House of Commons Home Affairs Committee...HC 361 Published on 3 November 2010 by authority of the...

HC 361 Published on 3 November 2010

by authority of the House of Commons London: The Stationery Office Limited

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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

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].

http://www.parliament.uk/

http://www.parliament.uk/homeaffairscom

mailto:[email protected]

Immigration Cap 1

Contents

Report Page

Key facts 3

1 Introduction 5 The Government’s immigration policy 5 Scope of the Committee’s inquiry 7

2 Immigration figures 8 Migration data 8 The Government’s figures: net long term immigration 8 Gross long-term immigration 11 Non-work routes 13

3 Whom will the cap affect? 14 Inflow and outflow 14 Cap will not affect EEA immigrants 14 Proportion of immigrants affected by cap 15

4 Impact on business and services 17 Highly skilled migrants 17 Recruiting needed skills 19 Location factors for businesses 20 Tax and investment 21 Public sector jobs 22 Merging Tier 2 routes 23 Exempting intra-company transfers? 24

5 Dependants 29

6 Level of the cap 31

7 Students 34

8 Administering the cap 36 Raising the points requirement 36 Allocating visas 37

First come, first served 38 Pooling system 38 Auction 39

Timing of application 41 Parliamentary scrutiny 42

Conclusions and recommendations 44

2 Immigration Cap

Formal Minutes 50

Witnesses 52

List of written evidence from oral witnesses 52

List of additional written evidence 53

List of Reports from the Committee during the last Parliament 54

Immigration Cap 3

Key facts

• Estimated net long-term immigration to the UK comprises estimated gross long-term immigration (those entering the UK) minus estimated gross long-term emigration (those leaving the UK), and totalled 196,000 in 2009. The figure includes British, EEA and non-EEA citizens coming to the UK for 12 months or more.

• The estimated gross long-term immigration figure allows a breakdown by nationality and reason for migration for all immigrants entering the country. Estimated gross long-term immigration totalled 538,000 in 2008,1 of which 52% (278,000) were non-EEA citizens. British citizens accounted for 15% of estimated gross long-term immigration to the UK, and EEA citizens 33%.

• The Government has announced that it intends to reduce estimated net long-term immigration to ‘tens of thousands each year, not hundreds of thousands’ and that the non-EEA economic immigrant cap is a first step in this process.

• EEA nationals are not subject to UK immigration control and the UK Government cannot influence the granting of citizenship rights by other EEA countries.

• In 2008, non-EEA citizens coming to work in the UK accounted for 12% of all gross long-term immigration. Non-EEA citizens coming to study and to join family members accounted for 23% and 11% respectively.

• Only non-EEA citizens are subject to immigration control, under the Points Based System. Tiers 1 and 2 cover economic migration, and Tier 4 students. Family reunification is covered under separate rules.

• There are approximately the same number of non-EEA main applicants to dependants under Tiers 1 and 2, a ratio of 5:4.

• The Government has implemented an interim cap on new non-EEA economic migrants under Tiers 1 and 2. Between July 2010 and March 2011 there will be a limit of 24,100 migrants, amounting to a 5% reduction on the previous year.

• A permanent cap on non-EEA economic migrants will be implemented from April 2011, administered through the Points Based System. The level of the cap has not yet been set, but will be announced by the end of 2010.

In 2009, intra-company transfers accounted for 60% of all Tier 2 visas and 40% of Tiers 1 and 2 combined.

1 The latest year for which a breakdown by reason for migration is available.

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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 Total1991 329 285 +441992 268 281 -131993 266 266 -11994 315 238 +771995 312 236 +761996 318 264 +551997 327 279 +481998 391 251 +1401999 454 291 +1632000 479 321 +1582001 481 309 +1712002 516 363 +1532003 511 363 +1482004 589 344 +2452005 567 361 +206 2006 596 398 +1982007 574 341 +2332008 590 427 +1632009 567 371 +196

Chart 1a: Long Term Migration to the UK, 1991-200910

-1000

100200300400500600700

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Calendar year

Mig

ratio

n (t

hous

ands

)

Net total

Inflow

Outflow

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 +772001 -21 +13 +129 +1222002 -65 +19 +134 +872003 -66 +16 +163 +1122004 -99 +80 +233 +2142005 -80 +78 +174 +172

2006 -127 +81 +205 +1592007 -87 +126 +181 +2192008 -90 +51 +169 +1292009 -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 Outflow2003 85 632004 113 652005 93 742006 100 792007 73 632008 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.

Immigration Cap 11

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 migration

All citizenships British EEA Non-EEA

All reasons 538 82 178 278

Definite job 137 23 70 44

Looking for work 70 18 29 23

Accompany/join 87 7 19 61

Formal study 172 6 40 126

Other 34 8 6 20

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-skilled & equivalent

Main applicants 10,055 15,515 18,780

Dependants 6,285 8,200 15,010

Tier 2: Skilled with job offer & equivalent

Main applicants 68,355 59,115 36,490

Dependants 30,150 22,055 26,985

Total (employment, leading to settlement)

Main applicants 78,410 74,630 55,270

Dependants 36,440 30,255 41,995

TOTAL (main applicant & dependants)

114,850 104,885 97,265

2007 2008 2009

Students (PBS Tier 4 and student visitors)

Main applicants 229,415 250,950 311,135

Dependants (tier 4 only)

19,295 24,200 30,170

Total 248,710 275,150 341,305

Family reunification

Main applicants 49,035 44,620 38,335

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/C4393B860D00478E802576C6003B0679 . 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


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.


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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


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


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

Immigration Cap 47

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 Mr Aidan Burley Lorraine Fullbrook Dr Julian Huppert Steve McCabe

Rt Hon Alun MichaelBridget Phillipson Mark Reckless Mr David Winnick

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, 8Nicola Blackwood Mr Aidan Burley Lorraine Fullbrook Dr Julian Huppert Steve McCabe Rt Hon Alun Michael Bridget Phillipson Mr David Winnick

Noes, 1Mark Reckless

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


Mr Amit Kapadia, Executive Director, Highly Skilled Migrant Programme Forum, Ms Sophie Barrett-Brown, Chair, and Mr Nicolas Rollason, Immigration Law Practitioners Association

Ev 33

Sir Andrew Green, Chairman, and Mr Alper Mehmet, Member, Advisory Council, MigrationWatch

Ev 39

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

http://www.parliament.ukhomeaffairscom/

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 Programme

HC 406(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 and Pensions Committee)

HC 540 (Cm 6755)

Second Report Draft Sentencing Guideline: Robbery HC 947

Third Report Draft Sentencing Guidelines—Overarching Principles: Domestic Violence and Breach of a Protective Order

HC 1231

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 McCabeMr Aidan Burley Alun MichaelLorraine Fullbrook Bridget PhillipsonDr Julian Huppert Mark RecklessMary MacLeod Mr David Winnick

Witnesses: Mr David Ramsden, Employment Committee, Federation of Small Businesses, and Dr AdamMarshall, Director of Policy and External Affairs, British Chambers of Commerce, gave evidence.

Q1 Chair: I call the Committee to order for the firstevidence session in its inquiry into the immigrationcap. I formally declare the interests of all Membersof the Committee which are shown in the Register ofMembers’ Interests. My wife is a solicitor and apartner in charge. I welcome to the dais the twowitnesses who are to start off the session, AdamMarshall and David Ramsden. I start with aquestion to both of you. What effect will theimmigration cap have on investment in the UnitedKingdom, especially its major cities?Mr Ramsden: We believe it will have an adverseeffect. The FSB does not want a cap. There is acertain immediacy when we have vacancies and webelieve a cap could prevent us getting the rightpersons for the right jobs as soon as possible.Dr Marshall: I agree with that in a certain sense. Ihave in my hand a pamphlet from UK Trade andInvestment which says that 50% of Europeanheadquarters are in the UK. There have been 469headquarters projects in the UK over the pastdecade compared with 86 in Germany, and that is onthe strength of the UK’s business environment. Asfar as the BCC and business community areconcerned, we need to keep that businessenvironment working well and that investment willbe forthcoming only when we can get the skills weneed for our businesses.

Q2 Chair: But the Prime Minister has made it veryclear that he wants the country to be seen as open forbusiness. Are you saying this means that we will beclosed for business? Do you feel that nothing couldprogress, or is this something that will just betemporary?Dr Marshall: I do not think that is the case. Thegovernment is in an extremely tricky position here.We and our member businesses acknowledge thatthere is a strong public desire to control migration interms of absolute numbers and to limit its impacts.On the other side we know the government realisesthere is a strong need to ensure businesscompetitiveness. I do not believe a cap would meanthat somehow Britain was closed to business. Itwould not give that signal but it might make somebusinesses’ immediate recruitment needs very

difficult and that could have knock-on impacts onemployment, recovery and tax revenues to theExchequer.

Q3 Chair: Mr Ramsden, Ministers would argue thatwe have a skill base in our country. Why is it notpossible for British industry to find those skillswithin the United Kingdom? Why do we have to goabroad when there are so many people with thoseskills here?Mr Ramsden: What you say is absolutely right. Wehave a skill base in this country and we have plentyof people who could obtain skills. The problem islack of training and an inability to find the right levelof training among UK citizens which means that onoccasions we have to go abroad. Under the pointssystem jobs must be advertised for a period of time,but if we cannot get anybody from the UKworkforce we say it is necessary to go abroad to findthose skills.

Q4 Chair: Can you tell me about consultationbetween the government and yourselves on this cap?How much time have you had to adjust to thisproposal?Mr Ramsden: Speaking personally, I have not beeninvolved but people within the FSB have been. TheFSB’s position is that it does not believe a cap wouldbe advantageous to small businesses.Dr Marshall: We are in consultation with both theUK Border Agency and the Migration AdvisoryCommittee. The timescales are tight and many ofour members continue to make representations to uson this subject, so we are still collecting evidenceon it.

Q5 Dr Huppert: I want to explore two related aspectsabout the effect of the immigration cap. I amconcerned particularly about some of the universityissues and high-tech businesses. I representCambridge where both of these are very significant.I have evidence from the Campaign for Science andEngineering, the Wellcome Trust and otherorganisations which show that from the point ofview of international working, collaboration andglobal headquarters this measure could be

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Ev 2 Home Affairs Committee: Evidence

20 July 2010 Mr David Ramsden and Dr Adam Marshall

devastating. I would be grateful for your commentson that. I also note that the consultations highlightthe fact that there would not be any change to therules for ministers of religion and elite sports people.Do you think that the message this country issending by saying we care about ministers of religionand elite sports people but not scientists, teachersand doctors is the right one?Dr Marshall: To start with the “university” question,in part I have personal experience of this because Iarrived in Cambridge as an American student over adecade ago and went through the system myself. Ihave been on the journey through the system tobecome a citizen of this country, so I declare that asa personal interest. Knowing the number of peoplewho came into those universities on work permits,skilled occupation permits et cetera and theimportance that that had for collaboration andeverything else, we believe it could have a majorimpact, which is why we are concerned about themechanisms that might be brought in to deliver thegovernment’s cap. We do not want any kind ofbusiness with a skill requirement, be it in the publicor private sector, to face restrictions whichultimately could harm UK economiccompetitiveness.

Q6 Alun Michael: I want to probe the question of thelonger term. When I was Minister of State forIndustry I found this was an issue raised bycompanies when considering investing in the UK interms of questions like, “Do you think there will beany change in the regulations?” and their wish forcertainty that they would have flexibility. Do youbelieve there is a problem in relation to uncertaintyabout how the rules might be applied over time?Mr Ramsden: I believe that will cause concern tooverseas companies thinking of investing in thiscountry and certainly people who attain skills andwish to practise them in the UK. I believe thatuncertainty is no friend.

Q7 Mr Winnick: I am a little surprised. In all thepublicity and controversy over immigrationparticularly in the months leading to and during thegeneral election undoubtedly it was an issue and onethat was not by any means confined to extremistgroups. It could be argued that one of the partiesthat form the present government made much ofimmigration. I am just wondering how far you putyour point of view—I may have missed it; I do notknow—against a cap and the necessity of peoplebeing allowed in to work for all the reasons you havegiven. How far did you try to put your point ofview—perhaps you did not—by advertisements andevery other avenue of communication?Dr Marshall: I believe businesses have beenscrupulous in trying to go down every route they canto advertise jobs and get posts advertisedappropriately before turning to the option ofoverseas labour. I also believe that businesses up anddown the country and members of the BritishChambers of Commerce acknowledge the concernsthat immigration has generated in localcommunities. What members say to me on a daily

and weekly basis is, “We would love to hire localpeople for jobs but . . .” There is always a “but” atthe end of the sentence. Invariably, we get into adiscussion about employability skills—the softskills—at the lower end of the labour market thatmakes things difficult for them. They say that theyturn to EU labour and in some cases, for examplecare homes, non-EU labour to try to fill the skillsgaps they face. I believe there is a strong volition onthe part of the business community to respond tothose concerns and to do the right thing.Mr Ramsden: The direct answer is that I do not recallspecific adverts being taken out during the electionby the Federation of Small Businesses. However, Iam quite sure you received a copy of our manifesto,as indeed should all candidates, in which there was areference to this.1

Q8 Mr Winnick: It is hardly what one woulddescribe as extensive publicity. It is not that I amnecessarily criticising you—heaven forbid—but Ijust wonder why you did not join in the debate at apublic level because the accusation was that thecountry was being flooded and that the previousgovernment was responsible for every possibleimmigration sin. Without taking sides, I would havethought you would have put the point of view youhave today that restrictions could be against thenational interest.Mr Ramsden: Equally, I do not believe that thefederation has ever kept its information secret.

Q9 Mary MacLeod: I would like to put a questionabout the need for skills. Mr Ramsden, you talkedabout the lack of training in the UK. I would like toquestion that a bit further. Is it not the case that wehave companies with great training capabilities inthe UK? We also have universities that produce morestudents than ever before. What are the skills we lackin the UK for which we must go elsewhere? Do wenot have the capability to train people across the agespectrum in new skills as and when they are needed,especially at a time when we are coming out of therecession and we also say we shall be tougher interms of some of the welfare policies?Mr Ramsden: I think you need to understand thatthe Federation of Small Businesses comprises smallbusinesses, often people with fewer than 10employees. Training can be very expensive. Inparticular, if you are running an Indian orBangladeshi restaurant and need a new chef it is notlikely that the training facility will be available in thiscountry; you will need to go to the particular countryto get that trained chef.Dr Marshall: We need to ask how we address thequestion of migration in concert with other areas likethe skills base and the benefits system, which we

1 The witness later stated that “In my response to questionseven I said that we had raised the issue in our 2010 electionmanifesto, which was published towards the end of 2009. Ona detailed reading of our manifesto this is not the case, but Iwould like to stress that the FSB has always played its partin the ongoing debate and that we will continue to do so. Aswe have repeatedly stated the introduction of any form ofcap on Tier One and Tier Two migrants would have asignificant impact on small businesses.”

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have not yet mentioned today. The question I wouldput is: do the skills being provided by our universitiesnecessarily address the needs of business? To befrank, quite often businesses are good at stampingtheir feet and saying they are not happy with theskills offered at the high end and they need to lookelsewhere for them but they are not good arearticulating directly what their needs are. There is aneed to marry up any changes to the immigrationsystem with better consultation with employers sowe ensure that over the longer term universities andcompanies generate the type of training and skillsthat will be taken up immediately.

Q10 Mary MacLeod: But what have you been doingto try to make that happen? Strategically, businessesshould be working with education andunderstanding what they need in future. I find itdifficult to understand why this is a new idea andsomething you need to do for the future because itshould be happening on an ongoing basis.Dr Marshall: To take the example of chambers ofcommerce, in local areas around the country manyare deeply involved in schools through the YoungChamber movement, for example, in trying to tackleworklessness. They work with local authorities toupskill people with bite size sorts of qualificationsthat will get people into work so that a business canopt for local rather than migrant labour et cetera. Ibelieve you will find that business organisations areengaged on the ground where they have that locallink, because at the end of the day the local businessowners involved in them know that if theircommunities are doing better their businesses willdo better.

Q11 Mary MacLeod: The fact remains that manyyoung people who come out of universities cannotfind jobs and I think more work needs to be done.Mr Ramsden: That may be right. Perhaps what weneed to look at are some of the degrees.

Q12 Chair: It is right that there are people comingout of universities who cannot find jobs.Mr Ramsden: Quite so, Mr Vaz, but I think you needto look at the sorts of degrees they are taking. Insmall businesses we are talking about specialisedpeople. Whenever we can get local labour of coursewe do so and we work with universities and collegesin an effort to make sure they understand our needs.

Q13 Steve McCabe: In your judgment who will becaught by the cap? Will it be skilled or unskilledpeople?Dr Marshall: Unfortunately, the worry is that unlessthe mechanisms are right the cap will catch theskilled. If you look at companies in our membership,those that take on unskilled labour, for example,often do so from within the European Union andtherefore it is those who cannot be restricted legallyby the cap. Our concern is over a company thatcomes to us and asks: what if it needs an engineerwith specialised skills in October or November butthe cap for that year has already been exceeded?Does it mean the company takes the decision not to

expand its business? Does the company have otheroptions open to it when it knows that a Britishperson with the same qualifications and levels ofskill may not be available for four or five yearsbecause it needs to train the individual up fromscratch? Therefore, it is the skilled about whom weare concerned.Mr Ramsden: My understanding is that this cap willapply to tiers 1 and 2.

Q14 Steve McCabe: Can you give us some idea of thetypes or levels of qualification or professionalexperience we are talking about so we have a fairlygood idea of the kind of cap that will be applied andthe sorts of skills that will be unavailable?Mr Ramsden: I have already given one example:Indian or Bangladeshi chefs.

Q15 Steve McCabe: I think that is quite a difficultone and that is why I pursue it. I am a BirminghamMP. South Birmingham College is fully kitted outwith a restaurant and training workshop. The ideathat you cannot train a balti chef in Birmingham andhave to bring that person in from Bangladeshescapes me. I am curious to know what kinds of realqualifications and skill levels—things that would notbe easily done at a local FE college—we aretalking about.Dr Marshall: Tier 1 is talking of the highest levels ofskills and the sorts of things for which countriesaround the globe compete and will continue tocompete. I think your question is aimed more at tier2 which covers such a wide span of potentialoccupations; that is, everything from a specialistengineer right through to a care home worker who ison a shortage occupation list at the moment becausewe cannot get enough care home workers to dealwith our ageing population. That is perhaps a betterexample. There are a number of private businesses,many of which are in my membership or perhaps mycolleague’s, that struggle to get the trainedemployees they need. That is something which in arelatively short space of time—one to two years—our further education colleges could upskill localpeople to do. Business however has an immediateneed. Therefore, how do you simultaneously ensurethat a business can meet its immediate need whilsttrying to remove that occupation hopefully fromthat list and therefore ensure that more local peoplecan get it in the longer term?

Q16 Lorraine Fullbrook: Mr Ramsden, you startedby saying you believed a cap would be the wrongthing to do because it would mean that the rightperson would not be employed in the right job, butyou went on to talk about the training aspect of theUK skills base. I suggest that your argument doesnot hold water. Your problem is not withimmigration policy but business skills policy.Therefore, are you not directing your fire at thewrong policy?Mr Ramsden: I do not think so. If we can getsufficiently trained people from the UK workforcethat is what we will do. There is no advantage to asmall business in deliberately trying to get someone




from outside, but the fact of the matter is that weneed on occasions to go beyond our own borders toget certain specialist skills. You have heard of anumber of examples. Another one is perhapsspecialist translators where the level of training inthis country is not such that we can get ouremployees here.

Q17 Nicola Blackwood: As Member for Oxford Westand Abingdon I have two excellent sources of skilledlabour in my constituency: the University of Oxfordand Oxford Brookes. You are very welcome to comeand hold a jobs fair there at any time if you are inneed of some skilled workers—tier 1 or tier 2. Youhave mentioned a number of times your concernabout the mechanism and how it would work. Howdo you believe the cap can be fairly administered?Do you think it would be better done through theexisting points-based system or an alternativesystem of which you are aware?Mr Ramsden: As far as concerns the FSB the simpleanswer is that it has no problem with the pointssystem and it being enhanced; it just does not wanta cap.

Q18 Nicola Blackwood: Of any kind?Mr Ramsden: Of any kind.

Q19 Nicola Blackwood: You have norecommendations about the way in which it couldwork in the midst of problems about how serviceswill cope?Mr Ramsden: Provided the points system issufficient then we believe that is the right strategy.

Q20 Dr Huppert: I notice that the UKBA’sconsultation paper on the limits talks about therelationship between the list of nationaloccupational shortages and testing the local labourmarket. It suggests restricting it to cases where thereis both a shortage and the local market has alreadybeen tested which would represent quite a change.Do you have any comments on what effect thatmight have?Dr Marshall: Unfortunately, I believe it would createa new process burden for businesses, especiallySMEs which often do not have a big HR function tohelp put this through. We have to remember thatbusinesses are subjected to a huge amount ofregulation. The question raised earlier aboutcertainty comes into it. There is employmentregulation of a variety of different types. When youstart to change the migration tests to whichbusinesses must subject jobs you could createadditional uncertainty for businesses. There is alsothe problem that many jobs are unique; they may notbe on a national shortage list. The job that got memy first work permit was unique; it featurednowhere. My employer, like other employers, had togo to UKBA with a job description and then test it inthe labour market. I believe that to create additionalbarriers to business getting the skills it needs bymerging those two routes would be a bit of adistraction and problem.

Q21 Chair: Since you raised your own work permit,obviously you are now settled here, are you?Dr Marshall: I am a UK citizen, yes.

Q22 Bridget Phillipson: The UK Border Agencyconsultation asks whether intra-company transfersshould be included in the cap. Do you have a viewon that?Dr Marshall: Quite a clear one. We do not supportthe inclusion of intra-company transfers under thecap. If we go back to the question of Europeanheadquarters destinations, the UK is the place forEuropean headquarters in part because intra-company transfers are permissible and are relativelyeasy to do. Therefore, it could affect businesslocation decisions for inward investors and createadditional cost and process burdens for existingsponsors. We are not in favour of it.Mr Ramsden: That is the FSB’s view, though it isoutside our remit.

Q23 Bridget Phillipson: The concern would be that itis a process open to abuse. Do you think safeguardshave been put in place to stop that kind of abusehappening or are further ones required?Dr Marshall: We are confident that businesses areusing the intra-company transfer route, especially incases of inward investment to the UK, to get theright skills into the economy at the right time andultimately the net economic benefit to this country issignificant.

Q24 Mr Winnick: I want to ask about the possibilityof people coming in along the lines we have beendiscussing where businesses should provide privatehealth care. Is that desirable?Mr Ramsden: As far as concerns the federation thereare already enough restrictions. We do not believethat an additional burden of providing privatehealth care should be imposed on us.Dr Marshall: There could also be some perverseconsequences. Effectively, you are creating a benefitwhich could be denied to existing staff in thatinstitution which could give rise to employment lawcases brought by UK residents who might want thatbenefit but would not be able to access it. Equally, itis a cost to business. We would rather look at themigration impacts fund and perhaps look at waysfor businesses that need migrant labour at times ofshortage to make a contribution via that route.Obviously, I do not want to start creating additionalcosts for my members, but if there is a need forbusinesses to contribute to match the migrationimpacts fund then perhaps that is something that canbe explored.

Q25 Mark Reckless: It is good to hear that businessis prepared to contribute to the costs and paysomething in terms of migrants who come to benefittheir companies. To the extent it is suggested that acap is some sort of crude measure that will prevent




particular individuals from hiring people, is thealternative not to have an auction system where wehave certificates of sponsorship and if businesseswant to bring in someone they can bid against those?If they decide it is not worthwhile to bring insomeone that is their decision.Dr Marshall: We are still consulting members overparticular mechanisms. As you might expect, a lot ofthem have very strongly-held views. Auctions are anidea I have seen proposed on a number of occasions,but I believe they would require a co-ordinatedglobal approach rather than just a UK-onlyapproach for it to work.

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 ofevidence on the immigration cap. I see that you havebrought Ms Homer with you. We have some specificquestions for her about aspects of theadministration, but we should like to concentrate onyou in the first session. We congratulate you on yourappointment. It is not very often that we have one ofthe subjects of our inquiry ending up as a Minister afew months later. I hope you felt the Home AffairsSelect Committee played a part in your rise. BeforeI move on to talk about migration figures, perhaps Imay raise with you some comments you made overthe weekend with specific regard to the Calaisscheme. The fact is that the British taxpayer ispaying up to £4,500 to individuals in Calais to gohome. Do you believe this is a proper use oftaxpayers’ money at a time of economic slowdown?Damian Green: I do. The quote I gave at the weekendwas that it looked unpalatable but I said, slightlyilliterately, it was the least worst option for tworeasons. First, if we can manage voluntary returnsthat is much better for the taxpayer. The cost of avoluntary return is approximately £3,000. If we haveto remove people the National Audit Office believesthe cost to be about £11,000, so there is a significantadvantage to the taxpayer. But also in the particularcase of people being returned from Calais of coursethey have never reached the British system, so all theother costs that may not be included in the particularremoval cost are avoided by the British taxpayer. Ifwe can find a way to encourage them to go back totheir home countries before they have even got hereit seems to me that it is both a sensible use oftaxpayers’ money and also better for the wholeimmigration system.

Q27 Chair: I do not suggest that the people in Calaiswill read the Mail on Sunday but this could be anadvertisement for people to come from all over theworld to end up in Calais so they can get a handoutfrom the British taxpayer. This is obviously not yourpolicy; you are continuing one that was pursued bythe previous government of which I believe thisCommittee was not aware. They will turn up because

Mr Ramsden: It is something new to me and I shouldlike to write to you, if I may.Chair: Mr Ramsden and Dr Marshall, it would bevery helpful if you could write to us on any issuesthat you believe are relevant to this inquiry. Theconsultation period is only 12 weeks and thereforewe have limited time, but if you have specificexamples we will be very keen to look at them.Members may want to be in touch with you duringthe recess if they wish to look at any of your localmembers and visit them to see how this will affectthem. Thank you very much for coming thismorning.

they will know they will get a payment and then gohome. There is nothing to stop them coming back,is there?Damian Green: There might be. Obviously, thatdepends on the French borders and system. I met theFrench immigration minister last week. He is asdetermined as I am to try to strengthen France’sborders. But the pull that you refer to, the thoughtaround the world “Let’s try to get into Britain”—isthat the UK has been seen as something of a softtouch in terms of both the problems at our bordersand also the capacity to make a life for oneself,possibly illegally, when one is here either by workingillegally or on benefits. One of the main drivers of thenew government’s immigration policy is to send themessage around the world that Britain is no longer asoft touch.

Q28 Chair: You do not think it is a bit of a soft touchto allow people to come all the way across Europe tothe Calais camp, which I and other Members of theCommittee in the past have visited, and give them ahandout of £4,500?Damian Green: To be fair to the French, there is nota Calais camp now. Not only have they cleared thejungle; they have cleared the trees, as it were. Youcould not set up a camp in a jungle; there are no treesthere. That has been very effective. You can measurethe effects. Not only are the number of illegalsgenerally caught in Kent down to about 10% of thelevels they were 10 years ago but the reception centrefor unaccompanied asylum-seeking children in myown constituency tells me that since the jungleclearance the numbers coming in are one third ofwhat they were. That is quite a sensitive indicator ofthe fact that the French have been effective. I do notbelieve there is anything like the numbers gatheringin Calais that there used to be.

Q29 Chair: As we know from Parliament Square,you do not need trees to make a camp. To move onto migration figures, is there an optimum figure forthe population of this country? Your predecessor feltthere was. Do you believe 70 million is a reasonablefigure for the population in, say, five years’ time?



20 July 2010 Damian Green MP and Ms Lin Homer CB

Damian Green: I think that in five years’ time thatwould involve eye-watering population growth andthat is not going to happen. I believe that forgovernment to set a population target would bepointless because many of the things that go up tomake the population are not, and should not be,under the control of government. Governmentcannot control the birth rate. At the other end, weare all living longer lives and remain healthier forlonger.

Q30 Chair: You do not have a figure?Damian Green: I am not going to say our approachis that we are trying to hit a figure of x by year y. Butwhat we should do and are doing is to say that thereare things government can control. It cannot controlthe birth rate but it can control the number of peoplecoming here and that is what we seek to do.

Q31 Chair: Let us turn to migration figures. Whenthe government talks about reducing migration fromhundreds of thousands to tens of thousands it refersto the international passenger survey data whichmeasures all migrants entering the country eachyear. Are you not concerned by the fact that thesefigures also include British citizens who are returningto this country? Is it right to cite figures that refer topeople who are in effect settled here?Damian Green: If they are returning having beenabroad for a long time clearly in terms of adding todemand on public services, housing and so on thenit is fair. To revert to your main point aboutpopulation growth and levels, what is vital is the rateof change of population so that our public servicesand attitudes can cope with a controlled change inpopulation. The lesson of the past 10 years has beenthat if you have an uncontrolled growth inpopulation through immigration, which peaked atnearly 250,000 a few years ago, you get stresses andstrains and the rise of extremist politicians andthings that everyone on this Committee woulddeplore. Therefore, the immigration policy isdesigned to reduce that pressure steadily and bring itdown to tens rather than a couple of hundredthousand that we have seen over the course of theprevious Parliament and in doing so to allow ourpublic services to cope. What I think lies behind yourquestion is: are the statistics perfect, accurate andhelpful? They are not. The international passengersurvey is clearly not perfect; it is a survey of arelatively small number, but you have to work withthe tools you have.

Q32 Chair: If we turn to the cap, we know that thetemporary one that came into effect yesterday hasthe figure of 24,100. What kind of figure do you havein mind? You have just begun the consultationperiod, but do you have in mind any kind of figureas to what the permanent cap will be? Will it be morethan that—40,000, 100,000? What is your currentthinking on it?Damian Green: As you say, as we have just startedconsultation it would be perverse and unhelpful forme to say this is the conclusion at which we willarrive at the end of it, not least because the

consultation on numbers is being done by theMigration Advisory Committee whose work Ihugely admire and who are independent ofgovernment. They will come up with arecommendation which will then go to Ministers.

Q33 Chair: We have heard evidence from somewitnesses today; we will hear others in September. Ifthey say that it should be a quarter of a million andthat is the consensus will you accept that figure?Damian Green: I think it is very unlikely to come upwith that sort of figure because it would be massivelyout of line with the trends we see. There is a validpoint behind that question which is: what do wewant to see over time? What I want to see is steadydownward pressure on the net immigration level. Icannot emphasise enough that the economic routeand the limit on it that you are discussing in thisreport is only one part of that. There are many otherroutes of immigration and we shall be looking at allof them. This is a vital part of it and a first step butthat is what it is.

Q34 Lorraine Fullbrook: I should like to explore alittle further your comments on Sunday. You saidthat you wanted to “change the perception of theUK as a soft touch for illegal immigration”. Youhave talked a little about your plans. I would likeyou to expand on your plan and how exactly you willenforce it moving forward.Damian Green: There are a number of things we needto do better than we have been doing in the past. Partof it is about internal enforcement. We shall be doinga lot of enforcement over the next few months onsham marriages, bogus colleges and illegal work—all the areas where people either use particular routeswe know about to evade immigration controls or,once they are here, to give themselves a life hereillegally. It is very important not only that we clampdown on all of that but do so very publicly. That ispart of sending a message. But there is another partof it of equal importance, namely to counter thefeeling that you cannot remove people and once theyare here you cannot get rid of them. It is reallyimportant that we remove people when they haveexhausted all their appeal rights. One of the otherthings we have been doing is to return people, evento difficult countries. Let me pick the mostcontroversial before the Committee does: Iraq. Wehave been sending charter flights back to Iraq. Insome parts of the media there has been a furoreabout it saying this is terrible. I believe there was aGuardian lead story on this for three days in a row. Iam absolutely unrepentant about returning peopleto Iraq who have no right to be in this country. I wasmildly angered by a radio report.

Q35 Chair: Minister, would you focus on the answerto Lorraine Fullbrook’s question because we havelots and lots of questions?Damian Green: Some of the people we are returning.There was one particular case involving a drugdealer who was not questioned at all. He said he hadbeen deported for driving a car which I thoughtshould have been challenged. But we know there are




lots of people in this country who have no right to behere and who are doing active harm to the citizens ofthis country. I think we need to remove them, andthat is what I mean by “sending a message”.

Q36 Dr Huppert: I am concerned that we are movingaway from the concept of the UK being a soft touchto being a very hard touch. We heard from theprevious witnesses from business their concernsabout the effect on the economy. If I may turn to thedata you mentioned, clearly there is a question as tohow many non-EU economic migrants there are andwhat the net flow is. I tabled a Written Questionabout the number of non-EU economic migrantscoming into and leaving the country. The Answercame on 28 June. I put the question to the HomeOffice but it was transferred to the Cabinet Office.For the last year for which figures are available,2008, there was a net outflow of non-EU economicmigrants. It was not a very large figure, but thosefigures—we will look at more recent ones when theyare available—suggest that already non-EUeconomic migrants are leaving and a cap would havevery little effect on it. Presumably, if you wanted tocap the net flow there would be no effect at all.Damian Green: I do not quite recognise those figures.I remember one slightly arcane dispute on one reportas to whether students who come here as studentsand then say they are leaving to find work tend to becaptured in some figures as though they had beenhere working. Therefore, they become misallocatedin the tables. But the most recent figures we haveshow that in 2008 net migration was positive by163,000. The biggest element of that was accountedfor by non-EU citizens: 187,000. EU citizensaccounted for 63,000, and the contribution of Britishcitizens was minus 87,000. That is where you get the163,000 from.Dr Huppert: I think that is based on the figure for allmigrants—I also have that figure—rather thanspecifically economic migrants which is what the capwould address. Perhaps you want to take it away andhave a look at the figures.

Q37 Chair: Can we have a copy of those figures?Damian Green: Yes.

Q38 Dr Huppert: This was an Answer from Mr NickHurd, Parliamentary Secretary of the CabinetOffice, so one hopes it is reliable.Damian Green: Indeed. Trying to say that the cap isthe only way we will achieve our net migration figureis simply wrong. There are many routes ofimmigration and we are looking at each in turn to seehow best we can get to the net figure we seek. Thereis not a direct read-across between what is controlledhere and that figure.

Q39 Mr Winnick: I assume you hope there will notbe a mole in your private office, but you never knowwhat may happen. As to the position about themaximum number resident in the UK, if that is theright expression—70 million was put—you told theChairman that it was not up to the government aseveryone recognises, but the rhetoric, if I may say so,

is somewhat different from what was said inopposition. Then the emphasis time and time againwas that it would be virtually the end of this countryif it went over 70 million, so I take it from youranswer to the chairman that you are rather relaxedabout it.Damian Green: I do not recognise thecharacterisation of the rhetoric in opposition, notleast because I was the opposition spokesman onimmigration for four and a half years. I know whatI was saying then. I have always emphasised andbelieved that it is the rate of change that matters.

Q40 Mr Winnick: But emphasis was put on thefigure of 70 million by and large, was it not?Damian Green: It was by some people. In a speech bythe Prime Minister in 2006 he made the point thatobviously population and demographics werehugely important, but very specifically he did not seta population target. I think that would be unhelpful,partly because it would be government setting itselfa target where it could not control some of the keyparameters. I cannot emphasise enough that I thinkit is rate of change that causes the problem in thisarea. That is one of the reasons why we set ourselvesa specific target on net migration because that is thebest reflection of the rate of change with whichpublic services can be comfortable.

Q41 Mr Winnick: I think you accept that whatevercurbs are now put on immigration which did notexist before it is quite likely that the population willby natural means go over 70 million?Damian Green: I do not know. I have seen figuresfrom the ONS but they are projections, notpredictions. If you look back on the sequence, theyare long lines on a graph that go up and down. Noneof us sitting round this table has any particularinsight into when and whether the population will goover 70 million.

Q42 Lorraine Fullbrook: In terms of those in the UKwho have no right to be here, given that under theprevious government we had two EU enlargementsand 10 new Member States, what plans do you haveto return those who have no right to be here?Damian Green: There are two separate issues. In thecase of EU enlargement the government iscommitted to the fact that in any future enlargementit will impose transitional controls. I believe thatduring the time of the previous government—this isnot hindsight; my party said so at a time before I didthis job—it was said we should have imposedtransitional controls in 2004 when Poland and theother 8 countries came in. We had some Poles herebut not as many as we did eventually. I think we arevery lucky that by and large the Polish people whocame here were hard-working, respectable andcontributed a lot to this country. If it had nothappened I think there would have been moreproblems. On the question of returning people, evenwithin the EU, if people commit serious criminaloffences they can be returned. Obviously, bydefinition we have good relations with all our EUpartners and we would seek to do that. One of the




problems is that there are some countries whoseasylum systems have such severe problems that weare not allowed to return asylum seekers who havecome from other countries and under the Dublinconvention ought to be returned there. We areattempting to help the Greeks in particular toimprove their asylum system. At the moment thecourts will not let us return failed asylum seekersthere because of the severe difficulties in the Greekasylum system. The same used to be the case withItaly but that is no longer so which means we canstart to return failed asylum seekers to Italy.

Q43 Chair: The Romanians have decided to issue80,000 passports to Moldavians who think they areRomanians and President Basescu of Romania hassaid that another 800,000 passports will be issued bythat country. I believe the Hungarians have issued40,000 passports to ethnic Hungarians and theBulgarians have issued 60,000 passports to theMacedonians. What is the point of a cap when wehave unlimited immigration from the EU?Damian Green: Even at its peak immigration fromthe EU was a significant but not overwhelming partof immigration. As it settles down we are alreadyback down to approximately one third ofimmigration coming from the EU. All experiencetells us that over time the flows within EU countriestend to equalise. For instance, when Spain andPortugal first came into the EUthere was anenormous influx and that has been reversed overtime.

Q44 Chair: On this particular point are you doinganything with the Minister for Europe or others inBrussels to say to our EU colleagues there is no pointin giving out passports to basically all and sundry?Damian Green: It is not for me to interfere in thenational politics of other countries; it is for me to saythat Britain obviously takes seriously the ability tocontrol the numbers coming into this country. In thespecific cases of Romania and Bulgaria their entry isstill subject to transitional arrangements. Thosetransitional arrangements might end in 2011 or beextended until 2013. Clearly, a range of factors willneed to be taken into account before we decide torelax them in 2011, if we were going to do so.

Q45 Alun Michael: As vice chairman of the All-PartyGroup for Moldova I shall resist the temptation tofollow up the Chairman’s question. I may take it upseparately. What assessment have you made of theimpact of a temporary cap on business and theeconomy?Damian Green: I think the temporary cap will nothave very much effect. We have deliberately set it sothat it will not cause any damage. We have set it at alevel which is 5% below last year’s figures for tiers 1and 2 and we have specifically exempted the sub-routes within tier 1 for investors and entrepreneurs.I very much believe that Britain should attract its fairshare—preferably more than its fair share—of thebrightest and best from around the world, but at thesame time obviously we need to control the overall

numbers coming here and both the interim and, Ihope, the permanent cap that will come in from nextApril will serve those purposes.

Q46 Alun Michael: I appreciate that communicatingas a Minister on these issues is very difficult, butwhen I was industry Minister I was frequently askedabout the future by companies that soughtreassurance. Before making a decision they wantedto get a response to fears that the government mightchange the rules due to media pressure and thatmight make it more difficult. That can lead to adecision to go elsewhere in Europe rather than theUK. Do you accept there is a very careful balance tobe maintained by Ministers if the government wantsto maintain the position of the UK as being open forbusiness?Damian Green: Which we do, and we think thiscontributes to it. You are right that constantchopping and changing of rules clearly does nothelp. That was why it was a general electioncommitment. We have moved very fast to implementit. The interim cap is already in operation as ofMonday. We are holding consultations to which Iknow business is contributing. We will then set apermanent system. The annual limit will be changed,as it is in America or Australia.

Q47 Alun Michael: But do you accept that fearsabout what that limit might achieve would havesome impact on investment decisions?Damian Green: Only if people thought it would bedamaging, and we do not think it is. That is one ofthe reasons we are consulting. Bodies like the CBIhave accepted the need for interim limits while theoutcome of the consultation is being considered, sobusiness groups themselves are supportive of theway we are doing it.

Q48 Mark Reckless: Perhaps I may say howwelcome it is to have a Kent MP as Minister forImmigration and also the speed with which thegovernment is moving to implement what we said inopposition. I want to follow up the point about EUimmigration. Whatever the arrangements we makefor non-EU economic migrants, is it not possiblethat individuals can short-circuit that system bygaining entry to another EU Member State andgaining citizenship there so they can then move tothe UK?Damian Green: If you are an EU citizen apart fromthe specific examples of the 8 countries you havefreedom of movement. That is one of the basics ofEU membership, and that is why the question put bythe Chairman is a good one: there is a legitimateinterest in who is being granted EU citizenship. But Ithink that in terms of the overall numbers experiencetells us that flows equalise. One of the greatestexporters of labour throughout the European Unionis this country. A lot of British people spend part oftheir working lives working in other Europeancountries and a lot of British citizens like to retire—or used to—to countries that have considerablyhotter climates than ours. The flows equalise overtime.




Q49 Mark Reckless: Initially we saw an influx oflabour from Spain following its accession and overtime that has been balanced by a flow largely ofBritish retirees to Spain. Do we really expect thesame to happen to, say, Poland?Damian Green: In terms of work, yes. It seems to mevery likely—I cannot put a timescale—that at somestage the economy of Poland and the other 8countries will grow to a level where the mass exodusfor immediate greater prosperity, if you like, will nothappen again. That has been the experience of theEU up to now in its first 40 years of existence, andthere is no reason to believe that will not be the case.The benefits of wider free markets in goods, capitaland people have been seen and I see no reason whythey should not be seen in the economies of centraland eastern Europe as they were in the countries ofthe southern European periphery that joined the EUjust after Britain.

Q50 Mr Burley: You mentioned that it would notjust be the cap that would control immigration. Inher statement on 28 June the Home Secretary saidthat reducing net migration would require action“beyond the economic routes”. Can you give theCommittee an idea of what other action you areconsidering to control immigration?Damian Green: We are looking at every route as youwould expect. The asylum numbers are really verysmall compared with what they were previously, butone can always make improvements. We are lookingat the student and educational route which just interms of sheer numbers is the biggest single routewithin the points-based system. We are looking alsoat family reunification and rights of settlement. It isnot simply a question of who is coming here in thefirst place because obviously if you are looking longterm it is also a question of who is staying here forlong periods. This is an all-embracing look at theimmigration system to see how we can establishmore stability in it. I suspect there will now be a greattemptation for the Committee to ask: what will wedo about x, y and z? We have not got there yet, butI can assure the Committee that we are looking at allpotential routes.

Q51 Mr Burley: Do you intend to cap familyreunification?Damian Green: I anticipated that kind of perfectlyreasonable question. We have not come to decisionsyet on the other routes, so there will be a rollingprogramme of announcements. We wanted to startwith the economic routes because they are in thecoalition agreement. Obviously, that was somethingwe wanted to get on with, but over the comingmonths and years we shall move round the system.

Q52 Mr Burley: I ask a wider question in the debateabout numbers. It seems that the debate is alwaysabout the numbers and what is the net number ofmigrants coming in. It strikes me that quality is asimportant as quantity, to coin a phrase,. Other thanthe tier 1 and tier 2 analysis, is there any other

perhaps deeper analysis done by the Home Office interms of what type of people we want in this countryrather than what the net number is?Damian Green: That is a really good point. One ofthe obvious points, intuitively, is that in economicterms some people coming as immigrants are morevaluable than others; indeed, some can be a net drainon the economy. If you look at it purelyeconomically, the trick is to maximise the former andminimise the latter. One of the arguments out therein this debate that I believe is most wrong-headed isthe idea that the higher the level of immigration thehigher growth you get. The definitive verdict on thatwas given by the Select Committee on EconomicAffairs of the House of Lords in April 2008. That isa report which is well worth studying for those whohave not read it. That Committee flatly said it didnot support the claims that net immigration isindispensable to fill labour and skill shortages andfound no evidence for the argument that netimmigration generated sufficient economic benefitsfor the existing UK population. Not only do wewant to control the numbers for all the reasons Ihave explained; we also want a system thatmaximises the number of those who are mostbeneficial. In a sense I think this is a non-partisanpoint. People are talking about our limit now. Weshould never forget that the previous governmenthad a limit within the points-based system ofunskilled workers in tier 3. That limit was zero andI believe it was right to do that.

Q53 Nicola Blackwood: Given that EU studentsaccounted for half of all non-EU migrants last yearand that many of our universities depend on feespaid by international students to maintain theirinternational competitiveness, what do you plan todo with student migration? Will you cap it? Whatassessment has been made of the impact that willhave on our higher education?Damian Green: As I explained, we are looking at thewhole student area partly in terms of numbers butalso in terms of the problems experienced bylegitimate businesses, languages colleges and so on.I and I am sure the hon Member for Cambridge andothers—anyone in seaside towns—have spoken tothem. There is clearly something out of joint, as itwere, where people feel that legitimate businessinterests are being damaged by what has happened.Nevertheless, we need to look at the long term sheerscale of the numbers coming in. One thing I want todo is differentiate the different types of learninginstitution. We tend to talk about students andassume we are talking of universities. A significantnumber of the people who come in are doing sub-degree courses, and there is obviously a sub-setwithin that concerned with English languagecourses. It is important to disentangle all these areasto discover where the problems are and, if you like,where the scams are. It is quite complex. You canhave bogus colleges bringing in bogus students; it isa straightforward end-to-end scam to evadeimmigration controls. You can have genuinestudents who apply to bogus colleges and arrive hereto find themselves very disappointed and that




damages the reputation of Britain as an educationprovider; or you can have bogus students foolinggenuine academic institutions. The Chairman isabout to stop me because my answer is going on toolong, but it is doing so precisely so I can illustrate thecomplexity of it. We have not come to a firmconclusion yet about what to do, but be assured thatwe are delving into what is a very complex issue.

Q54 Nicola Blackwood: While you delve what is yourreaction to the High Court judgment on the Englishlanguage requirement for tier 4 visas as they relate toEnglish language schools? English language schoolscontribute about £1.5 billion to foreign earnings bythe UK economy. A lot of them are in myconstituency and Dr Huppert’s constituency. We arenaturally quite concerned about the interim effectwhile you conduct that review.Damian Green: There have been a number of rulingssome of which basically boil down to the fact thatthings should have been put in the immigration rulesrather than just immigration guidance. In one casewe have laid orders and in another case we are aboutto do so in order that they become part of theimmigration rules because the judgment dealt withthat narrow point. We have addressed that.Therefore, when the court says we should dosomething we do it.

Q55 Mary MacLeod: Do you have any plans towork with academic institutions and also thebusiness sector to make sure that in this country wedevelop the right skills to fit our needs further downthe line?Damian Green: Absolutely, and that is another keypoint. The other side of the coin in response to thosewho say that we do not have the skills in this countryis that therefore we need to develop the skills. Itseems to me perfectly obvious that the danger is thatif we kept immigration policy the way it was beforewe would continue to have a cohort of people in thiscountry who never engaged with the world of work.It is often said that there are one million peopleunder the age of 25 who are not working, not beingtrained and are not in education. We cannot havesuccessive cohorts like that; we cannot run a stablesociety if we do that. There are two bits of work inother parts of government that fit in very much withthe immigration limit: one is on skills and training sowe can train up the people we need; the other iswelfare reform so that if you are able-bodied andcapable of work you cannot just live your whole lifeon benefits and say, ‘I’m not doing that job; it’s notfor me.’ If you are capable of working in this countryyou ought to be working, not living your life onbenefits.

Q56 Alun Michael: You have already made somereferences to settlement. Accepting that you havenot yet reached conclusions in terms of numbers, doyou intend to introduce a cap on settlement? Do youintend to break the link between migration andsettlement?

Damian Green: I am sorry to provide the sameanswer again, but the details of what we are toannounce are, if you like, some way down the line.I do believe that the rise in grant of settlement andapplications for settlement in the past couple ofyears has been eye-wateringly big. There wasapproximately a 58% increase in grants of settlementlast year and a 24% increase in applications.2 If wecarry on like that it will have a serious long-termeffect. I do not disagree with the principle underlyingthe previous government’s thoughts that we need totighten up, but I am looking very hard at themethods by which it went about it. Having beenopposition spokesman on the Bill that brought thatin, my thoughts are on record. Looking at what Isaid then, I am happy to say that I do not disagreewith it now. It seems to me that things likeprobationary citizenship and various other thingsmay well be an over-bureaucratic way of achievingthe desirable end, so that is what we are looking at.

Q57 Mark Reckless: The Home Office estimatedthat the new scheme might cost £37 million over fiveyears, principally in lost revenue from visaapplications. I was delighted to hear earlier from theBritish Chambers of Commerce that in principle ithad no objection, albeit it preferred a global scheme,to the auctioning of certificates of sponsorshipwithin tier 2. Would it not be possible at least tooffset the projected revenue loss by considering inaddition to the auction within general tier 1 a muchmore widespread allocation by price rather thanrationing of permits within tier 2?Damian Green: It is one of the matters in theconsultation so we are in the throes of asking peoplewhether they believe this would work in practice. Iregret to say that sometimes governments engage insham consultation but this is genuine consultation.We want to hear people’s views on it and we will lookat them. You need to make obvious safeguards. Forinstance, if everything was auctioned off you canimagine that banks and so on would be the onlypeople who could afford them and so we could notbring in anyone in any other sector. There are clearcommonsense constraints which mean that youcannot just operate a completely free market in thisarea, but it is an interesting idea and that is why wehave included it in the consultation.

Q58 Mark Reckless: On my reading of theconsultation it appears to be consulting on thatspecifically on tier 1 but to a degree dismisses it interms of tier 2 options. I just wonder whetherperhaps we might look more closely at the scope forthis within tier 2 and particularly, given the demandsfor 25% to 40% cuts, whether there is any scope forseeing this element of policy as a revenue-raisingrather than cost line?Damian Green: There are complex issues about feesand revenue-raising and overall we are not supposedto do more than recover our costs. There areTreasury conventions here.

2 The witness later corrected this statement as “. . . a 30%increase in grants of settlement last year and a 30% increasein applications.”




Q59 Chair: Is that a yes or no?Damian Green: It is genuine consultation. Ifsomebody comes up with a good idea we will seize it.

Q60 Dr Huppert: I want to move on immigrationand issues to do with detention. The first question isabout detention of children for immigrationpurposes. We discussed this in a Westminster Halldebate. I should be grateful if you would commenton where things are in thinking about alternatives tochild detention and how interaction with parents willtake place.Damian Green: We set up the review which was oneof the first things the new government did. Thatreview landed on my desk a couple of weeks ago, soit has been done very quickly and we are verygrateful to all the NGOs and outside bodiesparticularly the Diana Princess of Wales MemorialFund which co-chaired some of the sessions. At themoment it is on the ministerial desk, if you like, andwe hope to make an announcement very shortly.While we have been doing it we have been consciousthat people have asked what is happening to childrenin detention. We have already stopped overnightdetention of children at one of the two places whereit happened. I refer to Dungavel in Scotland. Thenumbers at Yarl’s Wood are markedly down. Ibelieve that on the day of the Westminster Halldebate the number was three and as of yesterdaythere were no children in detention.

Q61 Mark Reckless: I look forward to thatannouncement. On the broader issue of how wedetain people, I shall be going to Oakington onFriday. There have been lots of concerns about howpeople are treated there. You will be aware of thedeath of a gentleman in April in rather unusualcircumstances. I note that other people detainedwith him were removed the next day. There is also anissue which I have mentioned to you in the pastabout serious assault. What steps are being taken toensure we treat people humanely while we detainthem?Damian Green: There are lots of safeguards in place.Clearly, any death in custody is hugely regrettableand a very detailed investigation takes place. Thereare independent monitoring boards for each of thecentres. HM Inspectorate of Prisons also makesreports. Obviously, individual incidents give rise toseparate investigations. Just generally, a good deal oftraining goes on of all those involved because in theend you need people who have powers of restraint.People occasionally become violent or unco-operative and therefore we need to reserve thosepowers.

Q62 Steve McCabe: Obviously, nobody likes theidea of children being in detention. I understandthere is a problem with people who arrive herefraudulently with children who are not their own.What can you do about that, and how big a problemdo you think it is?Damian Green: It is a big problem, and one of thethings that the alternatives to detention review hasfocused on—because it is one of the most difficult

questions—is how to ensure we can remove peoplewho do not have the right to be here at the end of it.Clearly, any government needs to get that right aswell. If we do not my fear is that child trafficking ofthe type you mention will increase. You would knowthen there was no effective enforcement if you turnedup here with a child which might or might not beyour own. It is a point very well made and the needto keep those reserve powers has been at theforefront of our minds during the alternative todetention review.Alun Michael: When you spoke to Citizens UK inWestminster Abbey about the welcome decision toimplement the promise to end the detention ofchildren you gave the further commitment to do thatby Christmas. Are you confident that you canachieve that?

Q63 Chair: Westminster Abbey?Damian Green: It was a Christmas party. I suspectthat as immigration minister it is the only time I willever be given a bouquet for that announcement.They said that last year they had sent FatherChristmas to parade outside Yarl’s Wood to makethe point that there were children in there. I made thepossibly rash commitment that if anyone had to doit this year I would dress up as Father Christmas,which I think gives you the answer. I am confidentthat we will have this sorted well before Christmas.

Q64 Mary MacLeod: I am a London MP who isconcerned about homelessness. Do you believe thatboth EU and non-EU migrants are probably causinga problem of homelessness in this great city of ours?If so, do you have any plans to deal with it?Damian Green: We have found it to be a problemwith EU migrants particularly for those who camehere and lost their jobs because of the recession. Asyou rightly identify, it is a problem in London and inother areas like Peterborough. I have had a meetingwith my hon friend from Peterborough about this.We are taking action on it. We are working withpartner agencies and local authorities and triallingthis approach in Westminster, Peterborough,Southampton, Brent, Lambeth, Oxford, Readingand Slough where there are particular problems. Sofar over 200 rough sleepers have been considered forremoval under this approach and we are pursuingremoval action in over 100 cases. Eighteen people ofa variety of EU nationalities have been removedsince March of this year. It is a problem and we aretrying to deal with it.

Q65 Bridget Phillipson: You will be aware of the pilotscheme set up to support destitute victims ofdomestic violence with insecure immigration statusand no recourse to public funds. I was involved inthat pilot when I managed a women’s refuge and itwas a very welcome step particularly by smallervoluntary sector organisations that suffer asignificant financial strain in supporting people withuncertainty about where funding will come from atlocal level. Does the government have any plans tocontinue that scheme, and where are we with that?




Damian Green: You will be aware from having beeninvolved in what is a good scheme that the pilot wasscheduled to run until the end of August of this year.We have decided to extend that pilot until March ofnext year. The Home Secretary has made acommitment to find a long-term funding solution tothe issue. Clearly, it is an important issue that weneed to address properly.

Q66 Bridget Phillipson: On a similar note, theimmigration system changed in 2002. Victims ofdomestic violence who were married to Britishnationals could apply for indefinite leave to remain.I believed that to be a welcome step because there aremany vulnerable women in the community. I amdealing with a number of cases involving women ina similar position at the moment in my constituency.Because their husbands are not yet British nationalsand are often going through that process the onlyoption open to them is to seek asylum. There is anargument that the asylum system does not takeadequate notice of gender issues. Do you have anythoughts on that? Does the government have anyplans in that area?Damian Green: Perhaps you will let me go away andthink about that. I have heard the point aboutgender issues and the asylum system. We arepondering ways in which we can respond to that so,if I may, I shall take that away.

Q67 Chair: I am glad you are to stay for the nextsession which is concerned with the UK BorderAgency for which you have responsibility. Minister,before we turn to Ms Lin Homer I want to ask aquestion about bonuses. I put to the Home Secretarylast Thursday that in the previous session theCommittee was concerned that bonuses were givento senior Home Office officials, including obviouslyMs Homer and other members of the agency, despitethe fact that the backlog remained in existence andthere was dissatisfaction with it. Is it still the policyof this government to pay bonuses to senior officialsof the UKBA?Damian Green: Following consultation with thePrime Minister and Cabinet Secretary, for this yearthe permanent secretary has decided that less thanhalf of the available provision should be spent, sobonuses will be paid. Therefore, 8.6% of the pay billwas set aside for performance bonuses.

Q68 Chair: How much is that in terms of money?Damian Green: That is a good question to which I donot have the answer off the top of my head.

Q69 Chair: Would somebody be able to tell us beforethe end? You say that 8.6% has been set aside forbonuses?

Damian Green: Yes.

Q70 Chair: Of the total budget of UKBA?Damian Green: Of the pay bill of the Home Office.

Q71 Chair: We do not know what the amount is?Damian Green: I do not know off the top of my headwhat the Home Office pay bill is. But only 4% of the8.6% is being spent, so it is less than half.

Q72 Chair: Across the board in the Home Officeonly 4.3% of the pay bill of the department will beavailable for bonuses?Damian Green: Yes, and that is less than half of whatit could be, which means that average pay for HomeOffice senior civil servants will be cut by 4.6%because they are getting much smaller bonuses thanlast year.

Q73 Chair: Why? Is it because it is regarded asacceptable just to give bonuses as part of salary?When you say “cut”, presumably a bonus issomething you receive if you do a good job?Damian Green: Exactly, and not all civil servantsacross the Home Office will get bonuses.

Q74 Chair: So, it is not a pay cut; it is something theywill not get if they do not do a good job?Damian Green: They will get less money this yearthan last year, so I daresay it feels like a pay cut tothem.Chair: It is a very odd reading of the situation.

Q75 Mr Burley: I do not understand it. Surely, abonus is not compulsory but discretionary, so if youare not performing and therefore not entitled to abonus it does not count as a pay cut?Damian Green: It is a point about pay. The amountin the bottom right-hand column of the pay slip, asit were, will be less on average this year than it waslast year.

Q76 Chair: For the purposes of Parliament-speak,do you accept this is not a pay cut because it issomething people receive if they do a good job, or doyou just give out bonuses to anyone who wondersround to see you?Damian Green: No.

Q77 Chair: It is not a pay cut. The answer to myquestion is that the amount of money available forbonuses is being reduced to 4.6% but they will notget the 4.6% unless they do a good job?Damian Green: Yes.

Q78 Chair: That includes your own area, theUKBA?Damian Green: Yes.Dr Huppert: My question relates to both of you andhow the points-based system is being operated byUKBA. I am very concerned that in respect of anumber of issues a very pedantic line is being takenon various matters. For example, last weekend acouple came to my surgery. They were both doctors,a GP partner and a consultant, who earned rather




more than I do. They had applied for tier 1 visas, aswas appropriate, and it was rejected because they didnot have evidence that they could financiallysupport themselves. Although their main accountnormally had in it much more than my account atone stage they paid a large sum off their mortgage acouple of days before some money came in and so itdipped below £800 for a few days. Clearly, thesepeople are very wealthy; they are contributing to theUK. The UK is very short of skills in thoseparticular areas. Why is it sensible for us to rejectthem on technicalities like that? Is this how UKBAought to operate?

Q79 Chair: Obviously, not all of us will bring ourcases to these evidence sessions, but can you tell usthe principle? It is an absolutist set of rules, is it not?If you fall below you are out, basically, as DrHuppert said?Ms Homer: I am very happy to receive letters aboutindividual cases. As you say, this is probably not thesetting to go into too much detail. The Committeewill be aware that we moved on the points-basedsystem to an objective system whereby there are veryclear criteria for those who apply. We removed somefairly large areas of discretion that used to exist forentry clearance and other immigration officers. Thathas made for some transitional pain, if I may put itthat way, not least it is very important thatapplicants give us all the information we ask for anddo not leave us to guess. It is a matter of balance, butcertainly when we consulted the vast majority ofpeople believed that an objective system where onecould test oneself against the rules before applyingand did not feel oneself to be at the whim of theindividual officer was regarded as preferable. Wespent a lot of time over the past 12 months indiscussion with individual groups to make sure thatwas understood. Sometimes there are urban myths,if I may call them that, about blockages that do notexist. We believe that the objective system is soundbut it is important we have constructive dialogueswith groups. In the example you give it wouldprobably have been sensible for them to make theapplication at a point when their bank balance washealthy. That is the kind of help we would like to tryto give applicants rather than the feeling of runninginto a brick wall.

Q80 Mark Reckless: Is not the issue that wheresomeone has made an application for a post-studentwork visa and he or she has £800 in an accountfollowing the leading judgment of Lord JusticeSedley in Pankina & Ors your agency has applied arequirement without reference to this Housewhereby it should be at least £800 for the wholethree-month period? Individuals may have appliedwithin that period and done the right thing and gonehome when told to do so. What plans do you have,if any, to ensure that those people who have beenunlawfully turned down can have their casesproperly considered?Ms Homer: As the minister said, we would alwayswant to comply with what the court tells us to do.The court was very clear that it was not necessarily

an unreasonable thing to expect people to have asum of money in their accounts for a period of time.Its point was simply that that should be clear on theface of the rules, eg clear in front of Parliament. Thatwas the reference the Minister made to us to giveconsideration to how we implemented it in future.

Q81 Mark Reckless: Are you contacting applicantswho have been unlawfully rejected?Ms Homer: We are looking at what we have to do inrelation to that case and that will go forwards as wellas backwards.Mark Reckless: If you can update this Committee itwould be greatly appreciated.

Q82 Mr Winnick: I have absolutely no objection torelatively low-paid people in UKBA getting extramoney, and I hope that will be the position, but as faras concern the most senior people what bonus areyou as chief executive and your deputies due toreceive?Ms Homer: The bonus judgments for me and myteam are made by the Home Office as a wholerelative to the performance of the senior civil servicein the department as a whole.

Q83 Mr Winnick: What bonus did you get last year?Ms Homer: It is clear from the accounts of theagency. My salary is published in our accounts.

Q84 Mr Winnick: In which case, can you tell us sinceyou are now before a Committee of the House ofCommons?Ms Homer: I am happy to but I would want to dothat accurately. We have written to you before.

Q85 Chair: You do not know what your salary is?Ms Homer: Yes, I do know what my salary is.

Q86 Mr Winnick: I do not suggest that you are tryingto hide it. I ask a simple question.Ms Homer: Mr Winnick is asking me about thefigures for 2009 which are published.

Q87 Chair: I think Mr Winnick spoke over youbecause he is getting very excited. Obviously, thesalaries of civil servants are matters that interestMembers of Parliament. What is your currentsalary?Ms Homer: My salary is £208,000.

Q88 Chair: What was your bonus, approximately,for last year, not to the last penny?Ms Homer: Last year it was described as being in theregion of £10,000 to £15,000.

Q89 Chair: So, you have a salary of £200,000 andlast year a bonus of £15,000, or is all of that includedin the package?Ms Homer: No; that is on top.

Q90 Chair: Let us move to the substance of why youare here. Thank you very much for the update to theCommittee. Our problem is that it tends to comeliterally just before a session and we do not have the




time to digest the very important information yougive. It would be for the convenience of theCommittee if we agreed a timetable and UKBAstuck to it. We would like to read your letter at leisurebefore you come before us but it arrived onlyyesterday. I am glad the Minister has placed the letterin the Library of the House which is extremelyhelpful to other members, but in future it would bevery helpful if we stuck to a timetable. We will let youhave a list of dates with which we would like youto comply.Ms Homer: I am very happy to do that.Mr Burley: I understand you assured ourpredecessors that you were on course to meet thesummer 2011 deadline for dealing with the 400,000to 450,000 files which formed the historic legacy ofthe unfinished asylum cases under the previousgovernment. I also understand that it took nearlyfour years to deal with some 277,000 of those files.Can the 2011 deadline be met? If not, what will youdo with the cases still open when that deadline isreached?

Q91 Chair: Just remind us of the deadline. What isthe date by which you are supposed to clear theentire backlog? You have a date in mind, do you not?Ms Homer: Yes. Several Home Secretaries back,John Reid gave a commitment to Parliament that wewould finish the legacy backlog by the summer of2011.

Q92 Chair: Can we take 31 July as the target?Ms Homer: I am assuming the end of July, unless youdo not have any summer holiday at all next year.

Q93 Chair: Will you meet the point of Mr Burley’squestion?Ms Homer: I remain confident that we are on targetto meet the deadline. When I last appeared beforeyou we had been undertaking a change in the way wedid the work. You had pressed previous HomeSecretaries to make extra resource available to us.That was done, but the consequence was that wefront-loaded the system so that cases reached caseowners in a more finished and ready way, meaningthat the decision makers could then get throughcases more quickly. The consequence of that changeis that our performance in the first half of 2009slowed down relative to 2008, but I am pleased to saythat that has speeded up in the first quarter of thisyear. We are now at a level that is 68% more effectivethan it was for the remainder of the year, and I amconfident that we can finish by the deadline given toParliament.

Q94 Chair: You will know that this Committee in itslast report asked you to complete the backlog by theend of this year and you wrote back to say you couldnot do it. So, you are giving us an absolute guaranteetoday that the backlog will be cleared on 31 July nextyear? We are talking about 277,000 cases.Ms Homer: Which we have completed.

Q95 Chair: What is left? What is the backlog at themoment?

Ms Homer: You will recall that when we originallyshared this information with Parliament we took anestimate of the number of cases that required actionwhich we viewed as being between 400,000 and450,000. This was never an absolutely exact size.

Q96 Chair: As of today what do you believe it is?Ms Homer: We believe that it is in that region.

Q97 Chair: And you will clear 400,000 to 450,000 by31 July 2011?Ms Homer: I am confident that we are on target todo that. We have maintained a level of resource inour own team and added the extra team via thecommercial provider alongside us. The performancein the first quarter of this year has improved. It needsto step up a little bit more. Each case worker needs todo two cases a week more than they have been doing,which I think is manageable, so we remain verydetermined to hit that target.

Q98 Mr Burley: If you do not hit that target will youtake your bonus—yes or no?Ms Homer: It will not be for me to decide.

Q99 Mr Burley: You could decide not to take it.Ms Homer: Once in the period I have been here I didso voluntarily and that was the year of the foreignnational prisoner.

Q100 Mr Burley: Will you do that again next year?Ms Homer: That is very likely.

Q101 Lorraine Fullbrook: I should like to drill downa bit more into the clearance of the backlog. Will youexplain to the Committee the plans that the UKBorder Agency has put in place to manage itsresources to achieve the objectives it has been set andexactly how it will drive that given budgetaryrestraints? What plans have you put in place toachieve your objectives?Ms Homer: We take a fairly straightforwardapproach to business planning, so we spend timelooking at the objectives the government gives us,ensuring we put the resources in the right place. Wehave given ourselves year-on-year efficiency targetsagainst which to deliver and we then track thatinformation in a set of management informationwhich we report both to the permanent secretary ofthe Home Office and the Minister. We have taken theview you have the right to expect us to deliver valuefor money in the past and we can see that ratchetingup in future. For the past four years we have beenbroadly cash flat, so we have been absorbing ourown inflation and pressures and increasing theamount of work we do for that resource. We wouldexpect to have to continue to ramp up that approachas we go forward.

Q102 Lorraine Fullbrook: You said that in the pastall your plans had been to have the resources in thecorrect place. Do you think they have been in thewrong place until now?




Ms Homer: No, but I think a business must move itsresources to where they need to be. If I take thelegacy work in which this Committee has beenclosely involved, on my arrival in the job there wasnot a team of case workers focusing on those cases.We now have 800 staff dealing with that work.Similarly, as some Members know well, in 2006 wehad 80 people working on foreign nationalprisoners; we now have over 700. Therefore, abusiness must work out what its objectives are inconjunction with the people who direct it and thenmove resources to those places. We have to do thatwithin an overall constrained budget.

Q103 Mr Winnick: In addition to the backlog legacythat is being dealt with today as well as in othersessions the chief inspector of UKBA said thatanother backlog was forming, namely asylum cases.He doubts whether that backlog will be clearedwithin the target of the date given. Is it likely thatyou will meet the target to complete 90% of asylumcases within six months? The deadline is December2011.Ms Homer: I think the new asylum model remainsthe only one we can find anywhere in the worldwhere a country has set itself the target to concludecases rather than just decide them. I believe I said tothe Committee on the last occasion we met that ourprogress against those ramped-up targets of theproportion of cases that we were concluding hadbeen slower than we would have wished. However, itis improving year on year; it is now 10% better thanit was last year. I am confident that we are stillmoving in the right direction. The important thing isfor us to have some trend improvement.

Q104 Mr Winnick: Will that deadline be met?Ms Homer: I am not totally confident because we arein new circumstances that we will absolutely meetthe 2011 target, but I am very confident that year onyear we are concluding more cases. To pick up thechief inspector’s point about whether there isanother backlog, when the National Audit Officelooked at the asylum system in 2009 it correctlydirected that we should put resources into finishingout-of-time cases and not put all of our resourcesinto simply meeting the six-month deadline. We havedone that over the past year. It is one of the thingsthat has contributed to our being a bit slower aboutin-time cases, but the number of cases going outsideour service standard is now stabilising and we expectit to go down in future, so we do not believe we arebuilding up a backlog to replace the one we arefinishing off.

Q105 Mr Winnick: Minister, I know that you havebeen in office for only two months. Leaving aside allquestions of personalities, are you satisfied that theUKBA, which came into operation in April 2008, isdoing the job it should be doing, or do you have inmind changes, substantial or otherwise?Damian Green: My overall view is that the agencystarted from a relatively low base. John Reidfamously said in 2006 that it was not fit for purpose,and he was clearly right.

Q106 Chair: To this Committee?Damian Green: Indeed; it was a memorableappearance. My feeling is that it is better than it was,but there is an awfully long way to go. I do notbelieve Ms Homer would disagree with that analysis.Clearly, there are systems that still need to beimproved and performance, not least on backlogs,needs to improve. Do I propose wholesale, radicalreform of the organisation? Within the context ofimproving its performance and the wider context ofour awareness of the state of public finances we arelooking at ways in which performance can beimproved. One of the things I want to avoid doing isto make the mistake that I believe some of mypredecessors made, namely to discover there is acrisis and completely refocus all of the agency’sefforts to solve that immediate problem. I believethat leads to backlogs building up and areas beingunder-resourced.

Q107 Mr Winnick: You have no plans to reorganiseUKBA or bring in another organisation to replaceit?Damian Green: We do not intend to replace it withanother organisation, but we are looking atpotentially radical changes to make it more efficient.

Q108 Chair: If John Reid’s statement gave it, say, anE-rating you would say it had improved. Obviously,it is not the first-class organisation you would like—you have been there for only eight weeks—butwould you give it approximately a C-rating at themoment?Damian Green: I try to avoid giving marks out of 10or use an A to E rating for obvious reasons. I thinkthe best phrase I can use is one that will beparticularly familiar to Labour Members of theCommittee, that is, “a lot done, a lot more to do”.Chair: Things can only get better!

Q109 Mary MacLeod: Ms Homer, last autumn yourevealed that 40,000 immigration cases had beenidentified where there was no formal record ofwhether or not the applicant had left the country.Are those cases included within your estimate of400,000 to 450,000, and do you still think you will beable to get those done within the deadline of Julynext year?Ms Homer: They are not included but we haveagreed that we would aim to finish them atapproximately the same time. We have taken aninitial look and they are all being checked forcriminality. Our view is that probably in order ofpriority they fit at the end of that cohort of cases, butwe are confident we can finish those within the sameperiod, in part because quite a lot of them areadministrative and it is a matter of finishing off casesrather than anything substantive. A couple of casesI looked at recently included a young woman whowas a three year-old in 1990 and whose case for somereason was not determined when her mother’s was.That was a really easy one where subsequently werecognise we should make a grant and conclude it,but there are other cases where it is as simple as justupdating the records. We do intend to go through




them and resolve every case with the case resolutiondirectorate staff as they come to the end of thehistoric asylum legacy on which they have beenfocusing.

Q110 Mary MacLeod: So, that is a definite Julydeadline?Ms Homer: Yes.Chair: We shall write it in stone.

Q111 Alun Michael: I am sure you are relieved whenyou find the odd case that is as easy as you have justdescribed. Can you give an indication of whatproportion of the 40,000 are visa over-stayers andwhat proportion are students refused an extension,and what types of cases are involved?Ms Homer: In relation to both the main legacy andthis one I took the decision that we would startworking on the cases. My view is that historically theagency tended to put a lot of resource into workingout what was in the cupboard rather than dealingwith it. We have dip-sampled rather than gonethrough every case. As a consequence this may notbe completely accurate, but probably under half arestudent extension-type cases. Early indicationssuggest that in many cases they may have beenrectified by subsequent successful application or bythe student going home. The plan is to check all ofthose, but it appears that probably 40% of the casesrelate to students. The rest will be a mix of over-stayers, some spouse cases where again the positionmay have been subsequently rectified and someclaims for status which are relatively easy todetermine at this stage.

Q112 Mark Reckless: I have been trying to digestyour letter over night. I have two questions abouttable 1.1 in annex A which I found difficult toreconcile with the statement you make in paragraph11 of the letter. You say that the percentages of grantof applications have remained fairly consistentthroughout the life of the programme. If we go backto your letter of 4 February 2010, however, I notethat then you said 35% of applications had beengranted. I calculate that since then that number hasgone up to 56% for the period since your last letter.Ms Homer: I have not done the math. That soundstoo high to me given the numbers we have handledbetween February and now, but I do not want toargue with you on the math. What I would say is thatthroughout the period of the legacy we have hadperiods when we have concentrated on particularsorts of cases. Since we last saw you partly in relationto some of the advice we received from the NAO wehave concentrated on a number of supported cases.In the main that will include some long-standingfamily cases and that may lead to a temporaryincrease in grant rate. If you look at the proportionof cases over time sometimes you get a big bank ofapprovals, sometimes a big bank of “others” andsometimes a big bank of removals, which is why overthe whole period we have tracked it. But for thewhole 277,000 the figure now stands at 38%. Whenyou take the medium-term view it has been relativelyconsistent.

Q113 Mark Reckless: My second question abouttable 1.1 which relates to the comparison betweenmain applicants and dependants. I note that of themain applicants about one third, ignoring the“others” category, have been removed but fordependents the proportion is barely one in 20. I justwonder whether one possible conclusion is that yourchance of being granted leave to remain does notreflect so much your history of persecution orotherwise but whether or not you present yourselfwith dependents.Ms Homer: Not necessarily. What it actually reflectsis that we have historically struggled to persuadefamilies to go at the end of an unsuccessfulapplication for asylum. We have a bigger proportionof adults going out and therefore when you look atthe historic backlog there will be a number of peoplewith dependents who will then have gone on toacquire longer-term residence rights. It is more to dowith the fact that our ability to persuade families togo home has always been limited by the fact that wewill not allow families to suffer destitution ordifficult circumstance. It is right at the heart of thereview of the detention children. Finding a way topersuade a family to accept that no really means noand it must go home has been a long-standingchallenge and one that we are looking at afresh atthe moment.

Q114 Mark Reckless: Rather than merelypersuading them to go—I accept it will not bepossible in all circumstances—is there not a need forgreater focus and political will on enforcement ofremoval of people who are not entitled to be in thecountry?Ms Homer: The agency is very committed toenforcing removals. We have a strong record ofenforcing removals and we have been lookingconsistently at how we can increase that level evenfurther. We are probably the best of any Europeancountry at removing so it is a high performance, butone thing the Minister has asked us to do is seewhether we can clear away any more blockagesparticularly in the later stages of cases, shorten thetime it takes to appeal and improve our ability to getdocumentation for refused asylum seekers. Many ofour staff would be keen to get a higher level ofremovals.

Q115 Steve McCabe: When the previous version ofthis Committee took evidence in March 2009 itdiscovered that the agency was responding only to60% of MPs’ inquiries within the 20-day limit. MrGlyn Williams of the agency said at the time he didnot see why he could not do much better than that.What is the situation now?Ms Homer: We are doing better but in part it hasbeen helped by the fact that you have slowed downwriting letters to us during the election campaign.

Q116 Chair: No. I think the answer is that youwould not reply to them when we wrote to you. Yousaid, “You will not get a reply because you are a




candidate, not an MP.” You stopped writing andthat was why you had a slow down, not because wehad not written.Ms Homer: It is a two-fold answer. We applied theCabinet Office rules and subsequently sought toreply to those that were returned, but you did alsowrite us fewer letters. In overall terms, if you go backto 2004 we answered 34% of letters. We received35,000 letters that year. In 2009, the last completedyear, we received 66,000 letters from MPs andanswered 78% of them in time, so we are improving.Although it is not yet a published statistic and so Irisk getting into trouble with ONS, in the monthafter the election in May uniquely for the agency itresponded to nearly 90% of letters in time. We aretrying to use the slightly better catch-up that we gotthrough the election to stay on top of MPs’ letters.Steve McCabe: My experience of letters from theagency is that they are perfunctory and often lackany real information. Maybe one of the reasons youget so many is that any attempt to get information isfollowed up by another letter that does not meet thetarget. Has it occurred to you that maybe you needto rethink the way you communicate with MPs? Yousaid earlier in response to Dr Huppert that youwould be quite happy to hear about individual cases,but that is not the experience of MPs. Whether weare telling you about people who should be sent backand being helpful to you or whether we are askingabout people who have been lost—for example youhave approved the mother but forgotten thedaughter when the application was made at the sametime—the standard formatted reply is virtuallyuseless. I wonder why it takes so long for somebodyto run off a standard reply. If it is consuming stafftime and all that resource why do you not dosomething different to improve the nature of thecommunication and see if we can all end up happier?

Q117 Chair: I believe Mr McCabe’s views areendorsed by others. You now have a big system; youhave account managers and directors; you havepeople in Croydon and in the regions, but at the endof the day the same old letter comes back.Ms Homer: Chairman, I believe that on the lastoccasion you accused me of not even signing theletters I sent you.

Q118 Chair: I believe Mr Winnick did.Ms Homer: I take the point. It was not true; I didsign them. We take this very seriously. I put a lot ofpersonal effort into it, including speaking to anumber of MPs directly on cases where I perceivethat the quality is not right. We had two challengeson quantity and quality. I have put a very significanteffort into getting more timely responses. I think it isa fair challenge to us to say that we should now putan equal continuing effort into trying to improve thequality of the letters. I am very happy to take thataway.

Q119 Bridget Phillipson: I visited the UK BorderAgency in Croydon earlier this year before I waselected an MP. I was appalled beyond words by thetreatment meted out by staff to asylum seekers. The

people I was with were not really in a position tocomplain, nor did they feel that given they weregoing through that process it would be helpful totheir cases if they were seen to complain. Frankly, Ifelt that if I complained on their behalf I wouldprobably be asked to leave given the aggressivetreatment, frankly, of staff there. Do you think thatis an appropriate way for asylum seekers to betreated? I intend to visit Croydon over the summerrecess and I am grateful to the Minister for arrangingthat. When I visit as an MP I do not imagine I willbe told, ‘Sit there! What are you here for?”, that itwill be assumed I do not speak English, askedwhether I have tuberculosis or that I must be anasylum seeker myself.Ms Homer: I am really disappointed if that was yourexperience. We have put a lot of effort intoimproving the quality of the experience of peoplewhen they apply. In Croydon in particular we havedone some of that work with the South LondonCitizens organisation. I am perfectly happy to talk toMPs about what more we can do. We feel we havemade the system better. Obviously, I was not therewith you at the time but I can give the Committee anassurance that I take very seriously any suggestionsthat we are not treating people in a dignified andhumane way. We have systems and it is necessary totry to organise but I believe we should be able to dothat in an efficient way in terms of the time of bothstaff and the people who come and that it is dignifiedand appropriate. My view is that we have madeCroydon a lot better. Obviously, you did not see thatand I should like to learn from your experiences andsee if there is anything we can do to improve itfurther.

Q120 Alun Michael: I am pleased that the Ministeris here to hear this question. It used to be the casethat many of the questions that come to you in theform of letters or in other ways would have gone toMinisters. Parliament accepted that replies shouldcome from the heads of agencies in order to getquicker and more timely responses and not waste thetime of either Ministers or MPs. Do you accept thatMPs generally simply want to help deal effectivelyand fairly with the cases they take up and that veryoften correspondence is delegated further down theline and the response looks as if it is being sent inorder to tick a box that a reply has been made? Thatis frustrating; it is a waste of the time of the MP andhis or her staff. The attitude of the agency ought tobe that it sees the MPs as partner in trying to dealeffectively sometimes with very difficult cases thatcome to them.Ms Homer: Yes. I reply to between 20 and 50 lettersa day. I expect my senior directors similarly to sign acertain number of letters themselves and dip samplethe ones they do not sign in order to try to improvequality. I can assure you—I believe there are anumber of MPs who can confirm this—that Iintervene myself in cases where I regard the qualityas inappropriate.




Q121 Alun Michael: That does not lead to asignificant improvement which is why the delegationis problematic.Ms Homer: I accept that. The difficulty is that Icannot truthfully sign 66,000 letters. I have talkedbefore about the way one uses time. We have tocontinue to improve the quality of letters andmanagerially I have to do that by signalling theimportance of it to the rest of my workforce. That issomething I have tried to do the whole time I havebeen here. We have made some improvements and Iam disappointed that nobody in the room confirmsthat. Perhaps I am just kidding myself or amunlucky, but I now get comments from some MPs,including the very regular high volume ones, thatthey believe we have got better at it. I am absolutelyclear that we need to get better still.Chair: You are not kidding yourself. This is still anissue for Members of this House and it needs to bedealt with properly and effectively.

Q122 Mr Winnick: Normally, when we write toauthorities nationally a Minister replies. It could besaid that we are not writing directly to you; if we didit would be passed to UKBA. I do not know whetheryour experience was the same. I accept that thepractice was not precisely similar in the previousadministration, but when you received replies didyou feel that the Minister should at least have signedthe letter?Damian Green: As you say, I am in the position ofhaving been on both sides of this particularexchange. The truth is that I would prefer the letterto be substantive and helpful. As both a constituencyMP—therefore, I write to Ministers as well—andalso a Minister I care more about the timeliness andsubstance of the letter than about who signs it. I dosign letters as well.

Q123 Mr Winnick: You would take responsibility ifit was a letter that should be sent to a Member ofParliament rather than a junior person with duerespect?Damian Green: Indeed.Mr Winnick: A lot of the replies I receive, which I amsure is the experience of others—there should be noexception for me—are signed by people way downthe line.Chair: I think the message to the Minister is that heshould sign more letters.

Q124 Dr Huppert: Can I ask what is happeningabout e-borders and the £1.2 billion scheme to try totrack every entry and exit into the country? As Iunderstand it, there was a report by the Committeethat there was a risk it breached EU law as well asdata protection rules in France, Germany, Belgiumand a whole host of other places. To what extent hasit now been reformed to satisfy those legalrequirements? I am not aware that this Committeehas received a response to its report. If so, I havemissed it; if not, when will we have it?Ms Homer: I do owe you a reply and you will haveit very soon. I shall try to make sure you get it beforethe recess.

Q125 Chair: The election intervened and thereforeyou were busy not answering our letters. We wouldlike a reply as soon as possible.Ms Homer: Absolutely. We have undertaken furtherwork with Europe. They have confirmed the broadcompatibility of the scheme but also asked us towork with individual Member States. Since I lastsaw you a number of countries have indicated theyare content. In particular, France has confirmed thatit believes it is compatible with its arrangements. Weare moving forward on compatibility and Ministersare pressing the EU to bring their own arrangementsfor passenger name records further forward becausethere is some evidence of delay. We are not the onlycountry to press for it and I think we are inincreasingly strong company.

Q126 Chair: You will be aware that the PrimeMinister is very keen to deport foreign nationalprisoners. In the letter you sent to us yesterdayparagraph 1 appears to be incompatible withparagraph 2, but perhaps I do not read it correctly.You say that in 2009 to 2010 the total number ofharm removals was 37,745, but in paragraph 2 yourefer to 19,000 foreign national prisoners from theUK including a total of 5,535. Do you know howmany foreign national prisoners we have in ourprisons at the moment?Ms Homer: I do but I am not sure I can give it off thetop of my head. Between 11% and 14% of the prisonpopulation comprises foreign nationals. The totalprison population at the moment is about 83,000, soit is 11% to 14% of that.

Q127 Chair: How many foreign national prisonersfor the whole of last year did we remove?Ms Homer: We removed 5,535 in 2009. The figure of19,000 in paragraph 2 is the total number of foreignnational prisoners on criteria sentences since 2006,namely those who have served 12 months or more orhave been recommended for deportation orotherwise served a criminal sentence. Therefore, the19,000 is a cumulative figure. The harm removalsinclude a much wider range, so they may be peoplewho have been cautioned. They may includeexamples where we have a failed asylum seekerwhom the police believe is involved in gangcriminality but who has not been sentenced butwhom they ask us to prioritise.

Q128 Chair: They would come within the categoryof foreign national prisoners?Ms Homer: Absolutely. Therefore, those who serveda long sentence are at the top of that but we wouldthen take advice from local authorities and policeand seek to target our enforcement activity on thosecausing harm in a more general sense.

Q129 Chair: Of those who went missing andobviously cause concern how many have beencaught and how many are still on the run?




Ms Homer: You mean 1013?

Q130 Chair: Yes.Ms Homer: I set out in paragraph 5 the up-to-datefigure. We have concluded 793 of those cases, ofwhom 378 have been deported. That is seven morethan the last time I saw you.

Q131 Chair: How many are left to be tracked down?How many are wandering around and we do notknow where they are?Ms Homer: Seventy-three, and eight fewer casesthan the last time I saw you. We expected this to slowdown as it finished but I hope those figures indicatethat we remain determined to seek out and continuethose cases when we are able to.

Q132 Chair: The Prime Minister has made it veryclear that foreign national prisoners are a priority forthe agency and it remains so?Ms Homer: Absolutely—both the ongoing andhistoric. You did ask whether we could update youon the amount of the bonus. Would you like me todo that before you put another question?

Q133 Chair: Yes.Ms Homer: The 4% of the SCS pay bill which thepermanent secretary has distributed for bonuses forsenior civil servants this year is £773,000 across thewhole department.

Q134 Chair: So, the pot will go down to 4%?Ms Homer: That is the 4%.

Q135 Chair: So, it was £1.4 million but it is comingdown to £773,000?Ms Homer: Yes.

Q136 Chair: That is the Home Secretary’s decisionin the end?Ms Homer: That is the permanent secretaryfollowing Cabinet Secretary and Prime Ministerrules.

Q137 Chair: But who makes the decision? Is it thepermanent secretary, the Cabinet Secretary or theHome Secretary?Ms Homer: The permanent secretary makes thedecisions based on rules provided by the CabinetSecretary agreed with the Prime Minister, and he hasawarded half of what he could have awarded.

Steve McCabe: Does it mean that about £34 million of

the Home Office pay budget will go in bonuses tosenior civil servants?

Q138 Chair: Potentially. But Ms Homer is not takingher bonus if she does not reach her target on 31 July.She will not want to appear before us.Ms Homer: I always look forward to appearingbefore you.

Q139 Chair: There is one final question to theMinister on the consultation period. Thegovernment has allowed 12 weeks for consultationon the cap which came into effect yesterday.Parliament goes into recess next Tuesday. Obviously,the Committee is not sitting during the recess. Thatdoes not give us sufficient time to enable us to dojustice to any report we might produce. The HomeSecretary very kindly last week said she would bewilling to accept the report of the Select Committeeoutside. It was really based on a nod and a wink, butI seek from you something a bit stronger. We shallnot be able to do justice to our work in thatconstrained period. We would like to give you a goodreport. Bearing in mind that the previousgovernment was judicially reviewed three times onthe points-based system and judges have made clearthat it is due to lack of parliamentary scrutiny I hopethe Minister will look kindly on the fact that we maynot meet the deadline of 12 weeks and reject theSelect Committee’s report.Damian Green: I am sure we would not reject theSelect Committee’s report. The deadline is 17September. I do not breach any confidence when Isay that we shall not announce the result on 18September. Parliament is back for two weeks inSeptember but I am not sure when the Committeeplans to produce its report.

Q140 Chair: We may want another session but wehave not decided. We have asked for writtenevidence and so far have taken evidence only fromyou, Ms Homer, the Federation of Small Businessesand the British Chambers of Commerce. Others willwish to write in. We would like a bit of latitude.Damian Green: Obviously, we would welcome theSelect Committee’s view. If you can do it as fast aspossible after 17 September clearly that will bemutually helpful.Chair: Minister and Ms Homer, you have been herefor over an hour and a quarter. We are most grateful.

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Members present

Keith Vaz (Chair)

Nicola Blackwood Mary MacleodMr Aidan Burley Alun MichaelLorraine Fullbrook Bridget PhillipsonDr Julian Huppert Mark RecklessSteve McCabe Mr David Winnick

Witness: Professor David Metcalf, Chairman, Migration Advisory Committee, gave evidence.

Q141 Chair: Could I call the Committee to order andwelcome Professor David Metcalf to the dais? CouldI refer all those present to the Register of Members’Financial Interests, where the interests of Membersof this Committee are registered? Could I declare aparticular interest? My wife is an immigrationsolicitor and a part-time judge. Professor Metcalf,the Committee is in the middle of its inquiry into theimmigration cap and clearly the Migration AdvisoryCommittee, commonly known as the MAC, isextremely relevant as far as the Government isconcerned in respect of these matters. Do you thinkthat it’s something of a failure of the MAC that theGovernment has had to suggest a temporary cap? Ifyou look at the reasons why the Migration AdvisoryCommittee was set up, it was to advise theGovernment on numbers, shortages and skillshortages. Had that been working, perhaps the newGovernment wouldn’t have needed to have had thecap that it has imposed.Professor Metcalf: No, I don’t think that at all,Chair, if I may say. First of all, the Government setsour agenda. We don’t go off and decide what it is thatwe would wish to investigate. It’s agreed acrossGovernment and then we are asked to investigateparticular things further. The only areas that we’veever worked on have been to do with the area ofwork, and the fraction of people coming in, if youuse the International Passenger Survey figures, forexample, accounted for by work has substantiallyfallen. I mean, the numbers in the InternationalPassenger Survey in the work routes have fallen fromabout 110,000 in 2004 down to about 55,000presently; that is to say the main people, not thedependants. So, no, I don’t think it’s in any sense afailure of the MAC, if I may say. No.

Q142 Chair: So why do you think they bought it inthen?Professor Metcalf: Why did they bring the limit in?Well, the election and prior to that showed a generalconcern with levels of immigration and it is the casethat net immigration has risen. In 1994–95 it wasindeed in tens of thousands but net, as we know fromlast week, went up to 196,000 in 2009. So it seems tome legitimate that the numbers should be looked atand the public concern taken into account.However, one has to recognise that the levers undercontrol are, of course, the non-EU immigration. Theway that I’ve often said this in terms of the mainwork that the Migration Advisory Committee has

been doing, including the present investigation, isone thinks of it as a 3 x 3 matrix. You’ve got threeroutes in; you’ve got work, study and family. You’vegot three groups: British, EU, non-EU. So you’vegot nine cells and we’re only dealing with one ofthose cells.

Q143 Chair: Yes. But the temporary cap has anumber. The permanent cap, as yet, has no numberand you’ve been asked to advise the Government onwhat you describe as “achievable but nonethelesschallenging” as far as your work is concerned.Professor Metcalf: That was in the consultationdocument, I think. Yes.

Q144 Chair: Right. Have you been asked torecommend a certain number for the permanent capor just give advice generally? Will you actually besaying to Damian Green, “I think it should be 50,000or less”?Professor Metcalf: Yes. I don’t mean to beconvoluted but the way of trying to address thatquestion is somewhat complicated. First, we’ve onlybeen asked to do a number for the first year ofoperation but you can’t do that without in factthinking, where do you start from, where do youwant to end up in 2014 and what is your trajectory?So we will be discussing all of that but we will becoming up with a number for 2011–12. It is justpossible we may offer two options. I’m happy toelaborate on why that would be but it may be thatsome extra thought is required before we do that.But I would emphasise, as always, we’re onlymaking the recommendation and it’s up to theGovernment whether they accept it or not.Chair: We will come back to a number of aspects ofthat. Mr Huppert?

Q145 Dr Huppert: Thank you, Chair. I found yourdescription of that nine-way grid quite interestingand the description of the numbers. Firstly, you arepresumably aware that, according to the Office forNational Statistics and the IPS data, for non-EUeconomic migrants, for the last year where they havedata, there was net emigration. I think the figuresthat they gave to me in a written question on 28 Junewere 66,000 in and 74,000 out. Do you think it makessense to be talking about a cap on those coming inor looking at the net flow?



7 September 2010 Professor David Metcalf

Professor Metcalf: The net flow is quite difficultbecause, of course, you get people coming in asstudents and going out as work. It’s somewhatchallenging to marry those numbers up, in fact, toget the net figure. On the assumption that theCoalition Government agreement is to go for thetens of thousands, then work has to play its part inthis. But I would have to emphasise that so hasstudents and, I guess, so has family as well, becauseif students and family don’t take their proportionateshare, then work, which is itself the smallest of thethree fractions, will have to take a more thanproportionate share. So I do think that it’sabsolutely right to look at work, but I couldn’temphasise too strongly that the student route andthe family route will have to take their share,although I would emphasise it doesn’t have to beonly working on the inflow. You can also be workingon the outflow to get the net down.

Q146 Dr Huppert: But will you be looking at theoutflow figures as well, because they ought to berelated to what you would want as an inflow?Professor Metcalf: Yes, we are. I was thinking Iwould say something a little bit later in some detailabout that but I’d be happy to deal with it now.Chair: You can if you do so briefly.Professor Metcalf: You can operate on the outflowof work to get the numbers down as well asoperating on the inflow. The difficulty withoperating on the outflow in the short term is thatprobably many of the people who are here have whatsometimes they refer to as legitimate expectations ofbeing able, for example, to extend or to settle—because the way that you work on the outflow isinfluencing the duration of the stay. That would bethings like weakening the link between work andsettlement; possibly on the post-study work routemaking that more selective, for example. Frankly, Idon’t think that it’s likely that these policies wouldkick in, even if you were to introduce them now, until2013–14. So I think in the initial period—this year,for our recommendations the following year—we’regoing to have to be making recommendationsdealing with the inflow of work but whilesimultaneously addressing a number ofconsiderations that the Government may want tothink about to address the problem in the longerterm.Chair: Thank you. Mary Macleod?

Q147 Mary Macleod: Yes, thank you, Chairman.Professor Metcalf, I just wanted to touch on the tier2 numbers. The Government is consulting onmerging the current resident labour market testroute with the shorter occupation route for thoseoccupations that, of course, are in short supply. Canyou give us a feel for what you think is the mostimportant route in terms of the numbers of migrantsinvolved?Professor Metcalf: Yes. Within tier 2 those two—theresident labour market test route and the shortageroute—are the small fry compared with the intra-company transfers. So if we take out-of-countrynumbers, visas issued, and exclude dependants we’re

talking a total of about 9,000 in 2009 of which two-thirds is the resident labour market test and one-third is the shortage route. So the numbers comingin through these routes are quite small. I think thatthe shortage route is, in a sense, a very important oneand we have done quite a lot of work on defining theshortage occupation list, which is now much smallerthan it was when we started two and a half years ago.But that provides a good safety valve, particularly ina time of limits. So I think that one wouldn’t wantto lose the shortage occupation route. The residentlabour market test route is really a very importantone, particularly as it happens for health andeducation where there’s no national shortage butmaybe there’s a shortage of teachers in London,health care workers or nurses in a particular area.That provides an important route. So, for what it’sworth, speaking personally and also on behalf of theCommittee, we don’t think that the potentialproposal to merge those two routes is something wewould be in favour of. Indeed I’ll say it the other wayround; we’re not in favour of it.

Q148 Mary Macleod: And what’s the process interms of defining what those limits should be?Professor Metcalf: We are going through theconsultation process and through our ownmodelling, a long mechanism to go from theInternational Passenger Survey numbers to the visanumbers, and then partly through the consultationsto see whether any reduction should mainly fall ontier 1 or on tier 2. And then when we get to theoverall reduction we will make suggestionsconcerning the shortage route, the resident labourmarket test route and the intra-company transferroute. But it’s the nature of these things that theintra-company transfer route will have to take thelion’s share of this because the other two areabsolutely rather small.Chair: David Winnick?

Q149 Mr Winnick: Professor Metcalf, you are a well-known and distinguished figure in the academicworld. Can I ask you what experience you have onimmigration? You were appointed to this AdvisoryCommittee as chair. Do you have any day-to-dayknowledge of immigration or any reasons why, as faras you know, you were chosen apart from yourdistinguished academic self?Professor Metcalf: My grandfather was animmigrant, but thank you for your kind initialremarks. No. I think that when the Committee wasappointed it was an economics-based committee andthey were very keen to have a labour economist,somebody who knew about the labour market, to bethe chair of it, and certainly in the first couple ofiterations when we were mainly dealing with theshortage occupation list, this was important. To theextent that your question is, very reasonably, “Well,now we have been asked to range a bit wider thanjust the economic material into the social and publicservices”, I’m not personally an expert in that. Wehave some people on the Committee on that, but Ican talk in detail about the consultations on that ifyou would like.




Q150 Mr Winnick: You see, I ask that question in allseriousness because, as you will know, in the electionin May immigration was a very hot potato, notgoing into the pros and cons. Certain elementsexploited it, particularly one notorious politicalorganisation which didn’t make any headwayfortunately, far from it. But people may well ask inthe country, who feel the impact of immigration,whether those like yourself and your colleaguesunderstand what is happening on the ground. Howwould you respond to that?Professor Metcalf: Yes, I think that we do. I mean Idon’t live on a council estate in Green Lanes inHaringey, which would probably give me a betterfeel, in a sense, for the underlying life led by manyimmigrants and any tensions in the community. Butin terms of knowing some of the literature on issueslike the role of immigrants in the public services,health and education or the role in terms of housing,I know that we’ve undertaken a huge consultationexercise with the relevant GovernmentDepartments, the various local authorities and theacademic authorities on all of this. But, no, Isuppose that in answer to your question, I live aprivileged quasi-academic life and I don’t know, onthe ground, the particular way in which immigrantslive. But I go around with my eyes open.

Q151 Mr Winnick: Thank you, Professor Metcalf. Ithink that is a very satisfactory answer. You’reconsulting, apparently, on the impact of limiting newimmigration and placing restrictions on existingmigrants, whether they should be able to stay longeror switch their particular category within the pointssystem. That is taking place now, is it?Professor Metcalf: The consultation has just finishedand we will be reporting to Government by the endof this month. The point about the particular issuethat you raise there is for me to re-emphasise thatone can achieve the limit, the tens of thousands, overthe lifetime of a parliament by working on theoutflow as well as working on the inflow. That’s thekey point of that feature of the consultation.

Q152 Mr Winnick: And you’re reportingaccordingly to the Home Secretary?Professor Metcalf: Yes.Chair: Thank you, Mr Winnick. LorraineFullbrook?

Q153 Lorraine Fullbrook: Thank you, Chairman.Professor Metcalf, I’d like to explore a bit about thedependants of migrants; particularly on tier 1, thehighly-skilled migrants, and tier 2, skilled workerswith a job offer. How many visas go to actualworkers of tier 1 and tier 2 and how many actualvisas go to their dependants?Professor Metcalf: The ratio is of the order of 10:9and 50,000 visas go to the main people.Lorraine Fullbrook: Tier 1 or tier 2?Professor Metcalf: Which is split two-thirds tier 2,one-third tier 1.

Q154 Lorraine Fullbrook: And that 50,000 does notinclude dependants?

Professor Metcalf: Correct.

Q155 Lorraine Fullbrook: Do we have any figures onthe dependants for the tier 1 and tier 2 split?Professor Metcalf: No, we don’t. They’reaggregated. If I may, Chair?Chair: Yes, of course.Professor Metcalf: They were just recentlypublished. I mean we can get you these figures.However, in rough and ready terms the ratio is of theorder of five main people, four dependants, and itdoesn’t vary all that much between them. It’s slightlyhigher for tier 2 than it is for tier 1.

Q156 Lorraine Fullbrook: And do you think thisbalance is currently sustainable, given the policiesthat the Government wants to introduce?Professor Metcalf: Now, that’s a really goodquestion. We’ve agonised about this issue because bydefinition in a cap world a dependant displaces aworker and, therefore, it raises very delicate issues. Idon’t think that one wants to be saying to people,“Well, you can’t bring dependants”. Indeed it wouldalmost certainly be not lawful to say something likethat but you have put your finger on somethingwhich raises a difficult issue.

Q157 Chair: That is a different issue. What is theanswer to Ms Fullbrook’s question? Is a dependantgoing to displace another person who would beeligible under the cap?Professor Metcalf: Yes.Chairman: They will?Professor Metcalf: They can’t not do. Let’s start itoff. The dependants are in the InternationalPassenger Survey figures.Chair: Yes.Professor Metcalf: Okay. So to reach the tens ofthousands from the hundreds of thousands, you’vegot to be thinking about dependants. You cannotleave them out of the equation. Now, when you doyour cap, you can do it on the main people andassume that the ratio will be five main and fourdependants, or you can do in total and include thedependants.Chair: But the current temporary cap, just to helpthis Committee, we’re talking about a temporarycap of 24,000.Professor Metcalf: That’s excluding dependants.Chair: Excluding dependants. But on the permanentcap you need to address the issue of dependants, asMs Fullbrook has said.Professor Metcalf: If I may, Chair, you can do this intwo ways. In a sense it’s a matter of arithmetic. If youhave 20,000 main people and 18,000 dependants,you can operate the cap 20,000 main or 38,000 intotal.

Q158 Chair: Just to advise the Committee, howmany dependants are people able to bring in? Theirspouses, clearly.Professor Metcalf: Spouses and children. It countsunder this, yes; under tier 1 and tier 2.




Chair: Yes. Spouses and children under which age?Professor Metcalf: Sorry, I don’t know the detailsof that.

Q159 Chair: So does your research show you foreach person who has a permit to come here, whoqualifies under the points-based system, how manydependants each person brings in?Professor Metcalf: That’s what I said. The ratio is ofthe order of five main to four dependants.Chair: Right. Ms Fullbrook, did you havesomething else?Lorraine Fullbrook: I’m fine.

Q160 Chair: The other issue, of course, is whetherdependants can work or not. We’ve had, over the lastfew years, the almost ridiculous situation where astudent can only work a certain number of hours buta dependant can work full-time. Do you have anyplans to make any recommendations about that?Professor Metcalf: Well, we did investigatedependants in one of our reports last year. We werepersuaded by the evidence that the status quo shouldhold and that dependants should come in togetherwith the main points-based person and that thedependants should have no restrictions on work.

Q161 Chair: But isn’t that a little daft, that thestudent can only work for 22 hours but the spousecan work full-time?Professor Metcalf: Well, if you’re a student you’resupposed to be studying and so the 20 hoursrestriction seems quite reasonable. If I may say, whenwe made our report previously, of course, we weren’tin a world with limits. If you’re in a world with limitsit raises the very important issue that has been raisedhere about whether the dependant displaces. It mayvery well be, for example, and something one mightwant to think about—having suggestions on thepoints-based system—that perhaps somebodycoming with a better qualified dependant would getmore points.Chair: Julian Huppert.

Q162 Dr Huppert: Thank you. There are a lot of veryinteresting things. I’d love to know exactly whatyou’re going to be recommending but assuming thatyou can’t tell us that quite now, can I at least ask ifyou have looked at all the responses that you’ve hadfrom the consultation?Professor Metcalf: Some of them but a lot came in inthe last two or three days.Dr Huppert: I’m sure. We have also had a number ofwitnesses, people who have sent in writtencomments, and I’ve certainly had a lot of contactfrom companies and individuals in my constituency.The tenor of the comments so far—this is broadlysummarising—is people having a lot of concernsabout the cap, and certainly companies in myconstituency expressing great concerns about boththe short-term and the long-term one, particularlycompanies that are internationally facing, academicinstitutions and so forth. Would that be a fairsummary of the responses that you’ve had to your

consultation or are you getting a different picturefrom the people who write to you from the peoplewho contact us?Professor Metcalf: I thought your choice of wordswas very gracious. We’ve met, between us on theCommittee and the Secretariat, over 1,000companies and various stakeholders. Thecompanies, by and large, are rather hostile to theidea of a cap, which, of course, raises interestingquestions on the balance of any restriction betweentier 1 and tier 2. I don’t know about the things thathave come in just recently. We have not had a singlepiece of evidence really suggesting that tier 1somehow should be protected—the people comingin without a job offer. In a sense it’s not surprisingbecause, of course, it’s the Chinese nuclearphysicist—she’s coming in, as it were, from China,so you’re not going to get lobbied in that way. But itdoes suggest that, in a sense, the employer-led tier 2is the one probably that requires the greatestprotection. To elaborate a little bit on the sameconcerns as you have had, obviously theDepartment of Health and Department forEducation are concerned about the resident labourmarket test route, but the main thing is on the intra-company transfers. Banks and consultancycompanies often say, “We’ve got zero netimmigration so why should it affect us?” I was at theJapanese Embassy last week; the companies therewere very hostile, “We provide huge foreign directinvestment. Are you saying that it may be difficultfor us to get our people in?” What a couple of peoplehave pointed out is that we’ve got 353 occupations—you know, the way that the occupations areclassified—and one of those occupations, which issoftware engineer, accounts for half of all the intra-company transfers. You may want to pursue thiswith the next people who are up, but this issomething we shall be pursuing in our report.

Q163 Dr Huppert: But does this not run the risk ofputting you in a very difficult position? It seems tome that you’re saying that there is a drive fromaspects of Government to say the numbers should below and a very strong public drive to say that’s nothow it should be driven. How will you balance thedifference between the public consultation and theGovernment steer to take account of the fact thatthere’s little point in having public consultations ifone doesn’t pay a lot of attention to them?Professor Metcalf: That’s a really good point. I meanwe shall do as we, in a sense, always try to do, whichis to be both transparent and independent. But, ofcourse, the question we have been posed by theHome Secretary, a cross-Government question as itwere, is, “Tell us the contribution that work routesshould make to getting immigration down to tens ofthousands”. But we shall reflect in the report that thegeneral tenor of the evidence to us was not in favourof the caps, particularly on tier 2. We shall reflectthat. We are tasked with a very specific thing, whichis to say what the non-EU work routes can do as acontribution. We’ve got to go ahead and do that, butwe shall report the tenor of the evidence that we havefrom the stakeholders.




Chair: Thank you. Alun Michael? The impact of thecap on sectors.

Q164 Alun Michael: Thank you. What is theevidence of the impact of the cap on specific sectorsof the economy?Professor Metcalf: We don’t know that yet becausewe haven’t had the cap, but if one were to speculate,say, for example, that in recommending numbers toget to the tens of thousands and, therefore limiting,we make some suggestions about making the tier 2more selective, which we’d be minded to do—theselectivity is an important point—this could raisevery difficult issues for the Department of Healthand the Department for Education because it couldvery well be that some teachers and some nurseswould then find it difficult to meet the points criteria.So that would be one area by sector.

Q165 Alun Michael: But, forgive me, that isn’tevidence of an impact on sectors. In order to informthe Government, isn’t the Government going toneed to know which sectors are going to be mostvulnerable and, therefore, the economic impact ondifferent sectors is quite a crucial issue?Professor Metcalf: Absolutely. What I’m saying is aswe haven’t yet had the cap—it’s only been operatingfor a little time and the permanent one hasn’t comein—it’s difficult to adduce the evidence at this stage.I was just speculating that that would be one area.But the other area, pursuing my point about intra-company transfers, is it would be very difficult tointroduce the limit on the work without somewhatreducing the numbers of the intra-companytransfers and that implies a reduction in terms of theworkers coming in to do IT, who are 60% of theintra-company transfers.

Q166 Alun Michael: I understand that. The secondissue about the way the impact falls is that ofgeographical areas. Do you have any evidence onwhether the impact of a cap is going to be greater andconcentrated in particular areas of the country?Have you looked at that?Professor Metcalf: Again, because we haven’t hadthe cap, that can’t be done automatically, but it’squite clear that it would fall disproportionately onLondon and the south-east because this is where themain group of people who are coming in under tier1 and tier 2 are located.

Q167 Alun Michael: But isn’t there an issue anddoesn’t your advice have to reflect the fact that thereare one of two things that can happen: either theGovernment will have rules that make distinctionsabout different sectors of the economy or the impacton different parts of the country, or there is nothingand you merely describe the events afterwards? As Iunderstand it, your advice has to be about whatshould happen and what the implications ofdifferent decisions should be, rather than justwaiting until after the event and saying, “Oh, that’sa surprise. That’s what actually happened”.

Professor Metcalf: You raise a very important issue.We have not been tasked to do it in quite the way thatyou say. All we’ve been tasked to do is to come upwith essentially a number, possibly a range, in termsof the way in which the work can contribute to theoverall reduction, which, in turn, contributes togetting down to the tens of thousands. But we will bepointing out in our report what some of the potentialconsequences are and it’s clear that if, for example,the Japanese manufacturing companies were hit, orother manufacturing companies, or the financesector was very badly hit, this could have quitesubstantial adverse effects for foreign directinvestment.Alun Michael: But you’re not able to predict wherethose detrimental impacts might fall?Professor Metcalf: No. This is a separateconsultation altogether by UKBA. We’re notdeciding how the visas will be allocated, but we willbe making recommendations, if you’re in a cappedworld, about the points-based system becomingmore selective than it was previously.Chair: Lorraine Fullbrook has a supplementary.

Q168 Lorraine Fullbrook: Thank you, Chairman.Professor Metcalf, I’d just like some clarification ofwhat you’ve answered to Mr Michael. Are yousaying that you do not have any data that can tellyou the number of migrant workers in certainsectors of industry in the UK and within regions ofthe UK to extrapolate your figures?Professor Metcalf: No. We have but we don’t knowwhere the limits will fall yet, do we?Lorraine Fullbrook: But in terms of making yourrecommendations to the Home Secretary, you mustbe able to get that data from other departments andother statistics that are available.Professor Metcalf: No, no. We have, for example,the number of people who would come in to work inthe health sector, say as theatre nurses, in theshortage route. We have the number of chefs thatwould come in. We have all of that, but say that wesuggest a given reduction in the numbers coming inunder tier 1 and tier 2, the main ones, we don’t knowat this stage how the Home Office, UKBA, willdecide to allocate the remaining visas and, therefore,where the reduction falls. So I can’t predict at thisstage where. What we can do is say that if you raisethe earnings thresholds hand-in-hand with thelimits, which might be quite a sensible policy, thiscould have an adverse effect, for example, on healthor education, or indeed chefs. Say that you limit it bysector, which is another way that you might want todo it, this would have almost certainly an adverseeffect on the intra-company transfers coming in forsoftware engineering. So we will certainly say thatsort of thing, but until we know where the reductionfalls, which is not a matter for the MAC, we can’t.

Q169 Lorraine Fullbrook: But surely if you aremaking recommendations on this policy to theHome Secretary—I am not sure if I have understoodyou—are you saying you are not able to make




recommendations based on where migrants work, inwhich sectors and in which regions? That is what I’mtaking out of this.Chair: What is the answer, Professor?Professor Metcalf: That is certainly not what—Chair: You have not been given the information?Professor Metcalf: No.Chair: You don’t know how it’s going to work. Is itgoing to be an auction? You don’t know how manyin each sector? You have no idea, do you?Professor Metcalf: No, that is correct, but what wehave been asked—Chair: Is that is correct? You have no idea how thesystem is going to work?Professor Metcalf: Yes.Chair: So, Ms Fullbrook’s question to you is: if youdon’t know how the system is going to work and theUKBA is still consulting and we already have atemporary cap on, how can you make validrecommendations and representations to theGovernment? That is her question.Professor Metcalf: No, I understand her question,but in a sense you have to come at it in a differentway.

Q170 Lorraine Fullbrook: You see, I think you’recoming at it from the back end first. You’re talkingabout the numbers; it depends on the numbers inwhich tiers. I suggest it doesn’t because you have tostart from a basis of where the migrant workers areworking, in which industries and in which regions.Then it is up to the Government to decide on thatinformation where the splits are going to be. So thatis why I suggest you’re coming at it from the backend first.Professor Metcalf: In a sense, that is going back topicking winners. So what you’re saying is that youprotect particular regions and protect particularsectors.Lorraine Fullbrook: But I don’t understand how youcan make recommendations without knowing thisbasic information first.Professor Metcalf: I repeat: we do know where thepeople work, but what we have to come up with isrecommendations based on the numbers required ofthe work route to get it in four years down to tens ofthousands. There is a very delicate issue—Iapproached it in one way, you’re approaching it inanother—which is, who are the people who arevaluable? One way of thinking who is valuable is todo it by earnings—Chair: No, that is what this tells you; this is your role.But you cannot do that, as Ms Fullbrook has said,until you know the mechanism by which this is to bedone. So before you can continue with your workyou need to have it, is that right? Is that what youwould like? Would that be helpful to you?Professor Metcalf: Absolutely, but I am assumingthat this is an iterative process. We have only beenasked to do the first year.Lorraine Fullbrook: But the premise still standswhether you are doing one year or 10 years.Professor Metcalf: It does, but then once we’ve seenhow the first year works, including of coursestudents and families, we will come back to it and,

for example, had the Japanese companies inmanufacturing been hit rather badly, through theUKBA allocation process, we would wish then tofeed that in to the next iteration of this.Chair: A quick question from Mr Reckless. Do youhave a question?

Q171 Mark Reckless: Yes. The points-based system:is there not a distinction between having that as aqualifier and having it as the decider? I think thatwithin tier 1 there is some suggestion of auctioning acertain category of permits, but why can’t you justuse the points system as a qualifier, including intra-company transfers, and then if someone clears thatthen they are eligible, but whether they are allowedto come depends on what price clears the pool—thatis, these companies, rather than preventing thembringing in person A or person B, have to pay rathermore if they’re particularly keen to bring thisperson?Professor Metcalf: One allocation mechanism, eitherin whole or in part, is indeed an auction, but myunderstanding is that there are various Treasuryrules about the way in which you can do this, notnecessarily in the long term, which don’timmediately lend themselves to this. So therefore,instead of having a money auction, you can in asense go about it in the way you have just suggested,which is to auction by points. In a sense, that is thetier 1 suggestion, the so-called pool and cap: be veryselective and take within, say, a three month periodthe best people, that is, the people with the mostpoints under tier 1.Chair: We will come on to the role of the points basis.A very, very brief question Mr Michael.

Q172 Alun Michael: Yes. I think it would beproblematic if we have misunderstood what yousaid, but in answer to the questions by myself andLorraine Fullbrook, as I understand it, you are notlooking at the current patterns of arrival by sector orby geography and therefore you will not be able tosay to the Government, “If you undertake the cap inits detail in this particular way, this is the impact thatit would have on this sector or this part of thecountry”. And surely that is at the heart of your rolein advising how the Government should pursue thecap that it wishes to introduce, isn’t it?Chair: If you would give a brief answer Mr Michael’sbrief question we would be grateful.Professor Metcalf: Not by geography, but we willhave quite a lot to say about the impact by sector.Chair: Thank you. Nicola Blackwood.

Q173 Nicola Blackwood: Thank you. You havementioned the fact that it is very difficult to assessthe impact because we haven’t had a cap yet, puttingaside that is what you are advising the Governmenton. Surely we can look at other jurisdictions wherethey have already introduced numerical caps andassess the impact that way. So what work have youundertaken in that route?Professor Metcalf: We have certainly looked at someof the different jurisdictions. You know from theUKBA consultation they are minded to introduce




the New Zealand approach for tier 1, which is thisvery selective approach. I think the most informativerecent jurisdiction that we can get quite a lot from isAustralia. What Australia has done is it hasessentially changed the focus that it had for 20 yearsaway from a supply side-based system, wherebasically people didn’t have to have a job offer andjust came to an employer, but by far the greater areabeing employer sponsored migrants. That I think isquite interesting for us in the context of the tier 1 andthe tier 2 because that is the same message that weare getting from all of the consultation—that weshould be protecting relatively the tier 2 people, theemployer led, from the tier 1. The other majorchange that Australia has made is in terms ofstudents and it may very well have lessons, as andwhen the Government reviews our student route, forthe so-called post-study work route, which presentlyis among the most generous particular route in thewhole world.

Q174 Nicola Blackwood: As an MP for aconstituency with two internationally renowneduniversities in it, I have received a lot ofrepresentations on the potential impact thataddressing student numbers would have onuniversity funding and other aspects. So are you atthis point in favour of a cap on tier 4 or not?Professor Metcalf: We haven’t been asked to look atthis and I haven’t looked at it in detail. What I wouldsay is—

Q175 Chair: Then what is your personal view?Professor Metcalf: I am just about to give it. What Iwould say is that, certainly working at anotherdistinguished university, there is more than one wayof skinning a cat and you can work on the outflowas well as the inflow. I choose my words carefully: itis not self-evident to me that the post-study workvisa should be available for all 600-odd institutionswhich award degrees.

Q176 Chair: If that is the case if you want people towork after they have finished their degrees, peoplewill just not come and study here surely? Isn’t thatthe impact of what you are suggesting?Professor Metcalf: No, that is possible; it makes itless attractive. But I go back to my main point,which is: to the extent of what we have been taskedto do with work but what the Government says itwishes to do, which is to get down to the tens ofthousands, you simply can’t do that unless you alsolook at the student route. It is impossible. If youclose down tiers 1 and 2, you still wouldn’t get to thetens of thousands.Chair: That is very interesting and, because this is the“University Challenge” section, I have to ask MrHuppert to speak on behalf of Cambridge.

Q177 Dr Huppert: Thank you. I am going to have tovote three well renowned universities, just to capthat. There is real sensitivity about the issue ofstudents in my area as well. But doesn’t this say thatthere is a fundamental problem with trying to setanything up based on a cap on numbers coming in?

You have an issue that there are a lot of students—it is one of Britain’s largest export markets—and alot of them come and then go. But if you have anyconcerns it ought to be about the steady state andwhat we don’t get much analysis on is in versus out:people coming in as an export and then leaving againis very different from people coming in and notleaving. Now I know there are technical issues butwill you be highlighting that issue of net flow ratherthan just numbers coming in?Professor Metcalf: Absolutely, yes, we will be. Asyou know, there is the material publishedyesterday—I have only been given it today—aboutimmigrant journeys and interestingly, as it were,although it was reported one-fifth of students arestill here after five years, it is only one-fifth; four-fifths have gone, which is a much higher fractionthan is the case with work and is the case with family.So working on the outflow is very important indeedand, yes, we will be highlighting this. But I repeatthat, even if the Government were to make changesin the policy fairly quickly, I don’t think that willkick in until, say, two or three years’ time andtherefore, initially, what one has to work on is theinflow.Chair: Thank you. We have to move on because timeis getting short. Could I ask for brief questions andbrief responses? Mark.

Q178 Mark Reckless: You mentioned with thedependants issue the possibility of giving greaterpoints where dependants had skills, which impliesthat within the cap we want as skilled people aspossible to come in. In addition, couldn’t youconsider perhaps giving points for not havingdependants? Would that be a way of expanding thepoints there?Professor Metcalf: We’ve discussed various policyoptions in private. Obviously one would need to takeadvice. I think that probably would not find favourwith the lawyers.Mark Reckless: Yes.Chair: The lawyers?Professor Metcalf: Yes.Chair: Good. On that subject, Mr Reckless.

Q179 Mark Reckless: So who has the higher skillsfor dependants would legally be allowed, do youthink?Professor Metcalf: No, we did discuss in a previousreport that possibility. I mean before, we weren’t ina cap situation and so we said previously that weshould be relaxed about the dependants. We’re nowin a limits model, and therefore the dependants loomlarge and that is why thinking about extra points forqualified dependants is one possibility.

Q180 Mr Burley: The debate around immigrationoften focuses on the quantitative measures and whatis the net, and people coming in and people comingout, although this morning it has moved away fromthat, which I’m pleased about. But for me there is aqualitative side of it and, as you intimated thismorning, if you have students coming in but youhave workers leaving, if you have kind of low skilled




and dependants coming in but you have retired well-off independent people leaving, is there a netqualitative loss going on in this country, and haveyou made any assessment of the effects of whatmight be called a “brain drain” or that kind ofchange in a qualitative sense rather than just thenumbers?Professor Metcalf: That’s a very interesting questionindeed. Implicitly, yes. I don’t think we have everdone this explicitly but implicitly, yes. Essentially,the points-based system as it operates is raising thehuman capital of the British labour market because,by definition, the people coming in under tier 1 andtier 2 have to be skilled. That means at least to NVQ3 level and two A levels and above. There may beissues about dependants, but that will tend to raisethe skill level and, by and large, the evidence is thosepeople also contribute favourably to the publicfinances as well. So the points-based system, as it hasoperated thus far, has been important in raising thehuman capital. Of course there is always a tensionhere: if you permit the employers always to bring theimmigrants in without any limit, then they have lessincentive to upskill the British workforce. So there issomething of a tension there.

Q181 Mr Burley: You will know that the driverbehind the cap that was proposed during the electioncampaign is largely around the pressure on publicservices and the ability of this country to sustain acertain number of people. Could you give us an ideaon how the assessment of what the public services ina particular area can take will be made, because it isnot clear to me how they decide how many extrapatients that the dentist can take or the hospitalcould serve and so on, and the housing as well.Professor Metcalf: Yes, given the very limited timewe’ve had to do the work, we haven’t been able to dofull justice to this and I’m hoping that it’s somethingthat we’ll be able to return to. But in a sense, if youtake the public services, which will be health andeducation, and then you take the social, whichwould be, say, housing, crime and maybecongestion, one has to remember that on the publicservices the immigrants are important suppliersthrough being nurses and teachers. The evidence weare getting—in a sense it’s not surprising—is what isabsolutely crucial here is geographic mismatch. Youget a surge of people in Slough, or wherever it mightbe, and then we as a country get the benefits fromthis immigration over time and in a sense theTreasury collects the money, but the local authorityis left to try and deal with the social side. This isbased on the evidence we’re getting. It isn’t verysurprising, but that seems to be the main evidence onthis. There is particular evidence on housing.Chair: If you could write to us with that evidencethat would be helpful.Professor Metcalf: Yes, can I just say one sentence?Chair: Yes.Professor Metcalf: The issue for us is that you havequite strong evidence for immigration as a whole.There is no evidence for just tiers 1 and 2.

Chair: Thank you. Bridget Phillipson.

Q182 Bridget Phillipson: Thank you, Chair. TheGovernment wants to be judged on its success inreducing the numbers of net migration down to thetens of thousands. For that to happen by the end ofthe Parliament, as they intend, the figures that thatwill be judged on will be the figures published in2013. That will be very swift reduction, particularlyin terms of tier 1 and tier 2. What do you think theeconomic impact would be of that, particularly interms of the speed and the extent that will benecessary to see that kind of reduction?Professor Metcalf: That is what a lot of our reportwill be about. Yes, you are right. It depends whatnumber you start off with and it also depends whatnumber you want to end up with because you can’taim for 99 because then you have a 50% chanceyou’ll go above 100,000. So you’re absolutely rightthat the annual reduction implied in theInternational Passenger Survey numbers is quitesubstantial, between 30,000 and 40,000 a year, andthen you have to translate that into visas. So it willbe substantial. We are still consulting on this andthere is a very helpful cross-Government group ofeconomists who have been feeding in information tous. The macro consequences are probably not large.It will affect GDP but it might be GDP per head thatcounts—how well off we are—and the best evidenceis that that’s hardly effective at all. It would affectGDP, and therefore that might have an effect on thepublic finances, and that raises a difficult andimportant issue. I don’t think it would be relevantfor inflation; the tiers 1 and 2 are small beer in termsof the way that the labour market would operate inthe macro sense. I worry more that any reductioncould have an impact in a micro sense. Talking at theJapanese embassy last week—Chair: Sorry, but can we conclude on this?Professor Metcalf: Fine. I think that there would bean effect in foreign direct investment productivityand so on, and this is an area that we’re going toreport on.

Q183 Bridget Phillipson: So you think there wouldbe longer term consequences, in terms of theeconomic outlook for the country, rather than in theshort term? It might not be felt, but longer termperhaps it may be?Professor Metcalf: In the longer term it would bepossible to upskill our own people and that can indue course provide a substitute for immigration.Chair: Thank you, Professor. If there are other issuesobviously we will write to you about them. There aresome concerns that we have heard of today, so wewould be grateful if you could respond in writing.Professor Metcalf: Yes.Chair: Thank you so much.Professor Metcalf: Thank you.Chair: Could I call to the dais, please, Keith Sharp,Som Mittal and Hilton Dawson?



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, BritishAssociation of Social Workers, gave evidence.

Q184 Chair: Mr Sharp, Mr Dawson, Mr Mittal,thank you for coming to give evidence. It is alwaysdifficult with three witnesses but what I am going todo is ask you to be as brief as possible, if you can, andif there are other issues that you wish to write to usupon we are very happy to have written evidence. IfI could start with a question to each of you in turn,starting with you, Mr Sharp, what effect has thetemporary cap had on you and the businesses thatyou represent?Keith Sharp: Currently very little effect. That isprincipally because the intra-company transferroute is currently excluded from that temporary capand one of the points I would like to make today isthat that should remain the case but, at the moment,minimal impact on our business here.Chair: Mr Mittal.Som Mittal: Yes, that’s right and I think there is aconcern about if there would be a cap on this area. Irepresent the tech sector and 95% of all the work, Irepresent that organisation that does it, and we havemembers of your coalition as well, and I think for usit’s going to be a business impact here. I think it’sgoing to impact the UK economy in case it willhappen. We’re grateful that that cap was notintroduced on a temporary basis right now.Chair: Mr Dawson, welcome back to Parliament.Hilton Dawson: Thank you very much, Chair.Chair: What about your sector?Hilton Dawson: The situation is fragmented, Chair,I would say, and some parts of the country—notablyLondon—use the services of social workers fromnon-EU countries to a very, very great extent. I thinkit’s very difficult to say the effect that there has beenvery recently of changes to the cap, but so much ofthis is tied up with the general situation, the need forreform and improvement in social work, that we andthe Government will need to take a holistic approachto the development of this work.Chair: Mr Michael.

Q185 Alun Michael: I think the answers given to thefirst question, by Mr Sharp and Mr Mittal, meanthat the answer to this will need to perhaps tease outwhether there would be differential impact if there isa change of view on the employer-sponsoredapplication. But can each of you say how manyemployees in your area of activity would be affectedeach year if there was a permanent cap onimmigration, and perhaps what sort of level of cap,as far as your area of activity is concerned, would beacceptable to you?Chair: Mr Sharp.Keith Sharp: Yes, thank you. Currently, I work forTata Consultancy Services, which is the IT arm ofthe Tata Group, and the number of people in the UKas at 31 March 2010 was 3,150. That was down fromthe figure of two years previously, 31 March 2008,when the number was just over 3,500. What thatreflects is the recession, which took place over thoseyears, and what we see is a natural correction takingplace to the inflow and outflow. As you may havegathered, the year ended March 2008 we had a net

inflow. The following year we had a net outflow ofICT workers because of the reduction in demandfrom UK corporations and organisations for ourservices. So from where I see it, I have to say there isan economically driven supply and demandcorrection to the numbers of ICT workers coming inon a temporary basis into this country. But theanswer to your question is: at 31 March 2010 we had3,150 expatriate ICT professionals in the UK.Chair: Mr Mittal.Som Mittal: I just endorse the view here that peoplecome here for temporary purposes. It’s determinedby business and trade. It’s not intended to bemigration and I think the ICT provisions today donot allow people to apply for migration either. So Ithink clearly we have seen the trend in the last fewyears; it goes up and down with business and in morerecent years, particularly in the ICT sector, we haveseen a lot of investment coming in. India, forexample, which I represent today, is the secondlargest investor here and we are opening upheadquarters. The UK is the headquarters for themajority of our companies when they work panEurope. So for us, we need to bring in people toensure that the UK remains as a headquarters andshould there be at any point a quota system comingin, I think that will be quite detrimental to businesshere because then we would need to look at thoseplaces where the movement of people is not aconsideration.

Q186 Alun Michael: Briefly, the document youprovided to the Committee in advance relates to thespecific areas where you think there should be adifferent approach taken?Som Mittal: Yes, sir. In our experience working inother countries, and some countries recently—forexample, Switzerland—the difference in thiscategory of visa, as compared to any other is that it’ssponsored by employers. And in Switzerland, forexample, when they introduced a limitation in thevisa earlier, in January, what was a pattern whichcould be used around the year was consumed in thefirst week because people necessarily had to applybecause this is like a natural resource. We use humanresources to deliver here.

Q187 Chair: So you are worried the cap might befilled?Som Mittal: The cap might be filled and that couldbe detrimental because how do you take demand ofwhat’s required down the line for a year or threemonths? And you have to do it all in advancebecause you’re never sure whether you can bring inpeople to deliver the product.Chair: Thank you. Mr Dawson.Hilton Dawson: We would say there has been anover-reliance on the use of foreign social workers,and continues to be so because of the state of socialwork in Britain. As part of a programme of reformaffecting both adults and children’s services—it’schildren’s services where the main emphasis is at themoment—it will be important to allow at least 1,000



7 September 2010 Mr Keith Sharp, Mr Som Mittal and Mr Hilton Dawson

social workers from non EU countries to continue tocome to this country in a planned way, particularlythrough sponsorship and employmentarrangements with local authorities.Chair: Mary Macleod.

Q188 Mary Macleod: Thank you, Chairman. Werecently had giving evidence to us the Federation ofSmall Business and the British Chambers ofCommerce, and at that time I pressed them quitehard about why we are not using British people to dothe jobs that are in this country, especially since wehave unemployment and we have certainlygraduates leaving university without work. We haveheard already this morning about the eminentuniversities that we do have in this country, and I feltthere was a lack of businesses working with theuniversities and education establishments that wehave to create the right type of employees, longerterm. But perhaps you can each touch on why wecan’t recruit in each of your fields the British workersthat we need to fill the vacancies that you have inyour organisations.Keith Sharp: May I say we absolutely do? As agroup, the Tata Group employs over 40,000 peoplein the UK and the element I work for, TataConsultancy Services, employs around 2,500 UKnationals—or EEA nationals, to be precise—in theUK. We work to a particular business model. Wherewe have permanent employment in the UK, we wantthat to be filled by UK employees, which is whereour 2,500-plus UK employees come from. But thebusiness model we operate also requires temporaryinputs to a project being done for any one of 60 UKorganisations and that is where we use the temporarysupport from, in our instance, predominantly India.So it’s not either/or. And we do a lot of work—myboss is on the e-Skills Council for example—lookingat ways in which the UK can upskill and all thosegood things that need to happen, because weexpressly want to recruit very good people in theUK. Our business model is a blend of permanentUK employment, supplemented by temporary skillscoming in from India for a particular project.

Q189 Mary Macleod: There is a reasonably highnumber of temporary skills that you do havecoming in?Keith Sharp: As I said earlier, that fluctuatesaccording to demand. And just to stress the point,the people we bring in is in response to demand forservices from UK corporations and organisationsand were a cap to be introduced, yes, it would hurtour business but, dare I say, the first casualties ofthat or the first people to notice that would be theUK organisations who use the services of companieslike the one I work for to be more competitive, bemore productive, transform their businesses usingIT and technology strategies.Som Mittal: I just endorse this because Keith hererepresents the same sector and today, I believe,almost one third of the employees here arepermanent. They’re all high paying jobs that aregoing to the local people here. Just to give you anevidence of the nature of the work, for example the

model is typically about 10:90 or 20:80. It means theeffort, 90% happens in overseas countries. And ifyou develop an application it needs to be testedonshore and this person who has developed theapplication brings it over, installs it, tests it, and thenif there are any faults will take it back. So I think it’simportant that only a temporary worker comesbecause he or she has specialised knowledge in doingit. So it is a business model issue. It could be verydisruptive if this person was not able to come inbecause there could be timelines that would bemissed. I would also state that for a large number ofcompanies that we work for in the UK, they’reglobal companies, they’re expanding theiroperations overseas, they are developing newprojects and new services to be more competitivethere and that’s what we serve them with.Hilton Dawson: Social work is an internationalprofession. There are good reasons to bring peoplefrom other countries over issues such as inter-country adoption. There are good reasons to bringpeople with cultural skills and experiences. There arealso good reasons to build links with countries likeChina where they’re currently setting aboutrecruiting 5 million social workers; very importantlinks for our country there.

Q190 Chair: 5,000 social workers to go to China orto come to China?Hilton Dawson: 5 million social workers.

Q191 Chair: Oh, 5 million social workers; to stayin China?Hilton Dawson: To stay in China. Perhaps someBritish social workers could go there and supportthem as well. There is a lack of confidence in someof the social workers graduating from some Britishuniversities, with good reason. The standard ofsocial work education has not been high enough insome parts of the country in recent years. Socialworkers from countries like Australia, New Zealandand South Africa have done at least a four yearcourse, often at Masters level qualifications, whenthey come to this country. But the huge issue in thiscountry is about retention and the terrible fact is thatwe burn out very young social workers, very newlyqualified social workers, very quickly by exposingthem without enough support to the rigours of childprotection work. That’s a national scandal that wehave to face, but that has fuelled part of the need torecruit people from abroad who have been similarlybadly treated in some instances, as you can see fromour evidence.Chair: I think Mr Burley will want to explore thatwith you.

Q192 Mr Burley: What would happen to socialservices in the UK if you couldn’t get visas for non-EEA staff?Hilton Dawson: If we couldn’t get any at all thesituation would be even worse than it is at themoment, and it is parlous. Every Member hererepresents a constituency in which social work is incrisis—I am sorry to say it now—and it wouldsimply make that situation far worse. But we




certainly need to work towards a reduction of socialworkers coming from abroad, as I’ve said before, aspart of the reform of social work, which ensures thatwe have better standards in this country; that socialworkers are better supported by local authoritiesand other employers; and that we have a careerstructure, which enables social workers to remain inthe front line of practice, rather than leaving forother opportunities.

Q193 Mr Burley: My constituency has the highestyouth unemployment rate in the West Midlands andI suspect that if they were watching this on thetelevision at home they might be thinking, “Well,why can’t some of the 5 million people out of workin this country be doing the social work?” Is there aproblem with training what we have and are wegoing for an easy option by trying to import the skillsrather than training home grown talent?Hilton Dawson: The social work degree means thatwe’re now training 5,000 social workers a year, overand above the 4,000 social workers who were trainedunder the diploma. But we certainly need to recruitpeople from this country to the social work force. Weneed to train them well and as I’ve said, we need tosupport them properly. It is an absolute scandal thatpeople who have gone through three years of socialwork training then go into employment situationswhere they aren’t properly supported and are putinto some of the most difficult work that’sconceivable, trying to support families where childprotection is a huge issue. We need to get that right.Chair: Thank you. Mark Reckless.

Q194 Mark Reckless: Given that intra-companytransfers account for half of all tier 2 visas, I am notconvinced that is realistic to exclude them from thecap altogether. Were they to be included in the cap,would witnesses prefer a system where that quotawas allocated by sector or by company or a systemwhere there was a market-based auction process sothat you would know that you would be able tobring in some of your company, albeit at a price?Keith Sharp: Frankly, we haven’t got that far yetbecause we believe that the—I realise I am goingagainst what you just said; I apologise for that—butwe honestly believe there is a very strong case tobenefit the UK economy apart from anything else,let alone our own interests, in keeping the presentarrangement, which we have under the interim cap,whereby ICTs are excluded from that cap. I’veexplained a little earlier about the supply anddemand correction to the numbers coming in. Theother point to make, I think, is that there are nosettlement or permanent residency issues here. All ofthe ICT professionals that my company brings inleave; we have all the figures and have providedthose to the Border Agency in the past. They are hereto provide services to support UK competitivenessand efficiencies. The other point perhaps worthmaking is that, as I’ve said earlier, over the last threeyears we’ve had between 3,000 and 3,500 expatriateICT professionals in the UK, all of whom are paid,pay tax. Millions of pounds of income tax goes to theUK Exchequer from their work here. So from

supporting the British economy perspective, fromthe no issues of permanent settlement perspective,and from the contribution to the infrastructure whilethey’re here perspective, I honestly cannot see a logicfor imposing a cap on ICTs.

Q195 Mark Reckless: Could I then ask Mr Mittalperhaps to give me an answer to the quota allocationor market mechanism?Som Mittal: Well, we understand the objective andwhy this is being done, and we fully appreciate it, butI think the unintended consequences of putting a caphave yet to be seen. For example, I believe that wewould have to change our business models, whichwould mean that rather than people coming in herewe might have the local customer having to travelback to India to get infrastructure set up there to dothe testing I spoke about earlier. So if there is a capthen I think there would be many, many unintendedconsequences, including the ones about relocatingand finding out better ways to manage the Europeanoperations and so on. I think it’s important to see thenumber of visas that were issued last year, and in factwe find that almost 70% only get used becausepeople are taking visas in anticipation of the work;people are waiting, they have to fly in on anemergency basis to take care of the mission,particular applications that we manage. So for us tobe in a situation where we will find ourselves withouta visa is quite difficult to understand. And, as I said,we will have to re-engineer our businesses as we goforward. I would also say that I think that the worldhaving globalised, the UK has been at the forefrontwhere I think we have been able to—whether it wasthrough HSBC Bank or Barclays or Tesco—reachout, re-engineer the applications, products andservices globally by using this model very effectively.Chair: Thank you. Nicola Blackwood.

Q196 Nicola Blackwood: We were speakingpreviously to Professor Metcalf of the MigrationAdvisory Council about lessons that can be learntfrom other jurisdictions. Now certainly two of youhere have experience of the impact of caps in placessuch as the United States. I wondered what thatexperience has been and what lessons you could passon to us.Som Mittal: The only place that we actually see caps,in addition to what we saw in Switzerland earlier thisyear, has been in the US, and it was odd that duringthe time when the economies were doing well theyhad a cap, in this case of 65,000 people, and 26,000companies use that. Obviously there was a rush forit and there were again 65,000 visas; 180,000applications came in the first week and it was alottery system. And as you can see, the lottery systemis going to be most ineffective for business, and Ithink right now, as we see, and the economies are notin the same shape, against those 65,000 visas only30,000 have been applied for and it is six monthsdown already in the economy. So I think from ourexperience of that visa, there is a debate going on asto whether the quota system in the US was effectiveor not. What we have explained in our submission toboth the Migration Advisory Committee, as well as




to the Border Agency, are two things which I thinkwill meet the objectives that have been set out by theUK Government: firstly, I think there needs to bedata collected on those who are coming in or goingout. Currently it’s not done, so we’re kind ofdebating things based on individual data points andso on. I believe that many questions that you areasked about—you know, people who come in withdependants, what do they do?—I think all that issomething that we can volunteer and it’s so easy tocollect it when it is ICT under tier 2 because it isorganisations that are responsible and notindividuals. The second thing, we have said thatthere are many conditions that have been imposed inthe points-based system, and I think, with tightercompliance—and I think we have recommendedcertain areas that we think the Border Agency couldbe implementing—we can still achieve its objective.If I were to take a decision here, I would say don’tput quotas, get the data in and if you think it’s goingout of control put them back again a year or twolater. But it should be data based and see what thereal impact is.Chair: Thank you. Bridget Phillipson.

Q197 Bridget Phillipson: The Government appearsto favour allocation of visas on a first come, firstserved basis. What is your preferred option and whywould that be?Som Mittal: As I said, if it has to be, we will have tosee this, but imagine a situation where it’s first come,first served, it’s a rush coming in. I would like todistinguish the quota system in all other categories inICT because in all the other cases it is the individualwho applies for a visa, whereas in the ICT case it’sthe companies that sponsor it, which would meanthat they can lump up a lot of visas and hence you’llprobably find one company which had the speed toput the visas in on the first day. You’ll get it and Ithink it will create distortions in the system. So therewas a very direct question put to us and we werestruggling to offer any solutions to what wouldwork, whether it would work on an annual basis,quarterly basis or whatever, and rollovers, I thinkthere will be distortions in the system.Keith Sharp: If I may just say our current practice isto project forward on a rolling basis, quarterly andannually. And, as Som has just said, we will typicallyapply for more certificates of sponsorship—for theindividual work permits, as a sponsor company—than we believe that we’re going to need because theworst thing would be to be caught out unable tosupply the demand that’s there. So that’s how we’reworking it currently as a company without any cap.Dare I say, were there to be some sort of cappingintroduced, which clearly we don’t think would be agood idea, but were that to be the case, I think frommy company’s point of view we would like tocontinue to have the scope to plan ahead in terms ofour own company. I think some sort of first come,first served auction sounds like chaos to me, I haveto say.Chair: Thank you. Final question from JulianHuppert.

Q198 Dr Huppert: Thank you, Chair. I’m justinterested in trying to understand what the long-term consequences might be and what you might doin response. This is a question for Messrs Sharp andMittal. If the cap was introduced and you couldn’tget visas for non-EU workers or found it extremelyhard, what would you do? Would you train and hiremore local people? Would you move some of youroperations to other countries or would you movecompletely and relocate away from this country?Keith Sharp: We already recruit and train UKnationals, so the balance and the blend that we havereflects the demand for the types of services andprojects that we provide. So, as I’ve tried to explainduring this discussion, to us it’s not an “either/or”;it’s an “and” situation: UK nationals for thepermanent jobs that we have in the UK, and thenumber we have now of over 2,500 has risenappreciably over the last four or five years—I cansupply figures to the Committee if that’s required—supplemented, supported by the global skills that webring in on a temporary basis. And as Som said,rather better than I did, typically somebody comingin will have been working on a project, typically inIndia, come in for a period of time, typically 18 to 24months, to work at the sharp end, understand howit will be put into practice and then go back to homebase to continue completing the project, so it’s notan either/or in that respect. As to your other twooptions, it would be very easy to say, “We’re thinkingof doing this or that”. The company I work for, thegroup has been in the UK since 1907. TataConsultancy Services has been here since 1975. Wesee ourselves as staying here and will have to try andadapt and figure things out if the consequencesrequire us to do so. It will be disruptive and I wantto repeat that I think the first damage would be doneto the efficiency and the ability of UK organisationsto access the kind of services that we offer and wethen have to plan ahead accordingly. In my opinion,labour mobility has been a very important part ofthe UK economy remaining competitive and openfor trade and it’s that that is now in jeopardy.Som Mittal: I would just like to add, whichever wayyou look at it, the economic gain of putting in aquota and restricting I think is far more than anymigration gain that we can see. As Keith mentioned,the UK is an extremely important territory; it isgame changer in many of the things that arehappening, particularly in the services space. Someof the consequences would be that we would have tochange our business model, and I think that couldbring in lots of elements of inefficiency. For example,today we only have a development environment interms of computers back in India, but theproduction environment is right here, which meansthe last servers, but if we can’t get the people to testthem we will have to recreate the same environmentback in India. So the work will go on except that thecost will go up and we wonder whether it would stillgive an advantage to what all of you were intendingto do, so I would say that the pain is far more thanthe gain that I see here.

Q199 Chair: Did you meet the Prime Minister whenhe came to India recently?




Som Mittal: Yes, sir.

Q200 Chairman: Have representations been made bythe Indian Government to him about theconsequences of the cap?Som Mittal: I guess there were a large number oftopics. It was a successful trip. He had brought in avery large delegation of people, so I think the bondbetween the two countries came to a higher level. Butsubsequently it was followed by Minister DamianGreen coming in as well, and I think there wererepresentations made and he did meet a wide cross-section of people from the industry, and I am sure he

has come back with messages that we need to doeverything to make the relationship between thesetwo countries tighter.

Q201 Chair: Do you think the cap would damagethose relations?Som Mittal: I think so.

Chair: Mr Mittal, Mr Sharp, Mr Dawson, thank youvery much for coming in. The Committee may writeto you with further information as we proceed withour inquiry.Som Mittal: Thank you for the opportunity.




Members present

Keith Vaz (Chair)

Nicola Blackwood Mark RecklessSteve McCabe Mr David WinnickBridget Phillipson

Witnesses: Mr Amit Kapadia, Executive Director, Highly Skilled Migrant Programme Forum, Ms SophieBarrett-Brown, Chair, and Mr Nicolas Rollason, Immigration Law Practitioners Association.

Q202 Chair: Mr Rollason, Ms Barrett-Brown andMr Kapadia, thank you very much for coming togive evidence in the last open evidence session of thisCommittee on the immigration cap. Can I refer allthose present to the Register of Members’ Interests,where the interests of all Members here areregistered? Could I declare another interest: my wifeis an immigration solicitor and a part-time judge.Can I start with you, Mr Rollason, and Ms Barrett-Brown? The temporary cap has been in effect nowfor a few months. What difficulties—or perhapsthere are no difficulties—are being experienced byyour members? I am afraid you will need to speak upbecause the acoustics in the Palace are notparticularly good.Ms Barrett-Brown: I know the difficulty has beenquite extreme. It has affected different sponsors indifferent ways. The way that the interim cap hasbeen implemented, which wasn’t publishedbeforehand, is that those employers who use quite anumber of certificates of sponsorship have had a 5%to 50% reduction in the number they’re allowed touse compared with those they used in a specific sevenand a half month period last year, which wasbetween July last year and March of this year. Somesponsors—quite a large number—have received anallocation for no certificates whatsoever, and it has,I think, disproportionally affected smaller sponsors,smaller businesses in the UK, who have suddenlyfound that they had planned, they had gone througha recruitment process for a particular migrant, andthen suddenly found that their allocation waswithdrawn.Chair: Members of the Committee are havingdifficulty hearing you. I think your microphone maynot be on or perhaps you need to bring it—Ms Barrett-Brown: No, it’s not on.Chair: It is not on, that is why we cannot hear you.Ms Barrett-Brown: Is that on?Chair: That is much better. Maybe you can push itnearer to you.Ms Barrett-Brown: How about that? Does that makeany difference?Chair: Yes, but it looks uncomfortable. Why don’tyou bring it closer to you?Ms Barrett-Brown: No, I’m fine, thank you.Chair: So long as you don’t take it up and danceround the room, we are fine.Ms Barrett-Brown: I can’t promise not to do that.Chair: Okay. Is it on now?Ms Barrett-Brown: I’m not discerning anydifference.

Chair: Is there a member of the Committee staff whocan assist the witness? It is on. Could we put thevolume higher? It is the highest volume.Ms Barrett-Brown: I’ll project.Chair: That is much better, do project. We’ve put youcompletely off your evidence now. Can I give you anexample?Ms Barrett-Brown: Yes.

Q203 Chair: In my surgery last Friday, a gentlemanwho was given 10 certificates to run an Ayurvediccentre in my constituency but had not used thosecertificates in the last year came to see me. Hiscertificates have now been withdrawn on thegrounds that he has not used them. Is this happeningall over the country?Ms Barrett-Brown: It’s happening across the board,and from 19 July my firm personally, and memberswho are with immigration firms, were inundatedwith panicked phone calls from sponsors who—totally unexpectedly—had suddenly received letterssaying that they were having their entire allocationwithdrawn. In many cases it is simply a question ofchance that they didn’t happen to make use of thosecertificates previously within that very, very narrowwindow. They may have allocated quite a number ofcertificates in the window between March and Julywhen the limits came in or prior to the comparisonperiod.

Q204 Chair: Just to advise the Committee: did theyhave to pay a fee or go through some kind ofassessment in order to get those certificates in thefirst place?Ms Barrett-Brown: That’s absolutely correct. All ofthe sponsors had to pay a fee of either £300 or£1,000, but for many of them it’s not just theapplication fee. In order to gear their businesses upto meet the quite onerous duties of a sponsor, manyof them had undertaken audits within their business,engaged other professionals—lawyers, HRconsultants and auditors—to make sure thateverything was in order, as well as actually makingtheir applications. They’ve incurred significant cost,and obviously the cost of their recruitmentcampaigns and however they’ve identified thoseworkers. So it had a very substantial impact.Chair: Thank you. Mr Rollason, do you haveanything to add?Mr Rollason: I would add that the follow-on fromthat is that the safety net, effectively, which the UKBorder Agency has introduced for the interim cap is



14 September 2010 Mr Amit Kapadia, Ms Sophie Barrett-Brown and Mr Nicholas Rollason

the ability for sponsors to request additionalallocations if they have none left. So those sponsorswith zero allocations can make an exceptionalrequest for an additional certificate of sponsorship,which will be granted on exceptional grounds, andthere are very hazy criteria about how thoseadditional allocations will be given to sponsors. Ican tell you that of all the applications made by allthe sponsors in the UK which were considered by thepanel on 1 September, none of the new hires, none ofthe non-EU nationals being hired after a residentlabour market test, were approved. They were allrefused.

Q205 Chair: Every one of them?Mr Rollason: Every single one.

Q206 Chair: How many were being considered?Mr Rollason: We don’t know yet. We’re trying to findthat out. We don’t know what the limit is either.That’s the other point we’re concerned about. Foremployers now, the only people who can getcertificates of sponsorship under the current rulesare those who are extending their employment in theUK or being sponsored under work permits or tier2. So for new hires, it is now impossible to get anynon-EU nationals in sponsored by employers. Thatis the message, certainly, that we’re getting and thatis the very immediate impact of the interim limit. Itis, I think, a sign of things to come.

Q207 Chair: Mr Kapadia, you have been, of course,before the Committee in the past. Can I ask youabout the nature of skills as far as your members areconcerned? What additional skills do they bring tothe British labour market which are not alreadyhere?Mr Kapadia: Our members are working inprofessions such as—they are doctors—Chair: Again, you will need to speak up, I am afraid.Mr Kapadia: Our members are working inprofessions such as—they’re doctors, lawyers,financial analysts, energy specialists, lecturers andteachers.

Q208 Chair: Why do we not have these skills in theBritish labour market? Why do we have to lookabroad? Why do we have to look to yourorganisation?Mr Kapadia: There may be such skills available, butthen there is always a scarcity. You won’t be gettingenough skill sets within Britain itself, so you needskilled migrants coming from non-EU countries. Wehave observed recently there have been certainproblems concerning NHS health care, which isjeopardising employment services. So, that is whythere is a necessity for skilled migrants.Chair: Thank you.Ms Barrett-Brown: May I make a very brief point onthe interim limits, Chair?Chair: Yes.Ms Barrett-Brown: The first is that I obtained somestatistics by a Freedom of Information Act request,which revealed that 50% of small sponsors weregiven a zero allocation. So it’s a massive impact on

those small sponsors and, as Nicholas said, they’rebeing refused certificates of sponsorship. But I’d alsohighlight that the fact that no one can come in underthe resident labour market test does mean postswhere they have tried to fill the vacancy with residentworkers. They have made all the necessary efforts;they have advertised. There is no one in the residentlabour force to do those jobs and those jobs aregoing unfilled, which is having a very serious impacton British businesses, on their activity, on theirability to compete in the global market. It’sextremely serious.Chair: Thank you. David Winnick?

Q209 David Winnick: I wonder if I could just ask thisquestion, perhaps particularly to Mr Kapadia. Theargument is that at a time of recession, at a timewhen jobs are in short supply—obviously not in allfields, as you will be telling us and have told us—would it not be desirable in the first instance—this isthe sort of question Migrant Watch would certainlybe putting—that it should be British labour firstbefore there is any question of bringing people overunless it is simply impossible to fill the vacancywithin the UK domestic labour market? Whatwould you say to that?Mr Kapadia: There should be the principle offairness. Those migrants who are already in Britainshould not be discriminated against in terms ofBritish jobs for British workers. Migrants who arealready in Britain should be allowed to continuetheir stay. Our main concern is with those migrantswho are already in Britain. Most of those comingfrom non-EU countries are coming to fill positionswhich cannot be otherwise filled in Britain.

Q210 David Winnick: But would you, therefore,accept that it is only in those circumstances thatpeople from abroad should be brought in,particularly at a time of recession, and that if thevacancy can be filled within the UK labour marketthat should be the way to resolve the issue for theemployer?Mr Kapadia: As long as the existing migrants are notaffected, then it may be reasonable to a certainextent. But the basic concern with such strictmeasures in imposing cap on those who are enteringinto Britain—is that it can take time to realise thecontra effects which can take place. You shouldn’tbe entering into a position where certain measureshave been taken and later on, after certain time, theGovernment realises that it had a significant impacton UK businesses because ultimately those positionsare unfilled and that can have a serious impact onbusinesses and the UK economy.Chair: Thank you. Mark Reckless?

Q211 Mark Reckless: We have had some evidencefrom businessmen suggesting that if the number ofpeople they could bring in under tier 2 was restricted,they might relocate their business out of the country.We hear these threats on other issues frombusinesses. Is that really credible, particularly if wewere to have a system where perhaps we auctioned




permits and it was just a question of paying a certainamount rather than being told you couldn’t—flatout?Ms Barrett-Brown: That is certainly a message wereceive from our members all the time—that is whattheir clients are telling them. I wonder if I might beable to give an example from the US system, wherecaps were imposed. There was a very notableexample a couple of years ago when Microsoft washaving such difficulty with the H-1B cap that theyrelocated one of their centres to Canada, where theynow employ over 1,000 Canadians, and the US lostthose jobs. That is precisely the sort of circumstancethat many ILPA members’ clients envisage they mayface themselves.Mr Rollason: The businesses that are looking torelocate and move their businesses are often the mostmobile and most high value businesses, not the hugecorporations which have significant locations andthings in the UK. They are generally smalleremployers who may not employ that many people,but the value of the business in terms of tax revenues,in terms of the wealth generated, is quite significant.We’re talking here about alternative investmentcompanies, financial companies, a lot of whom aremoving to Switzerland because of the combinationof high taxes and this particular issue. We have heardevidence that this is the final nail in the coffin inmaking the decision to move outside the UK.

Q212 Mark Reckless: If I could come back on that,you say alternative investment managers are movingto Switzerland because of the possible immigrationchanges. Surely the alternative investment fundmanager directive is a far more significant issue forthem?Mr Rollason: Yes, but it will have limited impact inSwitzerland.

Q213 Mark Reckless: Well, that is why they aremoving there, isn’t it?Mr Rollason: That is one of the reasons they’removing there. The other thing that happened wasthis. A large number of these businesses relocating toSwitzerland have also had an impact on the quotasthat they have in Switzerland, because the Swisshave quotas and work permits for non-EUnationals, and because large companies like Google,which has significant operations in Switzerland,were unable to get people in, the Swiss Governmenthad to review its cap and increase it significantlybecause of the problems of bringing in very highlyskilled people who then pay quite a lot of tax inSwitzerland.

Q214 Nicola Blackwood: You have raised concernsabout the impact of the difficulty of obtaining visasunder tier 1 and tier 2 and the possibility thatemployers will then instead move to using ICTs. Wehave received evidence saying that ICTs are alreadybeing abused, and other evidence saying that theyabsolutely should not be included in the annuallimit. What is your view on the role that ICTs play inkeeping the economy going?

Mr Rollason: Our view is that ICTs are absolutelyvital to the UK, being a centre for businesses. It’sabsolutely key to operating both the businesses andbringing people with the right skills in within thesecompanies. We do not—and our clients do not—believe that ICTs should be included in the cap. Ifthere is a use of ICTs then the UK Border Agencyneeds to ramp up its operations to deal with those,but if we are going to limit ICTs, effectively themessage is going to go out that if you once starttelling people around the world, you can’t enter theUK, the UK has less business. The other thing toremember about ICTs is that for every ICT cominginto the UK to work for, say, an internationalcompany, moving here with their family, there will beother British citizens going into that same company,to go and work in South America, or wherever, so it’snot a one-way track. It is vital for businesses. Wethink that if that ability to bring people in is cut off,it will significantly damage the UK’s reputation as acentre for business(several inaudible words). Ifpeople are saying that that is simply not true, I cantell you that a lot of businesses are looking at othercentres they can get people into more easily.

Q215 Nicola Blackwood: So are you aware of anyinstances of ICT abuse? Is it something that you’vecome across?Mr Rollason: We hear about it constantly but Ihaven’t personally come across it. There are issues, Iunderstand, about relocation packages and taxbreaks for people being relocated to the UK. As wehave said, if the UKBA has concerns that inparticular industries there is abuse, then they need toramp up their investigations to ensure that doesnot happen.

Q216 Nicola Blackwood: So where do you hearabout it constantly from if you don’t come across ityourself?Mr Rollason: I didn’t say that I hear it constantly. Isaid I—Nicola Blackwood: You did, you said you hear aboutit, but where from?Ms Barrett-Brown: Predominantly everybody hearsfrom UKBA that there are abuses. But I can say in14 to 15 years’ practice I have never seen this abusethat’s reported. There are obviously certain interestgroups in certain sectors who have lobbiedGovernment to say that intra-company transfersshould not be allowed, particularly in the ITindustry, because they consider that British ITworkers may be able to fill some of those vacancies,but I have not seen any evidence of these abuses. Letus not forget that intra-company transfers don’t leadto settlement, as of earlier this year, so these are notroutes for people to be able to remain permanently inthe UK. That may be one of the concerns that peoplehave previously had—that overseas nationals mightbe using it as a vehicle for permanent stay. That is notpossible. That change is relatively recent, so we can’tsee the impact on that yet, but I’m sure it will havean impact.




Q217 Mark Reckless: My constituents have, I think,a legitimate concern that there have been very highlevels of immigration into this country, and theysupport having a cap. I hear what is being said, butthis Committee—and I think Parliament—has tostrike a balance. I can see why it would be difficultfor companies if there was a ban on ICTs or it wasvery difficult, you had to get through all these hoopsand so on, but surely just saying a certain limit—andwe could enforce that by auctioning those permitsand charging a fee to companies, say, a few thousandpounds, to bring in someone on an ICT—is that sounreasonable?Ms Barrett-Brown: We would say it is.Mr Rollason: I think auctioning as an idea in itself isnot one which ILPA agrees with. We believe wewould have these sort of eBay economics. We thinkthat if the principle is that the highest payer wins,there will be clear winners who will be the wealthycompanies who have absolutely no objection topaying £10,000, £20,000, £30,000 to get a banker tocome in and work for an investment bank in the UK.That may be hard for some, but others will pay it inan auction. It completely distorts the marketdemand by effectively enabling very large businessesthat typically pay large salaries anyway—largecompensation packages—to secure the permits thatthey need.Ms Barrett-Brown: How will the NHS, for example,compete in an auction? It’s placing a relative valueon the heart surgeon and the investment banker. Theinvestment banking business can clearly afford amuch higher premium for an auctioned permit thanthe NHS.

Q218 Mark Reckless: I wasn’t aware that ICTs werein widespread usage in the NHS?Ms Barrett-Brown: No, obviously not in the case ofICTs. You could pick any sector, but generally theauction principle is not limited to intra-companytransfers. The auction principle in the consultationis a suggestion across the board but, in any event, theprinciple—even within the ICT context—would stillapply that certain sectors obviously are, bydefinition, more able to pay than others. Thatdoesn’t necessarily mean that those that are moreable to pay offer the best economic contribution tothe UK in the contribution that that migrant willmake. That migrant may make a very valuablecontribution in up-skilling the local work force aswell. It’s not just about the revenues generated, thefees or the tax.Chair: Thank you. Bridget Phillipson?

Q219 Bridget Phillipson: Thank you, Chair. Do youthink that dependants should be excluded from thecap and, if so, should they be prevented fromworking while they’re in the UK?Ms Barrett-Brown: We do believe very strongly thatthey should be excluded from the cap. We have arange of concerns around their inclusion, not leastthat it may actively encourage discrimination inincentivising employers to try to only offer positionsto those who appear to be young migrants withoutfamilies. It would naturally have an impact of

discrimination around age and gender, and so wehave grave concerns there. But there is also thedisplacement question. If a business needs a veryskilled migrant worker, to have them displaced bythe fact that another migrant worker happens tohave twins rather than one dependent child wouldseem to be an entirely arbitrary manner of goingabout it. Equally, we’re also opposed to the idea ofdependants not being able to work. They make avaluable economic contribution in the UK on anumber of levels, and it would be a deterrent factorto some of the most highly skilled, bearing in mindthat many very highly skilled migrants—and we aretalking about the elite of migrants here; tier 1 andtier 2 are the most elite migrants in our system—arein partnerships with other very highly skilledindividuals. To restrict them from being able to workin the UK would encourage them to seek otherdestinations.Chair: Bridget Phillipson?

Bridget Phillipson: That’s fine, thank you, Chair.

Q220 Chair: This is very odd. If the Government hasa cap of 24,000, and people are allowed to bring independants, and there are two dependants perperson coming in here, what is the point of havinga cap?Ms Barrett-Brown: One can still make use of the cap.I should just add that the statistics, I understand, arethat less than one dependant is brought on averageper—Chair: It is 0.8%, whatever that is of a person.Ms Barrett-Brown: Yes.

Q221 Chair: Let us round them up to one person.Say it is one to one, that is 24,000 people, eachbringing in another person. That is 48,000 people.Ms Barrett-Brown: I should add that we are opposedto the concept of caps anyway, for various reasons.Chair: We understand that.Ms Barrett-Brown: If one sets the cap at 20,000 for—

Q222 Chair: The temporary cap is set at 24,000 now.Are dependants included in that figure?Ms Barrett-Brown: No, dependants are not includedin that, neither are applicants from within the UK,neither are intra-company transfers.

Q223 Chair: Help us with figures because we will bepursuing this with Ministers. The cap is now 24,000for this temporary period?Ms Barrett-Brown: Approximately, divided betweenthe two categories, yes.Chair: Right. Do you think it is more than 24,000 orless? What is the cap? Let’s agree on a figure. Whatis the cap at the moment, the temporary cap?Ms Barrett-Brown: About 24,000.Chair: All right, let’s agree on 24,000. Put thosenumbers aside. On top of that, each one of those24,000 people is likely to bring in 0.8 of a person, sayit’s a person.Ms Barrett-Brown: Yes.Chair: On top of that, how many intra-companytransfers are we talking about? How many people?




Ms Barrett-Brown: I don’t have the statistics.Chair: Mr Rollason, can you help us with thenumber of people?Mr Rollason: Certainly, for the interim cap, wecan’t—Chair: Can you give us a rough estimate based onlast year?Mr Rollason: If you look at the 2009 figures forintra-company transfers there were 22,000 of those,but remember the interim cap is only a six-monthperiod.

Q224 Chair: Sure. For the six-month period, then,we have 24,000 people coming in, another 24,000people coming as dependants, and another 22,000people coming—well, 12,000 because it’s for sixmonths—12,000 people coming in. It is already anextra 36,000 people. Is the cap really quite artificial?Ms Barrett-Brown: I think the cap’s extremelyartificial but for many more reasons than that alone.But the cap level is set at whatever level it is at,knowing that one can expect 0.8 dependants perapplicant. So it can be calculated—as I think DavidMetcalfe has said—to either, say, 40,000 includingdependants, or 24,000 not including dependants.

Q225 Chair: So even if the Government has told usthey only want 24,000 people to come in, it is 60,000people who will enter in the six-month period?Mr Rollason: It could be. We simply don’t know.

Q226 Nicola Blackwood: What sort of numberswould you expect without a cap during that period?Ms Barrett-Brown: That’s extremely difficult topredict. The cap figures were based on achieving a5% reduction on the numbers last year. Last year wasa recession year, so one would expect that if wesucceed in pulling out of the economic doldrumsthere would probably be an increased need formigrant workers to help accelerate economicgrowth. When one looks back at the statistics,economic prosperity is normally fairly consistentwith an increase in migration and economicdownturn normally has a decrease in immigration.So I would expect a greater need, but that’sspeculation, I think.Chair: Thank you. Steve McCabe?

Q227 Steve McCabe: Thank you. As I understand it,both organisations are opposed to the options forallocating visas. We just heard about auctioning, butI think you are also resistant to the idea of first come,first served, or pooling. If you had to pick a preferredoption from one of those three, what would it be?Mr Rollason: We don’t think any of those will work,unfortunately. We are much more in favour of amuch more qualitative assessment of who is comingin and what skills they’re bringing in by looking atpotentially the occupations that the UK needs, theskills, salary levels and other criteria, rather thansimply looking at, for example, a first come, firstserved system where you send your e-mail in atmidnight on 1 March when the cap is released, and

whoever gets their e-mail in first goes to the top ofthe list and gets what they want. It is simply not away to manage the system.

Q228 Steve McCabe: What is the difference betweenquality of assessment and pooling?Mr Rollason: Pooling could be used for tier 1, whichis where there isn’t necessarily an immediate need tocome to the UK, but our position is this. Tier 1 is in99% of cases used by migrants and employers tobring people into the UK where there is a job. I thinkit is a myth that tier 1 is a sort of category wherepeople wonder whether they’d like to come to theUK and live here for some sort of lifestyle change—looking for a job. Most people have a job offer or abusiness opportunity that they go on to pursue withinvestment coming in. That is our experience in 99%of cases. So, pooling in those systems, where you putyour name in a hat and it sits there for up to sixmonths, is simply not going to deal with that abilityfor highly skilled people to come in because theyhave no certainty about who they’re competingagainst.

Q229 Steve McCabe: Can I just clarify? Am I rightin thinking that the logic of your answer, though, isthat each individual application should be assessedwith some kind of quality threshold? So you are notanswering about how we should deal with the cap.You’re saying, “Forget the cap and assess eachindividual case”. Is that right?Mr Rollason: With migrants, within the limits ofwhat the UKBA’s resources are, we would like forthere to be not quantitative assessment butqualitative assessment of all applications,particularly in tier 2 where at the moment theoptions that are being looked at in terms of a modeland methods are first come, first served, which is theonly thing that has been suggested by the UK BorderAgency and which is simply not going to work. Ifyou look at what’s happening in the US with the H-1Bs, we have years where the H-1Bs areoversubscribed two times on the second or first dayon which they are opened for applications. Thesystem ends up with a lottery where you have to pickpeople out of a hat, which is simply not the way tomanage a migration system. You need to be able tolook at the skills and the occupations and say,“These are the people we want. These are the peoplewe need”, and adjust the points system accordingly.Steve McCabe: Thank you. Can I just ask MrKapadia, do you have anything to add to that?Mr Kapadia: Yes. If there is no choice then, the poolsystem brings in the highly skilled migrants, but thenthat also means increase in the points threshold, thecurrent points based system is tough enough. Inaddition, the points system the pool system brings inuncertainty and further delays which can deterpotential applicants from coming to UK.Chair: Thank you. Mr Reckless has a briefsupplementary, is that right?




Q230 Mark Reckless: Yes, Of the two systems, onewithout a cap where you qualitatively assess everyapplicant, and one with a cap where there is a lotteryor an auction, which would provide greatestemployment for immigration law practitioners?Mr Rollason: Can I just say that the complexitywhich the cap will bring will always create morework for immigration lawyers. We are against thecap. We are against complexity and are not ourselvesan organisation that is looking for any more work.Quite the opposite; we’re trying to make it easier foremployers, our clients, to be able to access the labourmarket and enable businesses to do what they needto do in terms of generating growth and operating assuccessful businesses. So, it’s quite the opposite interms of our interests.

Q231 Chair: I’m interested in the principle of whypeople come here. Obviously they come here to workand provide support for businesses and the publicsector in terms of areas such as being doctors in theNational Health Service. When people come inunder tier 1, do you think it is their expectation thatthey are going to settle at the end of that period? Isthis the problem that we have with our immigrationpolicy? We give out the expectation that if you staya certain number of years then you will be allowedto remain as permanent settlement?Ms Barrett-Brown: I think that is the expectationbecause that’s the present law.

Q232 Chair: That is the present law. Mr Kapadia, isthat the expectation of your members?Mr Kapadia: Yes, our members, definitely, most ofthose who come on tier 1 come with an intention thatafter a certain period of time they will settle here.These migrants we are talking about, they havevarious other options like Australia, Canada, NewZealand and other countries. So when they comehere with their families, in fact, to come and workhere, they do so with an intention that aftercontributing to the UK for a few years they will beable to settle here.

Q233 Chair: Of course, the same thing applies tostudents. Students are not included in the temporarycap, but the expectation is after they get their visasthey will be allowed to work for a two-year period.If that is taken away fewer students would come.Similarly, if the expectation was removed and peoplewere told very clearly, “You are coming to fill ashortage in the labour market”, would you foreseethe number of applicants for tier 1 declining on itsown without the need for a cap?Ms Barrett-Brown: I think there are two veryimportant issues there. One is largely around what isthe benefit of these migrants to the UK? A migrant

who is tier 1—the most highly skilled, the mostelite—is going to be disincentivised from making themost of his contribution to the UK if he knows he isgoing to have to leave at the end of it. If theGovernment wishes to encourage those migrants tointegrate, to invest on so many levels— investingtheir time, investing their money, investing theirexpertise—then sending the message that you will berequired to leave afterwards is not one that is goingto encourage those migrants. They will go toCanada, New Zealand, Australia and so on wherethey get granted indefinite status immediately oncethey come. The UK is already behind thosejurisdictions in how it operates the system.

Q234 Chair: Ms Barrett-Brown, both thisGovernment and the last Government were veryclear they wanted to limit numbers; some have beenless successful than they had anticipated. Surely thebest way to do it is to make it very clear to people likeMr Kapadia’s members, “If you come on a tier 1 visayou are coming to fill a gap in the labour market andyou will not be allowed to settle”?Mr Kapadia: I think it would be very difficult toattract highly skilled migrants with that sort ofproposal. You may be able to apply that sort ofruling on tier 2 migrants, like, for example, intracompany transfers who come for a shorter duration.I don’t think that the quality of highly skilledmigrants would be interested to come for a shortduration and go back.

Q235 Chair: So it is settlement that encouragespeople to apply, that is the whole thing, isn’t it?Ms Barrett-Brown: I don’t think it’s purelysettlement that encourages them to apply, but notbeing able to get settlement would disincentivise thevery elite, the most highly skilled, because they cango elsewhere where they have greater certainty. Toinvite someone to come and spend hundreds ofthousands of pounds over the course of X years andbe required to leave would disincentivise them. We’retalking about a very, very small number of migrantsin the overall migrant population here, and these arethe ones that stand to offer the most to the UK. TheGovernment itself has on many occasions said thatit still wants to attract the brightest and the best. Itwill not get those if it sends out a message that theycan come—

Q236 Chair: I understand that. One final question,and that concerns the judicial review that some ofyour members are taking out against theGovernment. Is it right that there is now a judicialreview against the Government as far as thetemporary cap is concerned?Ms Barrett-Brown: I understand that a letter beforeaction was sent by one member, but obviously thatis the member’s own private action.

Q237 Chair: Of course, but is this because there is alack of dialogue between the stakeholders and theUKBA? Under the points-based system, as you




know, the Government was successfully challengedtwice. I think it went up to the Supreme Court. Areyou entering into discussions with UKBA to makesure the system works? What is the consultation like?Ms Barrett-Brown: There was no consultation. Theway in which the interim cap was brought in, in myview, was an absolute disgrace. I received atelephone call before they were brought in advisingthat UKBA was very interested in consulting withILPA. We then received no consultation. A letter wassent out by Jeremy Oppenheim on 1 July informingsponsors that those who had allocated more thantwo of their certificates of sponsorship would take areduction. No reference was made at all to the foursponsors who have in fact had a zero allocationgiven to them. That suddenly started happening outof the blue after 19 July, so there was noconsultation. The impact assessments were utterlywoeful. They made no reference whatsoever to the

Witnesses: Sir Andrew Green, Chairman, and Mr Alper Mehmet, Member, Advisory Council, MigrationWatch.

Q239 Chair: Sir Andrew, welcome back to theCommittee. Thank you for coming to see us at suchvery short notice. You have a colleague with you. Idon’t know who that is.Sir Andrew Green: Yes. Mr Alper Mehmet. May Iintroduce him, Chair?Chair: Yes, please.Sir Andrew Green: He is a former ambassador toIceland, but he started life as an immigration officer,so he has a very wide experience.Chair: He is a former British Ambassador to—Sir Andrew Green: Yes, and he’s now a member ofour Advisory Council.Chair: Okay. Sorry, could you repeat his namebecause I didn’t have notice that he was coming.Sir Andrew Green: Alper Mehmet.

Chair: Alper Mehmet.Sir Andrew Green: I’m sorry you didn’t have notice.Chair: No. It will always be helpful to know who ourwitnesses are before they appear. Thank you forcoming and bringing your colleague Mr Mehmetwith you.

Q240 Chair: Broadly speaking, do you think thatthere is an upper limit as far as the population of thiscountry is concerned, which you would not like tosee breached?Sir Andrew Green: Yes, I do, broadly speaking. Ithink that is the central point, Chair. The wholebackground of this is what immigration is doing toour population, with the consequences for housing,public services, and so on. We would say that’s wherewe should start.

Q241 Chair: What is that limit? What should ourpopulation be?

actual terms of the interim minutes, and businesseswere suddenly left overnight with having theirallocations pulled away from them and in acompletely desperate situation.

Q238 Chair: Would you value a period of dialogueand consultation with UKBA? Have you asked formeetings with them?Ms Barrett-Brown: Yes, and to be fair we did ask fora meeting. I wrote to them following that. My letterwas ignored for three weeks, but we then did have ameeting with members of the UKBA, which I feltwas a constructive meeting but, in fact, we haven’tseen any amelioration of the impacts of the interimlimit because they have been overwhelmed byapplications for the exceptional additionalcertificates.Chair: Ms Barrett-Brown, Mr Rollason, MrKapadia, thank you very much for coming to giveevidence today. Thank you.

Sir Andrew Green: We believe that there should be abroad purpose, which is to bring immigration intobalance with emigration. The effect of that will be tostabilise our population at about 65 million. If we donot take measures of that kind, then immigrationwill account for two-thirds of our populationincrease. I think that Mr Winnick asked the Ministerrather an interesting question. He said if there is noimmigration we will hit 70 million anyway, I thinkwas the question. It wasn’t answered but the realityis that that is not the case. If there is no immigrationwe will stabilise at about 65 million. The converse isalso important. The converse is this. If we don’t getany serious reduction in immigration we will notonly hit 70 million in 20 years’ time on the presentprojections, we will go on to 80 million and onwards.There is no stopping an increase in our populationunless we make a very serious dent in immigration.

Q242 Chair: Do you think the current proposals—the temporary cap leading to a permanent cap—aregoing to achieve what you would like to see,basically a cap on the population of Britain of 65million?Sir Andrew Green: First of all, I’d like to put thetemporary cap aside. That’s running intodifficulties—you have examined the notes. Asregards a cap on economic migration, it’s importantto say that that only accounts for a quarter of non-EU migration. So any contribution from a cap willbe relatively small, but I do think it’s important thatwe bear down on all the many aspects ofimmigration, of which this is only one. The focus hasbeen on economic migration because that was in thecoalition’s stated policy. It was very muchunderstood and focused on by the electorate, and sothe Government had to come forward, first of all,with this proposal, which we will get in a month ortwo’s time, but it is only part of it.



14 Seprember 2010 Sir Andrew Green and Mr Alper Mehmet

Chair: Thank you. Mr Mehmet, please feel free tochip in if there’s something that you want to say,rather than wait for someone to address you with aquestion. Mark Reckless?

Q243 Mark Reckless: Yes, as you say, the focus hasbeen on the economic migration and, as we saw withthe recent figures, there can be very big swings in netmigration simply because of the change in Britishcitizens leaving the country. Don’t we also need toput a much greater focus on other categories ofimmigration and potentially look at restrictingfamily-related immigration and EU immigrationand other categories?Sir Andrew Green: Yes. We have to take measures inall fields. Can I just deal with EU migration becausethere is a lot of misunderstanding about that. Overthe last 10 years, the average net migration from theEU 15 has been about 20,000, and that’s comparedto net foreign immigration of 250,000. So from theEU 15 there is not really significant immigration,certainly over future years.

Q244 Chair: You are saying, since enlargement, thatnet migration has only been 20,000, even in the firstyear when a million people were reckoned to havecome from the new countries?Sir Andrew Green: The EU 15. That is the officialfigure.Chair: Oh, the EU 15, sorry, not since enlargement.Sir Andrew Green: Since enlargement, the A8, wenow have about 500,000 citizens here from thosecountries, but we predicted two years ago thatmigration from the East European countries wouldcome into balance. We were right about that. It isnow almost in balance: the net inflow in the lastquarter was about 5,000. When you look at thewhole picture of immigration, and you look at waysof reducing it, you can in fact put the EuropeanUnion to one side—unless they admit Turkey butthat’s a different subject altogether. Broadly, let’s putthe EU to one side. Then you have to focus on work,on study, on family reunion and various otherthings, and just one other point, focus on illegals.

Q245 Mark Reckless: To take an example of thefamily reunion channel, what type of restrictions doyou think would be plausible or acceptable in thatarea?Sir Andrew Green: I think that’s the most difficultarea of all. The Government are going tointroduce—or I think the previous Governmentintended to and this will continue—a language testfor foreign spouses. There is a lot of good sense inthat for all kinds of reasons to do with their arrivalhere and their integration into our society. I thinkthat’s the first step to take. I would in due course,when there are schools around the place that willmeet the need, raise that level of English for exactlythe same reasons. Beyond that, I think we are goingto have to look again at the question of whether weshould allow not arranged marriages—that’sperfectly normal in many societies; but whether youshould allow marriages to be arranged only for—specifically for—immigration. That seems to me to

be a different question altogether and one whichentails consequences for our society as a wholerather than a particular culture.Chair: Bridget Phillipson?

Q246 Bridget Phillipson: Thank you, Chair. We hada discussion earlier about the right to work here ascompared to the right to then settle, having workedhere for a period. Do you think it would be moreeffective just to keep the system as it is, but thenrestrict the rights of settlement of those people whohave come here to work under the existing tier-based system?Sir Andrew Green: I think that’s a very interestingidea—that you should separate economic migrationfrom settlement. It’s one that we favour. It’s one thatthe balanced migration group in Parliament arepromoting for this very reason: that it is a way tosquare the circle. You clearly need some economicmigrants and you clearly need to control yourpopulation, so if you had a system which said—theChairman, I think, was touching on it earlier—“Okay, you can come for four years but after that wewill expect you to go unless you pass a secondhurdle”, which would be based largely on salary, toallow people to settle. That would have theadditional advantage of encouraging employers totrain a successor rather than have to go around in acircle looking for another migrant.

Q247 Bridget Phillipson: If I could just return to yourcomments about family reunification, you talkedthere about marriage and whether it’s for thepurpose of immigration or quite what it would be.How would you determine those that you feel aresimply marrying British citizens for immigrationpurposes versus those who are marrying for thereasons that anybody else would marry? Whatcriteria could you use to determine that? How wouldthat work?Sir Andrew Green: The first thing you do is clampdown on clearly sham marriages. That is a slightlydifferent subject, but that’s the first and mostobvious thing to do. On the question of marriagesarranged purely for immigration, I think that canonly be done by interview, an interview designed totry to ensure that there was no pressure on either sideand so on. It’s not an easy area and I think probablyin real life people deal with it later down the track.Mr Mehmet: Chairman, may I come in?Chair: Yes.Mr Mehmet: As a former immigration officer, weused to interview people in these sort of casesregularly. The expertise was certainly there. Whetherit still is I’m not sure, but it is not going to beanything that’s a departure from what has beenpractised over many years, even though it hasn’tbeen recently—Chair: As you know, also, there are very fewinterviews. If you make an application in Pakistanit’s considered in Abu Dhabi on paperwork, so thechance to see people and make your assessment is nolonger there. Mr Reckless, can you hold on until MrMcCabe has had his turn.




Q248 Steve McCabe: Thank you. I think I’m rightthat you want to see the shortage occupation routefor tier 2 abolished. If that happened, are you happythat the present resident labour market test isrobust enough?Sir Andrew Green: Let me say, first of all, that I thinkthere is a huge fallacy underlying a lot of thearguments you’ve just heard about the amazingvalue of economic migration. There are clearly caseswhere it is absolutely essential and there are clearlycases where we have to have provision for it, but anawful lot of this is not essential. The shortageoccupation group probably is, but tier 1—“general”as it is called—are people who come here on speclooking for a job. There were 20,000 last year. Thenumbers are all over the place, so it’s about 20,000.It’s hard to argue that in the labour market thatwe’re in, business will collapse without 20,000 peoplelooking for a job. Secondly, on tier 1 again, there isthe post-study route which enables anybodycoming—Chair: We are coming on to post-study later on, yes.Sir Andrew Green: Let me come back to yourquestion on the shortage occupation. Our reason forsuggesting it be abolished is it is only 3,000 a year,and you have a very big bureaucracy deciding whichis which. We would tend to lump them together andhope that the labour market test will work.

Q249 Chair: So you would be in favour of abolishingthe Migration Advisory Committee?Sir Andrew Green: No.Chair: You want to keep it, okay.Sir Andrew Green: They’re outstanding I think, butI’d give them better work to do, which is to look atthe impact of immigration on our community.

Q250 Steve McCabe: Can I just ask one last point onthat, then. So you’re in favour of abolishing that.You say it’s only about 3,000. But I think you alsosaid that you wanted to see transitionalarrangements, and you specified occupations likechefs and senior care workers. Why, and what kindof transitional arrangements?Sir Andrew Green: I think the transitionalarrangement would have to be some kind of time lag,some postponement to give people time to adjust toit. There are one or two occupations where that isimportant. The Home Office might not like it. It’sdifficult to start making exceptions, but we think itneeds looking at.

Q251 Steve McCabe: I’m just struck by this. Why doyou think chefs are a group that we’ve got a problemrecruiting or training in this country?Sir Andrew Green: I don’t think we have, but there’sbeen a lot of pressure from employers of chefs. Ithink it’s true to say that something like 25% ofyoung Bangladeshis are unemployed and I thinkthat they should be helped into this kind of work. Ithink you mentioned earlier that there is a college inBirmingham that trains people.

Q252 Chair: But, Sir Andrew, it might not just beyoung Bangladeshis who want to be chefs; it mightbe people who are not Bangladeshis.Sir Andrew Green: Yes, I know.Chair: Isn’t the problem the fact that the skills thatwe need to enhance are not there in the country at themoment and we can’t suddenly stop chefs cominginto this country? In every South Asian restaurantthat I visit I have complaints from the owner that thequality chefs are not here. Isn’t that the problem?Sir Andrew Green: Yes. I won’t pursue that, Chair.There are wider issues.

Q253 Chair: Do you think that that’s a problem,perhaps in terms of the education academies andskills we have not been investing in that area and ifwe did we would have the chefs that we need,whether they are from the Bangladeshi communityor from the Irish community?Sir Andrew Green: Absolutely, but this applies acrossthe board.Chair: Of course, yes.Sir Andrew Green: One of the reasons we’re in thedifficulties we’re in now is that the training systemhas not produced the people we need. If employerscan take people off the shelf, don’t pay the trainingcosts, have someone who is more or less tied to thembecause of their visa, of course they’re going to dothat.Chair: Yes. Mark Reckless has a quicksupplementary and then Nicola Blackwood.

Q254 Mark Reckless: In terms of marriage, wouldyour concerns be dealt with by simply reinstitutingthe primary purpose rule or would you supportmoving further, say, an age restriction? I think theyuse 23 in Denmark. Do have any views in terms ofmarriage with first cousins, or are there any otherareas where you think, realistically, people mightwant to move?Sir Andrew Green: I think all of the above needlooking at. There is some experience in Denmarkabout raising the level of the age. This needs a lotof research.

Q255 Nicola Blackwood: You started to talk aboutthe post-study route and you proposed suspendingthat route entirely while British graduates arestruggling to find work.Sir Andrew Green: Yes.Nicola Blackwood: Is that sensible, is the firstquestion, if we are lacking in graduates in certainfields 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 academicposts? Obviously, as I represent Oxford West andAbingdon, I have two international universities. Thenature of academia is very international and you doget expertise from moving from place to place, andthere are very few posts available in your particularfield. I am slightly concerned about how that wouldimpact universities.Sir Andrew Green: I can certainly see where you’recoming from. Of course, the devil is always in thedetail. It would be absurd to stop a serious academic




from staying here; that is a certainty. But pleaseunderstand what the system is at the moment. Whatit is is this. It allows any foreign graduate of a Britishcollege or university to stay on for two years in orderto find a job. If he gets a job he can keep it. He canmove on to tier 2. This applies to 600 institutions; itapplies whether they get a first-class degree or a passdegree. It is absurd. It is 35,000 people a year, I think.The numbers are going up. But we are now sufferingfrom 10% student unemployment. I think it’sindefensible to have a system that is putting thesegraduates in direct competition with our graduatesat a time of very high unemployment.

Q256 Nicola Blackwood: Do you suggest abolishingthe scheme entirely?Sir Andrew Green: Suspending it completely.Nicola Blackwood: Suspending it completely, nothaving some kind of qualitative assessment ofstudents within a certain field where we are lackingand we need that expertise, where we’ve trainedthem often?Sir Andrew Green: If they’re really good they canapply under tier 2, but at the moment they have anautomatic right to stay on, and there’s no sense inthat.

Q257 Chair: But previous witnesses have said that ifwe did that, people would not apply to come in thefirst place, and there would be a huge drop in thenumber of overseas students coming to the UK.They apply because they know they have the chanceof working afterwards.Sir Andrew Green: Chairman, I don’t think that canpossibly be true. We are issuing student visas at therate of 1,000 a day, very nearly, and there is no checkon departure. If you’re concerned about the scale ofimmigration, I touched on illegal immigration andthat is where a lot of this lies, people staying on. I justsimply don’t believe that.

Q258 Chair: What is your estimate as to the numberof illegal people there are in the UK? We have anestimate from Boris Johnson, the Mayor of London.He said it was about 500,000 in London. Do youthink that is an exaggeration or do you think it ismore than that?Sir Andrew Green: It’s certainly not an exaggeration.He commissioned a report, I think, from the LSE?Chair: LSE.Sir Andrew Green: Which I think came out at about700,000. We would put it a bit higher than that, butit’s guesswork. We just looked at some of theirnumbers and then made a very small annualallowance. We would put it at approaching 1 million.Nobody really knows, but that is the order ofmagnitude. We did some work on Pakistanis and thescale of their remittances compared to the scale ofFilipino remittances, and that pointed to a very largenumber, something like 140,000, I believe, as aconservative estimate for illegal Pakistanis. So thereis a very big problem there. We’re not proposing theyshould all be rounded up and deported. What we aresuggesting is that the Government measures—previous Government and this Government—are on

the right lines. If you make it much more difficult towork in the UK, by tackling employers who arecheating on their fellow competitors and cheating onBritish workers, then that will of itself discouragepeople from staying on illegally. I think that’s theway forward, not truckloads of people—

Q259 Chair: So you do not agree with the Mayor’ssolution that everyone should be given an amnesty?Sir Andrew Green: I could hardly disagree more.David Winnick: Sir Andrew, you totally surpriseus—totally.Chair: Nicola Blackwood has a supplementary.

Q260 Nicola Blackwood: I would just like to gobriefly back to students. This Committee is gettingused to that. You mention that you don’t think therewill be a drop in applications if the post-study routeis suspended. Is that because there has been someassessment that a degree from a British universitystill has currency on the international labourmarket? Is there any evidence to support that?Sir Andrew Green: Support what?Nicola Blackwood: A degree from a Britishuniversity is valuable in its own right, regardless ofthe right to try and find a job in the UK?Sir Andrew Green: Oh, yes. It depends which countryyou’re talking about but, on the whole, Britisheducation has a very high reputation. We need tokeep it that way. I have to say that when I was inSaudi Arabia, one or two people—Ministers—cameup to me and said, “We’re a bit embarrassed aboutthis guy. He’s come back with a PhD from somesmall organisation in England and he doesn’t speakmuch English”. They said that. We need to protectour own brand and 1,000 a day is just ludicrous.Chair: David Winnick?Mr Mehmet: Chair—Chair: Sorry.Mr Mehmet: May I just add about recent experienceoverseas with regards to students coming here. In anumber of countries, my experience was that therewas no question that they were considering settlinghere at the point of applying for studies in thiscountry. All of them had a single focus and that wastheir studies.

Q261 Chair: To get a degree and go back?Mr Mehmet: Indeed.

Q262 Bridget Phillipson: The point is, surely, thatwhen people come they may not at that point wantto stay but they may determine, following study, thatthey want to stay for a limited period of time. Surelyit’s wrong to rule that out altogether, because at thepoint of application they may not want to stay, butthat may change?Sir Andrew Green: Yes, and it’s not necessarily bad ifit does. If someone wants to continue with theirstudies here genuinely, if they want to become anacademic genuinely, no problem. The issue at themoment is that the numbers have got badly out ofhand; almost everybody in the chain has a financialinterest in granting a visa. That is both the bodyitself, the agent, if they employ one down there, the




applicant who obviously wants to get in. The defaultposition—this is important—is to grant it becausethe immigration officer who reads through all thepapers—because it is done on paper now—can onlyintervene if he has grounds to do so.

Q263 David Winnick: Sir Andrew, so MigrationWatch would be happy to have a policy where ifpeople come for employment or studies, as long asthey don’t stay on afterwards, that would be whatyou would consider to be the best policy theGovernment can pursue. Is that right?Sir Andrew Green: Broadly speaking. There wouldbe good reason for some people to stay.

Q264 David Winnick: In what circumstances, then,would you say that certain people should be allowedto stay?Sir Andrew Green: As I mentioned, we would suggestthat there was a second points-based system whichpeople could apply for. Having done two or threeyears here, if they decide that they do want to stayhere, then they could apply for this, and that wouldbe very largely on the basis of salary. Because ifpeople are valuable economically then they’re goingto be paid a lot of money, with special arrangementsfor people of outstanding artistic or scientific merit,or perhaps academic merit, because those are veryimportant areas where pay is not always consistentwith value. It’s not impossible to do that. As Imentioned at the beginning of this, we don’t have achoice. If we don’t take serious measures we will findthat our population is simply—

Q265 David Winnick: Yes, we know the views youhave expressed on previous occasions and today, SirAndrew. Basically, except for the reasons that youhave stated, it would only be—as far as yourorganisation is concerned, as far as policy isconcerned that you would like to see pursued—avery small fraction that would be allowed to stay onafter they have been engaged in studies or business,as the case may be?Sir Andrew Green: Work or study, yes.

Q266 David Winnick: Can I ask you one otherquestion? Your organisation has been veryprominent in urging strict controls, much stricterthan have been applied by successive Governments.How far, from your experience and your colleague’s,is the position of the UK different from otheradvanced western countries, fellow members of theEU: France, Germany, Holland? Is the migrationthere so very different from what has beenexperienced in Britain in the last half century?Sir Andrew Green: That’s a very interesting questionand the answer is totally different for most of thosecountries. The difference is demographic. This iswhy we keep coming back to population. If you lookat Italy, Spain and Germany, they have very lowbirth rates of the order of 1.3, and what that meansis, for Germany, for example, if there was no

immigration at all their population would fall by25% in the next 25 to 30 years. Clearly, that’s atotally different situation from our own, where ifthere was no immigration at all, it would stillcontinue to increase to about 65 million and then tailoff fractionally. We are looking at totally differentsituations. As far as France is concerned, they havesignificant immigration. They also have a birth rateslightly higher than ours. They are also four timesbigger than England. The question of populationdensity is rather different for France than forEngland.

Q267 David Winnick: As far as population isconcerned, I take your point, but for immigrantgroups that have gone to the countries which I havementioned and stayed, is there again much of adifference? France and Germany have relativelylarge immigrant populations as compared to thesituation prior to the Second World War. So whatI’m asking you—leaving aside the effect on thepopulation, and we know your policy—is there agreat deal of difference between the UK and suchcountries?Sir Andrew Green: I come back to populationbecause that is the key to it. The reason people areconcerned about the numbers is, for example, that40% of new households are a result of immigration.The pressure on public services, pressure on schools,pressure on the health service and pressure on roadsare all being added to by the population increase.That I think lies at the basis of public concern. Someof your colleagues have been making the same pointin a rather different way.Chair: Thank you. Nicola Blackwood.

Q268 Nicola Blackwood: You heard a little earlierdiscussion about the ICT route and you heard thecomments from the migration lawyers that they arenot aware or have not experienced any instances ofabuse. We have also heard previously from TataConsultant Services and NASSCOM that anyattempt to put a limit on ICTs would harm theircompanies, but you claim that there are significantabuses. Could you comment on that dichotomy?Sir Andrew Green: Absolutely. The whole ICT routehas become thoroughly distorted. The originalpurpose of it was to allow major companies to movesenior staff around without difficulty. That isobviously important and it must continue. Theremust be no obstacles of that kind and, indeed, morebroadly, immigration policy must not be such as toimpede the economic recovery. We totally acceptthat. Your earlier witnesses talked about businessoptions. What they didn’t say is that what they werereferring to was a means of exporting jobs to India.Most of these workers coming here are here in orderto prepare for work to be offshored to India. That’swhat they’re here for. The mean income in the UK isabout £24,000. About 85% are probably for India.So obviously, firms are going to say that that is amarvellous idea. You can argue that because you arelowering costs by sending work to India you’re




making firms more profitable in the longer term andthat is for the benefit of our economy, but actuallywhen you have 2.5 million unemployed and whenamong graduates in computer science we have 17%,according to a recent report, unemployed, what arewe trying to do here?

Q269 Nicola Blackwood: How do you respond toILPA’s comment that in order to stop the abuses weshouldn’t change the system but UKBA should justwork harder? That is what they just said, they shouldwork harder to root out the abuse and stop it.Sir Andrew Green: Well, yes, and you will notice thatthe Migration Advisory Committee report on thissaid that there ought to be much strongerenforcement. I think there are something like 16,000sponsors and 125 visiting staff, so the opportunityfor abuse is there. We get plenty of anecdotalevidence—when I say “anecdotal” I mean frompeople working in these companies—that this iswhat is happening.Chair: Thank you. A final question from BridgetPhillipson.

Q270 Bridget Phillipson: How do you feel that thecap should be adjusted to take account ofdependants because, as far as we are aware, youfavour dependants being included within the cap? Isthat right?Sir Andrew Green: We’re talking population so wehave to include dependants, but you have to set thecap knowing that you’ve included dependants.

Q271 Chair: You heard the previous exchange thatfor every person coming in, 0.8 of a person comes inwith them.Sir Andrew Green: Roughly. We think that’s aboutright.

Chair: So the cap isn’t 24,000, it is 60,000.Sir Andrew Green: We don’t have a cap yet.Chair: No, the temporary cap.Sir Andrew Green: Yes. Leaving the temporary capaside, the MAC is going to propose a number, and Ithink their number will include dependants but itwill be raised for that reason. I don’t see how you cando anything else.

Q272 Chair: So you would favour dependants beingincluded in the permanent cap?Sir Andrew Green: They would have to be.

Q273 Chair: Would you limit the number ofdependants coming in? Because that is an average Igave you—0.8. Some people might have twins, as weheard earlier. They might want to bring all theirchildren in. Some people might have no children tobring in. Do you think there should be a limit on thenumber of dependants? Do you think the cap willwork?Sir Andrew Green: I think it can be made to work. Ithink it must be made to work. I think that it can bedone in a way that will not impede economicrecovery. It must take account of the fact that not alleconomic migrants are vital. They certainly aren’t.We must differentiate between the different groups.You will notice that the previous witnesses weretalking only about tier 2.

Q274 Chair: Do you think, at the end of the day,students will have to be included in this cap?Sir Andrew Green: What we will have to do is to havesome form of limit on that route, yes. But the firstthing is to make sure that students are genuine. Ifyou know they’re genuine and genuinely intend toreturn home, and there is some system to ensure thatthey do, that deals with most of the problem.Chair: Sir Andrew, Mr Mehmet, thank you verymuch for coming in. This concludes our inquiry intothe immigration cap. We will, of course, continue toreceive written submissions if you wish to write to us.



Written evidence

Memorandum submitted by the Federation of Small Businesses

The Federation of Small Businesses (FSB) welcomes the opportunity to respond to the cap on non-EUeconomic immigration consultation.

The FSB is the UK’s leading business organisation. It exists to protect and promote the interests of theself-employed and all those who run their own business. The FSB is non-party political, and with 213,000members, 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 UKeconomy. 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 opposedto the Government’s current proposals to cap migration through Tiers One and Two of the points-basedsystem 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 findour 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 torecruit 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 abarrier to economic growth and competitiveness. As we stated in our oral evidence: “There is certainimmediacy when we have vacancies and we believe a cap could prevent us getting the right persons for theright jobs as soon as possible”. This is an area of key concern for our members and an example of the impactof 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 forsponsorship (which gave us an “A” rating before the 19 July, but has now set our certificate allowanceto “nil”) and urged our Design Engineer from China to submit a Tier Two application ASAP, which hasnow been declined!

We are sorely disappointed about where Britain is heading in terms of being able to recruit highly skilledworkers. We have so far run three recruitment drives all of which proved that our niche engineeringshould 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 thereis an acute skilled staff shortage in Bangladeshi restaurants. The Bangladeshi Catering Association notesthat whilst the UK Government has included the category ‘skilled chef’ in its Shortage Occupation List thisis 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—tensof thousands rather than hundreds of thousands. We cannot give definitive predictions as to the full impactof any cap on Tiers One and Two until they are set but we are of the view that any form of cap would havea 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 skilledworkers has also fluctuated over the last three years.

1 Control of Immigration: Quarterly Statistical Summary, United Kingdom, January-March 2010http://rds.homeoffice.gov.uk/rds/pdfs10/immiq110.pdf



Table 1a

ENTRY CLEARANCE VISAS TO THE UNITED KINGDOM ISSUED TO ALL APPLICANTS, BYMAIN CATEGORY, Q1 2007 to Q1 2010

Total Temporary Leading to Settlement Settlement(1)

Tier 1Highly Tier 2Skilled Skilled

Workers Workersand and

Employment pre-PBS pre-PBSStudy(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 6,9352007 Q2 634,200 54,815 35,995 493,635 3,570 24.745 16,375 5,1052007 Q3 610,210 123,230 26,125 407,590 4,245 25,245 19,455 4,3152007 Q4 379,265 35,370 20,285 281,295 4,680 18,455 15,850 3,3252008 Q1 395,030 40,120 25,100 283,880 5,495 20,050 17,245 3,1402008 Q2 605,225 52,820 31,865 475,200 4,515 20,185 17,665 2,9802008 Q3 590,485 139,520 25,695 377,020 4,840 22,470 17,865 3,0702008 Q4 364,050 42,695 17,145 261,350 8,865 18,470 12,740 2,7852009 Q1 386,625 43,580 15,810 283,035 11,855 15,920 13,605 2,8202009 Q2 576,340 42,790 21,240 472,630 9,000 15,705 11,745 3,2302009 Q3 609,645 178,345 15,480 377,130 6,200 16,865 10,610 5,0152009 Q4 423,230 76,610 12,835 294,460 6,745 14,990 13,115 4,4752010 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 Surveyhighlighting how small businesses were leading the way out of the recession. This survey was undertaken atone most of the UK’s most difficult economic times and shows how resilient small businesses can be inensuring 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 tocontinue 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 growtheir business, but only if regulatory burden is removed. It is essential that small business owners are in aposition to hire the right employee for the job when they want to. For example, a fledgling engineeringcompany with three staff members may have been asked to tender for a large contract. However, the onlyway 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 essentialfor that small business to immediately recruit from a non-EU country. It is possible that a cap on migrationcould 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 underTier 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 thateither 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 systemwhere there are certificates of sponsorship and if businesses want to bring into the UK a non-EU employeethey can bid against those. As we said in our follow-up letter to the committee, this is an overly simplisticsolution which will act as a significant barrier to growth to small business owners looking to expand theirbusiness. 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 toGovernment in order to employ staff who have the skills which the UK education system has failed todeliver.

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 arrangementsfor skilled workers under Tier Two. Currently, migrants may enter through Tier Two where they have a joboffer which either passes the Resident Labour Market Test (where an employer has been unable to find asuitable resident worker) or is in an occupation which is in national shortage (as signified by its inclusionon the Shortage Occupation List). This means that, where an occupation is in national shortage, the locallabour market does not have to be tested even though there may be British workers available locally to fillthe vacancy. It also means that employers may bring in migrants even where an occupation is not in nationalshortage, rather than doing more to encourage British workers to apply for the vacancy, for example bytackling barriers to re–location.

11. The FSB agrees with the Government that migrants should only be brought in where every reasonableavenue to recruit a resident worker has been exhausted. However, the small business view is that we wantthe best and the right person for the job as soon as possible. We would therefore not be in favour ofcombining the tests to allow employers to only bring in migrants where the occupation was in nationalshortage 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 Federationof Small Businesses (FSB) welcomes the opportunity to provide supplementary evidence as requested andto 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 theself-employed and all those who run their own business. The FSB is non-party political, and with 213,000members, 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 UKeconomy. 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 arecertificates of sponsorship and if businesses want to bring into the UK a non-EU employee they can bidagainst those. The FSB is of the view that this is an overly simplistic solution which will act as a significantbarrier to growth to small business owners looking to expand their business. Instead of ploughing profitsback into businesses, rewarding employees for their hard work and playing their part in a vibrant economicrecovery, small business owners would be paying money to Government in order to employ those staff whohave 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, whichwas published towards the end of 2009. On a detailed reading of our manifesto this is not the case, but Iwould like to stress that the FSB has always played its part in the ongoing debate and that we will continueto do so. As we have repeatedly stated the introduction of any form of cap on Tier One and Tier Twomigrants would have a significant impact on small businesses.

July 2010



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% ofinward 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. Netimmigration has fallen from its peak of 245,000 in 2004 to 163,000 in 2008. The figure for 2009, due inNovember, may be slightly lower. Past experience suggests that net migration falls during periods ofrecession but resumes its upward trend thereafter. The latest population projections (2008 based) assumethat net migration will continue at 180,000 per year. This would bring the population of the UK to 70 millionin twenty years and 80 million shortly after mid-century. To stabilise our population we need to bring netimmigration 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.

55

60

65

70

75

80

85

90

2006 2011 2016 2021 2026 2031 2036 2041 2046 2051 2056 2061 2066 2071 2076 2081

mill

ions

ONS 2008-based PP (180k)90k40k

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—ineffect 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% ofthose who arrive in Britain; the results are then grossed up. Those who say that they intend to stay for overa year are counted, under the international definition, as immigrants. Of the two million granted a visa eachyear, 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



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 numbersinclude EU citizens who, in that year, were about ´rd of gross inward migration so non-EU economicmigration 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. Thereason is that the survey questions do not distinguish between workers returning home and those whoarrived as students returning home to seek work. This is a serious deficiency in the statistics which shouldlie 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 overthe last five.

8. There are no precise numbers for A8 nationals because some did not register, the self-employed werenot required to, and others were only here for a few months. In any case, there were no checks of individualson arrival or departure. The ONS estimates that the number of A8 residents rose from 114,000 in 2001 to689,000 in 2008.4

9. There are, however, a number of important reasons to believe that net immigration from the A8 willdecline:

— their economic level will rise towards ours;

— transitional arrangements end in May 2011 (and 2013 for Romania and Bulgaria) so the whole EU15 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 theEuropean Union, most of which are relatively small—except Turkey. The admission of Turkey to the EUwould have very serious implications for UK immigration control. Otherwise, it is clear that the mainimmigration pressure will be from outside the European Union and especially from the developing worldwhere 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 thatabout 132,000 non-EU migrants were admitted (or granted an extension) in 2009. This seems to be broadlysimilar to 2008 which is four times the level of 1995.5 There is certainly no sign that the Points BasedSystems (PBS) has significantly reduced economic migration. Indeed, the number of certificates ofsponsorship issued in Q4 2009 suggests a significant increase in Tier 2 (general) to about 30,000 a year anda smaller increase in Tier 2 (ICT) to about 34,000 a year.6 A clear set of work permit statistics from theHome 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 in2009.7 Tier 1 (post study route) is largely granted in-country and the numbers are running at about 35,000a 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.



Effectiveness of a Pool System

13. A pool system for Tier 1 (general), perhaps on a three month basis, seems entirely feasible. The limitcould be adjusted in the light of other flows. Tier 1 (post study route), running at about 35,000 a year, shouldbe 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 precautionaryapplications. 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 tomove their senior staff in and out of the UK without difficulty. This is a key attribute that must bemaintained. 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 withparticular IT functions in the UK so that the work can be off-shored. Some 85% of ICTs are project relatedin this way.8 This process conflicts with the principle that overseas nationals should be recruited for genuineand additional posts in the UK as well as with the requirement for specialist company knowledge. It is alsoopen to manipulation of pay and allowances. The Migration Advisory Committee has, quite rightly, calledfor much tighter policing; we would suggest that the salary requirement be raised to, say £50,000, to ensurethat those admitted under this route are genuinely required to occupy senior positions. A further means oftightening 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 thatit would be better to abolish this list and the bureaucracy associated with it. The only effect would be thatcertain employers would have to advertise jobs locally for a month. That might also give British workers anopportunity to change into the occupation concerned. There might have to be transition arrangements inparticular 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 isthe 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 salarywith recognition for special artistic or scientific merit. The Committee will be aware that the previousgovernment went out to consultation on such a scheme. The present government do not appear to havereached 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 40,080Tier 2 (Post Study)2 30,927 4,248 35,175Tier 2 (general)3 12,581 8,558 21,139Tier 2 (ICT)4 6,557 22,034 28,591Work Permits5 7,300 5,1656 12,465(previous system)

TOTAL 137,450

8 Salt (2008) quoted in Migration Advisory Committee August 2009 page 111.



ALTERNATIVE SOURCE FOR Q4 20098

Certificate of sponsorship allocated pending quarterlyguesstimate

Tier 2 general 6,965 2,735 7,500Tier 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 632W2. Ibid3. Hansard 4 March Col 1378W4. Hansard 12 June 2010 Col 851W and 13 July 2010 Col 632W5. Control of Immigration Statistics 2009—table 4.16. Migration Advisory Committee presentation7. deleted8. 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 900members (individuals and organisations), the majority of whom are barristers, solicitors and advocatespractising in all aspects of immigration, asylum and nationality law. Academics, non-governmentalorganisations 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 manyparliamentary committees, including to the Home Affairs Committee’s last enquiry into the Points-BasedSystem.

Executive Summary

— There is a serious risk that the cap will be the subject of successful legal challenges (with costsorders) on basis of vires and rationality.

— Perceptions of migrants and businesses as to how the cap will affect them should be studiedalongside the detailed empirical analyses of the Migration Advisory Committee.

— ILPA makes available to the Committee the quantitative data provided by the Migration AdvisoryCommittee.

— The first come, first served, pool and auction systems risk discriminating unlawfully given the wayin 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 atleast 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 willmake essential jobs impossible to fill. The resident labour market test is designed to identify a veryparticular shortage: that of a worker to do the job in question. If there are concerns about the testand/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 riskscreating a perverse system and discriminating on the grounds of age and gender. An equalityimpact assessment is essential.

The impact a cap on non-EU economic migration would have on the ability of UK business and industries torecruit the skills and staff they require

1. The Immigration Act 1971 (the Act) as amended underpins all UK immigration law. Section 1(4) ofthe Act provides the Secretary of State with the power to lay immigration rules before Parliament.



2. There have been a number of successful legal challenges to changes in the immigration rules includingthe cases of HSMP Forum,9 BAPIO,10 Pankina11 and English UK12 amongst others.13 ILPA foreseessimilar successful challenges to the proposed cap, the methods of implementation and the consultationprocess. One of the successful arguments advanced on behalf of migrants is legitimate expectation.14 Theprinciple of legitimate expectation arises where a public body has made a promise or adopted a practice thatrepresents 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 theirproposed 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 isirrational 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. Theview expressed overwhelmingly by members’ clients is that the imposition of an immigration cap will stifleeconomic growth, result in greater burdens on employers and affect the delivery of key public services. Theperception of migrants and businesses that businesses will be unable to recruit the staff and skills they requireis a key to their future behaviour. ILPA can report on these perceptions. The underlying economic data hasbeen 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 toother countries rather than to the UK, while multinationals will give serious consideration to leaving theUK to set up their European headquarters elsewhere, pulling out existing investment in the UK, taking someof their employees abroad and making others redundant.

7. Members highlight the effect on small businesses. Often, such businesses will have only obtained asponsorship licence to appoint one or two key strategic roles, so the limit is likely to have a disproportionateimpact 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, Entrepreneur04, 245 Tier 1 Post-Study Work00,335 Pre Tier 1 Highly Skilled Migrant Programme91,195 Tier 2 Resident Labour Market Test, Shortage occupations, sportspeople, ministers

of religion22,030 Tier 2 Intra Company Transfers05,165 Pre Tier 2 Work Permits00,105 Pre Tier 2 Other categories

— Some 15,015 dependants were granted entry under Tier 1 and predecessor schemes, some 26, 990under 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 aperiod 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 theimmigration 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 printedon 15 July 2010 and took effect five days later; HC 439 was ordered to be printed on 18 March 2010 and parts took effect on6 April 2010.

16 Migration Advisory Committee: Analysis of the Points-Based System: Tier 1, December 2008; Analysis of the Points-BasedSystem, Tier 2 and dependants, August 2009.

17 Presentation by Stephen Earl of the Migration Advisory Committee Secretariat The work of the Migration AdvisoryCommittee, 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 forImmigration.



The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants underTier 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 bedetermined by the outcome of litigation.

11. Systems must be evaluated in terms of their effect on migrants, their effect on the companies who wantto 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 aneat separation between Tiers 1 and 2. The consultation paper is misleading insofar as it suggests thatTier 1 migrants have no job offer; Tier 1 does not require the applicant to have a job offer., however it iscommonly the case that applicants’’ employment or business commitments/opportunities are the veryreason for their application. Many migrants who have a job offer nonetheless enter via Tier 1. This may bebecause a migrant much in demand can negotiate not to be tied to a particular company or because acompany has decided not to go down the route of being a UK Border Agency licensed sponsor (in the caseof small businesses, and some larger ones, this may be because hires from outside the Resident LabourMarket 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 tofill 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 “firstcome first served” system. The pool system suggested creates delay and uncertainty, skimming off the highestscoring applicants in a certain period so that the points required to qualify are unknown at the time ofapplication and leaving applicants for up to six months (by which time the employment or businessopportunity that attracted then to the UK is likely to have passed), thereby deterring those who have otheroptions. It appears to ILPA members unlikely that a pool system will be capable of linear ranking of allcandidates. Some elements for which points are awarded, such as satisfying maintenance requirements, aresimply 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 apart does not appear equitable and is open to manipulation. There are additional disadvantages if extrapoints are awarded according to level of English over and above the skilled level required for Tier 1 as thisappears to create a bias toward candidates from countries where English is the main language. The need foradequate 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. Yetcandidates within the pool are not, by inclusion in the pool alone, permitted to enter the UK and may findtheir application rejected after six months due to circumstances wholly beyond their control: the points thatother candidates applying at the same time have scored. The proclaimed efficiency of the system wouldappear to lie in creating revenue for the UK Border Agency and little else; effort is devoted to providingimmigration employment documents to persons who may never be permitted to enter the UK and use theirskills. For migrants, the prospect of paying a fee for no return and six months uncertainty is likely to be aninvitation to look to other countries, in particular those where a successful application would lead at onceto settlement.20

15. The “first come, first served” system, preferred in the consultation paper for Tier 2, is random in itsoperation. It’s perceived “fairness” is that it is equally unfair to all migrants. But this is not the case. If willaffect persons of different nationalities differently. Processing times vary in different posts around theworld,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 thequestionable legal basis for this see Annex 1). In other countries applications take several weeks. Some postsare not connected to the Agency’s central IT system, causing further delays. In addition, problems with theAgency’s information technology system are far from unknown.23 The point at which the cap is reached isdetermined by the number of allowed applications. If consular posts in, for example, Australia, have morestaff and work fastest, they may have allowed sufficient applications to reach the cap before applicationsfrom, 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 fromthat country. ILPA members are also aware that those companies with a larger migrant workforce are likelyto develop the most intricate knowledge of the workings of the system, to the advantage of their prospectiveemployees, of whatever Tier. A global “first come first served” system is logistically complex and open tocharges 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/processingtimes22 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 and5.24.



16. The first come first served system, besides being discriminatory, is not easy to operate, including ifapplications 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/herapplication will be studied.

17. As to Tier 2, we are at a loss to see how a wholly random system provides certainty for businesses, orenables them to recruit the migrants most needed. There may be certainty within a short period for thosewhose envelope happens to be at the top of the pile; for the others there is only the uncertainty and difficultiesthat come with having a key post unfilled, and no means to fill it. The UK Border Agency consultation paperenvisages that one could have a post that it has been impossible to find a resident labour market worker tofill, that is in an occupation where there is a shortage and yet be unable to recruit to the post because of thetime 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 abilityto tender higher fees has no necessary correlation with the need of the business for the worker, indeed it raisesthe question of whether, had the funds been invested in efforts to make the job more attractive to personsin the resident labour market, it could have been filled. Businesses with lower profit margins, not for profitsand voluntary organisations, as well as smaller businesses just starting up, risk being the most adverselyaffected.

19. There are two reasons why a post may go unfilled from within the resident labour market. One is thatno one can do the job; the other is that no one who can do the job wants it. If no one in the resident labourmarket can do the job, then, if a migrant worker cannot be recruited, the post will go unfilled. If no one inthe resident labour market wants the job, then if a migrant worker cannot be recruited the employer has theoption of leaving the job unfilled or endeavouring to make it more attractive to those in the resident labourmarket, for example by increasing salaries and job-related benefits. If the employer cannot afford to do thesethings, the job will go unfilled. The greater the shortage in the resident labour market, the more difficult itis likely to be to persuade the reluctant to apply. The effect of the proposals appears to be to put the greatestpressure 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 havebeen demonstrated and all run counter to the analyses of the Migration Advisory Committee as to the neteconomic 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 effectsof a cap on the ability to fill essential roles may be enormous.25 Caps are untried and untested. The exclusionof intra-company transfers provides, at the very least, a necessary buffer in this climate of uncertainty duringthe 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 andcalibrated so that migrants who have spent different periods with the company overseas can come to the UKfor 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 anyattempts to manage the figures by limiting intra-company transferees to short stays in the UK would comeat a price: intra-company transferees who come to the UK only for a period of two years or less are oftennot subject to UK tax.27 It is unclear why the UK would wish to deprive itself of revenue from taxation atthis time.

23. A cap on intra-company transfers is likely to put pressure on the business visitor route, and increaseexisting 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 increaseduse of the intra-company transfer system as a way to work around the cap.28 The priority in addressing thismust be to examine how the caps are to operate for Tiers 1 and 2: a business needing to fill a key post shouldnot need to be seeking a “work-around”. Another important safeguard is to ensure that those who enter bythis route can, when the relevant criteria are met, switch into other categories. This could help to ensure thatworkers move out of the intra-company transfer route when it is no longer the appropriate basis for theirstay in the UK. Finally, the Migration Advisory Committee recommended that the Government undertakemore robust monitoring and, if this was shown to be required, enforcement of the Intra-Company transferroute.29 ILPA is not aware that this recommendation has been implemented and suggests that theCommittee 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.



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 migrantlabour 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 filla particular post from within the resident labour market (British citizens, the settled and those exercisingEU free movement rights). The Resident Labour Market Test is intended to identify whether there is anyonein the resident labour market who can do the particular job that is advertised. The Resident Labour MarketTest is thus intended to be the more precise tool. We recall that the Resident Labour Market Test demandsthat no one within the resident labour market can be found to fill the vacancy rather than that the residentlabour 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, butthat both tests be applied to each vacancy. In the case of the Resident Labour Market Test, the proposalthat a job for which no resident labour market worker can be found cannot be filled unless the job is alsoon a shortage occupation list will result in vacancies going unfilled. While there may well be good reason tomonitor which jobs are being filled from outside the resident labour market, to better understand where thereis 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 therequired skills. It is also likely to be the only way to keep businesses operating in the meantime. If theGovernment is not satisfied that workers able to do the jobs within the resident labour market are beingidentified, then it should re-examine the resident labour market test. The Migration Advisory Committeerecommended that the route be retained.30

28. As to shortage occupation lists, the work of the Migrant Advisory Committee to identify whichoccupations should be included on the list is well-documented.31 The logic behind the lists is, as weunderstand it, that shortages are sufficiently widespread that it is reasonable to assume that no residentworker can be found to fill the vacancy and not reasonable to put the would-be employer to the expense, timeand trouble of looking for a resident labour marker worker who is most unlikely to be out there. Similarly tothe resident labour market test, the solution to any perceived problems would appear to lie in examining thecriteria for inclusion on the lists, perhaps in particular their ability to be sensitive to rapid changes in thelabour market, rather than demanding that businesses go to the expense, time and trouble of fruitlessrecruitments.

29. Employing migrant workers has become, under the sponsor-licensing system, an onerous burden foremployers. 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 hasdemonstrated that employers prefer to hire migrant workers and against the back-drop of currentresponsibilities we should be surprised to find such evidence. The notion that migrant workers are preferredbecause they will work for lower pay has not been shown to apply to those jobs qualifying for inclusion inTier 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 meetthe needs of the economy, as is the stated intention,34 becomes complex if not impossible if some includedin 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 torecruit single people without caring responsibilities. In ILPA members’ experience whether family memberscan accompany a migrant is an important factor in choice of destination for those with partners andchildren. It may also be a factor in length of stay, which in its turn could put pressure on the cap, with theneed to recruit arising more frequently if people stay for a shorter time. Younger people are less likely to haveformed 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 theHouse of Lords Committee on Economic Affairs HL Paper 82, esp Paras 2,13–2,26 and the evidence cited therein and theMigration 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 viawww.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 FamilyResponsibilities Convention 1981 (No 156) and Recommendation (No 156).



32. The evidence available already suggests that more dependent spouses and partners are women thanmen,36 following male primary applicants. When the Migration Advisory Committee examined thequestion 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 socialimpact”37

33. The Home Secretary (and Minister for Equalities) has indicated that, where the cap is concerned, thisindeed the Government’s intention:

“We want to ensure that we can properly weigh the economic considerations against the widersocial 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 ofHuman Rights, incorporated into UK law through the Human Rights Act 1998, protect the rights to respectfor family and private life, and to marry and found a family, without discrimination. If the UK were topropose 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 withextra points, this could engage the Convention.

36. ILPA members advise many migrant workers who have a choice of destination, because their skillsare in demand worldwide. Members advise many businesses that employ migrant workers, not because theyfeel a particular desire to do so, but because they can find no one else to do the job. The responsibilities ofbeing 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) publicthat migration is “under control.”39 ILPA suggests that no Government can lay claim to exercising controlover migration for work without demonstrating that it understands such migration and the wider effects ofits interventions. The Migration Advisory Committee has provided Government with considerable researchon these matters; we see no evidence in the UK Border Agency consultation paper that this has informedthinking on the cap. Migrants and their employers have a significant contribution to make to suchunderstanding 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 GROUPUSER 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 ConsularFees 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 theAgency—so like photocopying, no need for it to be in fees regulations. She said that the fee was notmandatory. It was for a priority service. It has no bearing on the outcome of the application. Where servicefalls below published standards it is not offered as people should not have to pay to get a service withinpublished standards.

She said that they had looked at including it in fees regulations but it could not be a local fee and it wastoo 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 regulationsbut that sidestepped the main issue in making it something the partners charged for rather than putting itin the fees regulations meant that it was not subject to parliamentary scrutiny. I suggested that this wasunacceptable and also asked that the UK Border Agency revisit the question of legality in the light of thejudgment in Pankina.

The Acting chair emphasised that it is not a mandatory fee, but agreed to seek advice on legality postPankina.

36 See Migration Advisory Committee, August 2009, op cit, Section 7, especially 7.6 Equality Issues and the evidence citedtherein.

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.



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 whichwas introduced in 2002. It was formed after the 2006 decision by Government to apply new qualifyingcriteria for existing Highly Skilled Migrants. “HSMP Forum” has been lobbying the legislature, executiveand judiciary by challenging unfair policies, to allow existing legal Skilled Migrants to settle in the UK. Theorganisation’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 industriesto recruit the skills and staff they require

We believe a cap on non-EU economic migration will tie down the businesses by preventing them fromrecruiting 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 anddepartments in the UK. Many companies in London rely on Tier 1 and Tier 2 migrants with some employinga large number of non-European migrants. Many Tier 1 immigrants hold key and senior positions and areinvolved in high value-added work. The proposed and potential cap on extension would not only make itmore difficult to recruit new staff but will add unnecessary uncertainty to businesses and their staff on Tier1 (and Tier 2) visas. It would be unfair to businesses to loose workers who engaged in high value-added workand 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 theEU nationals.

There are also legal consequences and costs of cap on extensions for example when a company needs toimmediately terminate a migrant’s employment due to the cap and has to pay for three to six months as pernotice 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 upwardtrend, shortcomings like these should not be allowed to thwart the commercial progress. Such a cap onlyheightens a sense of instability in a volatile economic environment. Also there are many trainees in the NHSwho are due to complete medical training in the next future. The cap will not only force them to abandontheir education but will also mean a waste of time for the NHS who has made a considerable investment toturn them into a potential skilled workforce. We believe skilled immigration should be a market drivenresponse 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 thousandsrather 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 thebrightest. 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 arrivingunder Tier 1 (previously HSMP) formed 3% of total immigration in 2008 (15,515 Tier 1 migrants of totalinflow of 590,000 migrants). However their contribution to the economy and the growth is significantlybigger than their size. Frequent changes in immigration policies and uncertainty about future cannot attracthighly skilled migrants. Countries such as Australia, New Zealand and Canada attract highly skilledmigrants by providing them a much better provision of permanent residency comparatively in the UK whereno such assurance is given and the Citizenship and Immigration Act will make the process of settlement evenmore difficult and delayed.

We oppose any retrospective changes and believe that immigration cap should not be applied onextensions of existing migrants. We have received many responses from Tier 1 migrants expressing concernregarding the possible cap on extensions. They feel that applying a cap on extensions is unfair and will exposethem to enormous uncertainty. The prospect of being sent to their countries of origin after spending yearsand investing in the UK would cause major damage to their personal life and career prospects. Migrantsthat came under Tier 1 have developed a reasonable expectation that they would be able to extend their stayunder the same conditions based on various judicial outcomes which confirmed Tier 1 extensions are basedon the same rules as applicable during their initial applications. Some Tier 1 migrants were disappointed tosee the Migration Advisory Committee’s consultation which is considering applying cap on extensions. Suchuncertainty can cause migrants to immigrate to countries with immigration friendly policies.

41 http://www.guardian.co.uk/uk/2010/aug/22/immigration-cap-business-jo42 Estimations made based on analysis of IPPR’s analysis (Limits to limits, 2010) and Control of Immigration Statistics, Home

Office, 2010.



Another group that would be affected by the potential cap on extensions are HSMP migrants—someHSMP migrants need to apply for second extension and face uncertainty despite spending almost five yearsin the UK and making it their “main home” as per the HSMP visa requirement. These migrants could notpredict 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 1migrants and lead to significant decrease in applications. The damage to UK’s reputation might beirreversible and it might deter foreign entrepreneurs and potential investors: the consistent change in policycan create lot of uncertainty and unpredictability for migrants to plan their lives. If there are retrospectivechanges towards Tier 1 (general) then in the future there is a possibility of retrospective change towardsentrepreneurs and investors as well.

4. The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants underTier 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 requirementsbut if other applicants hold higher degree (MSc or PhD) or earn higher salary then the applicant would berefused). The existing PBS requirements are high enough. There are also issues concerning delays in the timeinterval of applications selection in a pool system, transparency of such a system and whether there wouldbe 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 competewith 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 beunfair 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 ofmigrants since those coming under the current policy of intra-company transfers cannot apply forsettlement. These migrants although cannot access public funds like other migrants on tier 1 and 2 andwould 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 thatrequire specific skills that are not included in Shortage Occupation list like foreign languages. The shortageoccupation list is concerned with an occupation which is in national shortage and it has been acknowledgedas such but if there are resident workers available to fill in such occupation then it is arguably cannot beconsidered as a national shortage. The government’s assumption that employers tend to bring in migrantsto fill in positions of national shortage irrespective of availability of resident workers seems to be misplacedand if at all then this can be corrected by rather more efficient management of such a list. The shortageoccupation 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 causefurther 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 Tier1 and Tier 2 migrants from coming to the UK. Imposing cap on dependants of Tier 1 and Tier 2 holdersalready in the UK should be out of the question. Most of the children of current migrants have spent yearsin the UK and feel that UK is their main home and can speak only in English. It is unfair to expose thesefamilies to uncertainty and constant fear that despite their hard efforts they may face deportation. Inaddition, uprooting families of existing migrants would lead to possible violation of the right to respect forprivate 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 rightsas a barrier in limiting migrants as this can lead to possible segregation and biased treatment of migrantswho have dependants and those who do not. Migrants who have dependants are likely to be earning moreand therefore would be paying more taxes comparatively. In addition not everyone who comes on adependant visa seeks employment.

8. We recommend as follows:

— We believe the government should not apply any such proposed cap on migrants who are alreadyresident in the UK (including those who are switching internally from other categories). This is ofmajor concern due to the home secretary’s repeated claims of her intention to reduce net migration.



— We do not believe a cap is good for UK’s economy as it can further cause unnecessary detrimentto UK businesses in this ongoing difficult economic crisis. Also the overall image of the UK inattracting highly skilled migrants will be at risk. When the Prime Minister is eager to improve andstrengthen relations with major developing countries a cap can have adverse impact on suchinitiatives, 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 traderelations between India and the UK.43 Therefore, if the government goes ahead with its plans thenwe believe it needs to at-least ensure that migrants coming on tier 1 visas which constitute a verysmall 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 thanintroducing new procedural rules. In the recent past both employers and migrants have seen a vastnumber of new procedural changes in the immigration system, therefore the focus can be onimproving the present processes rather than reestablishing new ones which can cause furtherinconvenience 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 inthe United Kingdom. We have a growing membership of almost 13,000 which includes some social workersfrom 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 ethicalstandards.(ii)

BASW are the UK representatives at the International Federation of Social Workers (IFSW). We are anindependent organisation, funded by and accountable to social workers and committed to the higheststandards 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 theincreasing diversity of our country and changing demographic trends, this has led in particular to concernin 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 profoundinfluence upon the lives of millions of people often at times of transition and change. Furthermore the skillsof 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 theprofession in each country, which are at various stages of implementation. The challenges faced in eachcountry to have sufficient numbers of social workers in the right work locations have led torecommendations about initial education and recruitment, as well as critically important proposals foremployers 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 goodand bad consequences which are explored below.

Overall, Social Work in Britain and above all the people who use social work services have benefitted frommigration and should continue to do so. While BASW understands the case for a reduction of net migrationand for an overall reduction in the number of social workers coming to England, in particular we wouldwant to argue a strong professional case for the benefit of allowing a range of social workers from non EUcountries 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 provideour own core Social Work services. Each of the government reviews into social work across the UK haveexamined how we can more accurately understand the employment demand for social workers and how wecan address this through the education system and increasing the skills of existing staff. However, this doestake time.

The current employment of internationally educated social workers has raised the expectation ofemployers 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



One manager in children’s services reports:

“. . . .those from New Zealand and Australia had far superior academic qualifications and had ofcourse done a four year social work degree. They very quickly adapted to local needs and weremore likely than British social workers to follow up on research findings and to be keen oncontinuing professional development.”

They went on to say:

“Until those 18 year olds who are accepted for English University social work degrees are expectedto obtain a high standard in terms of “A” level qualifications and are guaranteed a local authoritypractice placement then I believe the necessity for employing overseas workers will continue to beessential”.

We are concerned that some employers look to recruit internationally rather than put resources intoeducating student social workers on programmes in the UK. There is also evidence of some newly qualifiedsocial workers now being unable to get jobs, while local authorities are still recruiting internationally. Thiscannot be sustained, but this may well be based on concern about the standards of some social work trainingin 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 professionalnetworks that a considerable number of local authorities have relied upon the recruitment of social workersto plug gaps. Furthermore, the flight away from employing qualified social workers in adult services inEngland actually masks the critical needs for older people, people with disabilities, people with physical ormental illness to have services which are appropriate to their level of need. There are areas of severe ongoingproblems across the UK and we propose that all social work as an integrated profession should be treatedas 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 broughtto the UK by non-EU trained and skilled social workers is vitally important to social inclusion and socialcohesion. They bring culturally appropriate and relevant knowledge for adults and children in ourdiverse society.

“To practice social work in the UK one has to have an in depth appreciation and respect for manycultures as well as a good grasp of the principles of law, culture and ethics of the UK. I have workedwith 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 thatthere should be opportunities to recruit and train social workers from many differentbackgrounds.”

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 issuesof immigration, fostering and adoption. The worker from the Philippines also has experience ofdealing 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 affirmtheir knowledge by teaching workers from other countries about local ways of working, in turnthe non–UK people help UK staff develop a greater vision for community work and internationaltheories 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 reasonsto 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 theirprofession 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 linksbetween the work of our profession and social development in some of the fastest progressing countries inthe world were emphasised by speakers from the UN, from China and Africa. We have since written to the



Secretary of State for International Development to advocate that the role of social work is emphasised byhis Department and to describe the work that BASW are undertaking to build development partnershipswith 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 gainopportunities to practice and learn abroad just as it is for social workers from both within and without theEU to come here.

Thus while we support moves to ensure that the UK trains and supports enough social workers to runour own services, we expect to also promote on our own and through the newly developing College of SocialWork, increasing opportunities for international study and work exchanges. This we believe is the healthyand 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 colleaguesreporting 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 beprofessional suicide for me. I had a love for my profession and now I hate it . . . we were not trainedon UK laws, we had no idea how the school system worked, our managers were not meeting withus, there are no policy and procedures, there was a backlog of 80 cases, we were told to get on withthe work and stop complaining. Out of the eight Americans that were hired only three are left. Ithas 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 statusof 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 wholack 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 amin favour of liberal immigration policies. However, my professional and personal experienceindicates very clearly that workers in health and social care cannot be effective if they are unableto communicate clearly in written and spoken English. Communication problems with overseasworkers are faced daily …many colleagues do not like to voice their concern aloud for fear of beinglabelled racist.”

Social Work is a professional task dependent on communication. There has been considerable debate asto the level of English language skills which should be demanded of entrants to social work programmes inEngland and there is likely to be pressure on the regulator in England from the Social Work Reform Boardfor a language requirement for all social workers. The details of this have yet to be finalised but would havean impact on international and EU recruitment.

In the 1990s work was done to draft an International Code for Recruitment on International SocialWorkers based on the Code for NHS staff. This was never adopted by government as it coincided with thesplitting of social work between the Department of Health and the Department of Children, Schools andFamilies. 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 staffpoached 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 enterthe country; and

3. that in the absence of large multi-national companies in our sector who are permitted intra-companytransfers, the profession should work with other professional association members within the InternationalFederation of Social Workers and UK employers to jointly sponsor people who come to work in the UKfor up to one year.

In England the Social Work Task Force recommended that all students should have an Assessed Year inEmployment before getting their full registration with the Care Council and licence to call themselves asocial worker. A similar system already operates in Northern Ireland, and Scotland and Wales haveprobationary arrangements. We could explore a similar model for international social workers, wherebythey are given a provisional licence to practice subject to a year’s satisfactory employment. This is a modelused elsewhere in the EU.

This would enable workers to ensure they had the language and knowledge skills to work effectively in theUK 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 thatsystem for renewal of visas.



What is Needed in the Future

There are a number of issues that the Coalition Government need to address before there can be areduction 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 theSocial Work Reform Board in England.

— To create a career structure that rewards experienced workers for remaining in practice and anorganisational environment that supports social work.

— To raise the standards required of those entering the profession and support ContinuingProfessional Development more effectively.

– To ensure that local authorities give appropriate support to social workers in their workforce andstop 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 recruitmentinto social work services will abate. BASW have developed a draft Social Work Bill which we will be formallylaunching 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 recruitthe skills and staff they require

In the short term we are concerned that a cap could prevent Local Authorities accessing skilled socialworkers from non-EU countries. Such workers are required across social work services. If Local Authoritiesare to continue recruiting such workers they must ensure that there are appropriate measures to induct andsupport 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 willreduce the need to recruit overseas social workers to address serious problems of social worker retention inEngland.

The situation in Scotland with the change in demographics, a decreasing working age population and anincreasing 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 CareCouncils who are responsible for the registration and regulation of the profession or from Local Authorityor Directors’ organisations.

3. The impact and effectiveness of a “first come, first served” or a pool system for highly skilled migrants undertier 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 levelsof written and verbal English language skills suitable for a profession where effective communication is ofthe essence. If the baseline criteria are right we think that a first come, first served system is transparent, fairand 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 inthe 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 withimportant skills relevant to older people and adults with illness or disability should be able to work in theUK 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 artificialbarriers which could undermine family life and unfair to prevent those with family responsibilities comingto work in the UK. In any good employment system there needs to be a good work/life balance and familylife is important to people remaining healthy at work.



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 yearold who was tortured to death at the hands of her aunt and boyfriend—while the case was still active withtheir 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 overworkedand burnt out social workers who were dealing with unmanageable caseloads that made it impossible forthem to effectively exercise their duties.

Due to long standing difficulty in retaining social workers and the inability to attract local qualifiedworkers some local authorities looked to the foreign market, hence, the international recruitmentprogrammes. 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 onor 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 naturaldeath. 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 fromNorth America, but I was totally unprepared for what awaited me. I often refer to my initial experience hereas a “baptism of fire”. I was astonished at the hand-written record keeping and the absence of a computerbased 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 ofbullying tactics in management style were among some of the many differences that appeared to be the orderof the day—a daunting experience for me—among other differences that left us feeling as if we had beendropped off on the wrong planet.

Further, there was no orientation or support in place for us, we felt isolated, disoriented, overwhelmedand unsupported. It was quite a relief when we started to receive some training. It should also be noted thatthough social work skills are transferable, the legal and political frameworks will vary from country tocountry, hence, the need to be able place these in their proper perspectives in order to function with anydegree 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 reactionto this was to confront the problem head on, however, it slowly dawned on me that I was creating furtherdifficulty for myself as this was the cultural norm. Notwithstanding, I continue to rebuff this issue whenconfronted with it as I believe that people should be treated with respect and dignity. Status in the workplaceor 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 amongother courses, placed the Children’s Act 1989 in perspective and gave me greater confidence in practicing inthis new milieu. The introduction of Framework I provided a welcome change and one that will vastlyimprove 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 needsectors. Consequently, my assessment skills are sharp and my ability to formulate effective interventionstrategies to address associated problems impeccable. My life experience also brings an added dimension tomy ability to relate to clients’ “frame of reference” with a keen sense of respect for humanity. I am taskoriented and I endeavour to treat clients with respect and dignity devoid of pre-judgement. This allows meto connect quickly with clients and aids in the establishment of a positive working relationship. In mostcases, this is possible even when faced with making the most difficult decisions regarding the removal ofchildren 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 myincreasing level of discomfort and feeling of vulnerability working on the front line in an unstable team. Ihad come to the realisation that if I was to continue working in the UK I needed to change department inorder to practice with a deeper level of comfort with less related stress. I was successful in my applicationfor a position on the Adoption Team. I had also been interested in this area and thought the change wouldprove professionally stimulating.

My experience in Child Protection over the years has been extensive. I have seen many changes but inessence very little has changed. The work remains challenging, stressful and the social worker is still givena daunting task often with unrealistic expectations in relation to caseload responsibility/management oftenresulting in “burn out”. I have remained in UK for the same reason I came to the profession and remainedall 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 valuesand judging them by standards that are outside their frame of reference. The issue of equality remains anillusive ideal.



The concept of recruitment of workers abroad is not new and has been ongoing since settlers were neededto settle and work the land. It is not new and will not go away despite what people say and try to do. It isa necessary aspect of life. Social Workers from other parts of the work bring skills, new approaches anddynamism to the job that is lacking in many respects. The client population also benefit greatly from thedifferent and often fresh approaches in building positive, effective empathetic working relationship often incases 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 theempowerment and liberation of people to enhance well-being. Utilising theories of human behaviour andsocial 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 PrinciplesInternational 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 levelis too restrictive then the UK economy will suffer. More consideration must be given to the effect a cap mayhave, not only on migration levels, but also inward investment, the number of business transactions thattake place in the UK and global competitiveness. The Impact Assessment must be reviewed with betterevidence 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 intohow this can operate without putting off the most highly skilled, geographically mobile individualsthe 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 makeit too difficult for businesses in the regions to access the skills they require. These two routes mustbe kept separate;

— the proposal that businesses should give health insurance to migrant workers is flawed and wouldnot work;

— employers are happy to play their part in up-skilling domestic workers but the Government musttake 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 oneout’ 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 hasbeen done into the reaction of potential Tier One migrants to such a system. Many businesses expressedconcern that the highly skilled, geographically mobile individuals who would qualify for such a pool maydecide 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 donot put off the exact people we need to attract if the UK economy is to compete successfully with othercountries for the top talent.

We strongly support the drive to increase the number of migrant investors and entrepreneurs coming tothe UK. Any inflexible requirements, such as the need to create a specific number of jobs, are likely to hinderthese efforts. We would support reducing the current threshold, particularly for regions that wouldparticularly benefit from private sector investment and in sectors where the UK is particularly looking to



fuel growth. UKBA should work closely with other agencies, such as UKTI, and emerging Local EnterprisePartnerships to identify areas with particularly opportunities and explore the possibility of individuallynegotiated 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 obligationon 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 UKnational could be as good a candidate as an already qualified migrant. For those occupations, there mustbe a commitment from Government that the cap will not affect business’s ability to get the skilled peoplethey require. For example, may of the occupations on the list require individuals with engineering experienceand qualifications. Although, over time, the Government and business should work together to ensure theUK 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 timeto train national workers to take these positions. Concentrated efforts to train unemployed people inprofessions 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 afurther tightening of tier two. If a first come first served system is be successful then it must operate on amonthly 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 levelsas a measure of the “importance” of a migrant to the economy/business is too crude. Particularly inprofessional services in London, relatively junior individuals command large salaries early on in theircareer,44 and it would be unwise to prioritise them over individuals with long careers in sciences ormanufacturing 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 anexemption for individuals entering the UK on an ICT for less than 12 months. On a macro level, it gives abad impression to companies considering setting up an office, or establishing their EU Headquarters in theUK. Currently, 50% of all European headquarters are based in the UK45 and the UK attracts 21% of allnew investment projects in Western Europe.46 We believe including ICTs in the cap puts both of theseachievements in jeopardy.

ICTs are used by companies for a number of different reasons. Many global businesses with offices allover the world want to able to transport senior people between them at will. Any restrictions on this practisewould 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 meanour 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 theutility of the UK office is diminished. It also puts at risk the availability of opportunities abroad for UKindividuals 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 ofjobs 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, butthat the number of transactions would decrease. For example, if a law firm is doing an international dealwhich 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 solicitorshttp://www.chambersstudent.co.uk/pdf/Salaries%20and%20Bens.pdf

45 http://www.ukti.gov.uk/pt pt/uktihome/aboutukti/localisation/113922.html46 http://www.ukti.gov.uk/uktihome/media/pressRelease/110612.html



expertise there as required. This would damage the UK economy by reducing the tax take from highly skilledindividuals who would no longer be working from the UK office and potentially reduce the corporation taxreceipts also as the transaction was recorded elsewhere.

Whilst we appreciate that the Government has a commitment to reducing the net migration flow into theUK, removing the flexibility from global businesses that have chosen to invest in UK jobs is not the way todo 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 responseto the economic downturn. Business is no fan of the resident labour market test, which requires them toadvertise 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 whereevery reasonable avenue to recruit a resident worker has been exhausted.” This implies that the preferenceis 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 labourmarket test must be fulfilled before a migrant worker may be employed ignores the fact that just as someskilled workers are highly geographically mobile, some workers are not. Just because there is not a nationalshortage of workers in one sector does not mean there is not a local shortage in some regions. Merging thetwo lists risks undermining businesses’ ability to hire the best and most productive candidate for the job andalso 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 locallyfor these roles.”

SME, Service Sector

Dependants

Although BCC has no evidence on the contribution of dependants to the economy, we are concerned thattheir inclusion in the cap would lead, at some stage in the process, to someone taking into account thenumber of dependants a migrant has before offering them a visa. This could lead to the UK falling foul ofdiscrimination and human rights legislation, as well as meaning bad decisions are made on which migrantsare allowed to work in the UK. If dependants are to be included in the cap, safeguards must be put in placeto 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. Manyalso take responsibility, not only for local supply, but also for whole areas of expertise. For example, theNEC in Birmingham has recently developed an apprenticeship in rigging, which is being rolled out acrossthe UK. What employers cannot do, and nor should they be expected to, is be responsible for strategic skillsplanning 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 workersin the occupations currently (and predicted to be ) listed on the shortage occupation list. This plan shouldgive 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 providingthe employees that business needs—the science and engineering careers. We call on the Government to tellbusiness what they are doing to stimulate UK citizens’ interest in these areas—from primary school to adultlearning—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 domesticworkers 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 workersare 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, whichit 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 workershealth 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 riskfalling foul of discrimination legislation. This would be very expensive.

47 http://www.ippr.org/members/download.asp?f%/ecomm/files/FFLabMigFINAL.pdf&a%skip



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 percentageof 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 couldinstead make a small contribution to the Migration Impact Fund—at no higher rate than the current £50worker contribution. This fund could then be used to reduce pressures on local infrastructure projects wherebusiness 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 placea burden on business means that it is even more important that the Impact Assessment (IA) is rigorous andaccurately measures costs and benefits. If the costs are under-calculated, then the Home Office will not beunder an obligation to reduce the costs to business in another area—resulting in the de facto regulatoryburden increasing.

The non-EU migrant cap will affect all businesses, and a proportion will take a special interest and requiremore detailed knowledge of the changes. Given this, it is unreasonable that the IA states employers will onlyspend £100,000 familiarising themselves with the new system. In April 2009, our Workforce Survey foundthat 60% of businesses were aware of the Points Based System (PBS). If we made the generous assumptionthat awareness has not risen over the past year, this still means that around 740,000 businesses are aware ofthe PBS and would presumably want to familiarise themselves with the changes this Government intendsto make to the system. The IA calculates it would cost each of these employers less than 1p to familiarisethemselves 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 forbusiness in the short term, there is no attempt to cost this impact. In the longer term, an assumption is madethat business will be able to adapt to the levels, whatever they are set at and regardless of the sector thebusiness operates in. As is clear in our response below, business is very concerned about the effect that thecap will have not only on their own business, but also on the economy in general and on both the numberof jobs in the UK and number of transactions that take place here. Without a rigorous IA assessing theimpacts felt at a micro, regional and macro level, BCC believes it will be difficult for Ministers to make adecision 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 arerestrictions on this route then global companies will reduce their investment, jobs and number oftransactions in the UK. We support measures to up-skill UK nationals to reduce reliance on migrant workersin shortage occupations –but the Government must recognise that this is a long term goal, and in the shortterm, 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 andmultinational companies that have a presence in India. NASSCOM’s members and associate membercompanies are broadly in the business of software development, software services, software products,consulting services, BPO services, e-commerce & web services, engineering services offshoring andanimation and gaming. NASSCOM’s membership base constitutes over 95% of the industry revenues inIndia and employs over 2.24 million professionals. NASSCOM member companies include not just IndianIT 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 economicmigration. The Committee will investigate the Government’s current proposals to cap migration throughTiers 1 and 2 of the points-based system by implementing a permanent limit.



2. The area of inquiry that NASSCOM wishes to respond to regards the proposal for a quota on IntraCompany Transfers (ICTs), which is one of the focus points of the inquiry. NASSCOM’s submission andthe provision of oral evidence concerns only the question: should ICTs be included in the proposedGovernment cap for non-EU migration? Any questions concerning quotas for mainstream immigration areoutside 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 UKto do jobs within the company which it only makes sense for an existing company employee with a particularset of skills and experience to do (source: UKBA, June 2010. Limits on non-EU economic migration. Aconsultation). ICTs are transferred by their overseas employer for an average time frame of 18 months in thecase of NASSCOM member companies. At the end of the transfer time period, ICTs return to the countryof 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 fromnon-EU countries. NASSCOM believes that ICTs should not be included in the quota. This stance issupported by the below arguments and followed by suggestions of possible alternative measures that the UKGovernment 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 likelyto tender the contract internationally to ensure it benefits from the best possible overallarrangement. But for overseas firms to compete for this contract, they would need to bring highlyskilled professionals to London, who are familiar with the company’s proprietary framework toliaise with the client, map systems and trouble-shoot throughout the development and installationprocess. These staff would also need to be willing to be relocated to the UK to then return to theirhome country to take forward the bulk of the development work. If the international IT Companycould not easily transfer staff to the UK for temporary periods, it could not effectively trade withthe UK bank. The UK would have effectively imposed a non-tariff trade barrier, pushing up costsfor 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 forimmigrants wishing to come to the UK to stay permanently.

Most of the highly skilled workers, especially in the IT industry, come for short durations andreturn to their countries after completion of the projects. We feel market forces should determineits needs on the visas and there is no need to limit, control or curtail this economic activity, sincethis 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—itwould 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 temporaryperiods to the UK that, as the consultation document says, “only makes sense for an existingcompany 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 comingto the UK is extremely modest.

The UKBA’s consultation document makes the point that ICTs are responsible for 45% of all Tier2 entry clearance visas, of which, according to the MAC, 36,000 were issued in 2009 (down from68,000 in 2007. This is in comparison to 362,000 student visas that have been issued in the 12months to June 2010). This means that about 16,000 ICTs were issued in 2009. But even thisrelatively modest figure exaggerates the figure that really counts—that is, the net number ofincoming ICT highly skilled workers.

Research by NASSCOM amongst its leading members suggests that (a) these companies apply foraround 40% more entry clearance visas than they actually use (something that reflects the premiumcompanies 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 termsdespite these highly skilled workers’ economic importance to the UK.

One of our recommendations is that the UKBA should capture this data from the sponsoringcompanies. NASSCOM members will be more than willing to help fill this data gap and assist theUKBA in the process.



4.5 Highly skilled ICT workers do not directly affect the local job market—the roles they perform arenot 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 hostcountry’s economy. They lead to distortions in the market, increased costs and a jump in thenumber of visa applications. This last point can be illustrated by a simple example. If two or threecompanies are on a final shortlist for a major IT scheme, these companies need to be in a positionto ensure they can deliver this scheme without delays should their tender be successful. In situationswhere there are quotas, these shortlisted two or three companies invariably choose to apply forvisas in case they win the contract, despite the costs in doing so—they cannot risk the possibilityof delays. This practice both inflates visa numbers from each short listed company and can makeit more difficult for other companies to secure visas.

Quotas could possibly work in the case of other tiers. The distinguishing factor is that ICTs aredemanded 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 believethe 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 byIndian companies come by way of acquisitions and setting up facilities in the UK. UKTI isencouraging 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 tothe UK—part of the intention of the quota. The problem for the UK economy is that this wouldmake it very hard to locate regional headquarters in the country (four out of five of NASSCOM’sbiggest members have their European headquarters in or around London) and they would bedriven to explore the possibility of locating elsewhere in Europe, particularly in light of moves tointroduce a Schengen-wide work permit.

A quota would also make the recent trend of India-based companies investing large sums in UKbusinesses 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 theinternational business community.

It is a truism that the world of business, economics and much else works from important but hardto define measures of “confidence” and perception. The UK has traditionally benefited from thisin the past as it is seen as a leading promoter of world trade and liberal markets—and hence attractstrade and investment. Introducing quotas for ICTs would send damaging signals to theinternational business community, the reverberations of which would extend beyond the issue ofICTs themselves.

5. Related to the central question, the UKBA and MAC consultations both ask whether ICTs should beallowed to bring dependants with them to the UK for the duration of their project work. We believe thatdependants should be allowed to accompany ICTs, as only a small proportion of ICTs bring dependantswith them. Firstly, preventing ICTs from bringing their families would make the UK a much less attractivebase from which to do business. Secondly, the economic contribution of the dependents is usually quitesignificant—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 policyand 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 comesto the UK and when they leave, thereby providing the government with robust data forenforcement 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 sponsoringcompanies. The standards expected of sponsoring companies should be clearly laid out—and thecompanies should be held to account accordingly. Unlike individuals, it is relatively easy tomonitor and control businesses.



6.3 Third, the situation regarding ICTs should then be reviewed again at a later date. The governmentwould have a far sounder statistical basis for making extremely important decisions affecting thelong 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 ensurethat UK companies and the UK economy remain competitive in a globalised world. If the decision toimplement a quota on ICTs is made, the disadvantages to the UK economy would be the same as with theimposition 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-knowncompanies in the UK.

— In the UK automobiles and parts sector, Land Rover and Jaguar Cars were ranked 2nd and 3rdrespectively.

— Tata Steel is by far the largest R&D investor in UK industrial and mining, accounting for 94% oftotal 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.



Export Sales.

— Tata is a major UK exporter. Tata’s UK ratio of exports to total sales is 57%, which compares with27%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. Inparticular, 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 Beveragesand Tata Steel Europe (Corus).TCS usage of ICTs as part of its business model helps UK organizationsenhance 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 organizationsbenefitting from IT and technology. This requires labour mobility. Because ICTs enter the UK on atemporary basis only, in response to demand from UK organizations, there are no “settlement” issues. ICTsshould 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 temporarybasis. 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 onthe project from outside the UK.

While in the UK, ICTs are net contributors to the UK economy, including spending money locally andpaying income tax on their UK earnings. As employees of the company, they are independent in terms ofhousing 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 intothe UK dropped significantly during the recession 2009/10; they have increased again in recent months asUK 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 demandmarket 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 usageof 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 andthere are not enough good quality UK/EU nationals, so we typically recruit some 20-25 non-EU nationalsper annum, mostly direct from University or through sponsorship through University. Indeed this is alreadystarting to impact us as, in anticipation of the new limits, we are already restricted to a fraction of the permitswe had last year—and last year was artificially very low because of the economic downturn. In fact we havethree 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 theycan identify so-called Shortage Occupations and put these at the top of any list subject to quota, data isinevitably 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 beverageworld.

— By locating the HQ of our company in the UK, even though we are owned and listed in India, weprovide high net worth individuals to the UK whose tax contribution to the economy is inevitablysignificantly 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.



— TGB’s decision to locate the company in the UK also enhances our ability to employ local talentinto global functions—providing high quality jobs—especially in an environment when younggraduates 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 tolocate the HQ of an international company. The higher personal tax rate that has been announcedhas already taken away one advantage. An inflexible (capped) migration policy will take awayanother advantage.

— There have been three cases of us hiring senior leaders directly from the global market—anAmerican, 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 thecompanies based here.

Tata Elxsi

Tata Elxsi provides Product Design and Engineering services and we are generally associated with theengineering, 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 withour 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 variousphases of product development and research.

A cap would mean that the customers would be restricted to avail the skills and the opportunity to designproducts 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 innovationcentre 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 valuableoccasion for us.

There is one point that I omitted to make. It concerns the Free Trade Agreement between the EU andIndia.

I understand that the agreement is being fast tracked even now, and that Mode 4 (that is provisions fortransnational corporations to bring in workers for service contracts) is the core demand of the Indiangovernment.

Mode 4 concessions provide for effectively unlimited movement of skilled workers by corporations, asIntra Company Transfers (ICTs), with no Resident Labour Market Test or Economic Needs Test. Clearlythis 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 commitmentwill be effectively irreversible.

The exclusion of ICTs from the cap will allow this to go ahead as a trade relations matter. Indeed, theMigration Advisory Committee Tier 2 report of August 2009 indicates that any national labour migrationpolicy 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 ICTsfrom the cap and Mode 4, nor on the nature of Mode 4 in EU trade agreement commitments, nor is thesignificance of the EU/India FTA being discussed publicly.

You might like to consider asking the government for an explanatory note on the subject. My particularconcern is that there may well be something in this agreement that would prevent the ICT threshold beingraised to a level that would make it apply only to senior management. In any event, it is, despite its apparentobscurity, a potentially significant matter of which the committee and, of course, the public will wish tobe aware.

September 2010



Correspondence from the Chair to the Minister for Immigration

Capping Migration

The Home Affairs Committee has been continuing its inquiry into the proposed permanent ImmigrationCap by taking evidence last week from, amongst others, Professor David Metcalf of the Migration AdvisoryCommittee. Professor Metcalf confirmed in his oral evidence, as you yourself have said, that theGovernment will not be able to achieve its overall aim of reducing net immigration to the tens of thousandswithout 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 UKto attend non-degree awarding institutions.

The Home Affairs Committee in the last Parliament undertook an inquiry into bogus colleges (EleventhReport 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 Basedsystem:

advance notice of inspection visits has been given in up to 85% of cases. This is unacceptable anddoes 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 rigorousand, critically, unannounced inspections. Any change in college ownership should require thecollege to be re-accredited. (Paragraph 22)

we consider that a more complete means of prevention requires the compulsory regulation ofprivate further education colleges and English language schools by the state. We therefore stronglyrecommend 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 makebetter use of intelligence provided by college networks, such as the Association of Colleges, to closedown bogus colleges. We intend to revisit this issue once Tier 4 of the Points Based System has beenfully implemented. (Paragraph 29)

We would like to know what progress is being made in addressing this issue, in particular how many boguscolleges have been closed down since our predecessors’ report; the respective roles of BIS/the Departmentfor Education and the Home Office in inspecting and regulating colleges that sponsor students under thePBS, and especially how inspections are carried out; and the number of foreign students affected by anyclosures 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 intelligencenetwork for use by the Department for Business, Enterprise and Skills (BIS), are matters for colleagues inBIS as they go wider than my interest, which relates to colleges insofar as they are sponsoring non-EEAstudents to study here. The UK Border Agency’s register of sponsors for Tier 4 is restricted to only thoseinstitutions that meet rigorous selection criteria, which includes an assessment of the academic provision ofthe institution via accreditation, and these institutions are also subject to visits by UK Border Agencyofficials.

You referred to the importance of unannounced visits in combating bogus colleges. The UK BorderAgency now has a requirement that at least 50% of standard post-licence visits must be unannounced, andthis requirement is being met by all regional visit teams. Additionally further visits are commissioned by theTier 4 sponsor investigations team all of which are unannounced. UK Border Agency visits to licensed Tier4 sponsors range from standard visits to check understanding, through to full compliance visits. Large-scaleoperations are co-ordinated by the sponsor investigations team, and involve support from other Agenciessuch as the Police.

You have asked for the number of colleges that have closed down since the Home Affairs Committee’slast 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 studentsaffected by closures or restrictions on the operation of colleges is 43,300. The UK Border Agency does nothave the power to close down colleges as the Agency’s licence relates only to non-EEA students comingunder T4 of the Points Based System.

20 September 2010



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 withProfessor David Metcalf of the Migration Advisory Committee (MAC).

We understand that the Migration Advisory Committee has been asked to recommend a numerical limitfor Tiers 1 and 2 for the first year of operation of a permanent immigration cap (2011–12). Professor Metcalftold us that the Government’s request did not specify whether the proposed figure should or should notinclude dependants, whether the Tier 2 cap should include the Intra-company transfer route, and, becauseof the parallel consultation being conducted by the UKBA on these issues, did not indicate what methodwould be used to allocate visas under the cap nor whether the shortage occupation and Resident LabourMarket Tests would be merged.

As a result of these uncertainties, Professor Metcalf said it was likely that the MAC would have torecommend two options rather than a single one for achieving the Government’s overall aim of reducingnet migration to the tens of thousands (Q 144); and, more seriously in our view, he said that it was impossiblefor the MAC to predict the impact of any particular cap on various sectors because of the number andsignificance of the unknown factors outlined above (Qq 164–170). [The question numbers refer to thetranscript 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 ofinformation being available, and

— whether it was the Government’s intention that the MAC should make a recommendation withoutbeing able to predict the impact on the various sectors of the economy that make use of migrantworkers 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 successof its policy by the end of the current Parliament, then this judgement would have to be based on the latestfigures 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 netimmigration 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 aspossible, so that the Government may consider it together with the consultation responses and the MAC’srecommendations in formulating its policy. We would therefore be grateful for a response to this letter by30 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) rolein 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 firstbeing told whether the limit should include dependants and intra company transfers (ICT) or whether theshortage occupation list and resident labour market test will be merged. As you know, these questions havebeen included in the UK Border Agency’s parallel consultation on the mechanism through which the limitis operated.

The UKBA consultation closed on 17 September and no decisions have been taken in respect of any ofthe policy questions within it. The MAC has indicated that it is content to answer the question it has beenasked, and I am confident that they have the information they require to answer the question posed. It is ofcourse open to us to adjust the MAC’s recommended limit if we decide on an approach based on differentassumptions from those used by the MAC.

You go on to question whether the Government has asked the MAC to Produce their report withoutsufficient information to consider sector specific impacts. Their consultation asked what economic impactsshould be taken in to account when setting the limit (question 1) and what sector specific impacts might beexpected if the number of Tiers 1 and 2 migrants were reduced (questions 8 and 9). The Committee hasreceived over 400 submissions from employers and sector groups in response to the questions set and theyhave 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 ofpossible impacts as they see them. Professor Metcalf pointed out that the MAC may be asked to review theposition at the end of the first year, at which point the limit could be adjusted in the light of experience.



You end by asking whether the Government is aiming to reduce net migration to the tens of thousandsby 2013. That is not the Government’s objective and moreover it is not what Professor Metcalf said.

October 2010

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