MAC (Migration Advisory Council) UK – Impact of tighter controls

Gagan SabharwalDirector NASSCOM

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Net migration is the biggest issue in the UK

Background

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• Managing immigration, from within and outside, Europe is a key political issue for the Conservative Government.

• Net migration increased from 236,000 to 330, 000 in the last year despite Prime Minister David Cameron’s election pledge to reduce migration.

• The Migration Advisory Committee (MAC), independent economic advisors to the Home Office, was tasked with leading a review of the Tier 2 visa route for skilled workers with a view to managing down annual net migration to the ‘tens of thousands’.

• On 19th January 2016, the MAC published its recommendations, which included changes to Intra Company Transfers, a short and temporary visa route that provides a critical channel for UK business to access India’s world leading expertise in information technology.

3x3 matrix

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Family Study Work

British EU Non-EU

Brexit

Restrictions / make it costly

ICT visas trends

2009

2012

2015

0 5000 10000 15000 20000 25000 30000 35000 40000

22029

16113

10727

4500

21229

13009

Tier 2 - Intra Company Transfers

short term Long term

5Source: MAC report

The MAC’s Recommendations

• Creates barriers to trade when the UK is currently facing IT skilled worker shortages.

ICT migrants to have two years company experience

before taking on a placement

• Likely to increase the time and cost for an ICT visa.

Companies to provide explanation on the

Certificate of Sponsorship detailing why an ICT is

required and the skills that person has.

• Encourages examining whether present system of allowances and initial non-payment of national insurance contributions confers a playing field tilted against British workers

Differentiates between conventional use of ICT Vs

third-party contracting (read IT firms)

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Recommendation Impact

The MAC’s Recommendations

• A significant cost, which would either be paid by the organisation or it would be passed on to the client making Indian companies less competitive.

Skills charge: annual £1,000 per ICT to use to

invest in human capital in the UK.

•Targets Indian IT companies in particular. Drives up cost for NASSCOM members considerably. Not clear how third party contracts will be defined in law or guidance.

Increase in minimum salary for ICTs working on ‘third-party contracts’ to

£41,500,

• Increase in cost would either be paid by the organisation or it would be passed on to the client making Indian companies less competitive.

The Immigration Health Surcharge to be extended to ICT, meaning applicants and any family members pay £200 for each year in

the UK.

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Recommendation Impact

Future depends on Brexit outcome

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Thank you

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