Immigration cap: Too low for business, but too high to meet Government targets

The Government has today announced its long-trailed cap on immigration. The cap is more accurately described as a cap on skilled migration for work from outside the EU through Tiers 1 and 2 of the Points-Based System.

The Government has today announced its long-trailed cap on immigration.  As ever with subject, the core of the policy changes have been somewhat obscured by a flurry of somewhat confusing statistics, so it’s worth being clear about what the changes announced today will really mean.

The first thing to be clear about is that this is not a cap on immigration, it’s a cap on skilled migration for work from outside the EU through Tiers 1 and 2 of the Points-Based System. Less snappy, but more accurate.

Total gross immigration to the UK in 2009 was estimated at 528,000. But of this total, only 292,000 was from outside the EU, and only 54,000 of that was work-related (down from 114,000 in 2004). So the cap (so far) only applies to a small proportion of total immigration to the UK.

In effect, Tiers 1 and 2 of the Points-Based System (which are limited to skilled migrants) are the only routes available for non-EU migrants to come to the UK to work (people coming under Tier 1 do not require an offer of employment before they come to the UK, whereas those coming under Tier 2 do, and must work for that employer).  In 2009, just over 55,000 visas were issued under these routes (plus an additional 42,000 to the dependents of main applicants).

But the cap announced today does not apply to all of Tier 1 and 2.  Importantly, intra-company transfers (which accounted for 22,000 of the 55,000 visas issued in 2009) have been excluded from the cap, as have post-study visas for foreign students graduating from UK higher education institutions (which accounted for just over 4,000 of the 55,000 visas issued – this will be looked at alongside the student visa regime).  So, based on last year’s figures, the cap applies to approximately 29,000 of the 55,000 Tier 1 and 2 migrants.  This means that the headline cap of 21,700 announced today amounts to a reduction of approximately 7,000.

The bulk of this reduction comes from Tier 1 – which will be reduced from almost 14,000 in 2009 to only 1,000 in 2011-12. Numbers under Tier 2 will actually be allowed to rise – up to 20,700 from around 14,000 in 2009.  This reflects the fact that Tier 2 is used by employers, rather than individual migrants, and employers’ groups have defended this route vociferously during the Government’s consultation.  Some people who would previously have come through Tier 1 will no doubt come through Tier 2 instead.

In addition, the Government has announced some changes to the criteria which apply to Tiers 1 and 2.  Tier 1 will become much more restrictive – limited to investors, entrepreneurs, and migrants of ‘exceptional talent’.  Tier 2 will now be restricted to graduate-level jobs (it was previously open to jobs requiring at least NVQ3 level skills) – this will affect sectors including social care who are currently able to bring skilled, but non-graduate, staff to the UK.  And intra-company transfers, although exempt from the cap, will be limited to those earning more than £40,000 (except for those coming to the UK for less than a year).  These changes might be expected to bring down the numbers somewhat more than the 7,000 suggested by the cap itself.

However, even if the cap and the changes in criteria together reduced inflows under Tiers 1 and 2 by 10,000 or more, this won’t go far towards the Government’s overall immigration target – to reduce total net immigration to the UK from current levels of around 200,000 to less than 100,000 by the end of this Parliament.  The Government has already indicated that it plans to restrict student and family migration, but it will also need to further cut skilled migration if it is to meet its overall immigration target – last week’s Migration Advisory Committee report suggested that cuts of up to 80% to Tiers 1 and 2 might be necessary.

So, although today’s announcements will no doubt have real consequences for some employers and sectors, they will likely result in a fairly modest reduction in immigration numbers.  If the Government intends to keep its overall promises on immigration, the cap announced today provides barely more than a starting point – much more radical (and potentially damaging) reductions will be needed in the coming months and years.

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10 Responses to “Immigration cap: Too low for business, but too high to meet Government targets”

  1. Will Straw

    Expert analysis from ippr's Sarah Mulley on why imm cap is too low for business, but too high to meet Gov targets

  2. Shamik Das

    RT @leftfootfwd: Immigration cap: Too low for business, too high to meet Government targets writes @ippr's Sarah Mulley

  3. House Of Twits

    RT @leftfootfwd Immigration cap: Too low for business, but too high to meet Government targets

  4. William J. C. Brown

    Immigration cap: Too low for business, but too high to meet Government targets

  5. dan

    lets see what private nursing homes do ???? for nurses ???

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