we have historically struggled to persuade proportion of the 40,000 are visa over-stayers and families to go at the end of an unsuccessful what proportion are students refused an extension, application for asylum. We have a bigger proportion and what types of cases are involved? of adults going out and therefore when you look at Ms Homer: In relation to both the main legacy and the historic backlog there will be a number of people this one I took the decision that we would start with dependents who will then have gone on to working on the cases. My view is that historically the acquire longer-term residence rights. It is more to do agency tended to put a lot of resource into working with the fact that our ability to persuade families to out what was in the cupboard rather than dealing go home has always been limited by the fact that we with it. We have dip-sampled rather than gone will not allow families to suffer destitution or through every case. As a consequence this may not difficult circumstance. It is right at the heart of the be completely accurate, but probably under half are review of the detention children. Finding a way to student extension-type cases. Early indications persuade a family to accept that no really means no suggest that in many cases they may have been and it must go home has been a long-standing rectified by subsequent successful application or by challenge and one that we are looking at afresh at the student going home. The plan is to check all of the moment. those, but it appears that probably 40% of the cases relate to students. The rest will be a mix of over- Q114 Mark Reckless: Rather than merely stayers, some spouse cases where again the position persuading them to go—I accept it will not be may have been subsequently rectified and some possible in all circumstances—is there not a need for claims for status which are relatively easy to greater focus and political will on enforcement of determine at this stage. removal of people who are not entitled to be in the country? Q112 Mark Reckless: I have been trying to digest Ms Homer: The agency is very committed to your letter over night. I have two questions about enforcing removals. We have a strong record of table 1.1 in annex A which I found difficult to enforcing removals and we have been looking reconcile with the statement you make in paragraph consistently at how we can increase that level even 11 of the letter. You say that the percentages of grant further. We are probably the best of any European of applications have remained fairly consistent country at removing so it is a high performance, but throughout the life of the programme. If we go back one thing the Minister has asked us to do is see to your letter of 4 February 2010, however, I note whether we can clear away any more blockages that then you said 35% of applications had been particularly in the later stages of cases, shorten the granted. I calculate that since then that number has time it takes to appeal and improve our ability to get gone up to 56% for the period since your last letter. documentation for refused asylum seekers. Many of Ms Homer: I have not done the math. That sounds our staff would be keen to get a higher level of too high to me given the numbers we have handled removals. between February and now, but I do not want to argue with you on the math. What I would say is that throughout the period of the legacy we have had Q115 Steve McCabe: When the previous version of periods when we have concentrated on particular this Committee took evidence in March 2009 it sorts of cases. Since we last saw you partly in relation discovered that the agency was responding only to to some of the advice we received from the NAO we 60% of MPs’ inquiries within the 20-day limit. Mr have concentrated on a number of supported cases. Glyn Williams of the agency said at the time he did In the main that will include some long-standing not see why he could not do much better than that. family cases and that may lead to a temporary What is the situation now? increase in grant rate. If you look at the proportion Ms Homer: We are doing better but in part it has of cases over time sometimes you get a big bank of been helped by the fact that you have slowed down approvals, sometimes a big bank of “others” and writing letters to us during the election campaign. sometimes a big bank of removals, which is why over the whole period we have tracked it. But for the whole 277,000 the figure now stands at 38%. When Q116 Chair: No. I think the answer is that you you take the medium-term view it has been relatively would not reply to them when we wrote to you. You consistent. said, “You will not get a reply because you are a Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
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20 July 2010 Damian Green MP and Ms Lin Homer CB candidate, not an MP.” You stopped writing and people I was with were not really in a position to that was why you had a slow down, not because we complain, nor did they feel that given they were had not written. going through that process it would be helpful to Ms Homer: It is a two-fold answer. We applied the their cases if they were seen to complain. Frankly, I Cabinet Office rules and subsequently sought to felt that if I complained on their behalf I would reply to those that were returned, but you did also probably be asked to leave given the aggressive write us fewer letters. In overall terms, if you go back treatment, frankly, of staff there. Do you think that to 2004 we answered 34% of letters. We received is an appropriate way for asylum seekers to be 35,000 letters that year. In 2009, the last completed treated? I intend to visit Croydon over the summer year, we received 66,000 letters from MPs and recess and I am grateful to the Minister for arranging answered 78% of them in time, so we are improving. that. When I visit as an MP I do not imagine I will Although it is not yet a published statistic and so I be told, ‘Sit there! What are you here for?”, that it risk getting into trouble with ONS, in the month will be assumed I do not speak English, asked after the election in May uniquely for the agency it whether I have tuberculosis or that I must be an responded to nearly 90% of letters in time. We are asylum seeker myself. trying to use the slightly better catch-up that we got Ms Homer: I am really disappointed if that was your through the election to stay on top of MPs’ letters. experience. We have put a lot of effort into Steve McCabe: My experience of letters from the improving the quality of the experience of people agency is that they are perfunctory and often lack when they apply. In Croydon in particular we have any real information. Maybe one of the reasons you done some of that work with the South London get so many is that any attempt to get information is Citizens organisation. I am perfectly happy to talk to followed up by another letter that does not meet the MPs about what more we can do. We feel we have target. Has it occurred to you that maybe you need made the system better. Obviously, I was not there to rethink the way you communicate with MPs? You with you at the time but I can give the Committee an said earlier in response to Dr Huppert that you assurance that I take very seriously any suggestions would be quite happy to hear about individual cases, that we are not treating people in a dignified and but that is not the experience of MPs. Whether we humane way. We have systems and it is necessary to are telling you about people who should be sent back try to organise but I believe we should be able to do and being helpful to you or whether we are asking that in an efficient way in terms of the time of both about people who have been lost—for example you staff and the people who come and that it is dignified have approved the mother but forgotten the and appropriate. My view is that we have made daughter when the application was made at the same Croydon a lot better. Obviously, you did not see that time—the standard formatted reply is virtually and I should like to learn from your experiences and useless. I wonder why it takes so long for somebody see if there is anything we can do to improve it to run off a standard reply. If it is consuming staff further. time and all that resource why do you not do something different to improve the nature of the communication and see if we can all end up happier?
Q117 Chair: I believe Mr McCabe’s views are Q120 Alun Michael: I am pleased that the Minister endorsed by others. You now have a big system; you is here to hear this question. It used to be the case have account managers and directors; you have that many of the questions that come to you in the people in Croydon and in the regions, but at the end form of letters or in other ways would have gone to of the day the same old letter comes back. Ministers. Parliament accepted that replies should Ms Homer: Chairman, I believe that on the last come from the heads of agencies in order to get occasion you accused me of not even signing the quicker and more timely responses and not waste the letters I sent you. time of either Ministers or MPs. Do you accept that MPs generally simply want to help deal effectively Q118 Chair: I believe Mr Winnick did. and fairly with the cases they take up and that very Ms Homer: I take the point. It was not true; I did often correspondence is delegated further down the sign them. We take this very seriously. I put a lot of line and the response looks as if it is being sent in personal effort into it, including speaking to a order to tick a box that a reply has been made? That number of MPs directly on cases where I perceive is frustrating; it is a waste of the time of the MP and that the quality is not right. We had two challenges his or her staff. The attitude of the agency ought to on quantity and quality. I have put a very significant be that it sees the MPs as partner in trying to deal effort into getting more timely responses. I think it is effectively sometimes with very difficult cases that a fair challenge to us to say that we should now put come to them. an equal continuing effort into trying to improve the Ms Homer: Yes. I reply to between 20 and 50 letters quality of the letters. I am very happy to take that a day. I expect my senior directors similarly to sign a away. certain number of letters themselves and dip sample the ones they do not sign in order to try to improve Q119 Bridget Phillipson: I visited the UK Border quality. I can assure you—I believe there are a Agency in Croydon earlier this year before I was number of MPs who can confirm this—that I elected an MP. I was appalled beyond words by the intervene myself in cases where I regard the quality treatment meted out by staff to asylum seekers. The as inappropriate. Processed: 28-10-2010 20:53:29 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG1
Ev 18 Home Affairs Committee: Evidence
20 July 2010 Damian Green MP and Ms Lin Homer CB
Q121 Alun Michael: That does not lead to a Q125 Chair: The election intervened and therefore significant improvement which is why the delegation you were busy not answering our letters. We would is problematic. like a reply as soon as possible. Ms Homer: I accept that. The difficulty is that I Ms Homer: Absolutely. We have undertaken further cannot truthfully sign 66,000 letters. I have talked work with Europe. They have confirmed the broad before about the way one uses time. We have to compatibility of the scheme but also asked us to continue to improve the quality of letters and work with individual Member States. Since I last managerially I have to do that by signalling the saw you a number of countries have indicated they importance of it to the rest of my workforce. That is are content. In particular, France has confirmed that something I have tried to do the whole time I have it believes it is compatible with its arrangements. We been here. We have made some improvements and I are moving forward on compatibility and Ministers am disappointed that nobody in the room confirms are pressing the EU to bring their own arrangements that. Perhaps I am just kidding myself or am for passenger name records further forward because unlucky, but I now get comments from some MPs, there is some evidence of delay. We are not the only including the very regular high volume ones, that country to press for it and I think we are in they believe we have got better at it. I am absolutely increasingly strong company. clear that we need to get better still. Chair: You are not kidding yourself. This is still an issue for Members of this House and it needs to be Q126 Chair: You will be aware that the Prime dealt with properly and effectively. Minister is very keen to deport foreign national prisoners. In the letter you sent to us yesterday Q122 Mr Winnick: Normally, when we write to paragraph 1 appears to be incompatible with authorities nationally a Minister replies. It could be paragraph 2, but perhaps I do not read it correctly. said that we are not writing directly to you; if we did You say that in 2009 to 2010 the total number of it would be passed to UKBA. I do not know whether harm removals was 37,745, but in paragraph 2 you your experience was the same. I accept that the refer to 19,000 foreign national prisoners from the practice was not precisely similar in the previous UK including a total of 5,535. Do you know how administration, but when you received replies did many foreign national prisoners we have in our you feel that the Minister should at least have signed prisons at the moment? the letter? Ms Homer: I do but I am not sure I can give it off the Damian Green: As you say, I am in the position of top of my head. Between 11% and 14% of the prison having been on both sides of this particular population comprises foreign nationals. The total exchange. The truth is that I would prefer the letter prison population at the moment is about 83,000, so to be substantive and helpful. As both a constituency it is 11% to 14% of that. MP—therefore, I write to Ministers as well—and also a Minister I care more about the timeliness and substance of the letter than about who signs it. I do Q127 Chair: How many foreign national prisoners sign letters as well. for the whole of last year did we remove? Ms Homer: We removed 5,535 in 2009. The figure of Q123 Mr Winnick: You would take responsibility if 19,000 in paragraph 2 is the total number of foreign it was a letter that should be sent to a Member of national prisoners on criteria sentences since 2006, Parliament rather than a junior person with due namely those who have served 12 months or more or respect? have been recommended for deportation or Damian Green: Indeed. otherwise served a criminal sentence. Therefore, the Mr Winnick: A lot of the replies I receive, which I am 19,000 is a cumulative figure. The harm removals sure is the experience of others—there should be no include a much wider range, so they may be people exception for me—are signed by people way down who have been cautioned. They may include the line. examples where we have a failed asylum seeker Chair: I think the message to the Minister is that he whom the police believe is involved in gang should sign more letters. criminality but who has not been sentenced but whom they ask us to prioritise. Q124 Dr Huppert: Can I ask what is happening about e-borders and the £1.2 billion scheme to try to track every entry and exit into the country? As I Q128 Chair: They would come within the category understand it, there was a report by the Committee of foreign national prisoners? that there was a risk it breached EU law as well as Ms Homer: Absolutely. Therefore, those who served data protection rules in France, Germany, Belgium a long sentence are at the top of that but we would and a whole host of other places. To what extent has then take advice from local authorities and police it now been reformed to satisfy those legal and seek to target our enforcement activity on those requirements? I am not aware that this Committee causing harm in a more general sense. has received a response to its report. If so, I have missed it; if not, when will we have it? Ms Homer: I do owe you a reply and you will have Q129 Chair: Of those who went missing and it very soon. I shall try to make sure you get it before obviously cause concern how many have been the recess. caught and how many are still on the run? Processed: 28-10-2010 20:53:29 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG1
Home Affairs Committee: Evidence Ev 19
20 July 2010 Damian Green MP and Ms Lin Homer CB
3 Ms Homer: You mean 1013? Steve McCabe: Does it mean that about £4 million of the Home Office pay budget will go in bonuses to Q130 Chair: Yes. senior civil servants? Ms Homer: I set out in paragraph 5 the up-to-date figure. We have concluded 793 of those cases, of Q138 Chair: Potentially.But Ms Homer is not taking whom 378 have been deported. That is seven more her bonus if she does not reach her target on 31 July. than the last time I saw you. She will not want to appear before us. Ms Homer: I always look forward to appearing Q131 Chair: How many are left to be tracked down? before you. How many are wandering around and we do not know where they are? Q139 Chair: There is one final question to the Ms Homer: Seventy-three, and eight fewer cases Minister on the consultation period. The than the last time I saw you. We expected this to slow government has allowed 12 weeks for consultation down as it finished but I hope those figures indicate on the cap which came into effect yesterday. that we remain determined to seek out and continue Parliament goes into recess next Tuesday. Obviously, those cases when we are able to. the Committee is not sitting during the recess. That does not give us sufficient time to enable us to do Q132 Chair: The Prime Minister has made it very justice to any report we might produce. The Home clear that foreign national prisoners are a priority for Secretary very kindly last week said she would be the agency and it remains so? willing to accept the report of the Select Committee Ms Homer: Absolutely—both the ongoing and outside. It was really based on a nod and a wink, but historic. You did ask whether we could update you I seek from you something a bit stronger. We shall on the amount of the bonus. Would you like me to not be able to do justice to our work in that do that before you put another question? constrained period. We would like to give you a good report. Bearing in mind that the previous Q133 Chair: Yes. government was judicially reviewed three times on Ms Homer: The 4% of the SCS pay bill which the the points-based system and judges have made clear permanent secretary has distributed for bonuses for that it is due to lack of parliamentary scrutiny I hope senior civil servants this year is £773,000 across the the Minister will look kindly on the fact that we may whole department. not meet the deadline of 12 weeks and reject the Select Committee’s report. Q134 Chair: So, the pot will go down to 4%? Damian Green: I am sure we would not reject the Ms Homer: That is the 4%. Select Committee’s report. The deadline is 17 September. I do not breach any confidence when I Q135 Chair: So, it was £1.4 million but it is coming say that we shall not announce the result on 18 down to £773,000? September. Parliament is back for two weeks in Ms Homer: Yes. September but I am not sure when the Committee plans to produce its report. Q136 Chair: That is the Home Secretary’s decision in the end? Q140 Chair: We may want another session but we Ms Homer: That is the permanent secretary have not decided. We have asked for written following Cabinet Secretary and Prime Minister evidence and so far have taken evidence only from rules. you, Ms Homer, the Federation of Small Businesses and the British Chambers of Commerce. Others will Q137 Chair: But who makes the decision? Is it the wish to write in. We would like a bit of latitude. permanent secretary, the Cabinet Secretary or the Damian Green: Obviously, we would welcome the Home Secretary? Select Committee’s view. If you can do it as fast as Ms Homer: The permanent secretary makes the possible after 17 September clearly that will be decisions based on rules provided by the Cabinet mutually helpful. Secretary agreed with the Prime Minister, and he has Chair: Minister and Ms Homer, you have been here awarded half of what he could have awarded. for over an hour and a quarter. We are most grateful. Processed: 28-10-2010 20:54:10 Page Layout: COENEW [SE] PPSysB Job: 005643 Unit: PAG2
Ev 20 Home Affairs Committee: Evidence
Tuesday 7 September 2010
Members present Keith Vaz (Chair)
Nicola Blackwood Mary Macleod Mr Aidan Burley Alun Michael Lorraine Fullbrook Bridget Phillipson Dr Julian Huppert Mark Reckless Steve McCabe Mr David Winnick
Witness: Professor David Metcalf, Chairman, Migration Advisory Committee, gave evidence.
Q141 Chair: Could I call the Committee to order and been doing, including the present investigation, is welcome Professor David Metcalf to the dais? Could one thinks of it as a 3 x 3 matrix. You’ve got three I refer all those present to the Register of Members’ routes in; you’ve got work, study and family. You’ve Financial Interests, where the interests of Members got three groups: British, EU, non-EU. So you’ve of this Committee are registered? Could I declare a got nine cells and we’re only dealing with one of particular interest? My wife is an immigration those cells. solicitor and a part-time judge. Professor Metcalf, the Committee is in the middle of its inquiry into the immigration cap and clearly the Migration Advisory Q143 Chair: Yes. But the temporary cap has a Committee, commonly known as the MAC, is number. The permanent cap, as yet, has no number extremely relevant as far as the Government is and you’ve been asked to advise the Government on concerned in respect of these matters. Do you think what you describe as “achievable but nonetheless that it’s something of a failure of the MAC that the challenging” as far as your work is concerned. Government has had to suggest a temporary cap? If Professor Metcalf: That was in the consultation you look at the reasons why the Migration Advisory document, I think. Yes. Committee was set up, it was to advise the Government on numbers, shortages and skill Q144 Chair: Right. Have you been asked to shortages. Had that been working, perhaps the new recommend a certain number for the permanent cap Government wouldn’t have needed to have had the or just give advice generally? Will you actually be cap that it has imposed. saying to Damian Green, “I think it should be 50,000 Professor Metcalf: No, I don’t think that at all, or less”? Chair, if I may say. First of all, the Government sets Professor Metcalf: Yes. I don’t mean to be our agenda. We don’t go off and decide what it is that convoluted but the way of trying to address that we would wish to investigate. It’s agreed across question is somewhat complicated. First, we’ve only Government and then we are asked to investigate been asked to do a number for the first year of particular things further. The only areas that we’ve operation but you can’t do that without in fact ever worked on have been to do with the area of thinking, where do you start from, where do you work, and the fraction of people coming in, if you want to end up in 2014 and what is your trajectory? use the International Passenger Survey figures, for example, accounted for by work has substantially So we will be discussing all of that but we will be fallen. I mean, the numbers in the International coming up with a number for 2011–12. It is just Passenger Survey in the work routes have fallen from possible we may offer two options. I’m happy to about 110,000 in 2004 down to about 55,000 elaborate on why that would be but it may be that presently; that is to say the main people, not the some extra thought is required before we do that. dependants. So, no, I don’t think it’s in any sense a But I would emphasise, as always, we’re only failure of the MAC, if I may say. No. making the recommendation and it’s up to the Government whether they accept it or not. Chair: We will come back to a number of aspects of Q142 Chair: So why do you think they bought it in that. Mr Huppert? then? Professor Metcalf: Why did they bring the limit in? Well, the election and prior to that showed a general Q145 Dr Huppert: Thank you, Chair. I found your concern with levels of immigration and it is the case description of that nine-way grid quite interesting that net immigration has risen. In 1994–95 it was and the description of the numbers. Firstly, you are indeed in tens of thousands but net, as we know from presumably aware that, according to the Office for last week, went up to 196,000 in 2009. So it seems to National Statistics and the IPS data, for non-EU me legitimate that the numbers should be looked at economic migrants, for the last year where they have and the public concern taken into account. data, there was net emigration. I think the figures However, one has to recognise that the levers under that they gave to me in a written question on 28 June control are, of course, the non-EU immigration. The were 66,000 in and 74,000 out. Do you think it makes way that I’ve often said this in terms of the main sense to be talking about a cap on those coming in work that the Migration Advisory Committee has or looking at the net flow? Processed: 28-10-2010 20:54:10 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG2
Home Affairs Committee: Evidence Ev 21
7 September 2010 Professor David Metcalf
Professor Metcalf: The net flow is quite difficult talking a total of about 9,000 in 2009 of which two- because, of course, you get people coming in as thirds is the resident labour market test and one- students and going out as work. It’s somewhat third is the shortage route. So the numbers coming challenging to marry those numbers up, in fact, to in through these routes are quite small. I think that get the net figure. On the assumption that the the shortage route is, in a sense, a very important one Coalition Government agreement is to go for the and we have done quite a lot of work on defining the tens of thousands, then work has to play its part in shortage occupation list, which is now much smaller this. But I would have to emphasise that so has than it was when we started two and a half years ago. students and, I guess, so has family as well, because But that provides a good safety valve, particularly in if students and family don’t take their proportionate a time of limits. So I think that one wouldn’t want share, then work, which is itself the smallest of the to lose the shortage occupation route. The resident three fractions, will have to take a more than labour market test route is really a very important proportionate share. So I do think that it’s one, particularly as it happens for health and absolutely right to look at work, but I couldn’t education where there’s no national shortage but emphasise too strongly that the student route and maybe there’s a shortage of teachers in London, the family route will have to take their share, health care workers or nurses in a particular area. although I would emphasise it doesn’t have to be That provides an important route. So, for what it’s only working on the inflow. You can also be working worth, speaking personally and also on behalf of the on the outflow to get the net down. Committee, we don’t think that the potential proposal to merge those two routes is something we Q146 Dr Huppert: But will you be looking at the would be in favour of. Indeed I’ll say it the other way outflow figures as well, because they ought to be round; we’re not in favour of it. related to what you would want as an inflow? Professor Metcalf: Yes, we are. I was thinking I Q148 Mary Macleod: And what’s the process in would say something a little bit later in some detail terms of defining what those limits should be? about that but I’d be happy to deal with it now. Professor Metcalf: We are going through the Chair: You can if you do so briefly. consultation process and through our own Professor Metcalf: You can operate on the outflow modelling, a long mechanism to go from the of work to get the numbers down as well as International Passenger Survey numbers to the visa operating on the inflow. The difficulty with numbers, and then partly through the consultations operating on the outflow in the short term is that to see whether any reduction should mainly fall on probably many of the people who are here have what tier 1 or on tier 2. And then when we get to the sometimes they refer to as legitimate expectations of overall reduction we will make suggestions being able, for example, to extend or to settle— concerning the shortage route, the resident labour because the way that you work on the outflow is market test route and the intra-company transfer influencing the duration of the stay. That would be route. But it’s the nature of these things that the things like weakening the link between work and intra-company transfer route will have to take the settlement; possibly on the post-study work route lion’s share of this because the other two are making that more selective, for example. Frankly, I absolutely rather small. don’t think that it’s likely that these policies would Chair: David Winnick? kick in, even if you were to introduce them now, until 2013–14. So I think in the initial period—this year, Q149 Mr Winnick: Professor Metcalf, you are a well- for our recommendations the following year—we’re known and distinguished figure in the academic going to have to be making recommendations world. Can I ask you what experience you have on dealing with the inflow of work but while immigration? You were appointed to this Advisory simultaneously addressing a number of Committee as chair. Do you have any day-to-day considerations that the Government may want to knowledge of immigration or any reasons why,as far think about to address the problem in the longer as you know, you were chosen apart from your term. distinguished academic self? Chair: Thank you. Mary Macleod? Professor Metcalf: My grandfather was an immigrant, but thank you for your kind initial Q147 Mary Macleod: Yes, thank you, Chairman. remarks. No. I think that when the Committee was Professor Metcalf, I just wanted to touch on the tier appointed it was an economics-based committee and 2 numbers. The Government is consulting on they were very keen to have a labour economist, merging the current resident labour market test somebody who knew about the labour market, to be route with the shorter occupation route for those the chair of it, and certainly in the first couple of occupations that, of course, are in short supply. Can iterations when we were mainly dealing with the you give us a feel for what you think is the most shortage occupation list, this was important. To the important route in terms of the numbers of migrants extent that your question is, very reasonably, “Well, involved? now we have been asked to range a bit wider than Professor Metcalf: Yes. Within tier 2 those two—the just the economic material into the social and public resident labour market test route and the shortage services”, I’m not personally an expert in that. We route—are the small fry compared with the intra- have some people on the Committee on that, but I company transfers. So if we take out-of-country can talk in detail about the consultations on that if numbers, visas issued, and exclude dependants we’re you would like. Processed: 28-10-2010 20:54:10 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG2
Ev 22 Home Affairs Committee: Evidence
7 September 2010 Professor David Metcalf
Q150 Mr Winnick: You see, I ask that question in all Professor Metcalf: Correct. seriousness because, as you will know, in the election in May immigration was a very hot potato, not going into the pros and cons. Certain elements Q155 Lorraine Fullbrook: Do we have any figures on exploited it, particularly one notorious political the dependants for the tier 1 and tier 2 split? organisation which didn’t make any headway Professor Metcalf: No, we don’t. They’re fortunately, far from it. But people may well ask in aggregated. If I may, Chair? the country, who feel the impact of immigration, Chair: Yes, of course. whether those like yourself and your colleagues Professor Metcalf: They were just recently understand what is happening on the ground. How published. I mean we can get you these figures. would you respond to that? However, in rough and ready terms the ratio is of the Professor Metcalf: Yes, I think that we do. I mean I order of five main people, four dependants, and it don’t live on a council estate in Green Lanes in doesn’t vary all that much between them. It’s slightly Haringey, which would probably give me a better higher for tier 2 than it is for tier 1. feel, in a sense, for the underlying life led by many immigrants and any tensions in the community. But Q156 Lorraine Fullbrook: And do you think this in terms of knowing some of the literature on issues balance is currently sustainable, given the policies like the role of immigrants in the public services, that the Government wants to introduce? health and education or the role in terms of housing, Professor Metcalf: Now, that’s a really good I know that we’ve undertaken a huge consultation question. We’ve agonised about this issue because by exercise with the relevant Government definition in a cap world a dependant displaces a Departments, the various local authorities and the worker and, therefore, it raises very delicate issues. I academic authorities on all of this. But, no, I don’t think that one wants to be saying to people, suppose that in answer to your question, I live a “Well, you can’t bring dependants”. Indeed it would privileged quasi-academic life and I don’t know, on almost certainly be not lawful to say something like the ground, the particular way in which immigrants that but you have put your finger on something live. But I go around with my eyes open. which raises a difficult issue.
Q151 Mr Winnick: Thank you, Professor Metcalf. I think that is a very satisfactory answer. You’re Q157 Chair: That is a different issue. What is the consulting, apparently,on the impact of limiting new answer to Ms Fullbrook’s question? Is a dependant immigration and placing restrictions on existing going to displace another person who would be migrants, whether they should be able to stay longer eligible under the cap? or switch their particular category within the points Professor Metcalf: Yes. system. That is taking place now, is it? Chairman: They will? Professor Metcalf: The consultation has just finished Professor Metcalf: They can’t not do. Let’s start it and we will be reporting to Government by the end off. The dependants are in the International of this month. The point about the particular issue Passenger Survey figures. that you raise there is for me to re-emphasise that Chair: Yes. one can achieve the limit, the tens of thousands, over Professor Metcalf: Okay. So to reach the tens of the lifetime of a parliament by working on the thousands from the hundreds of thousands, you’ve outflow as well as working on the inflow. That’s the got to be thinking about dependants. You cannot key point of that feature of the consultation. leave them out of the equation. Now, when you do your cap, you can do it on the main people and Q152 Mr Winnick: And you’re reporting assume that the ratio will be five main and four accordingly to the Home Secretary? dependants, or you can do in total and include the Professor Metcalf: Yes. dependants. Chair: Thank you, Mr Winnick. Lorraine Chair: But the current temporary cap, just to help Fullbrook? this Committee, we’re talking about a temporary cap of 24,000. Professor Metcalf: That’s excluding dependants. Q153 Lorraine Fullbrook: Thank you, Chairman. Chair: Excluding dependants. But on the permanent Professor Metcalf, I’d like to explore a bit about the cap you need to address the issue of dependants, as dependants of migrants; particularly on tier 1, the Ms Fullbrook has said. highly-skilled migrants, and tier 2, skilled workers Professor Metcalf: If I may, Chair, you can do this in with a job offer. How many visas go to actual two ways. In a sense it’s a matter of arithmetic. If you workers of tier 1 and tier 2 and how many actual have 20,000 main people and 18,000 dependants, visas go to their dependants? you can operate the cap 20,000 main or 38,000 in Professor Metcalf: The ratio is of the order of 10:9 total. and 50,000 visas go to the main people. Lorraine Fullbrook: Tier 1 or tier 2? Professor Metcalf: Which is split two-thirds tier 2, Q158 Chair: Just to advise the Committee, how one-third tier 1. many dependants are people able to bring in? Their spouses, clearly. Q154 Lorraine Fullbrook: And that 50,000 does not Professor Metcalf: Spouses and children. It counts include dependants? under this, yes; under tier 1 and tier 2. Processed: 28-10-2010 20:54:10 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG2
Home Affairs Committee: Evidence Ev 23
7 September 2010 Professor David Metcalf
Chair: Yes. Spouses and children under which age? consultation or are you getting a different picture Professor Metcalf: Sorry, I don’t know the details from the people who write to you from the people of that. who contact us? Professor Metcalf: I thought your choice of words Q159 Chair: So does your research show you for was very gracious. We’ve met, between us on the each person who has a permit to come here, who Committee and the Secretariat, over 1,000 qualifies under the points-based system, how many companies and various stakeholders. The dependants each person brings in? companies, by and large, are rather hostile to the Professor Metcalf: That’s what I said. The ratio is of idea of a cap, which, of course, raises interesting the order of five main to four dependants. questions on the balance of any restriction between Chair: Right. Ms Fullbrook, did you have tier 1 and tier 2. I don’t know about the things that something else? have come in just recently. We have not had a single Lorraine Fullbrook: I’m fine. piece of evidence really suggesting that tier 1 somehow should be protected—the people coming in without a job offer. In a sense it’s not surprising Q160 Chair: The other issue, of course, is whether because, of course, it’s the Chinese nuclear dependants can work or not. We’ve had, over the last physicist—she’s coming in, as it were, from China, few years, the almost ridiculous situation where a so you’re not going to get lobbied in that way. But it student can only work a certain number of hours but does suggest that, in a sense, the employer-led tier 2 a dependant can work full-time. Do you have any is the one probably that requires the greatest plans to make any recommendations about that? protection. To elaborate a little bit on the same Professor Metcalf: Well, we did investigate concerns as you have had, obviously the dependants in one of our reports last year. We were Department of Health and Department for persuaded by the evidence that the status quo should Education are concerned about the resident labour hold and that dependants should come in together market test route, but the main thing is on the intra- with the main points-based person and that the company transfers. Banks and consultancy dependants should have no restrictions on work. companies often say, “We’ve got zero net immigration so why should it affect us?” I was at the Q161 Chair: But isn’t that a little daft, that the Japanese Embassy last week; the companies there student can only work for 22 hours but the spouse were very hostile, “We provide huge foreign direct can work full-time? investment. Are you saying that it may be difficult Professor Metcalf: Well, if you’re a student you’re for us to get our people in?” What a couple of people supposed to be studying and so the 20 hours have pointed out is that we’ve got 353 occupations— restriction seems quite reasonable. If I may say,when you know, the way that the occupations are we made our report previously, of course, we weren’t classified—and one of those occupations, which is in a world with limits. If you’re in a world with limits software engineer, accounts for half of all the intra- it raises the very important issue that has been raised company transfers. You may want to pursue this here about whether the dependant displaces. It may with the next people who are up, but this is very well be, for example, and something one might something we shall be pursuing in our report. want to think about—having suggestions on the points-based system—that perhaps somebody Q163 Dr Huppert: But does this not run the risk of coming with a better qualified dependant would get putting you in a very difficult position? It seems to more points. me that you’re saying that there is a drive from Chair: Julian Huppert. aspects of Government to say the numbers should be low and a very strong public drive to say that’s not Q162 Dr Huppert: Thank you. There are a lot of very how it should be driven. How will you balance the interesting things. I’d love to know exactly what difference between the public consultation and the you’re going to be recommending but assuming that Government steer to take account of the fact that you can’t tell us that quite now, can I at least ask if there’s little point in having public consultations if you have looked at all the responses that you’ve had one doesn’t pay a lot of attention to them? from the consultation? Professor Metcalf: That’s a really good point. I mean Professor Metcalf: Some of them but a lot came in in we shall do as we, in a sense, always try to do, which the last two or three days. is to be both transparent and independent. But, of Dr Huppert: I’m sure. We have also had a number of course, the question we have been posed by the witnesses, people who have sent in written Home Secretary, a cross-Government question as it comments, and I’ve certainly had a lot of contact were, is, “Tell us the contribution that work routes from companies and individuals in my constituency. should make to getting immigration down to tens of The tenor of the comments so far—this is broadly thousands”. But we shall reflect in the report that the summarising—is people having a lot of concerns general tenor of the evidence to us was not in favour about the cap, and certainly companies in my of the caps, particularly on tier 2. We shall reflect constituency expressing great concerns about both that. We are tasked with a very specific thing, which the short-term and the long-term one, particularly is to say what the non-EU work routes can do as a companies that are internationally facing, academic contribution. We’ve got to go ahead and do that, but institutions and so forth. Would that be a fair we shall report the tenor of the evidence that we have summary of the responses that you’ve had to your from the stakeholders. Processed: 28-10-2010 20:54:10 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG2
Ev 24 Home Affairs Committee: Evidence
7 September 2010 Professor David Metcalf
Chair: Thank you. Alun Michael? The impact of the Professor Metcalf: You raise a very important issue. cap on sectors. We have not been tasked to do it in quite the way that you say. All we’ve been tasked to do is to come up with essentially a number, possibly a range, in terms Q164 Alun Michael: Thank you. What is the of the way in which the work can contribute to the evidence of the impact of the cap on specific sectors overall reduction, which, in turn, contributes to of the economy? getting down to the tens of thousands. But we will be Professor Metcalf: We don’t know that yet because pointing out in our report what some of the potential we haven’t had the cap, but if one were to speculate, consequences are and it’s clear that if, for example, say, for example, that in recommending numbers to the Japanese manufacturing companies were hit, or get to the tens of thousands and, therefore limiting, other manufacturing companies, or the finance we make some suggestions about making the tier 2 sector was very badly hit, this could have quite more selective, which we’d be minded to do—the selectivity is an important point—this could raise substantial adverse effects for foreign direct very difficult issues for the Department of Health investment. and the Department for Education because it could Alun Michael: But you’re not able to predict where very well be that some teachers and some nurses those detrimental impacts might fall? would then find it difficult to meet the points criteria. Professor Metcalf: No. This is a separate So that would be one area by sector. consultation altogether by UKBA. We’re not deciding how the visas will be allocated, but we will be making recommendations, if you’re in a capped Q165 Alun Michael: But, forgive me, that isn’t world, about the points-based system becoming evidence of an impact on sectors. In order to inform more selective than it was previously. the Government, isn’t the Government going to Chair: Lorraine Fullbrook has a supplementary. need to know which sectors are going to be most vulnerable and, therefore, the economic impact on different sectors is quite a crucial issue? Q168 Lorraine Fullbrook: Thank you, Chairman. Professor Metcalf: Absolutely. What I’m saying is as Professor Metcalf, I’d just like some clarification of we haven’t yet had the cap—it’s only been operating what you’ve answered to Mr Michael. Are you for a little time and the permanent one hasn’t come saying that you do not have any data that can tell in—it’s difficult to adduce the evidence at this stage. you the number of migrant workers in certain I was just speculating that that would be one area. sectors of industry in the UK and within regions of But the other area, pursuing my point about intra- the UK to extrapolate your figures? company transfers, is it would be very difficult to Professor Metcalf: No. We have but we don’t know introduce the limit on the work without somewhat where the limits will fall yet, do we? reducing the numbers of the intra-company Lorraine Fullbrook: But in terms of making your transfers and that implies a reduction in terms of the recommendations to the Home Secretary, you must workers coming in to do IT, who are 60% of the be able to get that data from other departments and intra-company transfers. other statistics that are available. Professor Metcalf: No, no. We have, for example, Q166 Alun Michael: I understand that. The second the number of people who would come in to work in issue about the way the impact falls is that of the health sector, say as theatre nurses, in the geographical areas. Do you have any evidence on shortage route. We have the number of chefs that whether the impact of a cap is going to be greater and would come in. We have all of that, but say that we concentrated in particular areas of the country? suggest a given reduction in the numbers coming in Have you looked at that? under tier 1 and tier 2, the main ones, we don’t know Professor Metcalf: Again, because we haven’t had at this stage how the Home Office, UKBA, will the cap, that can’t be done automatically, but it’s decide to allocate the remaining visas and, therefore, quite clear that it would fall disproportionately on where the reduction falls. So I can’t predict at this London and the south-east because this is where the stage where. What we can do is say that if you raise main group of people who are coming in under tier the earnings thresholds hand-in-hand with the 1 and tier 2 are located. limits, which might be quite a sensible policy, this could have an adverse effect, for example, on health or education, or indeed chefs. Say that you limit it by Q167 Alun Michael: But isn’t there an issue and sector, which is another way that you might want to doesn’t your advice have to reflect the fact that there do it, this would have almost certainly an adverse are one of two things that can happen: either the effect on the intra-company transfers coming in for Government will have rules that make distinctions software engineering. So we will certainly say that about different sectors of the economy or the impact sort of thing, but until we know where the reduction on different parts of the country, or there is nothing falls, which is not a matter for the MAC, we can’t. and you merely describe the events afterwards? As I understand it, your advice has to be about what should happen and what the implications of Q169 Lorraine Fullbrook: But surely if you are different decisions should be, rather than just making recommendations on this policy to the waiting until after the event and saying, “Oh, that’s Home Secretary—I am not sure if I have understood a surprise. That’s what actually happened”. you—are you saying you are not able to make Processed: 28-10-2010 20:54:10 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Professor David Metcalf recommendations based on where migrants work, in for example, had the Japanese companies in which sectors and in which regions? That is what I’m manufacturing been hit rather badly, through the taking out of this. UKBA allocation process, we would wish then to Chair: What is the answer, Professor? feed that in to the next iteration of this. Professor Metcalf: That is certainly not what— Chair: A quick question from Mr Reckless. Do you Chair: You have not been given the information? have a question? Professor Metcalf: No. Chair: You don’t know how it’s going to work. Is it Q171 Mark Reckless: Yes. The points-based system: going to be an auction? You don’t know how many is there not a distinction between having that as a in each sector? You have no idea, do you? qualifier and having it as the decider? I think that Professor Metcalf: No, that is correct, but what we within tier 1 there is some suggestion of auctioning a have been asked— certain category of permits, but why can’t you just Chair: Is that is correct? You have no idea how the use the points system as a qualifier, including intra- system is going to work? company transfers, and then if someone clears that Professor Metcalf: Yes. then they are eligible, but whether they are allowed Chair: So, Ms Fullbrook’s question to you is: if you to come depends on what price clears the pool—that don’t know how the system is going to work and the is, these companies, rather than preventing them UKBA is still consulting and we already have a bringing in person A or person B, have to pay rather temporary cap on, how can you make valid more if they’re particularly keen to bring this recommendations and representations to the person? Government? That is her question. Professor Metcalf: One allocation mechanism, either Professor Metcalf: No, I understand her question, in whole or in part, is indeed an auction, but my but in a sense you have to come at it in a different understanding is that there are various Treasury way. rules about the way in which you can do this, not necessarily in the long term, which don’t Q170 Lorraine Fullbrook: You see, I think you’re immediately lend themselves to this. So therefore, coming at it from the back end first. You’re talking instead of having a money auction, you can in a about the numbers; it depends on the numbers in sense go about it in the way you have just suggested, which tiers. I suggest it doesn’t because you have to which is to auction by points. In a sense, that is the start from a basis of where the migrant workers are tier 1 suggestion, the so-called pool and cap: be very working, in which industries and in which regions. selective and take within, say, a three month period Then it is up to the Government to decide on that the best people, that is, the people with the most information where the splits are going to be. So that points under tier 1. is why I suggest you’re coming at it from the back Chair: We will come on to the role of the points basis. end first. A very, very brief question Mr Michael. Professor Metcalf: In a sense, that is going back to picking winners. So what you’re saying is that you Q172 Alun Michael: Yes. I think it would be protect particular regions and protect particular problematic if we have misunderstood what you sectors. said, but in answer to the questions by myself and Lorraine Fullbrook: But I don’t understand how you Lorraine Fullbrook, as I understand it, you are not can make recommendations without knowing this looking at the current patterns of arrival by sector or basic information first. by geography and therefore you will not be able to Professor Metcalf: I repeat: we do know where the say to the Government, “If you undertake the cap in people work, but what we have to come up with is its detail in this particular way, this is the impact that recommendations based on the numbers required of it would have on this sector or this part of the the work route to get it in four years down to tens of country”. And surely that is at the heart of your role thousands. There is a very delicate issue—I in advising how the Government should pursue the approached it in one way, you’re approaching it in cap that it wishes to introduce, isn’t it? another—which is, who are the people who are Chair: If you would give a brief answer Mr Michael’s valuable? One way of thinking who is valuable is to brief question we would be grateful. do it by earnings— Professor Metcalf: Not by geography, but we will Chair: No, that is what this tells you; this is your role. have quite a lot to say about the impact by sector. But you cannot do that, as Ms Fullbrook has said, Chair: Thank you. Nicola Blackwood. until you know the mechanism by which this is to be done. So before you can continue with your work Q173 Nicola Blackwood: Thank you. You have you need to have it, is that right? Is that what you mentioned the fact that it is very difficult to assess would like? Would that be helpful to you? the impact because we haven’t had a cap yet, putting Professor Metcalf: Absolutely, but I am assuming aside that is what you are advising the Government that this is an iterative process. We have only been on. Surely we can look at other jurisdictions where asked to do the first year. they have already introduced numerical caps and Lorraine Fullbrook: But the premise still stands assess the impact that way. So what work have you whether you are doing one year or 10 years. undertaken in that route? Professor Metcalf: It does, but then once we’ve seen Professor Metcalf: We have certainly looked at some how the first year works, including of course of the different jurisdictions. You know from the students and families, we will come back to it and, UKBA consultation they are minded to introduce Processed: 28-10-2010 20:54:10 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Professor David Metcalf the New Zealand approach for tier 1, which is this You have an issue that there are a lot of students— very selective approach. I think the most informative it is one of Britain’s largest export markets—and a recent jurisdiction that we can get quite a lot from is lot of them come and then go. But if you have any Australia. What Australia has done is it has concerns it ought to be about the steady state and essentially changed the focus that it had for 20 years what we don’t get much analysis on is in versus out: away from a supply side-based system, where people coming in as an export and then leaving again basically people didn’t have to have a job offer and is very different from people coming in and not just came to an employer, but by far the greater area leaving. Now I know there are technical issues but being employer sponsored migrants. That I think is will you be highlighting that issue of net flow rather quite interesting for us in the context of the tier 1 and than just numbers coming in? the tier 2 because that is the same message that we Professor Metcalf: Absolutely, yes, we will be. As are getting from all of the consultation—that we you know, there is the material published should be protecting relatively the tier 2 people, the yesterday—I have only been given it today—about employer led, from the tier 1. The other major immigrant journeys and interestingly, as it were, change that Australia has made is in terms of although it was reported one-fifth of students are students and it may very well have lessons, as and still here after five years, it is only one-fifth; four- when the Government reviews our student route, for fifths have gone, which is a much higher fraction the so-called post-study work route, which presently than is the case with work and is the case with family. is among the most generous particular route in the So working on the outflow is very important indeed whole world. and, yes, we will be highlighting this. But I repeat that, even if the Government were to make changes Q174 Nicola Blackwood: As an MP for a in the policy fairly quickly, I don’t think that will constituency with two internationally renowned kick in until, say, two or three years’ time and universities in it, I have received a lot of therefore, initially, what one has to work on is the representations on the potential impact that inflow. addressing student numbers would have on Chair: Thank you. We have to move on because time university funding and other aspects. So are you at is getting short. Could I ask for brief questions and this point in favour of a cap on tier 4 or not? brief responses? Mark. Professor Metcalf: We haven’t been asked to look at this and I haven’t looked at it in detail. What I would Q178 Mark Reckless: You mentioned with the say is— dependants issue the possibility of giving greater points where dependants had skills, which implies Q175 Chair: Then what is your personal view? that within the cap we want as skilled people as Professor Metcalf: I am just about to give it. What I possible to come in. In addition, couldn’t you would say is that, certainly working at another consider perhaps giving points for not having distinguished university, there is more than one way dependants? Would that be a way of expanding the of skinning a cat and you can work on the outflow points there? as well as the inflow. I choose my words carefully: it Professor Metcalf: We’ve discussed various policy is not self-evident to me that the post-study work options in private. Obviously one would need to take visa should be available for all 600-odd institutions advice. I think that probably would not find favour which award degrees. with the lawyers. Mark Reckless: Yes. Q176 Chair: If that is the case if you want people to Chair: The lawyers? work after they have finished their degrees, people Professor Metcalf: Yes. will just not come and study here surely? Isn’t that Chair: Good. On that subject, Mr Reckless. the impact of what you are suggesting? Professor Metcalf: No, that is possible; it makes it Q179 Mark Reckless: So who has the higher skills less attractive. But I go back to my main point, for dependants would legally be allowed, do you which is: to the extent of what we have been tasked think? to do with work but what the Government says it Professor Metcalf: No, we did discuss in a previous wishes to do, which is to get down to the tens of report that possibility. I mean before, we weren’t in thousands, you simply can’t do that unless you also a cap situation and so we said previously that we look at the student route. It is impossible. If you should be relaxed about the dependants. We’re now close down tiers 1 and 2, you still wouldn’t get to the in a limits model, and therefore the dependants loom tens of thousands. large and that is why thinking about extra points for Chair: That is very interesting and, because this is the qualified dependants is one possibility. “University Challenge” section, I have to ask Mr Huppert to speak on behalf of Cambridge. Q180 Mr Burley: The debate around immigration often focuses on the quantitative measures and what Q177 Dr Huppert: Thank you. I am going to have to is the net, and people coming in and people coming vote three well renowned universities, just to cap out, although this morning it has moved away from that. There is real sensitivity about the issue of that, which I’m pleased about. But for me there is a students in my area as well. But doesn’t this say that qualitative side of it and, as you intimated this there is a fundamental problem with trying to set morning, if you have students coming in but you anything up based on a cap on numbers coming in? have workers leaving, if you have kind of low skilled Processed: 28-10-2010 20:54:10 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Professor David Metcalf and dependants coming in but you have retired well- Chair: Thank you. Bridget Phillipson. off independent people leaving, is there a net qualitative loss going on in this country, and have Q182 Bridget Phillipson: Thank you, Chair. The you made any assessment of the effects of what Government wants to be judged on its success in might be called a “brain drain” or that kind of reducing the numbers of net migration down to the change in a qualitative sense rather than just the numbers? tens of thousands. For that to happen by the end of Professor Metcalf: That’s a very interesting question the Parliament, as they intend, the figures that that indeed. Implicitly, yes. I don’t think we have ever will be judged on will be the figures published in done this explicitly but implicitly, yes. Essentially, 2013. That will be very swift reduction, particularly the points-based system as it operates is raising the in terms of tier 1 and tier 2. What do you think the human capital of the British labour market because, economic impact would be of that, particularly in by definition, the people coming in under tier 1 and terms of the speed and the extent that will be tier 2 have to be skilled. That means at least to NVQ necessary to see that kind of reduction? 3 level and two A levels and above. There may be Professor Metcalf: That is what a lot of our report issues about dependants, but that will tend to raise will be about. Yes, you are right. It depends what the skill level and, by and large, the evidence is those number you start off with and it also depends what people also contribute favourably to the public number you want to end up with because you can’t finances as well. So the points-based system, as it has aim for 99 because then you have a 50% chance operated thus far, has been important in raising the you’ll go above 100,000. So you’re absolutely right human capital. Of course there is always a tension that the annual reduction implied in the here: if you permit the employers always to bring the International Passenger Survey numbers is quite immigrants in without any limit, then they have less substantial, between 30,000 and 40,000 a year, and incentive to upskill the British workforce. So there is then you have to translate that into visas. So it will something of a tension there. be substantial. We are still consulting on this and there is a very helpful cross-Government group of Q181 Mr Burley: You will know that the driver economists who have been feeding in information to behind the cap that was proposed during the election us. The macro consequences are probably not large. campaign is largely around the pressure on public It will affect GDP but it might be GDP per head that services and the ability of this country to sustain a counts—how well off we are—and the best evidence certain number of people. Could you give us an idea is that that’s hardly effective at all. It would affect on how the assessment of what the public services in GDP, and therefore that might have an effect on the a particular area can take will be made, because it is public finances, and that raises a difficult and not clear to me how they decide how many extra important issue. I don’t think it would be relevant patients that the dentist can take or the hospital for inflation; the tiers 1 and 2 are small beer in terms could serve and so on, and the housing as well. of the way that the labour market would operate in Professor Metcalf: Yes, given the very limited time the macro sense. I worry more that any reduction we’ve had to do the work, we haven’t been able to do could have an impact in a micro sense. Talking at the full justice to this and I’m hoping that it’s something Japanese embassy last week— that we’ll be able to return to. But in a sense, if you Chair: Sorry, but can we conclude on this? take the public services, which will be health and Professor Metcalf: Fine. I think that there would be education, and then you take the social, which an effect in foreign direct investment productivity would be, say, housing, crime and maybe and so on, and this is an area that we’re going to congestion, one has to remember that on the public report on. services the immigrants are important suppliers through being nurses and teachers. The evidence we are getting—in a sense it’s not surprising—is what is Q183 Bridget Phillipson: So you think there would absolutely crucial here is geographic mismatch. You be longer term consequences, in terms of the get a surge of people in Slough, or wherever it might economic outlook for the country, rather than in the be, and then we as a country get the benefits from short term? It might not be felt, but longer term this immigration over time and in a sense the perhaps it may be? Treasury collects the money, but the local authority Professor Metcalf: In the longer term it would be is left to try and deal with the social side. This is possible to upskill our own people and that can in based on the evidence we’re getting. It isn’t very due course provide a substitute for immigration. surprising, but that seems to be the main evidence on Chair: Thank you, Professor. If there are other issues this. There is particular evidence on housing. obviously we will write to you about them. There are Chair: If you could write to us with that evidence some concerns that we have heard of today, so we that would be helpful. would be grateful if you could respond in writing. Professor Metcalf: Yes, can I just say one sentence? Professor Metcalf: Yes. Chair: Yes. Chair: Thank you so much. Professor Metcalf: The issue for us is that you have Professor Metcalf: Thank you. quite strong evidence for immigration as a whole. Chair: Could I call to the dais, please, Keith Sharp, There is no evidence for just tiers 1 and 2. Som Mittal and Hilton Dawson? Processed: 28-10-2010 20:54:10 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG2
Ev 28 Home Affairs Committee: Evidence
Witnesses: Mr Keith Sharp, Marketing Director, Tata Consulting Service, Mr Som Mittal, President, National Association of Software and Services Companies, and Mr Hilton Dawson, CEO, British Association of Social Workers, gave evidence.
Q184 Chair: Mr Sharp, Mr Dawson, Mr Mittal, inflow. The following year we had a net outflow of thank you for coming to give evidence. It is always ICT workers because of the reduction in demand difficult with three witnesses but what I am going to from UK corporations and organisations for our do is ask you to be as brief as possible, if you can, and services. So from where I see it, I have to say there is if there are other issues that you wish to write to us an economically driven supply and demand upon we are very happy to have written evidence. If correction to the numbers of ICT workers coming in I could start with a question to each of you in turn, on a temporary basis into this country. But the starting with you, Mr Sharp, what effect has the answer to your question is: at 31 March 2010 we had temporary cap had on you and the businesses that 3,150 expatriate ICT professionals in the UK. you represent? Chair: Mr Mittal. Keith Sharp: Currently very little effect. That is Som Mittal: I just endorse the view here that people principally because the intra-company transfer come here for temporary purposes. It’s determined route is currently excluded from that temporary cap by business and trade. It’s not intended to be and one of the points I would like to make today is migration and I think the ICT provisions today do that that should remain the case but, at the moment, not allow people to apply for migration either. So I minimal impact on our business here. think clearly we have seen the trend in the last few Chair: Mr Mittal. years; it goes up and down with business and in more Som Mittal: Yes, that’s right and I think there is a recent years, particularly in the ICT sector, we have concern about if there would be a cap on this area. I seen a lot of investment coming in. India, for represent the tech sector and 95% of all the work, I example, which I represent today, is the second represent that organisation that does it, and we have largest investor here and we are opening up members of your coalition as well, and I think for us headquarters. The UK is the headquarters for the it’s going to be a business impact here. I think it’s majority of our companies when they work pan going to impact the UK economy in case it will Europe. So for us, we need to bring in people to happen. We’re grateful that that cap was not ensure that the UK remains as a headquarters and introduced on a temporary basis right now. should there be at any point a quota system coming Chair: Mr Dawson, welcome back to Parliament. in, I think that will be quite detrimental to business Hilton Dawson: Thank you very much, Chair. here because then we would need to look at those Chair: What about your sector? places where the movement of people is not a Hilton Dawson: The situation is fragmented, Chair, consideration. I would say, and some parts of the country—notably London—use the services of social workers from Q186 Alun Michael: Briefly, the document you non-EU countries to a very, very great extent. I think provided to the Committee in advance relates to the it’s very difficult to say the effect that there has been specific areas where you think there should be a very recently of changes to the cap, but so much of different approach taken? this is tied up with the general situation, the need for Som Mittal: Yes, sir. In our experience working in reform and improvement in social work, that we and other countries, and some countries recently—for the Government will need to take a holistic approach example, Switzerland—the difference in this to the development of this work. category of visa, as compared to any other is that it’s Chair: Mr Michael. sponsored by employers. And in Switzerland, for example, when they introduced a limitation in the Q185 Alun Michael: I think the answers given to the visa earlier, in January, what was a pattern which first question, by Mr Sharp and Mr Mittal, mean could be used around the year was consumed in the that the answer to this will need to perhaps tease out first week because people necessarily had to apply whether there would be differential impact if there is because this is like a natural resource. We use human a change of view on the employer-sponsored resources to deliver here. application. But can each of you say how many employees in your area of activity would be affected Q187 Chair: So you are worried the cap might be each year if there was a permanent cap on filled? immigration, and perhaps what sort of level of cap, Som Mittal: The cap might be filled and that could as far as your area of activity is concerned, would be be detrimental because how do you take demand of acceptable to you? what’s required down the line for a year or three Chair: Mr Sharp. months? And you have to do it all in advance Keith Sharp: Yes, thank you. Currently, I work for because you’re never sure whether you can bring in Tata Consultancy Services, which is the IT arm of people to deliver the product. the Tata Group, and the number of people in the UK Chair: Thank you. Mr Dawson. as at 31 March 2010 was 3,150. That was down from Hilton Dawson: We would say there has been an the figure of two years previously, 31 March 2008, over-reliance on the use of foreign social workers, when the number was just over 3,500. What that and continues to be so because of the state of social reflects is the recession, which took place over those work in Britain. As part of a programme of reform years, and what we see is a natural correction taking affecting both adults and children’s services—it’s place to the inflow and outflow. As you may have children’s services where the main emphasis is at the gathered, the year ended March 2008 we had a net moment—it will be important to allow at least 1,000 Processed: 28-10-2010 20:54:10 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Mr Keith Sharp, Mr Som Mittal and Mr Hilton Dawson social workers from non EU countries to continue to model is typically about 10:90 or 20:80. It means the come to this country in a planned way, particularly effort, 90% happens in overseas countries. And if through sponsorship and employment you develop an application it needs to be tested arrangements with local authorities. onshore and this person who has developed the Chair: Mary Macleod. application brings it over, installs it, tests it, and then if there are any faults will take it back. So I think it’s Q188 Mary Macleod: Thank you, Chairman. We important that only a temporary worker comes recently had giving evidence to us the Federation of because he or she has specialised knowledge in doing Small Business and the British Chambers of it. So it is a business model issue. It could be very Commerce, and at that time I pressed them quite disruptive if this person was not able to come in hard about why we are not using British people to do because there could be timelines that would be the jobs that are in this country, especially since we missed. I would also state that for a large number of have unemployment and we have certainly companies that we work for in the UK, they’re graduates leaving university without work. We have global companies, they’re expanding their heard already this morning about the eminent operations overseas, they are developing new universities that we do have in this country, and I felt projects and new services to be more competitive there was a lack of businesses working with the there and that’s what we serve them with. universities and education establishments that we Hilton Dawson: Social work is an international have to create the right type of employees, longer profession. There are good reasons to bring people term. But perhaps you can each touch on why we from other countries over issues such as inter- can’t recruit in each of your fields the British workers country adoption. There are good reasons to bring that we need to fill the vacancies that you have in people with cultural skills and experiences. There are your organisations. also good reasons to build links with countries like Keith Sharp: May I say we absolutely do? As a China where they’re currently setting about group, the Tata Group employs over 40,000 people recruiting 5 million social workers; very important in the UK and the element I work for, Tata links for our country there. Consultancy Services, employs around 2,500 UK nationals—or EEA nationals, to be precise—in the Q190 Chair: 5,000 social workers to go to China or UK. We work to a particular business model. Where to come to China? we have permanent employment in the UK, we want Hilton Dawson: 5 million social workers. that to be filled by UK employees, which is where our 2,500-plus UK employees come from. But the Q191 Chair: Oh, 5 million social workers; to stay business model we operate also requires temporary in China? inputs to a project being done for any one of 60 UK Hilton Dawson: To stay in China. Perhaps some organisations and that is where we use the temporary British social workers could go there and support support from, in our instance, predominantly India. them as well. There is a lack of confidence in some So it’s not either/or. And we do a lot of work—my of the social workers graduating from some British boss is on the e-Skills Council for example—looking universities, with good reason. The standard of at ways in which the UK can upskill and all those social work education has not been high enough in good things that need to happen, because we some parts of the country in recent years. Social expressly want to recruit very good people in the workers from countries like Australia, New Zealand UK. Our business model is a blend of permanent and South Africa have done at least a four year UK employment, supplemented by temporary skills course, often at Masters level qualifications, when coming in from India for a particular project. they come to this country. But the huge issue in this country is about retention and the terrible fact is that Q189 Mary Macleod: There is a reasonably high we burn out very young social workers, very newly number of temporary skills that you do have qualified social workers, very quickly by exposing coming in? them without enough support to the rigours of child Keith Sharp: As I said earlier, that fluctuates protection work. That’s a national scandal that we according to demand. And just to stress the point, have to face, but that has fuelled part of the need to the people we bring in is in response to demand for recruit people from abroad who have been similarly services from UK corporations and organisations badly treated in some instances, as you can see from and were a cap to be introduced, yes, it would hurt our evidence. our business but, dare I say, the first casualties of Chair: I think Mr Burley will want to explore that that or the first people to notice that would be the with you. UK organisations who use the services of companies like the one I work for to be more competitive, be Q192 Mr Burley: What would happen to social more productive, transform their businesses using services in the UK if you couldn’t get visas for non- IT and technology strategies. EEA staff? Som Mittal: I just endorse this because Keith here Hilton Dawson: If we couldn’t get any at all the represents the same sector and today, I believe, situation would be even worse than it is at the almost one third of the employees here are moment, and it is parlous. Every Member here permanent. They’re all high paying jobs that are represents a constituency in which social work is in going to the local people here. Just to give you an crisis—I am sorry to say it now—and it would evidence of the nature of the work, for example the simply make that situation far worse. But we Processed: 28-10-2010 20:54:10 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Mr Keith Sharp, Mr Som Mittal and Mr Hilton Dawson certainly need to work towards a reduction of social supporting the British economy perspective, from workers coming from abroad, as I’ve said before, as the no issues of permanent settlement perspective, part of the reform of social work, which ensures that and from the contribution to the infrastructure while we have better standards in this country; that social they’re here perspective, I honestly cannot see a logic workers are better supported by local authorities for imposing a cap on ICTs. and other employers; and that we have a career structure, which enables social workers to remain in Q195 Mark Reckless: Could I then ask Mr Mittal the front line of practice, rather than leaving for perhaps to give me an answer to the quota allocation other opportunities. or market mechanism? Som Mittal: Well, we understand the objective and Q193 Mr Burley: My constituency has the highest why this is being done, and we fully appreciate it, but youth unemployment rate in the West Midlands and I think the unintended consequences of putting a cap I suspect that if they were watching this on the have yet to be seen. For example, I believe that we television at home they might be thinking, “Well, would have to change our business models, which why can’t some of the 5 million people out of work would mean that rather than people coming in here in this country be doing the social work?” Is there a we might have the local customer having to travel problem with training what we have and are we back to India to get infrastructure set up there to do going for an easy option by trying to import the skills the testing I spoke about earlier. So if there is a cap rather than training home grown talent? then I think there would be many, many unintended Hilton Dawson: The social work degree means that consequences, including the ones about relocating we’re now training 5,000 social workers a year, over and finding out better ways to manage the European and above the 4,000 social workers who were trained operations and so on. I think it’s important to see the under the diploma. But we certainly need to recruit number of visas that were issued last year, and in fact people from this country to the social work force. We we find that almost 70% only get used because need to train them well and as I’ve said, we need to people are taking visas in anticipation of the work; support them properly. It is an absolute scandal that people are waiting, they have to fly in on an people who have gone through three years of social emergency basis to take care of the mission, work training then go into employment situations particular applications that we manage. So for us to where they aren’t properly supported and are put be in a situation where we will find ourselves without into some of the most difficult work that’s a visa is quite difficult to understand. And, as I said, conceivable, trying to support families where child we will have to re-engineer our businesses as we go protection is a huge issue. We need to get that right. forward. I would also say that I think that the world Chair: Thank you. Mark Reckless. having globalised, the UK has been at the forefront where I think we have been able to—whether it was Q194 Mark Reckless: Given that intra-company through HSBC Bank or Barclays or Tesco—reach transfers account for half of all tier 2 visas, I am not out, re-engineer the applications, products and convinced that is realistic to exclude them from the services globally by using this model very effectively. cap altogether. Were they to be included in the cap, Chair: Thank you. Nicola Blackwood. would witnesses prefer a system where that quota was allocated by sector or by company or a system Q196 Nicola Blackwood: We were speaking where there was a market-based auction process so previously to Professor Metcalf of the Migration that you would know that you would be able to Advisory Council about lessons that can be learnt bring in some of your company, albeit at a price? from other jurisdictions. Now certainly two of you Keith Sharp: Frankly, we haven’t got that far yet here have experience of the impact of caps in places because we believe that the—I realise I am going such as the United States. I wondered what that against what you just said; I apologise for that—but experience has been and what lessons you could pass we honestly believe there is a very strong case to on to us. benefit the UK economy apart from anything else, Som Mittal: The only place that we actually see caps, let alone our own interests, in keeping the present in addition to what we saw in Switzerland earlier this arrangement, which we have under the interim cap, year, has been in the US, and it was odd that during whereby ICTs are excluded from that cap. I’ve the time when the economies were doing well they explained a little earlier about the supply and had a cap, in this case of 65,000 people, and 26,000 demand correction to the numbers coming in. The companies use that. Obviously there was a rush for other point to make, I think, is that there are no it and there were again 65,000 visas; 180,000 settlement or permanent residency issues here. All of applications came in the first week and it was a the ICT professionals that my company brings in lottery system. And as you can see, the lottery system leave; we have all the figures and have provided is going to be most ineffective for business, and I those to the Border Agency in the past. They are here think right now, as we see, and the economies are not to provide services to support UK competitiveness in the same shape, against those 65,000 visas only and efficiencies. The other point perhaps worth 30,000 have been applied for and it is six months making is that, as I’ve said earlier, over the last three down already in the economy. So I think from our years we’ve had between 3,000 and 3,500 expatriate experience of that visa, there is a debate going on as ICT professionals in the UK, all of whom are paid, to whether the quota system in the US was effective pay tax. Millions of pounds of income tax goes to the or not. What we have explained in our submission to UK Exchequer from their work here. So from both the Migration Advisory Committee, as well as Processed: 28-10-2010 20:54:10 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Mr Keith Sharp, Mr Som Mittal and Mr Hilton Dawson to the Border Agency, are two things which I think Q198 Dr Huppert: Thank you, Chair. I’m just will meet the objectives that have been set out by the interested in trying to understand what the long- UK Government: firstly, I think there needs to be term consequences might be and what you might do data collected on those who are coming in or going in response. This is a question for Messrs Sharp and out. Currently it’s not done, so we’re kind of Mittal. If the cap was introduced and you couldn’t debating things based on individual data points and get visas for non-EU workers or found it extremely so on. I believe that many questions that you are hard, what would you do? Would you train and hire asked about—you know, people who come in with more local people? Would you move some of your dependants, what do they do?—I think all that is operations to other countries or would you move something that we can volunteer and it’s so easy to completely and relocate away from this country? collect it when it is ICT under tier 2 because it is Keith Sharp: We already recruit and train UK organisations that are responsible and not nationals, so the balance and the blend that we have individuals. The second thing, we have said that reflects the demand for the types of services and there are many conditions that have been imposed in projects that we provide. So, as I’ve tried to explain the points-based system, and I think, with tighter during this discussion, to us it’s not an “either/or”; compliance—and I think we have recommended it’s an “and” situation: UK nationals for the certain areas that we think the Border Agency could permanent jobs that we have in the UK, and the be implementing—we can still achieve its objective. number we have now of over 2,500 has risen If I were to take a decision here, I would say don’t appreciably over the last four or five years—I can put quotas, get the data in and if you think it’s going supply figures to the Committee if that’s required— out of control put them back again a year or two supplemented, supported by the global skills that we later. But it should be data based and see what the bring in on a temporary basis. And as Som said, real impact is. rather better than I did, typically somebody coming Chair: Thank you. Bridget Phillipson. in will have been working on a project, typically in India, come in for a period of time, typically 18 to 24 months, to work at the sharp end, understand how Q197 Bridget Phillipson: The Government appears it will be put into practice and then go back to home to favour allocation of visas on a first come, first base to continue completing the project, so it’s not served basis. What is your preferred option and why an either/or in that respect. As to your other two would that be? options, it would be very easy to say,“We’re thinking Som Mittal: As I said, if it has to be, we will have to of doing this or that”. The company I work for, the see this, but imagine a situation where it’s first come, group has been in the UK since 1907. Tata first served, it’s a rush coming in. I would like to Consultancy Services has been here since 1975. We distinguish the quota system in all other categories in see ourselves as staying here and will have to try and ICT because in all the other cases it is the individual adapt and figure things out if the consequences who applies for a visa, whereas in the ICT case it’s require us to do so. It will be disruptive and I want the companies that sponsor it, which would mean to repeat that I think the first damage would be done that they can lump up a lot of visas and hence you’ll to the efficiency and the ability of UK organisations probably find one company which had the speed to to access the kind of services that we offer and we put the visas in on the first day. You’ll get it and I then have to plan ahead accordingly. In my opinion, think it will create distortions in the system. So there labour mobility has been a very important part of was a very direct question put to us and we were the UK economy remaining competitive and open struggling to offer any solutions to what would for trade and it’s that that is now in jeopardy. work, whether it would work on an annual basis, Som Mittal: I would just like to add, whichever way quarterly basis or whatever, and rollovers, I think you look at it, the economic gain of putting in a there will be distortions in the system. quota and restricting I think is far more than any Keith Sharp: If I may just say our current practice is migration gain that we can see. As Keith mentioned, the UK is an extremely important territory; it is to project forward on a rolling basis, quarterly and game changer in many of the things that are annually. And, as Som has just said, we will typically happening, particularly in the services space. Some apply for more certificates of sponsorship—for the of the consequences would be that we would have to individual work permits, as a sponsor company— change our business model, and I think that could than we believe that we’re going to need because the bring in lots of elements of inefficiency.For example, worst thing would be to be caught out unable to today we only have a development environment in supply the demand that’s there. So that’s how we’re terms of computers back in India, but the working it currently as a company without any cap. production environment is right here, which means Dare I say, were there to be some sort of capping the last servers, but if we can’t get the people to test introduced, which clearly we don’t think would be a them we will have to recreate the same environment good idea, but were that to be the case, I think from back in India. So the work will go on except that the my company’s point of view we would like to cost will go up and we wonder whether it would still continue to have the scope to plan ahead in terms of give an advantage to what all of you were intending our own company. I think some sort of first come, to do, so I would say that the pain is far more than first served auction sounds like chaos to me, I have the gain that I see here. to say. Chair: Thank you. Final question from Julian Q199 Chair: Did you meet the Prime Minister when Huppert. he came to India recently? Processed: 28-10-2010 20:54:10 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG2
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7 September 2010 Mr Keith Sharp, Mr Som Mittal and Mr Hilton Dawson
Som Mittal: Yes, sir. has come back with messages that we need to do everything to make the relationship between these Q200 Chairman: Have representations been made by two countries tighter. the Indian Government to him about the consequences of the cap? Q201 Chair: Do you think the cap would damage Som Mittal: I guess there were a large number of those relations? topics. It was a successful trip. He had brought in a Som Mittal: I think so. very large delegation of people, so I think the bond between the two countries came to a higher level. But Chair: Mr Mittal, Mr Sharp, Mr Dawson, thank you subsequently it was followed by Minister Damian very much for coming in. The Committee may write Green coming in as well, and I think there were to you with further information as we proceed with representations made and he did meet a wide cross- our inquiry. section of people from the industry, and I am sure he Som Mittal: Thank you for the opportunity. Processed: 28-10-2010 20:56:12 Page Layout: COENEW [SO] PPSysB Job: 005643 Unit: PAG3
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Tuesday 14 September 2010
Members present Keith Vaz (Chair)
Nicola Blackwood Mark Reckless Steve McCabe Mr David Winnick Bridget Phillipson
Witnesses: Mr Amit Kapadia, Executive Director, Highly Skilled Migrant Programme Forum, Ms Sophie Barrett-Brown, Chair, and Mr Nicolas Rollason, Immigration Law Practitioners Association.
Q202 Chair: Mr Rollason, Ms Barrett-Brown and Chair: Is there a member of the Committee staff who Mr Kapadia, thank you very much for coming to can assist the witness? It is on. Could we put the give evidence in the last open evidence session of this volume higher? It is the highest volume. Committee on the immigration cap. Can I refer all Ms Barrett-Brown: I’ll project. those present to the Register of Members’ Interests, Chair: That is much better, do project. We’ve put you where the interests of all Members here are completely off your evidence now. Can I give you an registered? Could I declare another interest: my wife example? is an immigration solicitor and a part-time judge. Ms Barrett-Brown: Yes. Can I start with you, Mr Rollason, and Ms Barrett- Brown? The temporary cap has been in effect now Q203 Chair: In my surgery last Friday, a gentleman for a few months. What difficulties—or perhaps who was given 10 certificates to run an Ayurvedic there are no difficulties—are being experienced by centre in my constituency but had not used those your members? I am afraid you will need to speak up certificates in the last year came to see me. His because the acoustics in the Palace are not certificates have now been withdrawn on the particularly good. grounds that he has not used them. Is this happening Ms Barrett-Brown: I know the difficulty has been all over the country? quite extreme. It has affected different sponsors in Ms Barrett-Brown: It’s happening across the board, different ways. The way that the interim cap has and from 19 July my firm personally, and members been implemented, which wasn’t published who are with immigration firms, were inundated beforehand, is that those employers who use quite a with panicked phone calls from sponsors who— number of certificates of sponsorship have had a 5% totally unexpectedly—had suddenly received letters to 50% reduction in the number they’re allowed to saying that they were having their entire allocation use compared with those they used in a specific seven withdrawn. In many cases it is simply a question of and a half month period last year, which was chance that they didn’t happen to make use of those between July last year and March of this year. Some certificates previously within that very, very narrow sponsors—quite a large number—have received an window. They may have allocated quite a number of allocation for no certificates whatsoever, and it has, certificates in the window between March and July I think, disproportionally affected smaller sponsors, when the limits came in or prior to the comparison smaller businesses in the UK, who have suddenly period. found that they had planned, they had gone through a recruitment process for a particular migrant, and Q204 Chair: Just to advise the Committee: did they then suddenly found that their allocation was have to pay a fee or go through some kind of withdrawn. assessment in order to get those certificates in the Chair: Members of the Committee are having first place? difficulty hearing you. I think your microphone may Ms Barrett-Brown: That’s absolutely correct. All of not be on or perhaps you need to bring it— the sponsors had to pay a fee of either £300 or Ms Barrett-Brown: No, it’s not on. £1,000, but for many of them it’s not just the Chair: It is not on, that is why we cannot hear you. application fee. In order to gear their businesses up Ms Barrett-Brown: Is that on? to meet the quite onerous duties of a sponsor, many Chair: That is much better. Maybe you can push it of them had undertaken audits within their business, nearer to you. engaged other professionals—lawyers, HR Ms Barrett-Brown: How about that? Does that make consultants and auditors—to make sure that any difference? everything was in order, as well as actually making Chair: Yes, but it looks uncomfortable. Why don’t their applications. They’ve incurred significant cost, you bring it closer to you? and obviously the cost of their recruitment Ms Barrett-Brown: No, I’m fine, thank you. campaigns and however they’ve identified those Chair: So long as you don’t take it up and dance workers. So it had a very substantial impact. round the room, we are fine. Chair: Thank you. Mr Rollason, do you have Ms Barrett-Brown: I can’t promise not to do that. anything to add? Chair: Okay. Is it on now? Mr Rollason: I would add that the follow-on from Ms Barrett-Brown: I’m not discerning any that is that the safety net, effectively, which the UK difference. Border Agency has introduced for the interim cap is Processed: 28-10-2010 20:56:12 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG3
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14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason the ability for sponsors to request additional those small sponsors and, as Nicholas said, they’re allocations if they have none left. So those sponsors being refused certificates of sponsorship. But I’d also with zero allocations can make an exceptional highlight that the fact that no one can come in under request for an additional certificate of sponsorship, the resident labour market test does mean posts which will be granted on exceptional grounds, and where they have tried to fill the vacancy with resident there are very hazy criteria about how those workers. They have made all the necessary efforts; additional allocations will be given to sponsors. I they have advertised. There is no one in the resident can tell you that of all the applications made by all labour force to do those jobs and those jobs are the sponsors in the UK which were considered by the going unfilled, which is having a very serious impact panel on 1 September, none of the new hires, none of on British businesses, on their activity, on their the non-EU nationals being hired after a resident ability to compete in the global market. It’s labour market test, were approved. They were all extremely serious. refused. Chair: Thank you. David Winnick?
Q205 Chair: Every one of them? Q209 David Winnick: I wonder if I could just ask this Mr Rollason: Every single one. question, perhaps particularly to Mr Kapadia. The argument is that at a time of recession, at a time Q206 Chair: How many were being considered? when jobs are in short supply—obviously not in all Mr Rollason: We don’t know yet. We’re trying to find fields, as you will be telling us and have told us— that out. We don’t know what the limit is either. would it not be desirable in the first instance—this is That’s the other point we’re concerned about. For the sort of question Migrant Watch would certainly employers now, the only people who can get be putting—that it should be British labour first certificates of sponsorship under the current rules before there is any question of bringing people over are those who are extending their employment in the unless it is simply impossible to fill the vacancy UK or being sponsored under work permits or tier within the UK domestic labour market? What 2. So for new hires, it is now impossible to get any would you say to that? non-EU nationals in sponsored by employers. That Mr Kapadia: There should be the principle of is the message, certainly, that we’re getting and that fairness. Those migrants who are already in Britain is the very immediate impact of the interim limit. It should not be discriminated against in terms of is, I think, a sign of things to come. British jobs for British workers. Migrants who are already in Britain should be allowed to continue Q207 Chair: Mr Kapadia, you have been, of course, their stay. Our main concern is with those migrants before the Committee in the past. Can I ask you who are already in Britain. Most of those coming about the nature of skills as far as your members are from non-EU countries are coming to fill positions concerned? What additional skills do they bring to which cannot be otherwise filled in Britain. the British labour market which are not already here? Mr Kapadia: Our members are working in Q210 David Winnick: But would you, therefore, professions such as—they are doctors— accept that it is only in those circumstances that Chair: Again, you will need to speak up, I am afraid. people from abroad should be brought in, Mr Kapadia: Our members are working in particularly at a time of recession, and that if the professions such as—they’re doctors, lawyers, vacancy can be filled within the UK labour market financial analysts, energy specialists, lecturers and that should be the way to resolve the issue for the teachers. employer? Mr Kapadia: As long as the existing migrants are not affected, then it may be reasonable to a certain Q208 Chair: Why do we not have these skills in the extent. But the basic concern with such strict British labour market? Why do we have to look measures in imposing cap on those who are entering abroad? Why do we have to look to your into Britain—is that it can take time to realise the organisation? contra effects which can take place. You shouldn’t Mr Kapadia: There may be such skills available, but be entering into a position where certain measures then there is always a scarcity. You won’t be getting have been taken and later on, after certain time, the enough skill sets within Britain itself, so you need Government realises that it had a significant impact skilled migrants coming from non-EU countries. We on UK businesses because ultimately those positions have observed recently there have been certain are unfilled and that can have a serious impact on problems concerning NHS health care, which is businesses and the UK economy. jeopardising employment services. So, that is why Chair: Thank you. Mark Reckless? there is a necessity for skilled migrants. Chair: Thank you. Ms Barrett-Brown: May I make a very brief point on Q211 Mark Reckless: We have had some evidence the interim limits, Chair? from businessmen suggesting that if the number of Chair: Yes. people they could bring in under tier 2 was restricted, Ms Barrett-Brown: The first is that I obtained some they might relocate their business out of the country. statistics by a Freedom of Information Act request, We hear these threats on other issues from which revealed that 50% of small sponsors were businesses. Is that really credible, particularly if we given a zero allocation. So it’s a massive impact on were to have a system where perhaps we auctioned Processed: 28-10-2010 20:56:12 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG3
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14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason permits and it was just a question of paying a certain Mr Rollason: Our view is that ICTs are absolutely amount rather than being told you couldn’t—flat vital to the UK, being a centre for businesses. It’s out? absolutely key to operating both the businesses and Ms Barrett-Brown: That is certainly a message we bringing people with the right skills in within these receive from our members all the time—that is what companies. We do not—and our clients do not— their clients are telling them. I wonder if I might be believe that ICTs should be included in the cap. If able to give an example from the US system, where there is a use of ICTs then the UK Border Agency caps were imposed. There was a very notable needs to ramp up its operations to deal with those, example a couple of years ago when Microsoft was but if we are going to limit ICTs, effectively the having such difficulty with the H-1B cap that they message is going to go out that if you once start relocated one of their centres to Canada, where they telling people around the world, you can’t enter the now employ over 1,000 Canadians, and the US lost UK, the UK has less business. The other thing to those jobs. That is precisely the sort of circumstance remember about ICTs is that for every ICT coming that many ILPA members’ clients envisage they may into the UK to work for, say, an international face themselves. company,moving here with their family,there will be Mr Rollason: The businesses that are looking to other British citizens going into that same company, relocate and move their businesses are often the most to go and work in South America, or wherever, so it’s mobile and most high value businesses, not the huge not a one-way track. It is vital for businesses. We corporations which have significant locations and think that if that ability to bring people in is cut off, things in the UK. They are generally smaller it will significantly damage the UK’s reputation as a employers who may not employ that many people, centre for business(several inaudible words). If but the value of the business in terms of tax revenues, people are saying that that is simply not true, I can in terms of the wealth generated, is quite significant. tell you that a lot of businesses are looking at other We’re talking here about alternative investment centres they can get people into more easily. companies, financial companies, a lot of whom are moving to Switzerland because of the combination of high taxes and this particular issue. We have heard Q215 Nicola Blackwood: So are you aware of any evidence that this is the final nail in the coffin in instances of ICT abuse? Is it something that you’ve making the decision to move outside the UK. come across? Mr Rollason: We hear about it constantly but I Q212 Mark Reckless: If I could come back on that, haven’t personally come across it. There are issues, I you say alternative investment managers are moving understand, about relocation packages and tax to Switzerland because of the possible immigration breaks for people being relocated to the UK. As we changes. Surely the alternative investment fund have said, if the UKBA has concerns that in manager directive is a far more significant issue for particular industries there is abuse, then they need to them? ramp up their investigations to ensure that does Mr Rollason: Yes, but it will have limited impact in not happen. Switzerland. Q216 Nicola Blackwood: So where do you hear Q213 Mark Reckless: Well, that is why they are about it constantly from if you don’t come across it moving there, isn’t it? yourself? Mr Rollason: That is one of the reasons they’re Mr Rollason: I didn’t say that I hear it constantly. I moving there. The other thing that happened was said I— this. A large number of these businesses relocating to Nicola Blackwood: You did, you said you hear about Switzerland have also had an impact on the quotas it, but where from? that they have in Switzerland, because the Swiss Ms Barrett-Brown: Predominantly everybody hears have quotas and work permits for non-EU from UKBA that there are abuses. But I can say in nationals, and because large companies like Google, 14 to 15 years’ practice I have never seen this abuse which has significant operations in Switzerland, that’s reported. There are obviously certain interest were unable to get people in, the Swiss Government groups in certain sectors who have lobbied had to review its cap and increase it significantly Government to say that intra-company transfers because of the problems of bringing in very highly should not be allowed, particularly in the IT skilled people who then pay quite a lot of tax in industry, because they consider that British IT Switzerland. workers may be able to fill some of those vacancies, but I have not seen any evidence of these abuses. Let Q214 Nicola Blackwood: You have raised concerns us not forget that intra-company transfers don’t lead about the impact of the difficulty of obtaining visas to settlement, as of earlier this year, so these are not under tier 1 and tier 2 and the possibility that routes for people to be able to remain permanently in employers will then instead move to using ICTs. We the UK. That may be one of the concerns that people have received evidence saying that ICTs are already have previously had—that overseas nationals might being abused, and other evidence saying that they be using it as a vehicle for permanent stay.That is not absolutely should not be included in the annual possible. That change is relatively recent, so we can’t limit. What is your view on the role that ICTs play in see the impact on that yet, but I’m sure it will have keeping the economy going? an impact. Processed: 28-10-2010 20:56:12 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG3
Ev 36 Home Affairs Committee: Evidence
14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason
Q217 Mark Reckless: My constituents have, I think, discrimination around age and gender, and so we a legitimate concern that there have been very high have grave concerns there. But there is also the levels of immigration into this country, and they displacement question. If a business needs a very support having a cap. I hear what is being said, but skilled migrant worker, to have them displaced by this Committee—and I think Parliament—has to the fact that another migrant worker happens to strike a balance. I can see why it would be difficult have twins rather than one dependent child would for companies if there was a ban on ICTs or it was seem to be an entirely arbitrary manner of going very difficult, you had to get through all these hoops about it. Equally, we’re also opposed to the idea of and so on, but surely just saying a certain limit—and dependants not being able to work. They make a we could enforce that by auctioning those permits valuable economic contribution in the UK on a and charging a fee to companies, say, a few thousand number of levels, and it would be a deterrent factor pounds, to bring in someone on an ICT—is that so to some of the most highly skilled, bearing in mind unreasonable? that many very highly skilled migrants—and we are Ms Barrett-Brown: We would say it is. talking about the elite of migrants here; tier 1 and Mr Rollason: I think auctioning as an idea in itself is tier 2 are the most elite migrants in our system—are not one which ILPA agrees with. We believe we in partnerships with other very highly skilled would have these sort of eBay economics. We think individuals. To restrict them from being able to work that if the principle is that the highest payer wins, in the UK would encourage them to seek other there will be clear winners who will be the wealthy destinations. companies who have absolutely no objection to Chair: Bridget Phillipson? paying £10,000, £20,000, £30,000 to get a banker to come in and work for an investment bank in the UK. Bridget Phillipson: That’s fine, thank you, Chair. That may be hard for some, but others will pay it in an auction. It completely distorts the market Q220 Chair: This is very odd. If the Government has demand by effectively enabling very large businesses a cap of 24,000, and people are allowed to bring in that typically pay large salaries anyway—large dependants, and there are two dependants per compensation packages—to secure the permits that person coming in here, what is the point of having they need. a cap? Ms Barrett-Brown: How will the NHS, for example, Ms Barrett-Brown: One can still make use of the cap. compete in an auction? It’s placing a relative value I should just add that the statistics, I understand, are on the heart surgeon and the investment banker. The that less than one dependant is brought on average investment banking business can clearly afford a per— much higher premium for an auctioned permit than Chair: It is 0.8%, whatever that is of a person. the NHS. Ms Barrett-Brown: Yes.
Q218 Mark Reckless: I wasn’t aware that ICTs were Q221 Chair: Let us round them up to one person. in widespread usage in the NHS? Say it is one to one, that is 24,000 people, each Ms Barrett-Brown: No, obviously not in the case of bringing in another person. That is 48,000 people. ICTs. You could pick any sector, but generally the Ms Barrett-Brown: I should add that we are opposed auction principle is not limited to intra-company to the concept of caps anyway, for various reasons. transfers. The auction principle in the consultation Chair: We understand that. is a suggestion across the board but, in any event, the Ms Barrett-Brown: If one sets the cap at 20,000 for— principle—even within the ICT context—would still apply that certain sectors obviously are, by Q222 Chair: The temporary cap is set at 24,000 now. definition, more able to pay than others. That Are dependants included in that figure? doesn’t necessarily mean that those that are more Ms Barrett-Brown: No, dependants are not included able to pay offer the best economic contribution to in that, neither are applicants from within the UK, the UK in the contribution that that migrant will neither are intra-company transfers. make. That migrant may make a very valuable contribution in up-skilling the local work force as Q223 Chair: Help us with figures because we will be well. It’s not just about the revenues generated, the pursuing this with Ministers. The cap is now 24,000 fees or the tax. for this temporary period? Chair: Thank you. Bridget Phillipson? Ms Barrett-Brown: Approximately, divided between the two categories, yes. Q219 Bridget Phillipson: Thank you, Chair. Do you Chair: Right. Do you think it is more than 24,000 or think that dependants should be excluded from the less? What is the cap? Let’s agree on a figure. What cap and, if so, should they be prevented from is the cap at the moment, the temporary cap? working while they’re in the UK? Ms Barrett-Brown: About 24,000. Ms Barrett-Brown: We do believe very strongly that Chair: All right, let’s agree on 24,000. Put those they should be excluded from the cap. We have a numbers aside. On top of that, each one of those range of concerns around their inclusion, not least 24,000 people is likely to bring in 0.8 of a person, say that it may actively encourage discrimination in it’s a person. incentivising employers to try to only offer positions Ms Barrett-Brown: Yes. to those who appear to be young migrants without Chair: On top of that, how many intra-company families. It would naturally have an impact of transfers are we talking about? How many people? Processed: 28-10-2010 20:56:12 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG3
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14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason
Ms Barrett-Brown: I don’t have the statistics. whoever gets their e-mail in first goes to the top of Chair: Mr Rollason, can you help us with the the list and gets what they want. It is simply not a number of people? way to manage the system. Mr Rollason: Certainly, for the interim cap, we can’t— Chair: Can you give us a rough estimate based on Q228 Steve McCabe: What is the difference between last year? quality of assessment and pooling? Mr Rollason: If you look at the 2009 figures for Mr Rollason: Pooling could be used for tier 1, which intra-company transfers there were 22,000 of those, but remember the interim cap is only a six-month is where there isn’t necessarily an immediate need to period. come to the UK, but our position is this. Tier 1 is in 99% of cases used by migrants and employers to bring people into the UK where there is a job. I think Q224 Chair: Sure. For the six-month period, then, it is a myth that tier 1 is a sort of category where we have 24,000 people coming in, another 24,000 people wonder whether they’d like to come to the people coming as dependants, and another 22,000 UK and live here for some sort of lifestyle change— people coming—well, 12,000 because it’s for six looking for a job. Most people have a job offer or a months—12,000 people coming in. It is already an business opportunity that they go on to pursue with extra 36,000 people. Is the cap really quite artificial? investment coming in. That is our experience in 99% Ms Barrett-Brown: I think the cap’s extremely of cases. So, pooling in those systems, where you put artificial but for many more reasons than that alone. your name in a hat and it sits there for up to six But the cap level is set at whatever level it is at, months, is simply not going to deal with that ability knowing that one can expect 0.8 dependants per for highly skilled people to come in because they applicant. So it can be calculated—as I think David have no certainty about who they’re competing Metcalfe has said—to either, say, 40,000 including against. dependants, or 24,000 not including dependants.
Q225 Chair: So even if the Government has told us Q229 Steve McCabe: Can I just clarify? Am I right they only want 24,000 people to come in, it is 60,000 in thinking that the logic of your answer, though, is people who will enter in the six-month period? that each individual application should be assessed Mr Rollason: It could be. We simply don’t know. with some kind of quality threshold? So you are not answering about how we should deal with the cap. Q226 Nicola Blackwood: What sort of numbers You’re saying, “Forget the cap and assess each would you expect without a cap during that period? individual case”. Is that right? Ms Barrett-Brown: That’s extremely difficult to Mr Rollason: With migrants, within the limits of predict. The cap figures were based on achieving a what the UKBA’s resources are, we would like for 5% reduction on the numbers last year. Last year was there to be not quantitative assessment but a recession year, so one would expect that if we qualitative assessment of all applications, succeed in pulling out of the economic doldrums particularly in tier 2 where at the moment the there would probably be an increased need for options that are being looked at in terms of a model migrant workers to help accelerate economic and methods are first come, first served, which is the growth. When one looks back at the statistics, only thing that has been suggested by the UK Border economic prosperity is normally fairly consistent Agency and which is simply not going to work. If with an increase in migration and economic you look at what’s happening in the US with the H- downturn normally has a decrease in immigration. 1Bs, we have years where the H-1Bs are So I would expect a greater need, but that’s oversubscribed two times on the second or first day speculation, I think. on which they are opened for applications. The Chair: Thank you. Steve McCabe? system ends up with a lottery where you have to pick people out of a hat, which is simply not the way to Q227 Steve McCabe: Thank you. As I understand it, manage a migration system. You need to be able to both organisations are opposed to the options for look at the skills and the occupations and say, allocating visas. We just heard about auctioning, but “These are the people we want. These are the people I think you are also resistant to the idea of first come, we need”, and adjust the points system accordingly. first served, or pooling. If you had to pick a preferred Steve McCabe: Thank you. Can I just ask Mr option from one of those three, what would it be? Kapadia, do you have anything to add to that? Mr Rollason: We don’t think any of those will work, Mr Kapadia: Yes. If there is no choice then, the pool unfortunately. We are much more in favour of a system brings in the highly skilled migrants, but then much more qualitative assessment of who is coming that also means increase in the points threshold, the in and what skills they’re bringing in by looking at current points based system is tough enough. In potentially the occupations that the UK needs, the addition, the points system the pool system brings in skills, salary levels and other criteria, rather than uncertainty and further delays which can deter simply looking at, for example, a first come, first potential applicants from coming to UK. served system where you send your e-mail in at Chair: Thank you. Mr Reckless has a brief midnight on 1 March when the cap is released, and supplementary, is that right? Processed: 28-10-2010 20:56:12 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG3
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14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason
Q230 Mark Reckless: Yes, Of the two systems, one who is tier 1—the most highly skilled, the most without a cap where you qualitatively assess every elite—is going to be disincentivised from making the applicant, and one with a cap where there is a lottery most of his contribution to the UK if he knows he is or an auction, which would provide greatest going to have to leave at the end of it. If the employment for immigration law practitioners? Government wishes to encourage those migrants to Mr Rollason: Can I just say that the complexity integrate, to invest on so many levels— investing which the cap will bring will always create more their time, investing their money, investing their work for immigration lawyers. We are against the expertise—then sending the message that you will be cap. We are against complexity and are not ourselves required to leave afterwards is not one that is going an organisation that is looking for any more work. to encourage those migrants. They will go to Quite the opposite; we’re trying to make it easier for Canada, New Zealand, Australia and so on where employers, our clients, to be able to access the labour they get granted indefinite status immediately once market and enable businesses to do what they need they come. The UK is already behind those to do in terms of generating growth and operating as jurisdictions in how it operates the system. successful businesses. So, it’s quite the opposite in terms of our interests. Q234 Chair: Ms Barrett-Brown, both this Government and the last Government were very clear they wanted to limit numbers; some have been less successful than they had anticipated. Surely the Q231 Chair: I’m interested in the principle of why best way to do it is to make it very clear to people like people come here. Obviously they come here to work Mr Kapadia’s members, “If you come on a tier 1 visa and provide support for businesses and the public you are coming to fill a gap in the labour market and sector in terms of areas such as being doctors in the you will not be allowed to settle”? National Health Service. When people come in Mr Kapadia: I think it would be very difficult to under tier 1, do you think it is their expectation that attract highly skilled migrants with that sort of they are going to settle at the end of that period? Is proposal. You may be able to apply that sort of this the problem that we have with our immigration ruling on tier 2 migrants, like, for example, intra policy? We give out the expectation that if you stay company transfers who come for a shorter duration. a certain number of years then you will be allowed I don’t think that the quality of highly skilled to remain as permanent settlement? migrants would be interested to come for a short Ms Barrett-Brown: I think that is the expectation duration and go back. because that’s the present law. Q235 Chair: So it is settlement that encourages people to apply, that is the whole thing, isn’t it? Ms Barrett-Brown: I don’t think it’s purely settlement that encourages them to apply, but not Q232 Chair: That is the present law. Mr Kapadia, is being able to get settlement would disincentivise the that the expectation of your members? very elite, the most highly skilled, because they can Mr Kapadia: Yes, our members, definitely, most of go elsewhere where they have greater certainty. To those who come on tier 1 come with an intention that invite someone to come and spend hundreds of after a certain period of time they will settle here. thousands of pounds over the course of X years and These migrants we are talking about, they have be required to leave would disincentivise them. We’re various other options like Australia, Canada, New talking about a very, very small number of migrants Zealand and other countries. So when they come in the overall migrant population here, and these are here with their families, in fact, to come and work the ones that stand to offer the most to the UK. The here, they do so with an intention that after Government itself has on many occasions said that contributing to the UK for a few years they will be it still wants to attract the brightest and the best. It able to settle here. will not get those if it sends out a message that they can come—
Q236 Chair: I understand that. One final question, Q233 Chair: Of course, the same thing applies to and that concerns the judicial review that some of students. Students are not included in the temporary your members are taking out against the cap, but the expectation is after they get their visas Government. Is it right that there is now a judicial they will be allowed to work for a two-year period. review against the Government as far as the If that is taken away fewer students would come. temporary cap is concerned? Similarly, if the expectation was removed and people Ms Barrett-Brown: I understand that a letter before were told very clearly, “You are coming to fill a action was sent by one member, but obviously that shortage in the labour market”, would you foresee is the member’s own private action. the number of applicants for tier 1 declining on its own without the need for a cap? Ms Barrett-Brown: I think there are two very Q237 Chair: Of course, but is this because there is a important issues there. One is largely around what is lack of dialogue between the stakeholders and the the benefit of these migrants to the UK? A migrant UKBA? Under the points-based system, as you Processed: 28-10-2010 20:56:12 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG3
Home Affairs Committee: Evidence Ev 39
14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason know, the Government was successfully challenged actual terms of the interim minutes, and businesses twice. I think it went up to the Supreme Court. Are were suddenly left overnight with having their you entering into discussions with UKBA to make allocations pulled away from them and in a sure the system works? What is the consultation like? completely desperate situation. Ms Barrett-Brown: There was no consultation. The way in which the interim cap was brought in, in my Q238 Chair: Would you value a period of dialogue view, was an absolute disgrace. I received a and consultation with UKBA? Have you asked for telephone call before they were brought in advising meetings with them? that UKBA was very interested in consulting with Ms Barrett-Brown: Yes, and to be fair we did ask for a meeting. I wrote to them following that. My letter ILPA. We then received no consultation. A letter was was ignored for three weeks, but we then did have a sent out by Jeremy Oppenheim on 1 July informing meeting with members of the UKBA, which I felt sponsors that those who had allocated more than was a constructive meeting but, in fact, we haven’t two of their certificates of sponsorship would take a seen any amelioration of the impacts of the interim reduction. No reference was made at all to the four limit because they have been overwhelmed by sponsors who have in fact had a zero allocation applications for the exceptional additional given to them. That suddenly started happening out certificates. of the blue after 19 July, so there was no Chair: Ms Barrett-Brown, Mr Rollason, Mr consultation. The impact assessments were utterly Kapadia, thank you very much for coming to give woeful. They made no reference whatsoever to the evidence today. Thank you.
Witnesses: Sir Andrew Green, Chairman, and Mr Alper Mehmet, Member, Advisory Council, Migration Watch.
Q239 Chair: Sir Andrew, welcome back to the Sir Andrew Green: We believe that there should be a Committee. Thank you for coming to see us at such broad purpose, which is to bring immigration into very short notice. You have a colleague with you. I balance with emigration. The effect of that will be to don’t know who that is. stabilise our population at about 65 million. If we do Sir Andrew Green: Yes. Mr Alper Mehmet. May I not take measures of that kind, then immigration introduce him, Chair? will account for two-thirds of our population Chair: Yes, please. increase. I think that Mr Winnick asked the Minister Sir Andrew Green: He is a former ambassador to rather an interesting question. He said if there is no Iceland, but he started life as an immigration officer, immigration we will hit 70 million anyway, I think so he has a very wide experience. was the question. It wasn’t answered but the reality Chair: He is a former British Ambassador to— is that that is not the case. If there is no immigration Sir Andrew Green: Yes, and he’s now a member of we will stabilise at about 65 million. The converse is our Advisory Council. also important. The converse is this. If we don’t get Chair: Okay. Sorry, could you repeat his name any serious reduction in immigration we will not because I didn’t have notice that he was coming. only hit 70 million in 20 years’ time on the present Sir Andrew Green: Alper Mehmet. projections, we will go on to 80 million and onwards. There is no stopping an increase in our population unless we make a very serious dent in immigration. Chair: Alper Mehmet. Sir Andrew Green: I’m sorry you didn’t have notice. Q242 Chair: Do you think the current proposals— Chair: No. It will always be helpful to know who our the temporary cap leading to a permanent cap—are witnesses are before they appear. Thank you for going to achieve what you would like to see, coming and bringing your colleague Mr Mehmet basically a cap on the population of Britain of 65 with you. million? Sir Andrew Green: First of all, I’d like to put the Q240 Chair: Broadly speaking, do you think that temporary cap aside. That’s running into there is an upper limit as far as the population of this difficulties—you have examined the notes. As country is concerned, which you would not like to regards a cap on economic migration, it’s important see breached? to say that that only accounts for a quarter of non- Sir Andrew Green: Yes, I do, broadly speaking. I EU migration. So any contribution from a cap will think that is the central point, Chair. The whole be relatively small, but I do think it’s important that background of this is what immigration is doing to we bear down on all the many aspects of our population, with the consequences for housing, immigration, of which this is only one. The focus has public services, and so on. We would say that’s where been on economic migration because that was in the we should start. coalition’s stated policy. It was very much understood and focused on by the electorate, and so the Government had to come forward, first of all, Q241 Chair: What is that limit? What should our with this proposal, which we will get in a month or population be? two’s time, but it is only part of it. Processed: 28-10-2010 20:56:12 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG3
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14 Seprember 2010 Sir Andrew Green and Mr Alper Mehmet
Chair: Thank you. Mr Mehmet, please feel free to be a different question altogether and one which chip in if there’s something that you want to say, entails consequences for our society as a whole rather than wait for someone to address you with a rather than a particular culture. question. Mark Reckless? Chair: Bridget Phillipson?
Q243 Mark Reckless: Yes, as you say, the focus has Q246 Bridget Phillipson: Thank you, Chair. We had been on the economic migration and, as we saw with a discussion earlier about the right to work here as the recent figures, there can be very big swings in net compared to the right to then settle, having worked migration simply because of the change in British here for a period. Do you think it would be more citizens leaving the country. Don’t we also need to effective just to keep the system as it is, but then put a much greater focus on other categories of restrict the rights of settlement of those people who immigration and potentially look at restricting have come here to work under the existing tier- family-related immigration and EU immigration based system? and other categories? Sir Andrew Green: I think that’s a very interesting Sir Andrew Green: Yes. We have to take measures in idea—that you should separate economic migration all fields. Can I just deal with EU migration because from settlement. It’s one that we favour. It’s one that there is a lot of misunderstanding about that. Over the balanced migration group in Parliament are the last 10 years, the average net migration from the promoting for this very reason: that it is a way to EU 15 has been about 20,000, and that’s compared square the circle. You clearly need some economic to net foreign immigration of 250,000. So from the migrants and you clearly need to control your EU 15 there is not really significant immigration, population, so if you had a system which said—the certainly over future years. Chairman, I think, was touching on it earlier— “Okay, you can come for four years but after that we Q244 Chair: You are saying, since enlargement, that will expect you to go unless you pass a second net migration has only been 20,000, even in the first hurdle”, which would be based largely on salary, to year when a million people were reckoned to have allow people to settle. That would have the come from the new countries? additional advantage of encouraging employers to Sir Andrew Green: The EU 15. That is the official train a successor rather than have to go around in a figure. circle looking for another migrant. Chair: Oh, the EU 15, sorry, not since enlargement. Sir Andrew Green: Since enlargement, the A8, we now have about 500,000 citizens here from those Q247 Bridget Phillipson: If I could just return to your countries, but we predicted two years ago that comments about family reunification, you talked migration from the East European countries would there about marriage and whether it’s for the come into balance. We were right about that. It is purpose of immigration or quite what it would be. now almost in balance: the net inflow in the last How would you determine those that you feel are quarter was about 5,000. When you look at the simply marrying British citizens for immigration whole picture of immigration, and you look at ways purposes versus those who are marrying for the of reducing it, you can in fact put the European reasons that anybody else would marry? What Union to one side—unless they admit Turkey but criteria could you use to determine that? How would that’s a different subject altogether. Broadly,let’s put that work? the EU to one side. Then you have to focus on work, Sir Andrew Green: The first thing you do is clamp on study, on family reunion and various other down on clearly sham marriages. That is a slightly things, and just one other point, focus on illegals. different subject, but that’s the first and most obvious thing to do. On the question of marriages Q245 Mark Reckless: To take an example of the arranged purely for immigration, I think that can family reunion channel, what type of restrictions do only be done by interview, an interview designed to you think would be plausible or acceptable in that try to ensure that there was no pressure on either side area? and so on. It’s not an easy area and I think probably Sir Andrew Green: I think that’s the most difficult in real life people deal with it later down the track. area of all. The Government are going to Mr Mehmet: Chairman, may I come in? introduce—or I think the previous Government Chair: Yes. intended to and this will continue—a language test Mr Mehmet: As a former immigration officer, we for foreign spouses. There is a lot of good sense in used to interview people in these sort of cases that for all kinds of reasons to do with their arrival regularly. The expertise was certainly there. Whether here and their integration into our society. I think it still is I’m not sure, but it is not going to be that’s the first step to take. I would in due course, anything that’s a departure from what has been when there are schools around the place that will practised over many years, even though it hasn’t meet the need, raise that level of English for exactly been recently— the same reasons. Beyond that, I think we are going Chair: As you know, also, there are very few to have to look again at the question of whether we interviews. If you make an application in Pakistan should allow not arranged marriages—that’s it’s considered in Abu Dhabi on paperwork, so the perfectly normal in many societies; but whether you chance to see people and make your assessment is no should allow marriages to be arranged only for— longer there. Mr Reckless, can you hold on until Mr specifically for—immigration. That seems to me to McCabe has had his turn. Processed: 28-10-2010 20:56:12 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG3
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14 Seprember 2010 Sir Andrew Green and Mr Alper Mehmet
Q248 Steve McCabe: Thank you. I think I’m right Q252 Chair: But, Sir Andrew, it might not just be that you want to see the shortage occupation route young Bangladeshis who want to be chefs; it might for tier 2 abolished. If that happened, are you happy be people who are not Bangladeshis. that the present resident labour market test is Sir Andrew Green: Yes, I know. robust enough? Chair: Isn’t the problem the fact that the skills that Sir Andrew Green: Let me say, first of all, that I think we need to enhance are not there in the country at the there is a huge fallacy underlying a lot of the moment and we can’t suddenly stop chefs coming arguments you’ve just heard about the amazing into this country? In every South Asian restaurant value of economic migration. There are clearly cases that I visit I have complaints from the owner that the where it is absolutely essential and there are clearly quality chefs are not here. Isn’t that the problem? cases where we have to have provision for it, but an Sir Andrew Green: Yes. I won’t pursue that, Chair. awful lot of this is not essential. The shortage There are wider issues. occupation group probably is, but tier 1—“general” as it is called—are people who come here on spec Q253 Chair: Do you think that that’s a problem, looking for a job. There were 20,000 last year. The perhaps in terms of the education academies and numbers are all over the place, so it’s about 20,000. skills we have not been investing in that area and if It’s hard to argue that in the labour market that we did we would have the chefs that we need, we’re in, business will collapse without 20,000 people whether they are from the Bangladeshi community looking for a job. Secondly, on tier 1 again, there is or from the Irish community? the post-study route which enables anybody Sir Andrew Green: Absolutely,but this applies across coming— the board. Chair: We are coming on to post-study later on, yes. Chair: Of course, yes. Sir Andrew Green: Let me come back to your Sir Andrew Green: One of the reasons we’re in the question on the shortage occupation. Our reason for difficulties we’re in now is that the training system suggesting it be abolished is it is only 3,000 a year, has not produced the people we need. If employers and you have a very big bureaucracy deciding which can take people off the shelf, don’t pay the training is which. We would tend to lump them together and costs, have someone who is more or less tied to them hope that the labour market test will work. because of their visa, of course they’re going to do that. Chair: Yes. Mark Reckless has a quick Q249 Chair: So you would be in favour of abolishing supplementary and then Nicola Blackwood. the Migration Advisory Committee? Sir Andrew Green: No. Q254 Mark Reckless: In terms of marriage, would Chair: You want to keep it, okay. your concerns be dealt with by simply reinstituting Sir Andrew Green: They’re outstanding I think, but the primary purpose rule or would you support I’d give them better work to do, which is to look at moving further, say, an age restriction? I think they the impact of immigration on our community. use 23 in Denmark. Do have any views in terms of marriage with first cousins, or are there any other areas where you think, realistically, people might Q250 Steve McCabe: Can I just ask one last point on want to move? that, then. So you’re in favour of abolishing that. Sir Andrew Green: I think all of the above need You say it’s only about 3,000. But I think you also looking at. There is some experience in Denmark said that you wanted to see transitional about raising the level of the age. This needs a lot arrangements, and you specified occupations like of research. chefs and senior care workers. Why, and what kind of transitional arrangements? Q255 Nicola Blackwood: You started to talk about Sir Andrew Green: I think the transitional the post-study route and you proposed suspending arrangement would have to be some kind of time lag, that route entirely while British graduates are some postponement to give people time to adjust to struggling to find work. it. There are one or two occupations where that is Sir Andrew Green: Yes. important. The Home Office might not like it. It’s Nicola Blackwood: Is that sensible, is the first difficult to start making exceptions, but we think it question, if we are lacking in graduates in certain needs looking at. fields such as science, engineering and technology, where we do have a bit of a gap at the moment? Also, would you want that limit to extend to academic Q251 Steve McCabe: I’m just struck by this. Why do posts? Obviously, as I represent Oxford West and you think chefs are a group that we’ve got a problem Abingdon, I have two international universities. The recruiting or training in this country? nature of academia is very international and you do Sir Andrew Green: I don’t think we have, but there’s get expertise from moving from place to place, and been a lot of pressure from employers of chefs. I there are very few posts available in your particular think it’s true to say that something like 25% of field. I am slightly concerned about how that would young Bangladeshis are unemployed and I think impact universities. that they should be helped into this kind of work. I Sir Andrew Green: I can certainly see where you’re think you mentioned earlier that there is a college in coming from. Of course, the devil is always in the Birmingham that trains people. detail. It would be absurd to stop a serious academic Processed: 28-10-2010 20:56:12 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG3
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14 Seprember 2010 Sir Andrew Green and Mr Alper Mehmet from staying here; that is a certainty. But please the right lines. If you make it much more difficult to understand what the system is at the moment. What work in the UK, by tackling employers who are it is is this. It allows any foreign graduate of a British cheating on their fellow competitors and cheating on college or university to stay on for two years in order British workers, then that will of itself discourage to find a job. If he gets a job he can keep it. He can people from staying on illegally. I think that’s the move on to tier 2. This applies to 600 institutions; it way forward, not truckloads of people— applies whether they get a first-class degree or a pass degree. It is absurd. It is 35,000 people a year, I think. Q259 Chair: So you do not agree with the Mayor’s The numbers are going up. But we are now suffering solution that everyone should be given an amnesty? from 10% student unemployment. I think it’s Sir Andrew Green: I could hardly disagree more. indefensible to have a system that is putting these David Winnick: Sir Andrew, you totally surprise graduates in direct competition with our graduates us—totally. at a time of very high unemployment. Chair: Nicola Blackwood has a supplementary.
Q256 Nicola Blackwood: Do you suggest abolishing Q260 Nicola Blackwood: I would just like to go the scheme entirely? briefly back to students. This Committee is getting Sir Andrew Green: Suspending it completely. used to that. You mention that you don’t think there Nicola Blackwood: Suspending it completely, not will be a drop in applications if the post-study route having some kind of qualitative assessment of is suspended. Is that because there has been some students within a certain field where we are lacking assessment that a degree from a British university and we need that expertise, where we’ve trained still has currency on the international labour them often? market? Is there any evidence to support that? Sir Andrew Green: If they’re really good they can Sir Andrew Green: Support what? apply under tier 2, but at the moment they have an Nicola Blackwood: A degree from a British automatic right to stay on, and there’s no sense in university is valuable in its own right, regardless of that. the right to try and find a job in the UK? Sir Andrew Green: Oh, yes. It depends which country Q257 Chair: But previous witnesses have said that if you’re talking about but, on the whole, British we did that, people would not apply to come in the education has a very high reputation. We need to first place, and there would be a huge drop in the keep it that way. I have to say that when I was in number of overseas students coming to the UK. Saudi Arabia, one or two people—Ministers—came They apply because they know they have the chance up to me and said, “We’re a bit embarrassed about of working afterwards. this guy. He’s come back with a PhD from some Sir Andrew Green: Chairman, I don’t think that can small organisation in England and he doesn’t speak possibly be true. We are issuing student visas at the much English”. They said that. We need to protect rate of 1,000 a day, very nearly, and there is no check our own brand and 1,000 a day is just ludicrous. on departure. If you’re concerned about the scale of Chair: David Winnick? immigration, I touched on illegal immigration and Mr Mehmet: Chair— that is where a lot of this lies, people staying on. I just Chair: Sorry. simply don’t believe that. Mr Mehmet: May I just add about recent experience overseas with regards to students coming here. In a Q258 Chair: What is your estimate as to the number number of countries, my experience was that there of illegal people there are in the UK? We have an was no question that they were considering settling estimate from Boris Johnson, the Mayor of London. here at the point of applying for studies in this He said it was about 500,000 in London. Do you country. All of them had a single focus and that was think that is an exaggeration or do you think it is their studies. more than that? Sir Andrew Green: It’s certainly not an exaggeration. Q261 Chair: To get a degree and go back? He commissioned a report, I think, from the LSE? Mr Mehmet: Indeed. Chair: LSE. Sir Andrew Green: Which I think came out at about Q262 Bridget Phillipson: The point is, surely, that 700,000. We would put it a bit higher than that, but when people come they may not at that point want it’s guesswork. We just looked at some of their to stay but they may determine, following study,that numbers and then made a very small annual they want to stay for a limited period of time. Surely allowance. We would put it at approaching 1 million. it’s wrong to rule that out altogether, because at the Nobody really knows, but that is the order of point of application they may not want to stay, but magnitude. We did some work on Pakistanis and the that may change? scale of their remittances compared to the scale of Sir Andrew Green: Yes, and it’s not necessarily bad if Filipino remittances, and that pointed to a very large it does. If someone wants to continue with their number, something like 140,000, I believe, as a studies here genuinely, if they want to become an conservative estimate for illegal Pakistanis. So there academic genuinely, no problem. The issue at the is a very big problem there. We’re not proposing they moment is that the numbers have got badly out of should all be rounded up and deported. What we are hand; almost everybody in the chain has a financial suggesting is that the Government measures— interest in granting a visa. That is both the body previous Government and this Government—are on itself, the agent, if they employ one down there, the Processed: 28-10-2010 20:56:12 Page Layout: COENEW [O] PPSysB Job: 005643 Unit: PAG3
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14 Seprember 2010 Sir Andrew Green and Mr Alper Mehmet applicant who obviously wants to get in. The default immigration at all their population would fall by position—this is important—is to grant it because 25% in the next 25 to 30 years. Clearly, that’s a the immigration officer who reads through all the totally different situation from our own, where if papers—because it is done on paper now—can only there was no immigration at all, it would still intervene if he has grounds to do so. continue to increase to about 65 million and then tail off fractionally. We are looking at totally different situations. As far as France is concerned, they have Q263 David Winnick: Sir Andrew, so Migration significant immigration. They also have a birth rate Watch would be happy to have a policy where if slightly higher than ours. They are also four times people come for employment or studies, as long as bigger than England. The question of population they don’t stay on afterwards, that would be what density is rather different for France than for you would consider to be the best policy the England. Government can pursue. Is that right? Sir Andrew Green: Broadly speaking. There would be good reason for some people to stay. Q267 David Winnick: As far as population is concerned, I take your point, but for immigrant groups that have gone to the countries which I have Q264 David Winnick: In what circumstances, then, mentioned and stayed, is there again much of a would you say that certain people should be allowed difference? France and Germany have relatively to stay? large immigrant populations as compared to the Sir Andrew Green: As I mentioned, we would suggest situation prior to the Second World War. So what that there was a second points-based system which I’m asking you—leaving aside the effect on the people could apply for. Having done two or three population, and we know your policy—is there a years here, if they decide that they do want to stay great deal of difference between the UK and such here, then they could apply for this, and that would countries? be very largely on the basis of salary. Because if Sir Andrew Green: I come back to population people are valuable economically then they’re going because that is the key to it. The reason people are to be paid a lot of money, with special arrangements concerned about the numbers is, for example, that for people of outstanding artistic or scientific merit, 40% of new households are a result of immigration. or perhaps academic merit, because those are very The pressure on public services, pressure on schools, important areas where pay is not always consistent pressure on the health service and pressure on roads with value. It’s not impossible to do that. As I are all being added to by the population increase. mentioned at the beginning of this, we don’t have a That I think lies at the basis of public concern. Some choice. If we don’t take serious measures we will find of your colleagues have been making the same point that our population is simply— in a rather different way. Chair: Thank you. Nicola Blackwood. Q265 David Winnick: Yes, we know the views you have expressed on previous occasions and today, Sir Q268 Nicola Blackwood: You heard a little earlier Andrew. Basically, except for the reasons that you discussion about the ICT route and you heard the have stated, it would only be—as far as your comments from the migration lawyers that they are organisation is concerned, as far as policy is not aware or have not experienced any instances of concerned that you would like to see pursued—a abuse. We have also heard previously from Tata very small fraction that would be allowed to stay on Consultant Services and NASSCOM that any after they have been engaged in studies or business, attempt to put a limit on ICTs would harm their as the case may be? companies, but you claim that there are significant Sir Andrew Green: Work or study, yes. abuses. Could you comment on that dichotomy? Sir Andrew Green: Absolutely. The whole ICT route Q266 David Winnick: Can I ask you one other has become thoroughly distorted. The original question? Your organisation has been very purpose of it was to allow major companies to move prominent in urging strict controls, much stricter senior staff around without difficulty. That is than have been applied by successive Governments. obviously important and it must continue. There How far, from your experience and your colleague’s, must be no obstacles of that kind and, indeed, more is the position of the UK different from other broadly, immigration policy must not be such as to advanced western countries, fellow members of the impede the economic recovery. We totally accept EU: France, Germany, Holland? Is the migration that. Your earlier witnesses talked about business there so very different from what has been options. What they didn’t say is that what they were experienced in Britain in the last half century? referring to was a means of exporting jobs to India. Sir Andrew Green: That’s a very interesting question Most of these workers coming here are here in order and the answer is totally different for most of those to prepare for work to be offshored to India. That’s countries. The difference is demographic. This is what they’re here for. The mean income in the UK is why we keep coming back to population. If you look about £24,000. About 85% are probably for India. at Italy, Spain and Germany, they have very low So obviously, firms are going to say that that is a birth rates of the order of 1.3, and what that means marvellous idea. You can argue that because you are is, for Germany, for example, if there was no lowering costs by sending work to India you’re Processed: 28-10-2010 20:56:12 Page Layout: COENEW [E] PPSysB Job: 005643 Unit: PAG3
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14 Seprember 2010 Sir Andrew Green and Mr Alper Mehmet making firms more profitable in the longer term and Chair: So the cap isn’t 24,000, it is 60,000. that is for the benefit of our economy, but actually Sir Andrew Green: We don’t have a cap yet. when you have 2.5 million unemployed and when Chair: No, the temporary cap. among graduates in computer science we have 17%, Sir Andrew Green: Yes. Leaving the temporary cap according to a recent report, unemployed, what are aside, the MAC is going to propose a number, and I we trying to do here? think their number will include dependants but it will be raised for that reason. I don’t see how you can do anything else. Q269 Nicola Blackwood: How do you respond to ILPA’s comment that in order to stop the abuses we Q272 Chair: So you would favour dependants being shouldn’t change the system but UKBA should just included in the permanent cap? work harder? That is what they just said, they should Sir Andrew Green: They would have to be. work harder to root out the abuse and stop it. Sir Andrew Green: Well, yes, and you will notice that Q273 Chair: Would you limit the number of the Migration Advisory Committee report on this dependants coming in? Because that is an average I said that there ought to be much stronger gave you—0.8. Some people might have twins, as we heard earlier. They might want to bring all their enforcement. I think there are something like 16,000 children in. Some people might have no children to sponsors and 125 visiting staff, so the opportunity bring in. Do you think there should be a limit on the for abuse is there. We get plenty of anecdotal number of dependants? Do you think the cap will evidence—when I say “anecdotal” I mean from work? people working in these companies—that this is Sir Andrew Green: I think it can be made to work. I what is happening. think it must be made to work. I think that it can be Chair: Thank you. A final question from Bridget done in a way that will not impede economic Phillipson. recovery. It must take account of the fact that not all economic migrants are vital. They certainly aren’t. We must differentiate between the different groups. Q270 Bridget Phillipson: How do you feel that the You will notice that the previous witnesses were cap should be adjusted to take account of talking only about tier 2. dependants because, as far as we are aware, you favour dependants being included within the cap? Is Q274 Chair: Do you think, at the end of the day, that right? students will have to be included in this cap? Sir Andrew Green: We’re talking population so we Sir Andrew Green: What we will have to do is to have have to include dependants, but you have to set the some form of limit on that route, yes. But the first cap knowing that you’ve included dependants. thing is to make sure that students are genuine. If you know they’re genuine and genuinely intend to return home, and there is some system to ensure that Q271 Chair: You heard the previous exchange that they do, that deals with most of the problem. for every person coming in, 0.8 of a person comes in Chair: Sir Andrew, Mr Mehmet, thank you very with them. much for coming in. This concludes our inquiry into Sir Andrew Green: Roughly. We think that’s about the immigration cap. We will, of course, continue to right. receive written submissions if you wish to write to us. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [SO] PPSysB Job: 005646 Unit: PAG1
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Memorandum submitted by the Federation of Small Businesses The Federation of Small Businesses (FSB) welcomes the opportunity to respond to the cap on non-EU economic immigration consultation. The FSB is the UK’s leading business organisation. It exists to protect and promote the interests of the self-employed and all those who run their own business. The FSB is non-party political, and with 213,000 members, it is also the largest organisation representing micro and small sized businesses in the UK. Small businesses make up 99.3% of all businesses in the UK, and make a huge contribution to the UK economy. They contribute 51% of the GDP and employ 58% of the private sector workforce. As we stated in the oral evidence we gave to the committee on Tuesday 20 July, we are strongly opposed to the Government’s current proposals to cap migration through Tiers One and Two of the points-based system by implementing a permanent limit. We have divided up our response in sections in line with the inquiry’s focus. We trust that you will find our comments helpful and that they will be taken into consideration.
The impact a cap on non-EU economic migration would have on the ability of UK business and industries to recruit the skills and staff they require 1. Any form of cap on non-EU economic migration would have an adverse effect and would act as a barrier to economic growth and competitiveness. As we stated in our oral evidence: “There is certain immediacy when we have vacancies and we believe a cap could prevent us getting the right persons for the right jobs as soon as possible”. This is an area of key concern for our members and an example of the impact of the proposals to date is outlined in the box below.
Box 1. Small business case study on impact of cap We are a small specialist business (four design engineers, one administrator). We are feeling the negative impact already and acutely, in that we rushed through an application for sponsorship (which gave us an “A” rating before the 19 July, but has now set our certificate allowance to “nil”) and urged our Design Engineer from China to submit a Tier Two application ASAP, which has now been declined! We are sorely disappointed about where Britain is heading in terms of being able to recruit highly skilled workers. We have so far run three recruitment drives all of which proved that our niche engineering should be on the skills shortage list but it isn’t!
2. A further example would be the UK’s requirement for skilled chefs. The FSB understands that there is an acute skilled staff shortage in Bangladeshi restaurants. The Bangladeshi Catering Association notes that whilst the UK Government has included the category ‘skilled chef’ in its Shortage Occupation List this is of little worth as the corresponding pre-conditions made it difficult to bring workers from outside UK.
The numbers of skilled and non-skilled migrants likely to be affected by a cap on Tiers One and Two 3. The FSB understands that the Coalition Government aims to scale net migration to 1990s levels—tens of thousands rather than hundreds of thousands. We cannot give definitive predictions as to the full impact of any cap on Tiers One and Two until they are set but we are of the view that any form of cap would have a negative impact on small businesses, particularly those in catering, finance, IT, engineering and care. 4. The table below1 shows that the level of highly skilled workers has nearly doubled since 2007. Furthermore, it is essential to note that this figure nearly trebled in 2009 and that the numbers of skilled workers has also fluctuated over the last three years.
1 Control of Immigration: Quarterly Statistical Summary, United Kingdom, January-March 2010 http://rds.homeoffice.gov.uk/rds/pdfs10/immiq110.pdf Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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Table 1a ENTRY CLEARANCE VISAS TO THE UNITED KINGDOM ISSUED TO ALL APPLICANTS, BY MAIN CATEGORY, Q1 2007 to Q1 2010
Total Temporary Leading to Settlement Settlement(1)
Tier 1 Highly Tier 2 Skilled Skilled Workers Workers and and Employment pre-PBS pre-PBS Study(2) (temporary) (3) Other(4) equivalents equivalents Family (5) 2007 Q1 448,755 35,295 29,910 324,805 3,840 30,065 17,905 6,935 2007 Q2 634,200 54,815 35,995 493,635 3,570 24.745 16,375 5,105 2007 Q3 610,210 123,230 26,125 407,590 4,245 25,245 19,455 4,315 2007 Q4 379,265 35,370 20,285 281,295 4,680 18,455 15,850 3,325 2008 Q1 395,030 40,120 25,100 283,880 5,495 20,050 17,245 3,140 2008 Q2 605,225 52,820 31,865 475,200 4,515 20,185 17,665 2,980 2008 Q3 590,485 139,520 25,695 377,020 4,840 22,470 17,865 3,070 2008 Q4 364,050 42,695 17,145 261,350 8,865 18,470 12,740 2,785 2009 Q1 386,625 43,580 15,810 283,035 11,855 15,920 13,605 2,820 2009 Q2 576,340 42,790 21,240 472,630 9,000 15,705 11,745 3,230 2009 Q3 609,645 178,345 15,480 377,130 6,200 16,865 10,610 5,015 2009 Q4 423,230 76,610 12,835 294,460 6,745 14,990 13,115 4,475 2010 Q1 406,455 54,290 16,445 296,410 6,685 16,915 11,150 4,550 (1) Includes spouse.civil partner and other family settlement (both indefinite leave), and Certificate of Entitlement. (2) Includes students, student visitors and PBS Tier 4. Publications prior to Q2 2010 included student visitors (those intending to stay and study for less then 6 months, with no permission to work) within the “Other” column. (3) Includes Ties 5 Temporary Workers and Youth Mobility, working holidaymakers and permit free employment. (4) Includes EEA family permits, visitors, transit and other temporary. Excludes student visitors. (5) Includes fiance´(e)/proposed civil partner, and spouse/civil partner (probationary period). 5. In February 2010 the FSB published the FSB-ICM ‘Voice of Small Business’ Annual Survey highlighting how small businesses were leading the way out of the recession. This survey was undertaken at one most of the UK’s most difficult economic times and shows how resilient small businesses can be in ensuring the UK remains open for business.
Box 2. FSB-ICM “Voice of Small Business” Annual Survey key findings — 53% of small firms introduced new or improved products and services last year and 51% intend to continue innovating next year — 27% said their profitability increased over the last year — 30% said their sales volume had increased over the last financial year — 48% of businesses expect to expand their client base in the coming year — 19% of small firms are intending to employ more staff in the coming year
6. As we look towards economic recovery these business owners will be in a stronger position to grow their business, but only if regulatory burden is removed. It is essential that small business owners are in a position to hire the right employee for the job when they want to. For example, a fledgling engineering company with three staff members may have been asked to tender for a large contract. However, the only way in which they could be successful would be to have an extremely specialist member of staff on board. If this specialist employee could not be recruited from within the UK or the EU, then it would be essential for that small business to immediately recruit from a non-EU country. It is possible that a cap on migration could prevent this resulting in the small business losing a key contract and potentially going out of business.
The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants under Tier One; and of a “first come, first served”, a pool, or an auction, system for skilled migrants under Tier One 7. The FSB is not in favour of any form of cap on the levels of non-EU migrant workers and notes that either proposal would have a negative impact on UK small businesses. 8. During our oral evidence session we agreed to provide further insight on a proposed auction system where there are certificates of sponsorship and if businesses want to bring into the UK a non-EU employee they can bid against those. As we said in our follow-up letter to the committee, this is an overly simplistic solution which will act as a significant barrier to growth to small business owners looking to expand their business. Instead of ploughing profits back into businesses, rewarding employees for their hard work and Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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playing their part in a vibrant economic recovery, small business owners would be paying money to Government in order to employ staff who have the skills which the UK education system has failed to deliver.
Whether and how intra-company transfers should be included in a cap 9. The issue of intra-company transfers is not applicable to the FSB.
The implications of merging the Resident Labour Market Test and Shortage Occupation Lists 10. The FSB understands that in this context, the Government has looked at the current arrangements for skilled workers under Tier Two. Currently, migrants may enter through Tier Two 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. 11. The FSB agrees with the Government that migrants should only be brought in where every reasonable avenue to recruit a resident worker has been exhausted. However, the small business view is that we want the best and the right person for the job as soon as possible. We would therefore not be in favour of combining the tests to allow employers to only bring in migrants where the occupation was in national shortage and the local labour market had been tested through JobCentre Plus.
Whether dependents should be included in the cap, and the effect of including them 12. It is not in our remit as a business organisation to comment on this. August 2010
Supplementary memorandum submitted by the Federation of Small Businesses Further to the oral evidence we gave on Tuesday 20 August to the above named inquiry, the Federation of Small Businesses (FSB) welcomes the opportunity to provide supplementary evidence as requested and to make a small correction to the draft evidence transcript. The FSB is the UK’s leading business organisation. It exists to protect and promote the interests of the self-employed and all those who run their own business. The FSB is non-party political, and with 213,000 members, it is also the largest organisation representing micro and small sized businesses in the UK. Small businesses make up 99.3% of all businesses in the UK, and make a huge contribution to the UK economy. They contribute 51% of the GDP and employ 58% of the private sector workforce.
Supplementary Evidence During the hearing, I agreed to provide further insight on a proposed auction system where there are certificates of sponsorship and if businesses want to bring into the UK a non-EU employee they can bid against those. The FSB is of the view that this is an overly simplistic solution which will act as a significant barrier to growth to small business owners looking to expand their business. Instead of ploughing profits back into businesses, rewarding employees for their hard work and playing their part in a vibrant economic recovery, small business owners would be paying money to Government in order to employ those staff who have the skills which the UK education system has failed to deliver.
Evidence Correction In my response to question seven I said that we had raised the issue in our 2010 election manifesto, which was published towards the end of 2009. On a detailed reading of our manifesto this is not the case, but I would like to stress that the FSB has always played its part in the ongoing debate and that we will continue to do so. As we have repeatedly stated the introduction of any form of cap on Tier One and Tier Two migrants would have a significant impact on small businesses. July 2010 Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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Memorandum submitted by MigrationWatch Summary 1. Main points: (a) The UK population is rising very rapidly, with 68% due to immigration. (b) A reduction in non EU economic migration must play its part but this only accounts for 25% of inward migration. There are no net figures. (c) EU migration is not where the main problem lies. (d) A pool for Tier 1 seems feasible. The Post Study Route should be suspended. (e) The ICT route needs serious tightening. (f) The shortage occupation route should be abolished. (g) Dependants should be included.
Introduction 2. The government proposals for a cap on economic migration must be seen in a wider context. Net immigration has fallen from its peak of 245,000 in 2004 to 163,000 in 2008. The figure for 2009, due in November, may be slightly lower. Past experience suggests that net migration falls during periods of recession but resumes its upward trend thereafter. The latest population projections (2008 based) assume that net migration will continue at 180,000 per year. This would bring the population of the UK to 70 million in twenty years and 80 million shortly after mid-century. To stabilise our population we need to bring net immigration down to about 40,000 per year, as illustrated in the graph below.
UK population projections on different migration assumptions, 2006 / 11 to 2081. Fertility and mortality assumptions as in ONS 2008-based Principal Projection. 90
85 ONS 2008-based PP (180k) 80 90k 40k 75
millions 70
65
60
55 2006 2011 2016 2021 2026 2031 2036 2041 2046 2051 2056 2061 2066 2071 2076 2081
3. Immigration accounts, directly and indirectly,for 68% of our population growth over the next 25 years. Furthermore, over the two most recent decades, the decennial growth rate has doubled each decade—in effect our population has been growing exponentially.
Economic Migration 4. The precise scale of economic migration is uncertain. It is derived from a voluntary survey of 2% of those who arrive in Britain; the results are then grossed up. Those who say that they intend to stay for over a year are counted, under the international definition, as immigrants. Of the two million granted a visa each year, about 600,000 declare themselves as immigrants. They are then asked their main reason for migrating. The results for 2008 are set out below:2
2 Source: ONS Long term international migration series MN Table 2.04. http://www.statistics.gov.uk/statbase/Product.asp?vlnk%15053 Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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Thousands Formal Study 175 Definite Job 145 Looking for Work 75 Accompany/Join 88 Other 64 No reason stated 44 TOTAL 590
5. This table suggests that only 37% of migrants come to work or to seek work. However, these numbers include EU citizens who, in that year, were about ´rd of gross inward migration so non-EU economic migration might be about 25% of inward migration as a whole.3
6. It is important to note that there is no reliable estimate of net migration for the purposes of work. The reason is that the survey questions do not distinguish between workers returning home and those who arrived as students returning home to seek work. This is a serious deficiency in the statistics which should lie at the heart of this debate.
Economic Migration from the EU 7. Net migration from the EU 15 has averaged about 20,000 a year over the past 10 years and 35,000 over the last five.
8. There are no precise numbers for A8 nationals because some did not register, the self-employed were not required to, and others were only here for a few months. In any case, there were no checks of individuals on arrival or departure. The ONS estimates that the number of A8 residents rose from 114,000 in 2001 to 689,000 in 2008.4
9. There are, however, a number of important reasons to believe that net immigration from the A8 will decline:
— their economic level will rise towards ours;
— transitional arrangements end in May 2011 (and 2013 for Romania and Bulgaria) so the whole EU 15 will be open to them;
— the number of Poles reaching the age of 18 will decline by 30% between 2005 and 2016; and
— a reverse flow will start to counter-balance the inflow.
It is noteworthy that, in Q4 2009, net migration from the A8 countries was negative for the first time.
10. The government have promised to impose strict transitional controls on new members of the European Union, most of which are relatively small—except Turkey. The admission of Turkey to the EU would have very serious implications for UK immigration control. Otherwise, it is clear that the main immigration pressure will be from outside the European Union and especially from the developing world where the number of young people is growing rapidly and unemployment is very high.
Non-EU Economic Migration—Numbers Affected 11. Government statistics are extremely confusing and seldom tally with each other. Annex A suggest that about 132,000 non-EU migrants were admitted (or granted an extension) in 2009. This seems to be broadly similar to 2008 which is four times the level of 1995.5 There is certainly no sign that the Points Based Systems (PBS) has significantly reduced economic migration. Indeed, the number of certificates of sponsorship issued in Q4 2009 suggests a significant increase in Tier 2 (general) to about 30,000 a year and a smaller increase in Tier 2 (ICT) to about 34,000 a year.6 A clear set of work permit statistics from the Home Office would be an aid to constructive discussion. 12. Tier 1 (general) seems to be running at about 20,000 a year, judging by the number of visas issued in 2009.7 Tier 1 (post study route) is largely granted in-country and the numbers are running at about 35,000 a year.
3 The Migration Advisory Committee have come to a similar figure—see para 2.25 of their consultation document. 4 Population Trends 138 page 15. 5 Migration Advisory Committee September 2008, Table 2.3. 6 Hansard, 5 February 2010, Column 508W. 7 Control of Immigration Statistics 2009 Table 1.1. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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Effectiveness of a Pool System 13. A pool system for Tier 1 (general), perhaps on a three month basis, seems entirely feasible. The limit could be adjusted in the light of other flows. Tier 1 (post study route), running at about 35,000 a year, should be suspended for so long as British graduates are struggling to find work. 14. For Tier 2 (general), first come-first served risks stimulating a high volume of precautionary applications. A quarterly (or even monthly) pool would be better. An auction system should be investigated.
Intra-company Transfers (ICT’s) 15. This scheme has gone badly wrong. It was originally intended to allow international companies to move their senior staff in and out of the UK without difficulty. This is a key attribute that must be maintained. Unfortunately, the scheme has been used in recent years to post tens of thousands of, at best, middle ranking IT workers to the UK—often from India. Their purpose is to become familiar with particular IT functions in the UK so that the work can be off-shored. Some 85% of ICTs are project related in this way.8 This process conflicts with the principle that overseas nationals should be recruited for genuine and additional posts in the UK as well as with the requirement for specialist company knowledge. It is also open to manipulation of pay and allowances. The Migration Advisory Committee has, quite rightly, called for much tighter policing; we would suggest that the salary requirement be raised to, say £50,000, to ensure that those admitted under this route are genuinely required to occupy senior positions. A further means of tightening this route would be to deny renewal unless the applicant was earning a very high salary such as £70,000 per annum.
Shortage Occupation Lists 16. The number of visas granted under this scheme is very small—only a few thousand. We suggest that it would be better to abolish this list and the bureaucracy associated with it. The only effect would be that certain employers would have to advertise jobs locally for a month. That might also give British workers an opportunity to change into the occupation concerned. There might have to be transition arrangements in particular cases such as chefs and senior care workers.
Dependants 17. Dependants should certainly be included in the cap since it is the overall scale of immigration that is the underlying concern. Obviously, the cap itself would have to be such as to take account of their inclusion.
Settlement 18. What really matters, especially from the point of view of population, is not who comes but who settles. A second Points Based System for settlement would take some of the pressure off the work permit system (although it might add to the problems of removal). This second hurdle could be based very largely on salary with recognition for special artistic or scientific merit. The Committee will be aware that the previous government went out to consultation on such a scheme. The present government do not appear to have reached a view on it. August 2010
Annex A WORK PERMITS GRANTED IN CALENDAR 2009
In country Out of country Total Tier 1 (general)1 26,122 13,958 40,080 Tier 2 (Post Study)2 30,927 4,248 35,175 Tier 2 (general)3 12,581 8,558 21,139 Tier 2 (ICT)4 6,557 22,034 28,591 Work Permits5 7,300 5,1656 12,465 (previous system) TOTAL 137,450
8 Salt (2008) quoted in Migration Advisory Committee August 2009 page 111. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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ALTERNATIVE SOURCE FOR Q4 20098
Certificate of sponsorship allocated pending quarterly guesstimate Tier 2 general 6,965 2,735 7,500 Tier 2 ICT 7,680 2,845 8,500
Total 14,465 5,580 16,000
1. Hansard 12 June 2010 Col 851W and 13 July 2010 Col 632W 2. Ibid 3. Hansard 4 March Col 1378W 4. Hansard 12 June 2010 Col 851W and 13 July 2010 Col 632W 5. Control of Immigration Statistics 2009—table 4.1 6. Migration Advisory Committee presentation 7. deleted 8. Hansard 5 Feb 2010 Column 580W
Memorandum submitted by Immigration Law Practitioners’ Association The Immigration Law Practitioners’ Association (ILPA) is a professional association with some 900 members (individuals and organisations), the majority of whom are barristers, solicitors and advocates practising in all aspects of immigration, asylum and nationality law. Academics, non-governmental organisations and individuals with an interest in the law are also members. Established over 25 years ago, ILPA exists to promote and improve advice and representation in immigration, asylum and nationality law, through an extensive programme of training and disseminating information and by providing evidence- based research and opinion. ILPA is represented on numerous Government, including UK Border Agency, and other “stakeholder” and advisory groups and has provided written and oral evidence to many parliamentary committees, including to the Home Affairs Committee’s last enquiry into the Points-Based System.
Executive Summary — There is a serious risk that the cap will be the subject of successful legal challenges (with costs orders) on basis of vires and rationality.
— Perceptions of migrants and businesses as to how the cap will affect them should be studied alongside the detailed empirical analyses of the Migration Advisory Committee.
— ILPA makes available to the Committee the quantitative data provided by the Migration Advisory Committee.
— The first come, first served, pool and auction systems risk discriminating unlawfully given the way in the UK visa system operates across the globe, and constraints inherent in the three models. Equalities impact assessments are required.
— Intra-company transfers should not be included in the cap; they have the potential to provide at least some buffer against perverse and unintended consequences of the imposition of a cap.
— The resident labour market test and shortage occupation lists should not be merged: to do so will make essential jobs impossible to fill. The resident labour market test is designed to identify a very particular shortage: that of a worker to do the job in question. If there are concerns about the test and/or the list these should be addressed directly.
— Dependants should not be included in the cap and should be allowed to work: to do otherwise risks creating a perverse system and discriminating on the grounds of age and gender. An equality impact assessment is essential.
The impact a cap on non-EU economic migration would have on the ability of UK business and industries to recruit the skills and staff they require 1. The Immigration Act 1971 (the Act) as amended underpins all UK immigration law. Section 1(4) of the Act provides the Secretary of State with the power to lay immigration rules before Parliament. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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2. There have been a number of successful legal challenges to changes in the immigration rules including the cases of HSMP Forum,9 BAPIO,10 Pankina11 and English UK12 amongst others.13 ILPA foresees similar successful challenges to the proposed cap, the methods of implementation and the consultation process. One of the successful arguments advanced on behalf of migrants is legitimate expectation.14 The principle of legitimate expectation arises where a public body has made a promise or adopted a practice that represents how it proposes to act in a given area. 3. Recent years have seen instances of changes to the immigration rules with almost immediate effect, failing to respect the parliamentary convention of 21 days.15 The current tendency to change the Points- Based System requirements with almost no notice is very difficult for prospective migrants and their proposed employers attempting to plan for the future, in particular where they have prepared applications. 4. ILPA members are well aware of the strength of feeling among their clients that the proposed cap is irrational and anticipate legal challenges as to its lawfulness, including on the grounds of irrationality. 5. ILPA members advise migrants and employers working and operating across all industry sectors. The view expressed overwhelmingly by members’ clients is that the imposition of an immigration cap will stifle economic growth, result in greater burdens on employers and affect the delivery of key public services. The perception of migrants and businesses that businesses will be unable to recruit the staff and skills they require is a key to their future behaviour. ILPA can report on these perceptions. The underlying economic data has been studied by the Migration Advisory Committee.16 6. The clearest messages put forward to members is that migrants with a choice of destination will go to other countries rather than to the UK, while multinationals will give serious consideration to leaving the UK to set up their European headquarters elsewhere, pulling out existing investment in the UK, taking some of their employees abroad and making others redundant. 7. Members highlight the effect on small businesses. Often, such businesses will have only obtained a sponsorship licence to appoint one or two key strategic roles, so the limit is likely to have a disproportionate impact on these businesses.
The numbers of skilled and non-skilled migrants likely to be affected by a cap on Tiers 1 and 2 8. The Migration Advisory Committee figures17 indicate that in 2009: — Visas were granted as follows—
14, 120 Tier 1 General, Investor, Entrepreneur 04, 245 Tier 1 Post-Study Work 00,335 Pre Tier 1 Highly Skilled Migrant Programme 91,195 Tier 2 Resident Labour Market Test, Shortage occupations, sportspeople, ministers of religion 22,030 Tier 2 Intra Company Transfers 05,165 Pre Tier 2 Work Permits 00,105 Pre Tier 2 Other categories — Some 15,015 dependants were granted entry under Tier 1 and predecessor schemes, some 26, 990 under Tier 2 and predecessor schemes. — Some 65,925 Tier 1 in-country applications (including extensions) and some 20, 145 Tier 2 in- country applications (including extensions) were granted. 9. ILPA highlights that the figures on the basis of which the interim cap18 was set were taken from a period of recession and one during the summer months when recruitment is often at a low.
9 R (HSMP Forum Ltd) v SSHD [2008] EWHC 664 (Admin); R (HSMP Forum (UK) Ltd) v SSHD [2009] EWHC 711 (Admin). See Joint Committee on Human Rights, 20th Report of Session 2006–07, Highly Skilled Migrants: changes to the immigration rules, HL paper 173, HC 993, 9 August 2007. 10 R (BAPIO Action Ltd) v SSHD [2008] UKHL 27. 11 SSHD v Pankina et ors [2010] ECWA Civ 719. 12 R (English UK) v SSHD [2010] EWHC 1726. 13 See, for example R (Chong Meui Ooi) v SSHD [2007] EWHC 3221 (Admin), Odelola v SSHD [2009] UKHL 25, R (Limbu) v SSHD [2008] EWHC 2261 (Admin). 14 See the leading case of CCSU [1985] AC 374. 15 Recent examples of statements of changes in immigration rules that have come into force the day after they were made include Cm 7929 (parts taking effect 20 August 2010); Cm 382 (parts taking effect 23 July 2010), HC 96 was ordered to be printed on 15 July 2010 and took effect five days later; HC 439 was ordered to be printed on 18 March 2010 and parts took effect on 6 April 2010. 16 Migration Advisory Committee: Analysis of the Points-Based System: Tier 1, December 2008; Analysis of the Points-Based System, Tier 2 and dependants, August 2009. 17 Presentation by Stephen Earl of the Migration Advisory Committee Secretariat The work of the Migration Advisory Committee, August 2010. 18 See Hansard HC Report: 28 June 2010, Col 585 per the Home Secretary; 15 July 2010 Col 42WS per Minister of State for Immigration. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants under Tier 1; and of a “first come, first served”, a pool, or an auction, system for skilled migrants under Tier 2 10. A cap that may be unlawful for the reasons described above cannot be effective. Its impact will be determined by the outcome of litigation. 11. Systems must be evaluated in terms of their effect on migrants, their effect on the companies who want to benefit from their skills and the resources required to administer them. ILPA foresees bureaucracy, delay, expense and risks. 12. Contrary to what may be assumed from the UK Border Agency consultation paper,19 there is not a neat separation between Tiers 1 and 2. The consultation paper is misleading insofar as it suggests that Tier 1 migrants have no job offer; Tier 1 does not require the applicant to have a job offer., however it is commonly the case that applicants’’ employment or business commitments/opportunities are the very reason for their application. Many migrants who have a job offer nonetheless enter via Tier 1. This may be because a migrant much in demand can negotiate not to be tied to a particular company or because a company has decided not to go down the route of being a UK Border Agency licensed sponsor (in the case of small businesses, and some larger ones, this may be because hires from outside the Resident Labour Market are very infrequent). The disadvantages of uncertainty for migrants and employers created by the “first come, first served” system and the risks of being unable to identify workers with the skills required to fill a particular post therefore also affect Tier 1. 13. The UK Border Agency consultation paper suggests a pool system is fairer for Tier 1 than a “first come first served” system. The pool system suggested creates delay and uncertainty,skimming off the highest scoring applicants in a certain period so that the points required to qualify are unknown at the time of application and leaving applicants for up to six months (by which time the employment or business opportunity that attracted then to the UK is likely to have passed), thereby deterring those who have other options. It appears to ILPA members unlikely that a pool system will be capable of linear ranking of all candidates. Some elements for which points are awarded, such as satisfying maintenance requirements, are simply mandatory criteria to which an arbitrary number is attached. Others, such as degree equivalences, divide into broad bands. Salaries are ranked in bands, and to do otherwise and let minor differences play a part does not appear equitable and is open to manipulation. There are additional disadvantages if extra points are awarded according to level of English over and above the skilled level required for Tier 1 as this appears to create a bias toward candidates from countries where English is the main language. The need for adequate equality impact assessment is apparent. 14. There is a suggestion that it would be reasonable to require a fee to be paid to enter the pool. Yet candidates within the pool are not, by inclusion in the pool alone, permitted to enter the UK and may find their application rejected after six months due to circumstances wholly beyond their control: the points that other candidates applying at the same time have scored. The proclaimed efficiency of the system would appear to lie in creating revenue for the UK Border Agency and little else; effort is devoted to providing immigration employment documents to persons who may never be permitted to enter the UK and use their skills. For migrants, the prospect of paying a fee for no return and six months uncertainty is likely to be an invitation to look to other countries, in particular those where a successful application would lead at once to settlement.20 15. The “first come, first served” system, preferred in the consultation paper for Tier 2, is random in its operation. It’s perceived “fairness” is that it is equally unfair to all migrants. But this is not the case. If will affect persons of different nationalities differently. Processing times vary in different posts around the world,21 creating a disadvantage for applicants in countries with slower processing times. In some countries, such as the United States of America, UK consular posts offer premium and priority service applications (Tier 4 same day service and 48 hour premium service,22 services which now incur a fee—as to the questionable legal basis for this see Annex 1). In other countries applications take several weeks. Some posts are not connected to the Agency’s central IT system, causing further delays. In addition, problems with the Agency’s information technology system are far from unknown.23 The point at which the cap is reached is determined by the number of allowed applications. If consular posts in, for example, Australia, have more staff and work fastest, they may have allowed sufficient applications to reach the cap before applications from, for example, India, have ever been considered. The potential for inequitable treatment is high. Similarly if each post is given a quota, where the size of the quota will affect the chances of nationals from that country. ILPA members are also aware that those companies with a larger migrant workforce are likely to develop the most intricate knowledge of the workings of the system, to the advantage of their prospective employees, of whatever Tier. A global “first come first served” system is logistically complex and open to charges of operating in a discriminatory manner just as is a system that allocates quotas of visas to posts. An equality impact assessment is required.
19 Limits on Non-EU economic migration, 28 June 2010. 20 As is the case for certain categories in, eg, Australia, Canada, New Zealand, the United States of America. 21 See www.ukvisas.gov.uk/en/howtoapply/processingtimes 22 See https://www.visainfoservices.com/Pages/Content.aspx?Tag%Services PAGE, USA, link Additional Services. 23 See eg Chief Inspector of the UK Border Agency, An inspection of the UK Visa Section Pakistan settlement applications, Jan- April 2010, paras 8.24–8.28 and Croydon Public Enquiry Office: Unannounced Inspection, 4 February 2010, paras 5.22 and 5.24. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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16. The first come first served system, besides being discriminatory, is not easy to operate, including if applications exceed the limit at which the cap is set on the first day of its operation. There is, ILPA suggests, a limit to the fee that can be charged to a migrant who does not even have any certainty that his/her application will be studied. 17. As to Tier 2, we are at a loss to see how a wholly random system provides certainty for businesses, or enables them to recruit the migrants most needed. There may be certainty within a short period for those whose envelope happens to be at the top of the pile; for the others there is only the uncertainty and difficulties that come with having a key post unfilled, and no means to fill it. The UK Border Agency consultation paper envisages that one could have a post that it has been impossible to find a resident labour market worker to fill, that is in an occupation where there is a shortage and yet be unable to recruit to the post because of the time of submission relative to other applicants, a matter largely beyond the applicant’s, or their sponsors’ control. 18. As to an auctions system, we rate the chances of this being applied fairly very low indeed. The ability to tender higher fees has no necessary correlation with the need of the business for the worker, indeed it raises the question of whether, had the funds been invested in efforts to make the job more attractive to persons in the resident labour market, it could have been filled. Businesses with lower profit margins, not for profits and voluntary organisations, as well as smaller businesses just starting up, risk being the most adversely affected. 19. There are two reasons why a post may go unfilled from within the resident labour market. One is that no one can do the job; the other is that no one who can do the job wants it. If no one in the resident labour market can do the job, then, if a migrant worker cannot be recruited, the post will go unfilled. If no one in the resident labour market wants the job, then if a migrant worker cannot be recruited the employer has the option of leaving the job unfilled or endeavouring to make it more attractive to those in the resident labour market, for example by increasing salaries and job-related benefits. If the employer cannot afford to do these things, the job will go unfilled. The greater the shortage in the resident labour market, the more difficult it is likely to be to persuade the reluctant to apply. The effect of the proposals appears to be to put the greatest pressure on areas of the labour market where shortages are already most acute. 20. Neither the efficiency nor the effectiveness of the first come first served, pool or auction systems have been demonstrated and all run counter to the analyses of the Migration Advisory Committee as to the net economic benefits of migration,24 at a time when the UK can ill afford to place its economy in jeopardy.
Whether and how intra-company transfers should be included in a cap 21. Intra-company transfers should not be included in a cap. For the reasons set out above, the effects of a cap on the ability to fill essential roles may be enormous.25 Caps are untried and untested. The exclusion of intra-company transfers provides, at the very least, a necessary buffer in this climate of uncertainty during the period in which the effects of the cap can, if the will and resources are there, be understood. 22. In recent years and months the intra-company transfer system has been substantially changed and calibrated so that migrants who have spent different periods with the company overseas can come to the UK for different periods.26 Intra-company transfers of less than 12 months do not count toward net migration, because net migration is measured in terms of those who remain in the UK for 12 months or more. But any attempts to manage the figures by limiting intra-company transferees to short stays in the UK would come at a price: intra-company transferees who come to the UK only for a period of two years or less are often not subject to UK tax.27 It is unclear why the UK would wish to deprive itself of revenue from taxation at this time. 23. A cap on intra-company transfers is likely to put pressure on the business visitor route, and increase existing confusion about when it can properly be used. 24. There will be concerns that caps on Tiers 1 and (in particular) 2 will lead to efforts to make increased use of the intra-company transfer system as a way to work around the cap.28 The priority in addressing this must be to examine how the caps are to operate for Tiers 1 and 2: a business needing to fill a key post should not need to be seeking a “work-around”. Another important safeguard is to ensure that those who enter by this route can, when the relevant criteria are met, switch into other categories. This could help to ensure that workers move out of the intra-company transfer route when it is no longer the appropriate basis for their stay in the UK. Finally, the Migration Advisory Committee recommended that the Government undertake more robust monitoring and, if this was shown to be required, enforcement of the Intra-Company transfer route.29 ILPA is not aware that this recommendation has been implemented and suggests that the Committee question the Government on this.
24 See the reports at www.ukba.homeoffice.gov.uk/aboutus/workingwithus/indbodies/mac/reports-publications/ 25 See Migration Advisory Committee, op.cit. August 2009, esp. pages 103–105. 26 See Statement of Changes in Immigration Rules HC 439 and www.ukba.homeoffice.gov.uk/workingintheuk/tier2/ict/, accessed 26 August 2010. 27 See Migration Advisory Committee, August 2009, op cit para 6.143. 28 Ibid. Section 6.4 discusses intra-company transfers at length. 29 Migration Advisory Committee, August 2009, op cit para 6.184, page 145. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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The implications of merging the Resident Labour Market Test and Shortage Occupation Lists 25. Any suggestions that shortage occupation lists are the sine qua non of tests for a need for migrant labour and the Resident Labour Market test a poor relation stand to be refuted. 26. Shortage occupation lists look at general shortages, regardless of whether it might be possible to fill a particular post from within the resident labour market (British citizens, the settled and those exercising EU free movement rights). The Resident Labour Market Test is intended to identify whether there is anyone in the resident labour market who can do the particular job that is advertised. The Resident Labour Market Test is thus intended to be the more precise tool. We recall that the Resident Labour Market Test demands that no one within the resident labour market can be found to fill the vacancy rather than that the resident labour market worker be the best person for the job. 27. The proposal set out in the UK Border Agency consultation paper is not that the tests be merged, but that both tests be applied to each vacancy. In the case of the Resident Labour Market Test, the proposal that a job for which no resident labour market worker can be found cannot be filled unless the job is also on a shortage occupation list will result in vacancies going unfilled. While there may well be good reason to monitor which jobs are being filled from outside the resident labour market, to better understand where there is a need to “skill up” the resident labour market, work will not wait until a worker is skilled up to do it. Indeed, the only hope of “skilling up” the resident labour market may be to bring in those that have the required skills. It is also likely to be the only way to keep businesses operating in the meantime. If the Government is not satisfied that workers able to do the jobs within the resident labour market are being identified, then it should re-examine the resident labour market test. The Migration Advisory Committee recommended that the route be retained.30
28. As to shortage occupation lists, the work of the Migrant Advisory Committee to identify which occupations should be included on the list is well-documented.31 The logic behind the lists is, as we understand it, that shortages are sufficiently widespread that it is reasonable to assume that no resident worker can be found to fill the vacancy and not reasonable to put the would-be employer to the expense, time and trouble of looking for a resident labour marker worker who is most unlikely to be out there. Similarly to the resident labour market test, the solution to any perceived problems would appear to lie in examining the criteria for inclusion on the lists, perhaps in particular their ability to be sensitive to rapid changes in the labour market, rather than demanding that businesses go to the expense, time and trouble of fruitless recruitments.
29. Employing migrant workers has become, under the sponsor-licensing system, an onerous burden for employers. Becoming a sponsor is costly and entails taking on extensive new responsibilities. Responsibilities increase with each migrant worker employed. We are not aware of evidence that has demonstrated that employers prefer to hire migrant workers and against the back-drop of current responsibilities we should be surprised to find such evidence. The notion that migrant workers are preferred because they will work for lower pay has not been shown to apply to those jobs qualifying for inclusion in Tier 232 and salary guidelines33 are designed to ensure that this does not happen.
Whether dependents should be included in the cap, and the effect of including them 30. Dependants should not be included in the cap. Measuring the effect of the cap and adjusting it to meet the needs of the economy, as is the stated intention,34 becomes complex if not impossible if some included in the limit are skilled workers and others babies. 31. If a cap that includes dependants places pressures on businesses, this could give rise to incentives to recruit single people without caring responsibilities. In ILPA members’ experience whether family members can accompany a migrant is an important factor in choice of destination for those with partners and children. It may also be a factor in length of stay, which in its turn could put pressure on the cap, with the need to recruit arising more frequently if people stay for a shorter time. Younger people are less likely to have formed families than older ones. Studies show that more women than men have caring responsibilities.35 Questions of discrimination on the grounds of age and gender thus arise.
30 Migration Advisory Committee, August 2009, op cit Section 6.3 and recommendation seven. 31 Identifying skilled occupations where migration can sensibly help to fill labour shortages: Methods of investigation and next steps for the Committee’s first Shortage Occupation List, Migration Advisory Committee, February 2008 and Skilled, Shortage, Sensible: Review of Methodology, Migration Advisory Committee, March 2010, esp para 1.3. 32 See the House of Lords Committee on Economic Affairs First Report of Session 2007–08 The Economic Impact of Migration, HL 82 of Session 2007-2008 vol I paras 70 to 79 and vol 2 evidence and The Government Reply to the first report from the House of Lords Committee on Economic Affairs HL Paper 82, esp Paras 2,13–2,26 and the evidence cited therein and the Migration Advisory committee report op cit December 2009, page 51. 33 Set out in the UK Border Agency Codes of Practice for sponsoring skilled workers, accessed via www.ukba.homeoffice.gov.uk/employers/points/sponsoringmigrants/employingmigrants/codesofpractice/ 34 Hansard HC Report: 28 June 2010, Col 585 per the Home Secretary. 35 See Migration Advisory Committee, op cit August 2009, section 7, especially 7.6; Department of Health Carers at the heart of 21st century families and communities, 10 June 2008 and see International Labour Organisation Workers with Family Responsibilities Convention 1981 (No 156) and Recommendation (No 156). Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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32. The evidence available already suggests that more dependent spouses and partners are women than men,36 following male primary applicants. When the Migration Advisory Committee examined the question of dependants (in the context of examination of their entitlement to work) it noted that: “. . . we think the Government will want to take account of other factors (such as wider social impact”37 33. The Home Secretary (and Minister for Equalities) has indicated that, where the cap is concerned, this indeed the Government’s intention: “We want to ensure that we can properly weigh the economic considerations against the wider social and public service implications”38 34. An equality impact assessment, covering, inter alia, age and gender, is thus essential. 35. We pause to observe that articles 8 and 12, read with Article 14, of the European Convention of Human Rights, incorporated into UK law through the Human Rights Act 1998, protect the rights to respect for family and private life, and to marry and found a family, without discrimination. If the UK were to propose to treat migrants differently, as to initial grant of leave or extensions, on the basis of marital/ partnership status or their having children, for example by rewarding the migrant with no dependants with extra points, this could engage the Convention. 36. ILPA members advise many migrant workers who have a choice of destination, because their skills are in demand worldwide. Members advise many businesses that employ migrant workers, not because they feel a particular desire to do so, but because they can find no one else to do the job. The responsibilities of being a sponsor are onerous and no responsible director undertakes them lightly. As ILPA understands it, one reason why the UK Government wants a cap is so that it can demonstrate to a (frequently hostile) public that migration is “under control.”39 ILPA suggests that no Government can lay claim to exercising control over migration for work without demonstrating that it understands such migration and the wider effects of its interventions. The Migration Advisory Committee has provided Government with considerable research on these matters; we see no evidence in the UK Border Agency consultation paper that this has informed thinking on the cap. Migrants and their employers have a significant contribution to make to such understanding and their voices have been raised40 against the UK Border Agency’s current proposals. August 2010
Annex 1 EXTRACT FROM ILPA NOTE OF THE UK BORDER AGENCY INTERNATIONAL GROUP USER PANEL MEETING ON 22 JULY 2010 Priority and Premium Service Fees I asked what was the legal basis for charging for this given that it is contained neither within the Consular Fees Order 2010 [SI 2010/238] nor the Immigration and Nationality (Cost Recovery Fees) Regulations 2010 [SI 2010/228]. The Acting Chair said that it is an extra service offered by commercial partners not the Agency—so like photocopying, no need for it to be in fees regulations. She said that the fee was not mandatory. It was for a priority service. It has no bearing on the outcome of the application. Where service falls below published standards it is not offered as people should not have to pay to get a service within published standards. She said that they had looked at including it in fees regulations but it could not be a local fee and it was too complicated to set out different fees for different countries in a schedule. So it is done by commercial partners and therefore Agency says they do not need to put it in regulations. [. . .] I protested that it was all very well talking about administrative convenience and complicated regulations but that sidestepped the main issue in making it something the partners charged for rather than putting it in the fees regulations meant that it was not subject to parliamentary scrutiny. I suggested that this was unacceptable and also asked that the UK Border Agency revisit the question of legality in the light of the judgment in Pankina. The Acting chair emphasised that it is not a mandatory fee, but agreed to seek advice on legality post Pankina.
36 See Migration Advisory Committee, August 2009, op cit, Section 7, especially 7.6 Equality Issues and the evidence cited therein. 37 Ibid. At 7.93. 38 Hansard HC Report: 28 June 2010, Col 585. 39 Speech by Damian Green, then shadow immigration minister, at the International Bar Association 4th Biennial Global Immigration Law Conference 19–20 November 2009, London. 40 See responses to this consultation and media coverage, eg Fears force immigration cap rethink, George Parker & James Boxell, Financial Times, 24 June 2010. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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Memorandum submitted by Highly Skilled Migrant Programme Forum (HSMP Forum) 1. “HSMP Forum” is a not-for-profit organisation. HSMP Forum took its name from the UK’s which was introduced in 2002. It was formed after the 2006 decision by Government to apply new qualifying criteria for existing Highly Skilled Migrants. “HSMP Forum” has been lobbying the legislature, executive and judiciary by challenging unfair policies, to allow existing legal Skilled Migrants to settle in the UK. The organisation’s aim is to support and assist migrants under the world-renowned British principles of fair play, equality and justice and believes in challenging any unfair policies which undermines migrants’ interests. The following is our submission on the issues concerned with the proposed permanent immigration cap.
2. The impact a cap on non-EU economic migration would have on the ability of UK business and industries to recruit the skills and staff they require We believe a cap on non-EU economic migration will tie down the businesses by preventing them from recruiting skilled staff when required. Businesses cannot wait for months if they urgently need specific skills. In addition, cap will threaten economic performance and recovery from current economic problems. Organisations unable to fill certain positions may find the need to outsource such requirements overseas.41 They may find it more economical to outsource in a larger spectrum than continue with such posts and departments in the UK. Many companies in London rely on Tier 1 and Tier 2 migrants with some employing a large number of non-European migrants. Many Tier 1 immigrants hold key and senior positions and are involved in high value-added work. The proposed and potential cap on extension would not only make it more difficult to recruit new staff but will add unnecessary uncertainty to businesses and their staff on Tier 1 (and Tier 2) visas. It would be unfair to businesses to loose workers who engaged in high value-added work and it is irrational to expect the companies to replace their existing non-EU staff with EU nationals, especially when there is a specific language requirement or skills requirements that cannot be fulfilled by the EU nationals.
There are also legal consequences and costs of cap on extensions for example when a company needs to immediately terminate a migrant’s employment due to the cap and has to pay for three to six months as per notice period obligations (a six-month notice is common for senior workers and managers).
At a time the economy desperately relies on an injection of skills and talent to show a consistent upward trend, shortcomings like these should not be allowed to thwart the commercial progress. Such a cap only heightens a sense of instability in a volatile economic environment. Also there are many trainees in the NHS who are due to complete medical training in the next future. The cap will not only force them to abandon their education but will also mean a waste of time for the NHS who has made a considerable investment to turn them into a potential skilled workforce. We believe skilled immigration should be a market driven response rather than a political one.
3. The numbers of skilled and non-skilled migrants likely to be affected by a cap on Tiers 1 and 2 Government has set an ambitious target “to reduce immigration to the levels of 1990s tens of thousands rather than hundreds of thousands”. In addition, it wants to continue to attract the “brightest and the best” to the UK. It is unrealistic to reduce immigration on such a scale without having to forego the best and the brightest. Especially, since the target group for such a cap is intended to be that of Tier 1 and Tier 2 migrants. According to our estimate a cap might affect around 50% of highly skilled migrants.42 Immigrants arriving under Tier 1 (previously HSMP) formed 3% of total immigration in 2008 (15,515 Tier 1 migrants of total inflow of 590,000 migrants). However their contribution to the economy and the growth is significantly bigger than their size. Frequent changes in immigration policies and uncertainty about future cannot attract highly skilled migrants. Countries such as Australia, New Zealand and Canada attract highly skilled migrants by providing them a much better provision of permanent residency comparatively in the UK where no such assurance is given and the Citizenship and Immigration Act will make the process of settlement even more difficult and delayed.
We oppose any retrospective changes and believe that immigration cap should not be applied on extensions of existing migrants. We have received many responses from Tier 1 migrants expressing concern regarding the possible cap on extensions. They feel that applying a cap on extensions is unfair and will expose them to enormous uncertainty. The prospect of being sent to their countries of origin after spending years and investing in the UK would cause major damage to their personal life and career prospects. Migrants that came under Tier 1 have developed a reasonable expectation that they would be able to extend their stay under the same conditions based on various judicial outcomes which confirmed Tier 1 extensions are based on the same rules as applicable during their initial applications. Some Tier 1 migrants were disappointed to see the Migration Advisory Committee’s consultation which is considering applying cap on extensions. Such uncertainty can cause migrants to immigrate to countries with immigration friendly policies.
41 http://www.guardian.co.uk/uk/2010/aug/22/immigration-cap-business-jo 42 Estimations made based on analysis of IPPR’s analysis (Limits to limits, 2010) and Control of Immigration Statistics, Home Office, 2010. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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Another group that would be affected by the potential cap on extensions are HSMP migrants—some HSMP migrants need to apply for second extension and face uncertainty despite spending almost five years in the UK and making it their “main home” as per the HSMP visa requirement. These migrants could not predict that they would be subject to the cap despite their efforts and contribution. Frequent immigration changes and uncertainty will send negative message to new potential Tier 1 migrants and lead to significant decrease in applications. The damage to UK’s reputation might be irreversible and it might deter foreign entrepreneurs and potential investors: the consistent change in policy can create lot of uncertainty and unpredictability for migrants to plan their lives. If there are retrospective changes towards Tier 1 (general) then in the future there is a possibility of retrospective change towards entrepreneurs and investors as well.
4. The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants under Tier 1; and of a “first come, first served”, a pool, or an auction, system for skilled migrants under Tier 2 A pool system will ensure that the candidates with highest skills would be allowed to come to the UK. However it also means increasing the requirements of PBS (for example if a person meets PBS requirements but if other applicants hold higher degree (MSc or PhD) or earn higher salary then the applicant would be refused). The existing PBS requirements are high enough. There are also issues concerning delays in the time interval of applications selection in a pool system, transparency of such a system and whether there would be any appeal rights which will create many uncertainties for migrants intending to come to UK. Under the “Auction” method small firms would be potential losers since it would be impossible for them to compete with big corporations. We believe such methods should not be applied to existing migrants in the UK.
5. Whether and how intra-company transfers should be included in a cap Applying a cap only on Tier 1 and Tier 2 might lead to the situation that big corporations will use intra- company transfer route as alternative way to bring in skilled workers. That would lead to surge in intra- company transfer visas and consequently the Tier system limits would be reached earlier. That would be unfair towards small businesses that cannot benefit from intra-company transfers and also for the migrants. We believe the inclusion of intra-company transfers within the cap will lead to further exploitation of migrants since those coming under the current policy of intra-company transfers cannot apply for settlement. These migrants although cannot access public funds like other migrants on tier 1 and 2 and would be paying for the public services they access.
6. The implications of merging the Resident Labour Market Test and Shortage Occupation Lists Merging the Resident Labour Market Test and Shortage Occupation Lists would hurt companies that require specific skills that are not included in Shortage Occupation list like foreign languages. The shortage occupation list is concerned with an occupation which is in national shortage and it has been acknowledged as such but if there are resident workers available to fill in such occupation then it is arguably cannot be considered as a national shortage. The government’s assumption that employers tend to bring in migrants to fill in positions of national shortage irrespective of availability of resident workers seems to be misplaced and if at all then this can be corrected by rather more efficient management of such a list. The shortage occupation list should be used to reduce bureaucracy and make it much easier for businesses to recruit non- European migrants when the skillsets are not available locally. Merging these two can potentially cause further procedural delays and difficulties for businesses urgent needs.
7. Whether dependents should be included in the cap, and the effect of including them Preventing spouses from accompanying the main applicants based on cap will discourage potential Tier 1 and Tier 2 migrants from coming to the UK. Imposing cap on dependants of Tier 1 and Tier 2 holders already in the UK should be out of the question. Most of the children of current migrants have spent years in the UK and feel that UK is their main home and can speak only in English. It is unfair to expose these families to uncertainty and constant fear that despite their hard efforts they may face deportation. In addition, uprooting families of existing migrants would lead to possible violation of the right to respect for private and family life as per Article 8 ECHR, there can be possible challenges in courts and mounting costs. It will also be wrong and unfair for the government to consider the entry of dependents with working rights as a barrier in limiting migrants as this can lead to possible segregation and biased treatment of migrants who have dependants and those who do not. Migrants who have dependants are likely to be earning more and therefore would be paying more taxes comparatively. In addition not everyone who comes on a dependant visa seeks employment. 8. We recommend as follows: — We believe the government should not apply any such proposed cap on migrants who are already resident in the UK (including those who are switching internally from other categories). This is of major concern due to the home secretary’s repeated claims of her intention to reduce net migration. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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— We do not believe a cap is good for UK’s economy as it can further cause unnecessary detriment to UK businesses in this ongoing difficult economic crisis. Also the overall image of the UK in attracting highly skilled migrants will be at risk. When the Prime Minister is eager to improve and strengthen relations with major developing countries a cap can have adverse impact on such initiatives, a cap will be considered as a protectionist measure by other countries, for example, India has already expressed its unhappiness over such measures and said that it can impact trade relations between India and the UK.43 Therefore, if the government goes ahead with its plans then we believe it needs to at-least ensure that migrants coming on tier 1 visas which constitute a very small proportion of the overall immigration inflow in the country is exempted from such a cap. — It is also important that the government rather tries to perfect the present processes rather than introducing new procedural rules. In the recent past both employers and migrants have seen a vast number of new procedural changes in the immigration system, therefore the focus can be on improving the present processes rather than reestablishing new ones which can cause further inconvenience and hardships to both employers and migrants. August 2010
Memorandum submitted by British Association of Social Workers BASW The British Association of Social Workers (BASW) is the professional association for social workers in the United Kingdom. We have a growing membership of almost 13,000 which includes some social workers from non EU countries some of whom have contributed to and are quoted in this paper. Social Work is a global profession with an international definition (i) and internationally accepted ethical standards.(ii) BASW are the UK representatives at the International Federation of Social Workers (IFSW). We are an independent organisation, funded by and accountable to social workers and committed to the highest standards of professional practice. As an organisation with members from all four countries of the UK with bases in Birmingham, Belfast, Cardiff and Edinburgh and which engages closely with devolved administrations we are well aware of the increasing diversity of our country and changing demographic trends, this has led in particular to concern in Scotland for increased immigration.
Social Work in the UK Social Work is one of the most important professions in our society and social workers have a profound influence upon the lives of millions of people often at times of transition and change. Furthermore the skills of qualified social workers are critical to enhancing social inclusion and social cohesion. The importance of social work across the UK has been demonstrated in the government reviews of the profession in each country, which are at various stages of implementation. The challenges faced in each country to have sufficient numbers of social workers in the right work locations have led to recommendations about initial education and recruitment, as well as critically important proposals for employers as to how better to retain social work staff. The response of employers to the shortages has been to recruit internationally. This has had both good and bad consequences which are explored below. Overall, Social Work in Britain and above all the people who use social work services have benefitted from migration and should continue to do so. While BASW understands the case for a reduction of net migration and for an overall reduction in the number of social workers coming to England, in particular we would want to argue a strong professional case for the benefit of allowing a range of social workers from non EU countries to work here for a range of reasons.
Shortage of Social Workers We accept the argument that the UK should expect to train and develop our own population to provide our own core Social Work services. Each of the government reviews into social work across the UK have examined how we can more accurately understand the employment demand for social workers and how we can address this through the education system and increasing the skills of existing staff. However, this does take time. The current employment of internationally educated social workers has raised the expectation of employers as to the appropriate education and skills levels needed from our UK educated social workers.
43 http://www.peoplemanagement.co.uk/pm/articles/2010/07/indian-government-to-be-consulted-on-immigration-cap.htm; http://indiatoday.intoday.in/site/Story/103394/World/developed-nations-cannot-have-protectionist-attitude-sharma.html Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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One manager in children’s services reports: “. . . .those from New Zealand and Australia had far superior academic qualifications and had of course done a four year social work degree. They very quickly adapted to local needs and were more likely than British social workers to follow up on research findings and to be keen on continuing professional development.” They went on to say: “Until those 18 year olds who are accepted for English University social work degrees are expected to obtain a high standard in terms of “A” level qualifications and are guaranteed a local authority practice placement then I believe the necessity for employing overseas workers will continue to be essential”. We are concerned that some employers look to recruit internationally rather than put resources into educating student social workers on programmes in the UK. There is also evidence of some newly qualified social workers now being unable to get jobs, while local authorities are still recruiting internationally. This cannot be sustained, but this may well be based on concern about the standards of some social work training in England and the current process of change will take time. The Migration Advisory Council currently agree that there is a shortage of children’s social workers. Indeed it is clear from evidence supplied by our members and from BASW involvement in professional networks that a considerable number of local authorities have relied upon the recruitment of social workers to plug gaps. Furthermore, the flight away from employing qualified social workers in adult services in England actually masks the critical needs for older people, people with disabilities, people with physical or mental illness to have services which are appropriate to their level of need. There are areas of severe ongoing problems across the UK and we propose that all social work as an integrated profession should be treated as a shortage occupation.
The Positive Contributions of Non-EU Social Workers 1. We work with UK residents from across the world Our society is now immensely diverse and BASW would contend that the skills and knowledge brought to the UK by non-EU trained and skilled social workers is vitally important to social inclusion and social cohesion. They bring culturally appropriate and relevant knowledge for adults and children in our diverse society. “To practice social work in the UK one has to have an in depth appreciation and respect for many cultures as well as a good grasp of the principles of law, culture and ethics of the UK. I have worked with superlative staff from overseas who have achieved this level of understanding and practice.” Recruitment Manager “With the multi-cultural and multi-ethnic country that Great Britain is now it is imperative that there should be opportunities to recruit and train social workers from many different backgrounds.” Adoption social worker
2. They bring international professional expertise There is compelling evidence of the importance of overseas social workers to critical areas of child care. “Two experienced workers from Canada and the Philippines are experts on the overlapping issues of immigration, fostering and adoption. The worker from the Philippines also has experience of dealing with children from an inter–country sending situation.” Manager of Fostering and Adoption Team “A mix of skills works best and some immigrants offer synergy. It allows staff of the UK to affirm their knowledge by teaching workers from other countries about local ways of working, in turn the non–UK people help UK staff develop a greater vision for community work and international theories of greater responsibility”. Social Worker from South Africa
Enriching Skills and Knowledge in the UK&International Development However well we improve the standards and retention of UK staff, there will continue to be good reasons to recruit social workers from overseas to a wide range of social work roles. However the issue of social workers from non-EU countries being afforded opportunities to practice their profession in the UK goes beyond the needs of people who require services in this country. BASW recently attended the world conference on social work in Hong Kong where the crucial links between the work of our profession and social development in some of the fastest progressing countries in the world were emphasised by speakers from the UN, from China and Africa. We have since written to the Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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Secretary of State for International Development to advocate that the role of social work is emphasised by his Department and to describe the work that BASW are undertaking to build development partnerships with nascent social work associations in countries such as Malawi, Rwanda and Armenia. Social Work is an international profession and it is critical that social workers from the UK gain opportunities to practice and learn abroad just as it is for social workers from both within and without the EU to come here. Thus while we support moves to ensure that the UK trains and supports enough social workers to run our own services, we expect to also promote on our own and through the newly developing College of Social Work, increasing opportunities for international study and work exchanges. This we believe is the healthy and appropriate professional response to meet the needs of service users and professional staff.
Critical Aspects from the Experience of Social Workers from Outside the EU However, in our experience we have become increasingly concerned about some of our colleagues reporting very poor experiences with some local authorities. One social worker from the USA reports: “I was sold a fantasy that later turned into a nightmare . . . coming to the UK has proved to be professional suicide for me. I had a love for my profession and now I hate it . . . we were not trained on UK laws, we had no idea how the school system worked, our managers were not meeting with us, there are no policy and procedures, there was a backlog of 80 cases, we were told to get on with the work and stop complaining. Out of the eight Americans that were hired only three are left. It has only been 16 months.” And a worker from Canada who has stayed for 16 years says of colleagues who came with them: “Many found it difficult to settle into the standard of living; others could not accept the low status of social work in the UK, some did not like the politicised environment and the lack of resources— some felt de-professionalised and disrespected.” It is also clear that pressures to fill staff shortages have led to the recruitment of some social workers who lack the basic skills to do the job. One social worker originally from Pakistan says: “I am deeply committed to anti-discriminatory and anti-oppressive practice and politically I am in favour of liberal immigration policies. However, my professional and personal experience indicates very clearly that workers in health and social care cannot be effective if they are unable to communicate clearly in written and spoken English. Communication problems with overseas workers are faced daily …many colleagues do not like to voice their concern aloud for fear of being labelled racist.” Social Work is a professional task dependent on communication. There has been considerable debate as to the level of English language skills which should be demanded of entrants to social work programmes in England and there is likely to be pressure on the regulator in England from the Social Work Reform Board for a language requirement for all social workers. The details of this have yet to be finalised but would have an impact on international and EU recruitment. In the 1990s work was done to draft an International Code for Recruitment on International Social Workers based on the Code for NHS staff. This was never adopted by government as it coincided with the splitting of social work between the Department of Health and the Department of Children, Schools and Families. We believe that this should be developed by the profession and supported by government. It should include: 1. a commitment not to recruit from developing countries (who can ill afford to have their trained staff poached by the UK) unless as part of an exchange programme; 2. that no international social worker should be “employed” by a recruitment agency when they first enter the country; and 3. that in the absence of large multi-national companies in our sector who are permitted intra-company transfers, the profession should work with other professional association members within the International Federation of Social Workers and UK employers to jointly sponsor people who come to work in the UK for up to one year. In England the Social Work Task Force recommended that all students should have an Assessed Year in Employment before getting their full registration with the Care Council and licence to call themselves a social worker. A similar system already operates in Northern Ireland, and Scotland and Wales have probationary arrangements. We could explore a similar model for international social workers, whereby they are given a provisional licence to practice subject to a year’s satisfactory employment. This is a model used elsewhere in the EU. This would enable workers to ensure they had the language and knowledge skills to work effectively in the UK and to get their professional registration with the Care Councils which would give them the mandatory “Licence to Practice” as a social worker. We would then want to prioritise those who had been through that system for renewal of visas. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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What is Needed in the Future There are a number of issues that the Coalition Government need to address before there can be a reduction in the need to recruit social workers from outside the EU: — To build upon and develop the work undertaken by the Social Work Taskforce, and latterly the Social Work Reform Board in England. — To create a career structure that rewards experienced workers for remaining in practice and an organisational environment that supports social work. — To raise the standards required of those entering the profession and support Continuing Professional Development more effectively. – To ensure that local authorities give appropriate support to social workers in their workforce and stop treating social workers coming to the UK in the way described by our American colleague. If measures were introduced to address these issues the pressures that currently drive overseas recruitment into social work services will abate. BASW have developed a draft Social Work Bill which we will be formally launching in October. We believe this would be a step towards much needed reform.
Summary response for the Inquiry 1. The impact a cap on non-EU migration would have on the ability of UK business and industries to recruit the skills and staff they require In the short term we are concerned that a cap could prevent Local Authorities accessing skilled social workers from non-EU countries. Such workers are required across social work services. If Local Authorities are to continue recruiting such workers they must ensure that there are appropriate measures to induct and support them and that workers with the appropriate language and communication skills are recruited. In the medium term we hope that the major reform and improvement of social work in England will reduce the need to recruit overseas social workers to address serious problems of social worker retention in England. The situation in Scotland with the change in demographics, a decreasing working age population and an increasing number of older people is a cause of deep concern to our members.
2. The numbers of skilled and non-skilled migrants likely to be affected by a cap on tiers 1 and 2 BASW have no access to the overview statistics that should be available to the Inquiry from the Care Councils who are responsible for the registration and regulation of the profession or from Local Authority or Directors’ organisations.
3. The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants under tier 1 and of a “first come, first served”, a pool or an auction system for skilled migrants under tier 2 BASW believe that baseline criteria for qualification should ensure that applicants have the high levels of written and verbal English language skills suitable for a profession where effective communication is of the essence. If the baseline criteria are right we think that a first come, first served system is transparent, fair and workable. We would support a first come, first served approach to applicants with a job offer at tier 2. We would support priority given to those who have a satisfactory work record in the UK.
4. Whether and how intra-company transfers should be included in a cap? BASW believe that joint development arrangements with social work associations should be regarded in the same way as intra-company transfers. We would have no objection to them being included in a cap. See details above.
5. The implications of merging the Resident Labour Market Test and Shortage Occupation Lists We have no objection to this proposal but firmly believe that social workers from non-EU countries with important skills relevant to older people and adults with illness or disability should be able to work in the UK and that social work is treated as a single professional group.
6. Whether dependents should be included in the cap and the effect of including them We do not believe that dependents should be included in the cap because it is unethical to draw artificial barriers which could undermine family life and unfair to prevent those with family responsibilities coming to work in the UK. In any good employment system there needs to be a good work/life balance and family life is important to people remaining healthy at work. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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APPENDIX A REFLECTION FROM ONE NON-EU SOCIAL WORKER In the UK recent changes in Legislation were brought on by the death of Victoria Climbie´—an eight year old who was tortured to death at the hands of her aunt and boyfriend—while the case was still active with their local authority—resulted in local authorities being held up to intense public scrutiny. Consequently, local authorities were forced to address the long standing issue of under-staffing that resulted in overworked and burnt out social workers who were dealing with unmanageable caseloads that made it impossible for them to effectively exercise their duties. Due to long standing difficulty in retaining social workers and the inability to attract local qualified workers some local authorities looked to the foreign market, hence, the international recruitment programmes. This approach saw the recruitment of social workers from the Americas and parts of Africa (many social workers also came from Australia, but were not part of the recruitment drive). Notwithstanding, many of the new recruits found conditions in the UK less than desirable and moved on or returned to their homelands. Some returned home within weeks of their arrival in the UK. The program had failed to address the issue of workers longevity in the workforce and soon died a natural death. This is unfortunate, because better handled it would have been much more effective. As an international recruit to the UK, I expected some aspects of practice in the UK to be different from North America, but I was totally unprepared for what awaited me. I often refer to my initial experience here as a “baptism of fire”. I was astonished at the hand-written record keeping and the absence of a computer based recording system; difficulties in locating basic, pertinent information on files; the different jargons; the premise of parental rights which seemingly take precedence over the rights of the child; elements of bullying tactics in management style were among some of the many differences that appeared to be the order of the day—a daunting experience for me—among other differences that left us feeling as if we had been dropped off on the wrong planet. Further, there was no orientation or support in place for us, we felt isolated, disoriented, overwhelmed and unsupported. It was quite a relief when we started to receive some training. It should also be noted that though social work skills are transferable, the legal and political frameworks will vary from country to country, hence, the need to be able place these in their proper perspectives in order to function with any degree of confidence. Another difficult learning curve for me was coming to terms with the way people related to each other— the pervasive “top heavy”, “blaming”,” bullying” atmosphere present in the workplace. My first reaction to this was to confront the problem head on, however, it slowly dawned on me that I was creating further difficulty for myself as this was the cultural norm. Notwithstanding, I continue to rebuff this issue when confronted with it as I believe that people should be treated with respect and dignity. Status in the workplace or the aspiration towards such is no justification for treating another person in disrepute. In relation to formal internal training courses, I found all the seminars interesting and informative— Childcare Legislation, Enhancing Court Skills, the Assessment Framework, Childcare Planning among other courses, placed the Children’s Act 1989 in perspective and gave me greater confidence in practicing in this new milieu. The introduction of Framework I provided a welcome change and one that will vastly improve the quality of the recording system. Having practiced social work in child protection for 20 years, I have developed an extensive knowledge/ skill base in the field at the front line, working in duty and assessment and family services/children in need sectors. Consequently, my assessment skills are sharp and my ability to formulate effective intervention strategies to address associated problems impeccable. My life experience also brings an added dimension to my ability to relate to clients’ “frame of reference” with a keen sense of respect for humanity. I am task oriented and I endeavour to treat clients with respect and dignity devoid of pre-judgement. This allows me to connect quickly with clients and aids in the establishment of a positive working relationship. In most cases, this is possible even when faced with making the most difficult decisions regarding the removal of children in abusive or other situations where placement in care is inevitable. After 19 months of practice in the UK I joined the adoption team. My decision was based on my increasing level of discomfort and feeling of vulnerability working on the front line in an unstable team. I had come to the realisation that if I was to continue working in the UK I needed to change department in order to practice with a deeper level of comfort with less related stress. I was successful in my application for a position on the Adoption Team. I had also been interested in this area and thought the change would prove professionally stimulating. My experience in Child Protection over the years has been extensive. I have seen many changes but in essence very little has changed. The work remains challenging, stressful and the social worker is still given a daunting task often with unrealistic expectations in relation to caseload responsibility/management often resulting in “burn out”. I have remained in UK for the same reason I came to the profession and remained all these years, that is, the ever present need for workers that are reflective of the population which we serve. Too often clients are served by workers who are totally outside of their realities imposing middle class values and judging them by standards that are outside their frame of reference. The issue of equality remains an illusive ideal. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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The concept of recruitment of workers abroad is not new and has been ongoing since settlers were needed to settle and work the land. It is not new and will not go away despite what people say and try to do. It is a necessary aspect of life. Social Workers from other parts of the work bring skills, new approaches and dynamism to the job that is lacking in many respects. The client population also benefit greatly from the different and often fresh approaches in building positive, effective empathetic working relationship often in cases where things have gone sour with past workers.
References (i) International definition of social work “The social work profession promotes social change, problem solving in human relationships and the empowerment and liberation of people to enhance well-being. Utilising theories of human behaviour and social systems, social work intervenes at the points where people interact with their environments. Principles of human rights and social justice are fundamental to social work.”
(ii) Ethics in Social Work, Statement of Principles International Federation of Social Workers (IFSW) International Association of Schools of Social Work (IASSW) August 2010
Memorandum submitted by The British Chambers of Commerce (BCC) Summary The BCC believes that this policy will only be successful if the cap strikes the right balance—if the level is too restrictive then the UK economy will suffer. More consideration must be given to the effect a cap may have, not only on migration levels, but also inward investment, the number of business transactions that take place in the UK and global competitiveness. The Impact Assessment must be reviewed with better evidence sought on the cost implications for businesses and the economy, in both the short and long term.
Our key points are:
— although a pool system for Tier One migrants is the preferred approach, research must be done into how this can operate without putting off the most highly skilled, geographically mobile individuals the UK needs to attract;
— ICTs must not be included in the limit;
— the merging of the Resident Labour Market Test and the Shortage Occupation List would make it too difficult for businesses in the regions to access the skills they require. These two routes must be kept separate;
— the proposal that businesses should give health insurance to migrant workers is flawed and would not work;
— employers are happy to play their part in up-skilling domestic workers but the Government must take a long term, strategic look at the UK’s skills shortages, and act to find solutions to them; and
— the costs to business as calculated by the Impact Assessment must be increased if the ‘one in one out’ policy to reduce the regulatory burden is to be successful.
Tier One Although the pool system is the “least worst” option, we are very concerned that not enough research has been done into the reaction of potential Tier One migrants to such a system. Many businesses expressed concern that the highly skilled, geographically mobile individuals who would qualify for such a pool may decide to approach a country where they will not have to wait around, as their skills are so highly valued. For these individuals, the marketplace is truly global and the UK Government must ensure that rules do not put off the exact people we need to attract if the UK economy is to compete successfully with other countries for the top talent.
We strongly support the drive to increase the number of migrant investors and entrepreneurs coming to the UK. Any inflexible requirements, such as the need to create a specific number of jobs, are likely to hinder these efforts. We would support reducing the current threshold, particularly for regions that would particularly benefit from private sector investment and in sectors where the UK is particularly looking to Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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fuel growth. UKBA should work closely with other agencies, such as UKTI, and emerging Local Enterprise Partnerships to identify areas with particularly opportunities and explore the possibility of individually negotiated entrance requirements with UKBA, depending on the investor/entrepreneur. “The UK should not put any further obligation on investors especially if there is no such obligation on domestic companies. The objective should be to encourage FDI as much as possible.” Business based in Australia
Tier Two Level Most of the occupations on the shortage list would take years of training before an unqualified UK national could be as good a candidate as an already qualified migrant. For those occupations, there must be a commitment from Government that the cap will not affect business’s ability to get the skilled people they require. For example, may of the occupations on the list require individuals with engineering experience and qualifications. Although, over time, the Government and business should work together to ensure the UK produces more of these skilled professionals, such a strategy would not bear fruit for over a decade. Conversely, for the minority of occupations on the list, such as care home workers, it will take less time to train national workers to take these positions. Concentrated efforts to train unemployed people in professions where there are local and/or national shortages should form part of DWP’s welfare reforms.
Mechanism At a micro level, businesses are very concerned that their businesses would be negatively impacted by a further tightening of tier two. If a first come first served system is be successful then it must operate on a monthly basis to give businesses the maximum flexibility through the year. The suggestion that some visas would be prioritised within the system is positive, but just using wage levels as a measure of the “importance” of a migrant to the economy/business is too crude. Particularly in professional services in London, relatively junior individuals command large salaries early on in their career,44 and it would be unwise to prioritise them over individuals with long careers in sciences or manufacturing who may be heading to UK destinations where the pay is not as high as the South East.
Intra-Company Transfers (ICTs) BCC is strongly opposed to the inclusion of ICTs within the cap—regardless of whether there is an exemption for individuals entering the UK on an ICT for less than 12 months. On a macro level, it gives a bad impression to companies considering setting up an office, or establishing their EU Headquarters in the UK. Currently, 50% of all European headquarters are based in the UK45 and the UK attracts 21% of all new investment projects in Western Europe.46 We believe including ICTs in the cap puts both of these achievements in jeopardy. ICTs are used by companies for a number of different reasons. Many global businesses with offices all over the world want to able to transport senior people between them at will. Any restrictions on this practise would have a negative impact on the willingness of such businesses to base themselves in the UK. “Difficulties in transferring specialists from elsewhere in the organisation would very likely mean our parent company would not continue to support a development studio in the UK” Subsidiary of a Global Software Development Business Some businesses have said that ICTs are crucial to their staff training and drive to promote from within. If individuals from other offices cannot come to the UK office to train and work in different fields then the utility of the UK office is diminished. It also puts at risk the availability of opportunities abroad for UK individuals based in London who may wish to gain experience elsewhere. “We look to hire and promote from within as current employees have business knowledge— including ICTs in the cap puts this in jeopardy” Global business with over 7,000 employees in the UK Some businesses have been clear and said that the inclusion of ICTs in the cap will reduce the number of jobs their company bases in the UK, and may have affected their decision to set up here in the first place. Business strongly disagrees with the premise that less ICTs would mean more jobs for UK workers. Importantly, other businesses have said that the number of employees in the UK would not change, but that the number of transactions would decrease. For example, if a law firm is doing an international deal which involves the working of several offices, they may choose to base that work abroad and transfer in the
44 Many law firms in London offer over £50,000 as a starting wage to their newly qualified solicitors http://www.chambersstudent.co.uk/pdf/Salaries%20and%20Bens.pdf 45 http://www.ukti.gov.uk/pt pt/uktihome/aboutukti/localisation/113922.html 46 http://www.ukti.gov.uk/uktihome/media/pressRelease/110612.html Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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expertise there as required. This would damage the UK economy by reducing the tax take from highly skilled individuals who would no longer be working from the UK office and potentially reduce the corporation tax receipts also as the transaction was recorded elsewhere. Whilst we appreciate that the Government has a commitment to reducing the net migration flow into the UK, removing the flexibility from global businesses that have chosen to invest in UK jobs is not the way to do this, and could have severe long term consequences for the economy.
Merging the Shortage Occupation and Resident Labour Market tests The entry requirements for Tier Two were significantly tightened by the previous Government in response to the economic downturn. Business is no fan of the resident labour market test, which requires them to advertise in a Job Centre Plus with often no prospect of success, and often delays the filling of the post. However, merging the two routes would make it more difficult for businesses where there is a local shortage, rather than a national shortage, in the skills and/or experience they require. The conclusion that the consultation paper comes to is that, “migrants should only be brought in where every reasonable avenue to recruit a resident worker has been exhausted.” This implies that the preference is a domestic worker that is “good enough” should be recruited by a business, rather than the best candidate, who may or may not be a migrant worker. Similarly, the assertion that both a national and local labour market test must be fulfilled before a migrant worker may be employed ignores the fact that just as some skilled workers are highly geographically mobile, some workers are not. Just because there is not a national shortage of workers in one sector does not mean there is not a local shortage in some regions. Merging the two lists risks undermining businesses’ ability to hire the best and most productive candidate for the job and also may compound the skills shortages that some regions currently face. “In my region, unemployment is so low at entry level that it is near impossible to recruit locally for these roles.” SME, Service Sector
Dependants Although BCC has no evidence on the contribution of dependants to the economy, we are concerned that their inclusion in the cap would lead, at some stage in the process, to someone taking into account the number of dependants a migrant has before offering them a visa. This could lead to the UK falling foul of discrimination and human rights legislation, as well as meaning bad decisions are made on which migrants are allowed to work in the UK. If dependants are to be included in the cap, safeguards must be put in place to prevent this (eg redacting the number of dependants from a migrant’s application to UKBA).
Up-skilling UK workers Many employers already take their responsibility to train and up-skill their workers very seriously. Many also take responsibility, not only for local supply, but also for whole areas of expertise. For example, the NEC in Birmingham has recently developed an apprenticeship in rigging, which is being rolled out across the UK. What employers cannot do, and nor should they be expected to, is be responsible for strategic skills planning and identifying skills gaps and knowledge across the whole economy. If the cap is to work, the Government must have an immediate plan to put in place to up-skill UK workers in the occupations currently (and predicted to be ) listed on the shortage occupation list. This plan should give indicative timescales which will aid the Migration Advisory Committee in setting the level of the cap. The shortage occupation list provides a stark warning as to where our skills system is failing in providing the employees that business needs—the science and engineering careers. We call on the Government to tell business what they are doing to stimulate UK citizens’ interest in these areas—from primary school to adult learning—rather than relying on business to see the skills gaps and train individuals as and when needed. “Without a culture and educational shift of mammoth proportions the task (up-skilling domestic workers to fill the skills gaps) is too great and in any case would require decades.” Food Manufacturer
Health Insurance BCC believes that economic migrants are net contributors to the public purse in the UK.47 These workers are often highly skilled, likely to be young and have working dependants. We do accept that in local terms, some areas may have resource issues, such as access to school places or availability of health services, which it appears migrants contribute to. However, there is not a causal link between the two. BCC does not support the suggestion that sponsors should have to give their non-EU migrant workers health insurance. There are several major obstacles to this policy being successful: 1. A business would have to provide private healthcare to domestic workers as well, otherwise risk falling foul of discrimination legislation. This would be very expensive.
47 http://www.ippr.org/members/download.asp?f%/ecomm/files/FFLabMigFINAL.pdf&a%skip Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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2. Migrant workers could still choose to use NHS services if they wished. 3. Private healthcare provision varies in quality and reach. A scheme which only pays a percentage of the consultant fees is unlikely to tempt the majority of workers away from free NHS services. 4. Private healthcare does not cover all services- such as Accident & Emergency. A solution may be that for businesses that do not want to offer private healthcare as a benefit, they could instead make a small contribution to the Migration Impact Fund—at no higher rate than the current £50 worker contribution. This fund could then be used to reduce pressures on local infrastructure projects where business may see some return (eg transport) rather than purely on health spending.
Impact Assessment The Government’s announcement that a “one in one out” system will apply to new regulations that place a burden on business means that it is even more important that the Impact Assessment (IA) is rigorous and accurately measures costs and benefits. If the costs are under-calculated, then the Home Office will not be under an obligation to reduce the costs to business in another area—resulting in the de facto regulatory burden increasing. The non-EU migrant cap will affect all businesses, and a proportion will take a special interest and require more detailed knowledge of the changes. Given this, it is unreasonable that the IA states employers will only spend £100,000 familiarising themselves with the new system. In April 2009, our Workforce Survey found that 60% of businesses were aware of the Points Based System (PBS). If we made the generous assumption that awareness has not risen over the past year, this still means that around 740,000 businesses are aware of the PBS and would presumably want to familiarise themselves with the changes this Government intends to make to the system. The IA calculates it would cost each of these employers less than 1p to familiarise themselves with the new rules. BCC would like the new IA to have a more realistic cost for familiarisation, based on the ASHE figures for management wages and a more rational estimate of the time it will take. We were also disappointed that, although there are several references in the IA to negative impacts for business in the short term, there is no attempt to cost this impact. In the longer term, an assumption is made that business will be able to adapt to the levels, whatever they are set at and regardless of the sector the business operates in. As is clear in our response below, business is very concerned about the effect that the cap will have not only on their own business, but also on the economy in general and on both the number of jobs in the UK and number of transactions that take place here. Without a rigorous IA assessing the impacts felt at a micro, regional and macro level, BCC believes it will be difficult for Ministers to make a decision based on the level of risk to the economy and regulatory burden on business.
Conclusion It is of critical importance to the economy that the ICT route is not included in the cap—if there are restrictions on this route then global companies will reduce their investment, jobs and number of transactions in the UK. We support measures to up-skill UK nationals to reduce reliance on migrant workers in shortage occupations –but the Government must recognise that this is a long term goal, and in the short term, skilled migrants must be allowed to enter the UK and fill the gaps in the labour market. August 2010
Memorandum submitted by NASSCOM NASSCOM@ is the premier trade body and the chamber of commerce of the IT-BPO industries in India. NASSCOM is a global trade body with more than 1,200 members, which include both Indian and multinational companies that have a presence in India. NASSCOM’s members and associate member companies are broadly in the business of software development, software services, software products, consulting services, BPO services, e-commerce & web services, engineering services offshoring and animation and gaming. NASSCOM’s membership base constitutes over 95% of the industry revenues in India and employs over 2.24 million professionals. NASSCOM member companies include not just Indian IT BPO firms but they also include many UK based organisations such as BT, RBS, Barclays, HSBC, TESCO and Logica. NASSCOM’s area of interest is Intra Company Transfers (ICTs).
Introduction 1. The Home Affairs Select Committee is undertaking an inquiry into the cap on non-EU economic migration. The Committee will investigate the Government’s current proposals to cap migration through Tiers 1 and 2 of the points-based system by implementing a permanent limit. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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2. The area of inquiry that NASSCOM wishes to respond to regards the proposal for a quota on Intra Company Transfers (ICTs), which is one of the focus points of the inquiry. NASSCOM’s submission and the provision of oral evidence concerns only the question: should ICTs be included in the proposed Government cap for non-EU migration? Any questions concerning quotas for mainstream immigration are outside NASSCOM’s area of expertise.
What are ICTs? 3. Intra–Company Transfers are the mechanism used by businesses to bring their own people into the UK to do jobs within the company which it only makes sense for an existing company employee with a particular set of skills and experience to do (source: UKBA, June 2010. Limits on non-EU economic migration. A consultation). ICTs are transferred by their overseas employer for an average time frame of 18 months in the case of NASSCOM member companies. At the end of the transfer time period, ICTs return to the country of origin.
Should ICTs be included in the proposed quota for UK migration? 4. The key question is whether ICTs should be included in the Government’s quota on net migration from non-EU countries. NASSCOM believes that ICTs should not be included in the quota. This stance is supported by the below arguments and followed by suggestions of possible alternative measures that the UK Government could consider (paragraph 5). 4.1 The purpose of ICTs is to allow UK plc to remain competitive in today’s globalised economy. Limiting the availability of ICTs would limit the UK’s competitiveness. If, for example, a leading London-based bank wanted to renew its IT systems, it would be likely to tender the contract internationally to ensure it benefits from the best possible overall arrangement. But for overseas firms to compete for this contract, they would need to bring highly skilled professionals to London, who are familiar with the company’s proprietary framework to liaise with the client, map systems and trouble-shoot throughout the development and installation process. These staff would also need to be willing to be relocated to the UK to then return to their home country to take forward the bulk of the development work. If the international IT Company could not easily transfer staff to the UK for temporary periods, it could not effectively trade with the UK bank. The UK would have effectively imposed a non-tariff trade barrier, pushing up costs for its own businesses and damaging the country’s long term economic position. 4.2 ICTs no longer allow even highly skilled workers to settle in the UK. They are not a route for immigrants wishing to come to the UK to stay permanently. Most of the highly skilled workers, especially in the IT industry, come for short durations and return to their countries after completion of the projects. We feel market forces should determine its needs on the visas and there is no need to limit, control or curtail this economic activity, since this migration does not lead to permanent migration of the professionals. 4.3 The exclusion of ICTs from the quota would not undermine the integrity of the basic policy—it would arguably strengthen it by making it more “business friendly”. The UKBA’s own consultation document recognises “the unique and temporary nature” of ICTs. They are a mechanism used by overseas and UK businesses to transfer key staff for temporary periods to the UK that, as the consultation document says, “only makes sense for an existing company employee to do”. ICTs can be easily and justifiably excluded from the policy. 4.4 Whilst economically important, the contribution ICTs make to the net number of people coming to the UK is extremely modest. The UKBA’s consultation document makes the point that ICTs are responsible for 45% of all Tier 2 entry clearance visas, of which, according to the MAC, 36,000 were issued in 2009 (down from 68,000 in 2007. This is in comparison to 362,000 student visas that have been issued in the 12 months to June 2010). This means that about 16,000 ICTs were issued in 2009. But even this relatively modest figure exaggerates the figure that really counts—that is, the net number of incoming ICT highly skilled workers. Research by NASSCOM amongst its leading members suggests that (a) these companies apply for around 40% more entry clearance visas than they actually use (something that reflects the premium companies put on being able to move quickly and flexibly should the clients’ needs dictate it) and (b) that for every three ICT highly skilled workers who these companies bring into the country, they send two or more home. Based on these ratios, the actual net figures for 2009 for ICT “migration” in 2009 would have been a little over 6,000—a modest number in absolute terms despite these highly skilled workers’ economic importance to the UK. One of our recommendations is that the UKBA should capture this data from the sponsoring companies. NASSCOM members will be more than willing to help fill this data gap and assist the UKBA in the process. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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4.5 Highly skilled ICT workers do not directly affect the local job market—the roles they perform are not roles that local workers could do unless (a) they were familiar with the company’s systems and (b) were willing to move overseas. 4.6 Where quotas have been implemented for ICT type schemes, it has led to hoarding, increased costs, inflated figures and a distortion of the system. Quotas on ICT-type schemes have a deeply unhappy history for both business and the host country’s economy. They lead to distortions in the market, increased costs and a jump in the number of visa applications. This last point can be illustrated by a simple example. If two or three companies are on a final shortlist for a major IT scheme, these companies need to be in a position to ensure they can deliver this scheme without delays should their tender be successful. In situations where there are quotas, these shortlisted two or three companies invariably choose to apply for visas in case they win the contract, despite the costs in doing so—they cannot risk the possibility of delays. This practice both inflates visa numbers from each short listed company and can make it more difficult for other companies to secure visas. Quotas could possibly work in the case of other tiers. The distinguishing factor is that ICTs are demanded by “corporations” whereas it is the “individuals” that demand the visas. At times, regulating the flow of individuals does become necessary for the economy. It is here that we believe the importance of the Points-Based System comes to the fore. 4.7 Including ICTs in the quota would be detrimental to the UK’s ability to attract inward investment, undermining a major strand of the UK’s economic strategy. Indian companies have been the second largest investors in the UK. Investments into the UK by Indian companies come by way of acquisitions and setting up facilities in the UK. UKTI is encouraging such activities from Indian companies showcasing the UK as a “gateway to Europe” for Indian companies. A quota on ICTs would inevitably mean that companies seek to minimise the staff they transfer to the UK—part of the intention of the quota. The problem for the UK economy is that this would make it very hard to locate regional headquarters in the country (four out of five of NASSCOM’s biggest members have their European headquarters in or around London) and they would be driven to explore the possibility of locating elsewhere in Europe, particularly in light of moves to introduce a Schengen-wide work permit. A quota would also make the recent trend of India-based companies investing large sums in UK businesses less likely to be sustainable. It would raise difficult practical as well as “confidence” issues. 4.8 Including ICTs in the migration quota would greatly damage the UK’s reputation with the international business community. It is a truism that the world of business, economics and much else works from important but hard to define measures of “confidence” and perception. The UK has traditionally benefited from this in the past as it is seen as a leading promoter of world trade and liberal markets—and hence attracts trade and investment. Introducing quotas for ICTs would send damaging signals to the international business community, the reverberations of which would extend beyond the issue of ICTs themselves. 5. Related to the central question, the UKBA and MAC consultations both ask whether ICTs should be allowed to bring dependants with them to the UK for the duration of their project work. We believe that dependants should be allowed to accompany ICTs, as only a small proportion of ICTs bring dependants with them. Firstly, preventing ICTs from bringing their families would make the UK a much less attractive base from which to do business. Secondly, the economic contribution of the dependents is usually quite significant—they typically have high disposable incomes which they spend in the UK.
So what should the UK government do? 6.Whilst including ICTs in the migration quota would be unnecessary for the integrity of the overall policy and extremely damaging to business, there are other measures the government should explore. 6.1 First, all ICT sponsoring companies should be obliged to inform the UKBA when a worker comes to the UK and when they leave, thereby providing the government with robust data for enforcement and policy development purposes. This data would also underscore the facts that (a) ICT workers only travel to the UK for temporary periods, they do not settle in the country, and (b) that the net numbers involved are relatively modest. 6.2 Second, greater emphasis should be placed on auditing the compliance of ICT sponsoring companies. The standards expected of sponsoring companies should be clearly laid out—and the companies should be held to account accordingly. Unlike individuals, it is relatively easy to monitor and control businesses. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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6.3 Third, the situation regarding ICTs should then be reviewed again at a later date. The government would have a far sounder statistical basis for making extremely important decisions affecting the long term future of the UK economy.
Conclusion 7. In conclusion, ICT visas are not a route to immigration, but rather a platform for trade. ICTs ensure that UK companies and the UK economy remain competitive in a globalised world. If the decision to implement a quota on ICTs is made, the disadvantages to the UK economy would be the same as with the imposition of any other non-tariff trade barrier. August 2010
Memorandum submitted by Tata Limited Tata in the UK. — Tata established in the UK in 1907. — Tata currently employs just under 41,000 people across the UK. — Tata generates over £11 billion revenues in the UK. — Tata is the largest manufacturer in the UK. — Tata is one of the biggest industrial employers in the UK. — Tata is the 6th largest industrial investor in UK R&D.
Tata Investments in the UK (Quoted in US$) Tata has made a total investment of $15 billion through the acquisitions of: — Corus Steel—$12.1 billion; 2007. — Jaguar Land Rover—$2.3 billion; 2008 . — Tetley—$407 million; 2000 . — Brunner Mond—$180 million; 2005
Employment — Tata employs just under 41,000 people across the UK. — Directly and indirectly Tata’s activities in the UK support a total of over 166,000 jobs.48 — Tata has a nationwide industrial and manufacturing presence. — Tata’s major centres of employment are, in order: — West Midlands. — Yorkshire & The Humber. — North West. — Wales. — North East. — East Midlands. — Tata is the biggest Indian employer in the UK.
Research &Development — Tata is the 6th largest49 UK industrial investor in R&D . — Tata is the 8th largest UK investor in R&D. — In the year ending 2009 Tata invested over £496 million in R&D, ahead of many well-known companies in the UK. — In the UK automobiles and parts sector, Land Rover and Jaguar Cars were ranked 2nd and 3rd respectively. — Tata Steel is by far the largest R&D investor in UK industrial and mining, accounting for 94% of total R&D in the sector.
48 Direct employment of 41,000 ! indirect employment of 125,000 % 166,000—re-absorption % 88,000. 49 According to BIS The R&D Scoreboard/09. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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Export Sales. — Tata is a major UK exporter. Tata’s UK ratio of exports to total sales is 57%, which compares with 27%50 for the UK as a whole, and 37%51 for the UK manufacturing sector.
Overall Comments The Tata group has serious reservations about the impact of proposed caps on the UK economy. In particular, we urge that Intra-Company Transfers continue to be excluded from the capping policy.
Implications—from the Individual Tata Companies Tata Consultancy Services (TCS) TCS is the prime user of ICTs among Tata companies in the UK—others include Tata Global Beverages and Tata Steel Europe (Corus).TCS usage of ICTs as part of its business model helps UK organizations enhance and transform their operations, making them more competitive and efficient in the world economy. Accessing and using the right blend of talent globally as well as in the UK is crucial to UK organizations benefitting from IT and technology. This requires labour mobility. Because ICTs enter the UK on a temporary basis only, in response to demand from UK organizations, there are no “settlement” issues. ICTs should therefore continue to be excluded from any Government cap. TCS deploys a tried and tested business model to bring leading IT and technology to UK organizations. This model combines UK skills in permanent positions; supported by ICT professionals on a temporary basis. ICTs are temporarily based in the UK as part of the overall project according to the business model. Most ICTs stay for a period of 18–24 months; all depart the UK after this, often to continue working on the project from outside the UK. While in the UK, ICTs are net contributors to the UK economy, including spending money locally and paying income tax on their UK earnings. As employees of the company, they are independent in terms of housing and health provision. Far from being a drain on UK infrastructure; the opposite is in fact the case. The number of ICTs coming into UK is determined by economic demand. Numbers of ICTs coming into the UK dropped significantly during the recession 2009/10; they have increased again in recent months as UK organizations seek post-recession IT strategies to renew sustainable, profitable growth. Setting quotas for ICTs is therefore unnecessary and artificial, given the natural supply and demand market correction to numbers entering the UK on a temporary basis. Given this natural market fluctuation, it would also be extremely difficult to set and manage caps on ICTs. The result of any cap on ICTs would be to damage the ability of UK organizations to benefit from usage of IT services and projects. The impact on population and usage of amenity would be minimal, if not illusory, given the temporary, self-sufficient and contributing nature of ICTs.
Tata Steel Europe (Corus) This will affect Tata Steel Europe in two ways: certain Engineering occupations are difficult to fill and there are not enough good quality UK/EU nationals, so we typically recruit some 20-25 non-EU nationals per annum, mostly direct from University or through sponsorship through University. Indeed this is already starting to impact us as, in anticipation of the new limits, we are already restricted to a fraction of the permits we had last year—and last year was artificially very low because of the economic downturn. In fact we have three for the whole year. Unless the UK/EU is able to produce more engineering graduates, we will be unable to fill some vacancies, though I would anticipate this would be dozens rather than hundreds. While the UKBA will argue that they can identify so-called Shortage Occupations and put these at the top of any list subject to quota, data is inevitably going to be 12–18 months old.
Tata Global Beverages If there is a cap on ICT—we will face a severe blow to our global mobility strategy. The global mobility strategy is key to developing our organisation into a global player in the beverage world. — By locating the HQ of our company in the UK, even though we are owned and listed in India, we provide high net worth individuals to the UK whose tax contribution to the economy is inevitably significantly higher than the value of the public services they utilise.
50 Export value over total GDP at current prices for 2009. Source: ONS. 51 Export value over value of output of manufacturing sector for 2007. Sources: BERR/BIS; House of Commons, Economic & Statistics Section. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
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— TGB’s decision to locate the company in the UK also enhances our ability to employ local talent into global functions—providing high quality jobs—especially in an environment when young graduates in the UK face employability issues. — The migration and ICT flexibility, in addition to an evolved personal taxation infrastructure, combined with a comprehensive dual taxation environment, makes the UK an attractive place to locate the HQ of an international company. The higher personal tax rate that has been announced has already taken away one advantage. An inflexible (capped) migration policy will take away another advantage. — There have been three cases of us hiring senior leaders directly from the global market—an American, an Indian and an Australian. The cap on Tier 2 (General) will also be a big problem— for us and for the country. It will stop the inflow of high level talent that adds value to the companies based here.
Tata Elxsi Tata Elxsi provides Product Design and Engineering services and we are generally associated with the engineering, research and product development teams of our customers. In the current economic situation, the customers tend to innovate and churn out new products quickly. Tata Elxsi helps these companies with our services and IPs to bring the products quicker to the market. Customers in the UK also find it difficult to find and employ engineers from different domains and skills. Tata Elxsi is able to help our customers to bridge this gap and our engineers come to the UK in various phases of product development and research. A cap would mean that the customers would be restricted to avail the skills and the opportunity to design products fast and at lower costs. Similarly, it would restrict our business and revenues from the UK. We currently have a design studio in Milton Keynes and are planning to setup a design and innovation centre either in Wales or Scotland. Limits to ICT would hamper the plans too. September 2010
Supplementary memorandum submitted by MigrationWatch UK Thank you for the opportunity to give evidence to your Committee on Tuesday morning. It was a valuable occasion for us. There is one point that I omitted to make. It concerns the Free Trade Agreement between the EU and India. I understand that the agreement is being fast tracked even now, and that Mode 4 (that is provisions for transnational corporations to bring in workers for service contracts) is the core demand of the Indian government. Mode 4 concessions provide for effectively unlimited movement of skilled workers by corporations, as Intra Company Transfers (ICTs), with no Resident Labour Market Test or Economic Needs Test. Clearly this is not only about senior management. The potential effects on UK workers, in IT and in other sectors, are very significant and very damaging. And as a trade agreement undertaking, the Mode 4 commitment will be effectively irreversible. The exclusion of ICTs from the cap will allow this to go ahead as a trade relations matter. Indeed, the Migration Advisory Committee Tier 2 report of August 2009 indicates that any national labour migration policy making is subordinated to the requirements of the trade agreement. Despite this, there is as yet, no public information on the interrelationship between the exemption of ICTs from the cap and Mode 4, nor on the nature of Mode 4 in EU trade agreement commitments, nor is the significance of the EU/India FTA being discussed publicly. You might like to consider asking the government for an explanatory note on the subject. My particular concern is that there may well be something in this agreement that would prevent the ICT threshold being raised to a level that would make it apply only to senior management. In any event, it is, despite its apparent obscurity, a potentially significant matter of which the committee and, of course, the public will wish to be aware. September 2010 Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
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Correspondence from the Chair to the Minister for Immigration Capping Migration The Home Affairs Committee has been continuing its inquiry into the proposed permanent Immigration Cap by taking evidence last week from, amongst others, Professor David Metcalf of the Migration Advisory Committee. Professor Metcalf confirmed in his oral evidence, as you yourself have said, that the Government will not be able to achieve its overall aim of reducing net immigration to the tens of thousands without addressing the question of Tier 4 student visas. We have also noted your recent comments about the large proportion of students who come to the UK to attend non-degree awarding institutions. The Home Affairs Committee in the last Parliament undertook an inquiry into bogus colleges (Eleventh Report of Session 2008–09). The Committee expressed concerns about UKBA’s ability to deal with the issue, adding that, despite the apparently tighter registration and inspection process under the Points Based system: advance notice of inspection visits has been given in up to 85% of cases. This is unacceptable and does not give us any confidence in the rigour of the inspection regime in combating bogus colleges. The UK Border Agency should ensure that sufficient resources are provided to allow for rigorous and, critically, unannounced inspections. Any change in college ownership should require the college to be re-accredited. (Paragraph 22) we consider that a more complete means of prevention requires the compulsory regulation of private further education colleges and English language schools by the state. We therefore strongly recommend that the Government uses the Companies Act 2006 to restrict use of the term “college” in future to properly accredited institutions and instigates an inspection regime to enforce this. (paragraph 27); and we recommend that the Department for Business, Enterprise and Skills devises a system to make better use of intelligence provided by college networks, such as the Association of Colleges, to close down bogus colleges. We intend to revisit this issue once Tier 4 of the Points Based System has been fully implemented. (Paragraph 29) We would like to know what progress is being made in addressing this issue, in particular how many bogus colleges have been closed down since our predecessors’ report; the respective roles of BIS/the Department for Education and the Home Office in inspecting and regulating colleges that sponsor students under the PBS, and especially how inspections are carried out; and the number of foreign students affected by any closures or restrictions on the operation of such colleges. 15 September 2010
Correspondence from the Minister for Immigration to the Chair Reducing Net Migration Thank you for your letter of 15 September. The points you raise about restriction of use of the term “college”, and the development of an intelligence network for use by the Department for Business, Enterprise and Skills (BIS), are matters for colleagues in BIS as they go wider than my interest, which relates to colleges insofar as they are sponsoring non-EEA students to study here. The UK Border Agency’s register of sponsors for Tier 4 is restricted to only those institutions that meet rigorous selection criteria, which includes an assessment of the academic provision of the institution via accreditation, and these institutions are also subject to visits by UK Border Agency officials. You referred to the importance of unannounced visits in combating bogus colleges. The UK Border Agency now has a requirement that at least 50% of standard post-licence visits must be unannounced, and this requirement is being met by all regional visit teams. Additionally further visits are commissioned by the Tier 4 sponsor investigations team all of which are unannounced. UK Border Agency visits to licensed Tier 4 sponsors range from standard visits to check understanding, through to full compliance visits. Large-scale operations are co-ordinated by the sponsor investigations team, and involve support from other Agencies such as the Police. You have asked for the number of colleges that have closed down since the Home Affairs Committee’s last report in July 2009. We have suspended 214 Tier 4 sponsors since 21 July 2009 and revoked 48 licences. Since the launch of Tier 4 we have revoked a total of 53 sponsor licenses. The number of non-EEA students affected by closures or restrictions on the operation of colleges is 43,300. The UK Border Agency does not have the power to close down colleges as the Agency’s licence relates only to non-EEA students coming under T4 of the Points Based System. 20 September 2010 Processed: 28-10-2010 22:38:55 Page Layout: COENEW [E] PPSysB Job: 005646 Unit: PAG1
Ev 74 Home Affairs Committee: Evidence
Correspondence from the Chair to the Minister for Immigration Capping Migration:Role of the MAC The Home Affairs Committee has some questions arising from its oral evidence session last week with Professor David Metcalf of the Migration Advisory Committee (MAC). We understand that the Migration Advisory Committee has been asked to recommend a numerical limit for Tiers 1 and 2 for the first year of operation of a permanent immigration cap (2011–12). Professor Metcalf told us that the Government’s request did not specify whether the proposed figure should or should not include dependants, whether the Tier 2 cap should include the Intra-company transfer route, and, because of the parallel consultation being conducted by the UKBA on these issues, did not indicate what method would be used to allocate visas under the cap nor whether the shortage occupation and Resident Labour Market Tests would be merged. As a result of these uncertainties, Professor Metcalf said it was likely that the MAC would have to recommend two options rather than a single one for achieving the Government’s overall aim of reducing net migration to the tens of thousands (Q 144); and, more seriously in our view, he said that it was impossible for the MAC to predict the impact of any particular cap on various sectors because of the number and significance of the unknown factors outlined above (Qq 164–170). [The question numbers refer to the transcript of the oral evidence, a copy of which is enclosed with this letter for ease of reference.] We would be grateful if you would tell us: — whether the MAC is indeed being asked to make a recommendation without these key pieces of information being available, and — whether it was the Government’s intention that the MAC should make a recommendation without being able to predict the impact on the various sectors of the economy that make use of migrant workers under Tier 1 and, particularly, Tier 2. We also noted with interest the MAC’s suggestion that, if the Government were to be judged on the success of its policy by the end of the current Parliament, then this judgement would have to be based on the latest figures then available, which would be those for 2013. — Is it your understanding that the Government’s aim in practice is to bring the level of net immigration down to the tens of thousands within three years (2011–13)? You will understand that we wish to make our report on the proposed Immigration Cap as soon as possible, so that the Government may consider it together with the consultation responses and the MAC’s recommendations in formulating its policy. We would therefore be grateful for a response to this letter by 30 September. 17 September 2010
Correspondence from the Minister for Immigration to the Chair Thank you for your letter of 17 September regarding the Migration Advisory Committee’s (MAC) role in advising the Government on limits for non-EU economic migrants. You ask whether the MAC has been asked to advise on the level of the limit in its first year without first being told whether the limit should include dependants and intra company transfers (ICT) or whether the shortage occupation list and resident labour market test will be merged. As you know, these questions have been included in the UK Border Agency’s parallel consultation on the mechanism through which the limit is operated. The UKBA consultation closed on 17 September and no decisions have been taken in respect of any of the policy questions within it. The MAC has indicated that it is content to answer the question it has been asked, and I am confident that they have the information they require to answer the question posed. It is of course open to us to adjust the MAC’s recommended limit if we decide on an approach based on different assumptions from those used by the MAC. You go on to question whether the Government has asked the MAC to Produce their report without sufficient information to consider sector specific impacts. Their consultation asked what economic impacts should be taken in to account when setting the limit (question 1) and what sector specific impacts might be expected if the number of Tiers 1 and 2 migrants were reduced (questions 8 and 9). The Committee has received over 400 submissions from employers and sector groups in response to the questions set and they have met with over 1,000 employers during the course of the consultation. Their report will draw from the large amount of evidence they have received and will take account of possible impacts as they see them. Professor Metcalf pointed out that the MAC may be asked to review the position at the end of the first year, at which point the limit could be adjusted in the light of experience. Processed: 28-10-2010 22:38:55 Page Layout: COENEW [O] PPSysB Job: 005646 Unit: PAG1
Home Affairs Committee: Evidence Ev 75
You end by asking whether the Government is aiming to reduce net migration to the tens of thousands by 2013. That is not the Government’s objective and moreover it is not what Professor Metcalf said. October 2010
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