The Home Secretary recently announced new restrictions on UK business and employment-related immigration, and the first measures swiftly followed.  HR Law reports on the interim immigration cap, and considers the long-term implications for employers.

HR Law admits to some surprise that, in the first round at least, the immigration hawks have the upper hand.  For the first time, caps have been introduced for skilled and highly skilled migrants.  It is worth considering some facts behind the headlines:

  • The scope and intention of the interim cap is modest, although for some applicants and employers the effects are not.
  • The interim measures are in place until April 2011; what follows is uncertain, and the subject of a “consultation exercise”.
  • There is a “debate” within the coalition Government as to the future direction of policy – and employers and business leaders will have their say.

Scope and intention
With effect from 19 July 2010, interim caps were introduced in some sub-categories of Tier 1 and Tier 2 of the points based system.  The stated long term aim is to impose “permanent limits on non-EU economic migration by 1 April 2011”.  The short term is to reduce immigration approvals and prevent a deluge of applications. Permission under Tier 1 (General) will be capped at the level of the corresponding period in 2009, and in Tier 2 ( General) at 5 percentage points lower.

The legal mechanism for the cap in Tier 1 (General) is set out in a Statement of Changes in Immigration Rules, HC59 laid before Parliament on 28 June 2010. 

For Tier 2 (General),  HC96 was laid before Parliament on 15 July 2010.

There is still some confusion about how the cap is working in practice, and what parts of the system are affected.  HR Law summarises the answers as follows:

Tier 1
Tier 1 offers stand-alone immigration permission to “highly skilled” migrants.  The subcategories usually applicable to employers are Tier 1 (General) for migrants already established in their careers, and Tier 1 (Post-study work) for recent graduates from UK academic institutions. Only Tier 1 (General) is subject to the interim cap.

There are two aspects to the “cap” in Tier 1 (General):

  • an immediate increase in the number of “attribute” points required for all initial Tier 1 (General) applicants from 75 to 80 points, thereby excluding marginal candidates; and
  • a monthly interim limit for initial Tier 1 (General) applications made from outside the UK between 19 July 2010 and 31 March 2011. 

UKBA gives the following example:

“If your application meets all the requirements but the limit for that month would be exceeded if we issued you a visa, we will defer your application to the next month when the limit allocation re-opens.  If your application does not meet the requirements, we will process it as normal even if the limit has been exceeded.  You can still submit your application even when a monthly limit has been reached.  All applications will be processed in the order in which they are received, as far as operationally possible”.

Inevitably, there may still be a cumulative effect of applications banking up against the over-spill from successive previous months.  Top tips for employers who are planning to bring a migrant in under Tier 1 are:

  • take into account the additional five points required for attributes 
  • be aware that the operation of the interim cap may significantly extend the time it takes for the visa to be issued
  • be aware that, from April 2011, more extensive and permanent restrictions may be in place.

Tier 2
Tier 2, in reality a successor to the old work permit system, enables licensed sponsor employers to issue Certificates of Sponsorship to migrants who meet a points-based assessment in the UK.  The cap operates via a restriction on the number of Certificates of Sponsorship which can be issued in Tier 2 (General).

Tier 2 (General) is the subcategory for “new hire” employees in respect of whom the sponsor has normally had to undertake a prescribed “Resident Labour Market Test” (via advertising/recruitment search).  Tier 2 Intra-company transfers, and the specialist categories of Sportsperson and Minister of Religion, are not affected.

UKBA is contacting licensed sponsors to set new limits on the amount of Tier 2 (General) Certificates of Sponsorship which can be issued.  This appears to be somewhat crudely based on last year’s usage for many employers; we have seen numerous cases where the allocation has been reduced to zero.  There is a mechanism for requesting override in exceptional circumstances, whereby an employer can file a formal “Tier 2 (General) request for additional allocation of sponsorship”.  However, in each case a convincing argument must be made on a prescribed form – somewhat reminiscent of the very subjective work permit system which Certificates of Sponsorship were meant to replace.

Top tips for employers relying on Tier 2 (General) for transfers during the period to 31 May 2011 are:

  • check your allocation for Tier 2 (General), and any reduction via your sponsor management system access 
  • consider if you have a specific business need to make an exceptional request for additional allocations
  • be aware that more permanent limits may be introduced from April 2011.

The future of economic migration?

We remain sceptical that the Government’s aim of reducing net migration to 1990s levels – “tens of thousands rather than hundreds of thousands” – can be achieved.  First, a significant proportion of migration is from within the EEA or family-based “chain” migration, neither of which can be controlled via the points based system.  Second, there are already signs that the “debate” within the Cabinet will give way to disagreement, amid disapproval from our trade partners and business leaders of the focus on cutting skilled and highly skilled migrants.  An unimpressed Indian minister remarked ominously during the Prime Minister’s recent trade visit that restrictions preventing skilled Indian nationals wishing to transfer to the UK would be “viewed very dimly”  by India.

As consultation on the long term cap gets underway, dissenting voices will only grow louder. 

Perhaps we should give the last word to the Business Secretary, Vince Cable:

“Business is clear that we want Britain to be open for business.  We want flexibility and we want these regulations when they come in to be administered with a light touch”.

Then again, employers may want the last word. They may conclude that a “light touch” requires a different approach from Government.

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