Immigration: skill shortages inquiry

The aim of the Tier 2 cap is to help deliver the Government’s objective of reducing net migration to the ‘tens of thousands’, despite the significant disparity between the net migration figure, currently 336,000 a year, and the relatively small number of 20,700 possible Tier 2 (General) visas. The Government can only control three routes of migration, one of which is the non-EEA inflow for work. However, the number of people coming to the UK to take up work has not reduced, and the number of people seeking to come to take up a high skilled job in the UK has increased. While the cap may serve a purpose in discouraging recruitment from non-EU countries, it has had a displacement effect in stimulating recruitment from EU countries. If the increase in EU migration compensates for any decrease in non-EU migration, then this will not help the Government reach their target of reducing net migration to the tens of thousands.

We recognise the dramatic rise in those using the Intra Company Transfer route (Tier 2 (ICT)) to come to work in the UK. We note that these are highly paid, highly skilled people who tend to come to the UK for a limited time to work on a particular project. When the cap was introduced on Tier 2 visas, a decision was made to keep the Tier 2 (ICT) visa outside the cap. If the cap is to remain, we would support the continued exclusion from it of Tier 2 (ICT) visas. We may revisit this issue after the MAC has published its findings on how the Tier 2 (ICT) visa might be changed.

The Tier 2 cap of 20,700 appears to play a very limited role in Government attempts to restrict net migration. There are no immediate consequences if the Government fails to reach its overall target to reduce migration to the tens of thousands. There are real consequences if the cap on Tier 2 visas is reached, as was discovered in June

The initiative to put unused Certificates of Sponsorship back into the system is the right approach. It is common sense and has helped to reduce the pressure that had been building up in the system. The 456 unused certificates reclaimed in October clearly adds substantially to the 1,650 allocation for that month.

The recycling of unused certificates was announced in September 2015, several months after the cap was reached. The Government should, in its response to this Report, explain why it did not implement these measures earlier, and whether the 30 Immigration: skill shortages mechanism to put unused certificates back into the system was considered only as a result of the cap being reached.

We welcome the recent decision by the Government to put nurses on the Shortage Occupation List. Had this not been done, there would have been thousands of unfilled nursing vacancies going into winter. Potentially, this could have had immense consequences throughout the NHS. We would support a decision for nurses to remain on the Shortage Occupation List.

We are pleased that the decision to put nurses on the Shortage Occupation List means that those nurses subject to the Immigration Rules changes, and who were at risk of having to leave the country if they did not earn £35,000 after five years, will now be able to apply to stay and continue to contribute to the NHS.

One of the aims of the cap is to incentivise training and recruitment of domestically trained nurses. We ask the Government, in its response to this Report, to set out its plans to increase the number of nurse training places available, and confirm whether nurses will remain on the Shortage Occupation List until such time as the number of domestically trained nurses reaches the Department of Health’s target.

The negative consequences to recruitment in the healthcare sector under the cap is representative of a broader issue of how the cap interacts with skilled migrants who work in public sector roles that do not pay a high salary but are considered important for society. It is unfortunate that salary becomes the determining factor when the system for allocating Certificates of Sponsorship comes under pressure.

Raising the minimum salary requirements for Tier 2 visas may ease pressure on the cap but it would not meet the needs of those employers who want to bring in particular skills but are unable to pay the higher salary required. The marginal benefit to the Exchequer from increased income tax collected from higher paid employees is of less relevance than filling vacancies in the most pressed sectors on the Shortage Occupation List. We would be concerned if the minimum salary threshold was raised without measures simultaneously built in to mitigate the impact upon public sector roles, such as teaching, and certain low pay sectors, such as social care. It would serve to relieve one problem whilst worsening another. If the MAC recommend raising the minimum salary threshold then they should consider how the impact upon SMEs might be mitigated. We recommend that consideration also be given to exempting certain public sector roles from the cap for Tier 2 (General) visa. We also welcome confirmation that the MAC will look again at regional differentiation, particularly if the cap continues to force up salary requirements, or if raising the minimum salary thresholds is to be considered.

We recommend that the priority given to PhD level posts in securing Certificates of Sponsorship is maintained.

Many witnesses were concerned that the current time period for people to move from a Tier 4 study visa to a Tier 2 work visa is too short. We recommend that the Government look again at the timetable it allows for graduates to search for and secure posts in graduate level work and training schemes, given the significant benefits of post-study working opportunities to our economy and our universities. In its 2011 report on Student Visas, our predecessor Committee recommended that the Government give consideration to either a) introducing a six month visa to look for work with the possibility of an extension of 18 months if the applicant has received the offer of skilled work or is a director of a company which has two full-time equivalent employees; b) limiting the number of institutions whose qualifications entitle the holder to post study work; and c) given concerns about maintaining UK competitiveness in STEM research, exempting STEM graduates from new restrictions until the domestic market is sufficiently robust. We repeat that recommendation.

Our predecessor Committee also said it was not persuaded that students are in fact migrants, and that only if a student or former student seeks settlement—or the length of time they have spent in the country is excessive—should their status in the UK be regarded as that of a migrant rather than a student visitor. While recognising that students are not migrants, we consider it essential that the number of students on visas should be recorded and published alongside migration figures, to ensure transparency. We note the renewed debate around the contribution international students make to the UK’s exports. We urge the Government to look again at the value of international students to the UK, economically, intellectually and culturally, and consider how it might devise policies that reduce the barriers for international students to stay in the UK and take up high skilled employment.

The argument is sometimes made that employing migrant labour militates against training UK domestic workers, particularly in high-skilled sectors. However, the evidence given to us suggested that UK employers who employ skilled foreign workers also train their own workforce, rather than simply relying on employing non-UK workers. The UK Commission on Employment and Skills 2013 survey found that employers would be more likely to choose to train their own workforce to fill skills gaps than recruit non-UK nationals. It is difficult to demonstrate causation, but we found little evidence that the Tier 2 cap was the lever that incentivised improvements in training to meet UK skill needs. The motivation to recruit from abroad seemed to be more a desire to get the best person for the job, and the need to respond flexibly to the needs of the economy within the appropriate timescale.

The Government needs to provide more clarity on its plans for an Apprenticeship Levy and an Immigration Skills Charge. In particular, it needs to clarify whether employers who recruit from abroad will be subject to both, and whether employers who already carry out training will still be subject to both. The Government has said that the Apprenticeship Levy will only be charged upon businesses with a payroll of £3 million. Similarly, the Government needs to be clear about what allowances will be made for small and medium enterprises, which might be subject to the Immigration Skills Charge. In response to our Report, the Government also needs 32 Immigration: skill shortages to make clear how the Immigration Skills Charge will contribute to filling the high level skills gaps such as those exhibited by the Shortage Occupation List.

The Government should be very concerned that international firms feel restricted in their ability to operate graduate training schemes in the UK. This is not just about whether those firms bring in non-EU candidates for those schemes, but whether the barriers created would incentivise those schemes to be operated in other countries instead of the UK. Whilst this would reduce the number of non-EU candidates coming in to the UK, it would also reduce the opportunities for UK graduates to find training opportunities in their chosen field without moving abroad. We do not agree that this meets the criteria of an immigration system that provides control while attracting the brightest and the best. We agree with the Migration Advisory Committee and recommend that the Government exempts Certificates of Sponsorship for graduate training schemes from the cap.

We were told that there were problems with the audit process for employers with a Tier 2 sponsor licence. Sarah Rapson, Director General of UK Visas and Immigration, believes that the audit system is working better now than previously and told us there has been increased investment in staff training. We welcome the tacit acknowledgment that the system needed improvement. We identified a difference in quality of decision-making in the audit and casework parts of the process. A decision made following an audit visit can have devastating consequences for an employer. The review process of the audit decision needs to be publicly available, and subject to a clear timetable, for it to gain confidence among those who are subject to the licence regime.

The Home Office itself does not have an exceptional record at producing information successfully to short deadlines. With this in mind, we do not consider that the period of time allowed for an organisation to give further information in the event of a suspension or revocation of a licence is long enough, and we recommend that this is increased to at least 40 working days. It is also unsatisfactory that there is currently no appeal process and we recommend that the Home Office introduces the right to appeal a decision to suspend or revoke a sponsor’s licence rather than requiring sponsors to resort to costly and time-consuming judicial review claims.