UK Immigration Cap for Tier 1 and Tier 2

The Government's Migration Advisory Committee (the MAC) has published its report entitled "Limits on Migration: Limits on Tier 1 and Tier 2 for 2011/12 and supporting policies."

The MAC describes itself as "a non-departmental public body comprised of economists and migration experts which provides transparent, independent and evidence-based advice to the Government on migration issues."

The MAC dates from the early planning stages of the UKBA's points based system, and met for the first time in December of 2007.

The MAC's main role is in compiling a list of "shortage occupations" – UK jobs for which there is recognized to be a shortage of labour from within the European Economic Area. People applying for entry clearance or for leave to remain under Tier 2 of the Points Based System – the replacement for the work permit regime – do not have to satisfy a Resident Labour Market test if they are applying for a job which is included in the MAC's list of shortage occupations.

The Migration Advisory Committee also periodically issues recommendations – notably in March of this year its recommendation led the UKBA to issue a new Statement of changes in the Immigration Rules (HC439) whereby the threshold for a successful application for entry clearance or for leave to remain as a Tier 1 (General) Migrant was lowered to enable applicants who did not have a Masters' Degree (- or indeed any after school qualification provided their previous earnings were impressive enough) to be eligible to apply.

In its new report, the product of a consultation exercise begun in June of this year, the MAC has been necessary to estimate what the required limits on immigration to the UK must be in order for the government to meet its objective of reducing net migration to the UK to an annual level of "tens of thousands". As the government has frequently stated it is concerned that net migration to the UK has been occurring at a level in excess of one hundred thousand people per year in the recent years.

"Net migration" is a difficult concept to pin down. The report works from the assumption that it can be measured by the change in numbers of non-UK and non-EEA nationals in the UK population between two years.

To a great extent therefore this is a numbers exercise. The MAC's report, which is 324 pages long, concludes that to meet the government's goal the limits (or caps as they are generally known) on applications for entry clearance under the Tier 1 General and Tier 2 categories of the points based system must ensure that between 37,400 and 43,700 visas are issued in 2011.
Breaking this down further – the recommendation is that between 3,150 and 6,300 fewer Tier 1 (General) and the same estimate of Tier 2 visas are issued in 2010. A total of 50,000 such visas were issued in 2009, so this is a recommended cut of between 13 and 25%.

The report makes it clear that it is not including any recommendation regarding placing any limit upon people who already have leave to remain in the UK and who are entitled, under the Immigration Rules, to "switch" into either Tier 1 General or into Tier 2. Neither is there any recommendation that applications by dependant family members of people granted visas as Tier 1 (General) or Tier 2 migrants should be limited. Also the report states that it received a very full response to the consultation and that there was:

"widespread concern amongst the employers who submitted evidence to us regarding restrictions on migration. They argued that restrictions could affect businesses' ability to be competitive, stunt economic recovery, and lead to reduced investment"

On this issue, which has plainly been vexing the Coalition government in the period leading up to the release of this report (and as was noted on this site) the MAC notes that "migration clearly has a positive impact on Gross Domestic Product (GDP), through its effect on the size of the UK workforce".

And that, "based on the available evidence it can be inferred that Tier 1 and Tier 2 migrants are highly likely, on average, to make a positive net fiscal contribution, especially in the short-term".

The report also confirms that "regarding provision of public services, migrants, including Tier 1 and 2 migrants, help alleviate skill shortages in key public service occupations in areas such as health and education."

As to the Government's aims the report is critical as to the reliability of the data available to measure net migration. For example it notes that the International Passenger Survey, which defines migrants as people either coming to the UK or leaving the UK for more than a year, gives a net migration figure for 2009 of 184,000. By contrast the Annual Population Survey gives a net migration figure for the same year is 53,000.

The report also makes it clear that the government's objective of reducing net migration to the level of tens of thousands per year can't be met by limiting just Tiers 1 and 2, because the statistics providing the basis for the MAC's report show that these routes represent "only a small fraction of overall migration flows". Thus the report suggests that to meet the government's target, the contribution made by students and by people seeking to join their families in the UK would also need to be considered.
The report's publication coincides with the intensification of the public debate as to the virtues, if any, of capping Tiers 1 and 2 at a time when the UK economy desperately needs skilled labour to maintain its buoyancy.

Last Wednesday, 17 November 2010 Lord Hunt of Kings Heath said in the House of Lords:

"There is great concern that the way in which the current cap is operating is doing real damage not just to British business and industry but to the arts and academia, as we have discussed in the House on several occasions in the past few weeks….I hope that we will receive an early announcement from the Government that they will look at the policy again and make it more flexible".

For professional legal advice on immigration or work permit in the UK, contact the Gherson team.