Skilled migrant workers from outside of the European Union who earn less than £35,000 are to lose the right to work in the UK for any more than five years in a move that will “cause big problems for employers”, a think tank has warned.
The move, which will be introduced from April 2016, is intended to cut the number of non-Europeans and their dependents who settle in the country each year by 40,000 to 20,000, effectively creating a temporary ‘guest worker’ labour force.
It is the first time that a UK government has imposed an economic threshold on the right to settle in the country. In the past, the issue has been decided on the basis of how long someone has lived in the UK or their ties to the country.
In a written statement to Parliament, home secretary Theresa May said: “Until now, settlement has been a virtually automatic consequence of five years’ residence in the UK as a skilled worker. Those who have settled have tended to be less well paid and lower-skilled than those who have not and the volumes of migrant workers settling have reached record levels in recent years.”
According to official figures, fewer than 10,000 migrant workers and their dependents were granted the right to settle in the country in 1997, but by 2010, this figure had risen to 84,000.
As a result, May continued: “In future, we will exercise control to ensure that only the brightest and best remain permanently,” although the £35,000 earnings threshold would be waived for any “shortage occupations”.
Scientists and researchers in PhD-level jobs will also be exempt from the earnings test, she added.
But Matt Cavanagh, associate director at think tank, the Institute of Public Policy Research, told the Guardian that the policy “makes no sense in economic terms, will cause big problems for employers, and is unfair on individual migrants”.
Intra-company transfers rocket
“It could also discourage the ‘brightest and best’ from coming here in the first place. The majority of working migrants don’t stay permanently anyway, but they value the option, and if Britain no longer offers it, they may go elsewhere,” he said.
Rather than taking away settlement rights, it would make more sense to provide migrants with financial incentives to return home, Cavanagh added.
The news came to light as it emerged that UK businesses were bypassing the coalition government’s cap on skilled migrants anyway by bringing in staff from overseas sites via ‘intra-company transfer’ schemes.
The number of workers coming to the UK using this route – especially from IT firms based in India, which are exempted from the coalition government’s immigration cap – has surged from 22,000 in 2009 to 29,700 in the 12 months to September last year.
This means that workers coming to the country on an intra-company transfer visa now outnumber those with other work visas by three to one. Employers can bring in staff from overseas sites to work in the UK for up to six months if they earn more than £24,000. Those earning £40,000 can stay longer than a year.
The upshot, official estimates appear to show, is that as few as 10,000 tier two work visas will be issued for skilled migrants from outside of the European Economic Area in the 12 months to April 2012 – less than half the annual limit of 21,700 set by May in a bid to cut net migration from 250,000 to “tens of thousands” by the next election.
But the Home Office’s migration advisory committee said that, even though such visas were undersubscribed, it did not feel it necessary to change the current limit because such a move would negatively affect the perception that the UK was an attractive place to do business.
The move was welcomed by the CBI. Neil Carberry, director for employment and skills policy at the employers’ lobby group, said that any change would “only damage the UK’s attractiveness as a place to invest and do business”, particularly as “there is little evidence of skilled migrant workers undercutting the labour market”.
