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Cap on Immigration
Implications for your Business

The Government announced on 20 May 2010

“We will introduce an annual limit on the number of non-EU economic migrants admitted into the UK to live and work. We will consider jointly the mechanism for implementing the limit.”

According to figures released by the Office of National Statistics and the Home Office show that net Immigration to the UK in the year to September 2009 declined by more than 11%. Applications in Tier 1 and 2 of the Points Based System were down almost 15% in the first quarter of 2010, compared with the first quarter of 2009.

Given that a cap on immigration will only cover the economic routes under the Points Based System, many commentators and politicians are questioning how effective a cap will be.

How could your company be affected?
If your organisation relies on skilled non-EEA workers, it is likely that the UKBA will limit the number of certificates of sponsorship you can issue. This could be a huge problem if your business has an urgent demand for skilled workers under Tier 2, you may not be able to meet this demand quickly.

Your organisation could also be effected in the following ways:

• loss of skills and knowledge in the workplace
• not being able to meet clients’ needs through the use of experts from outside the EU
• not being able to complete projects on time
• the number of staff in your overseas company who you can bring to the UK to train, could be significantly reduced
• the financial impact of a cap on your business
• mergers and acquisitions – the cap could mean that non-EEA national employees cannot be transferred
• if your company employs Tier 1 General migrants, there could be a delay in the consideration of their application if the quota is reached

It is time to now start thinking about how the Government’s proposals could affect your business...

Deadline
The deadline to respond is 7 September 2010.

If your company is concerned by the introduction of a limit, it is important to respond to this consultation.

Here is the link to download the consultation paper and further information concerning the proposals.

Email your responses to mac@homeoffice.gsi.gov.uk

Or send written responses to

Migration Advisory Committee,
1st Floor Green Park House,
29 Wellesley Road,
Croydon CR0 2AJ

If your company requires any further information or assistance to draft a response to MAC, please contact us.

Summary of new provisions

Temporary cap
The Government has commenced a consultation on how a cap on Immigration should be determined and implemented. On 28 June 2010, the Government announced the introduction of temporary measures during a 12 week consultation period. From 19 July 2010, we will see:

• Increase in the level of points required for Tier 1 (General)
• A grant allocation – the Government will set a limit on the number of applications that may be granted. The limit will operate on a monthly basis and affect only Entry Clearance application
• The interim limits will also include limiting the number of certificates of sponsorship that Tier 2 sponsors are able to issue

Proposals for a permanent cap
The Government’s proposals for a cap focus on Tier 1 and Tier 2 of the Points Based System. The following are proposals only, which will be reviewed by the Migration Advisory Committee (the Migration Advisory Committee advises the Government on migration issues):

Tier 1

• Applicants would undertake a points test and after passing the test, they would be able to make an “expression of interest” by entering a pool of potential candidates. The UKBA would invite the relevant number of candidates from the pool to apply for entry to the UK. Those candidates invited to apply would be candidates with the highest points scores and those not selected to be invited to make a full application over a period of six months would be removed from the pool.
• Raising the points threshold for migrants

Tier 2

• Limiting the number of certificates of sponsorship issued - A specified number of visas would be released on a quarterly basis and applications would be accepted against that quarterly quota.
• Changing the criteria for Tier 2 (General) applications
• A pooling system could be applied
• Auctions – quarterly auctions where 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
• Including Intra-Company Transfers in the limits – either to offer Intra-Company Transferees periods of leave of less than 12 months or to exempt any Intra-Company Transferee coming to the UK for a period of less than 12 months