House of Commons - Managing Migration: The Points Based System

Managing Migration: The Points Based System - Home Affairs Committee Contents

11 Sector-specific issues

169. In addition to comments on the principle, design and administration of the new system, we took evidence from a range of industries employing migrants under different tiers of the Points Based System. In this section we report on problems specific to different industries.

Catering and hospitality

170. In addition to hearing from the Bangladeshi Caterers' Association at our launch seminar in June 2008, we took oral evidence from Jabez Lam of the Chinese Immigration Concern Committee, Ranjit Mathrani of Masala World, and met a wide range of representatives from the Bangladeshi catering sector during our visit to Bangladesh in October 2008. We also received written evidence from London Assembly Member Murad Qureshi, the Chinese Immigration Concern Committee, the British Hospitality Association, Kaman Tsang, Christine Lee & Co Solicitors, and Mei Wong.

171. Representatives of the international catering and restaurant industries—in particular Bangladeshi, Indian and Chinese cuisines—argued that they were already suffering from a labour shortage, which would be unduly exacerbated by the Points Based System. This was in part due to the long hours and low pay of certain roles, traditionally filled by migrant workers, the recruitment of whom the suspension of Tier 3 (low-skilled) of the PBS would prevent. On the other hand, they argued, skilled roles such as that of specialist chef would struggle to meet the points requirement under Tier 2 of the Points Based System, particularly in respect of formal qualifications and of the English language requirement. The industry had made representations to the Migration Advisory Committee for inclusion of these jobs on the shortage occupation list.

LABOUR SHORTAGE

172. The catering industries are a key employer for minority ethnic communities in the UK. The Chinese Immigration Concern Committee (CICC) stated that:

[There are] 17,500 Chinese catering outlets in the UK, with an annual turnover of nearly £5 billion employing 100,000 workers directly; together with the related businesses are employing over 50 per cent of the UK Chinese working population. British Chinese catering is the economic backbone of Chinese community in the UK.[202]

According to the Bangladeshi Caterers Association (BCA) the 12,000 Bangladeshi restaurants and takeaways that make up its membership turn over £3.5bn per year. In a written submission, London Assembly member, Murad Qureshi, told us that:

There are over 2,100 ethnic restaurants in London, and most of them (over 1,200) are Indian or Chinese. The ethnic restaurant market is worth in excess of £3bn nationally and contributed over £1.2bn to London's economy in 2002.[203]

173. The Chinese Immigration Concern Committee (CICC) pointed out that certain international cuisines have historically relied heavily on migrant labour:

Since the 1980s UK Chinese catering has experienced a continuous labour shortage as children left their family in pursuit of their own careers. The Chinese catering industry has relied on migrant workers to fill the vacancies and support its growth…Each new wave of Chinese migrant provided new workforce to the industry and brought with them knowledge and skilled of new cuisines.[204]

174. Witnesses reported that the sector was already suffering labour shortages. Jabez Lam of the CICC told us that research conducted in 2008 which asked Jobcentre Plus to refer suitable candidates for 101 vacancies for Chinese chefs found that "over the six-week period we only had one suitable referral and the wages we offered were between £17,000 and £18,000 initially and in the mid point we increased all the jobs by £1,000".[205] Banglor Rashid of the Bangladeshi Caterers' Association told us that the Bangladeshi curry industry in the UK employs 90,000 people but estimates that it has 27,500 vacancies.[206]

175. An article in The Guardian newspaper of 6 May 2008 suggested that shortages were caused in part by an intergenerational problem, with the children of those in the sector declining to follow their parents into the business:

Dr Shyam Patiar, who runs a hotel business and is director of skills development at Llandrillo College in Colwyn Bay, north Wales, says jokingly: "I am guilty. I put all my children through private schools to give them a chance". His elder daughter is an ear, nose and throat surgeon, her sister is an employment lawyer, and his son is a trader in the city. They did not want to work in a kitchen seven days a week for a fraction of what they can earn with their education.[207]

Bangloor Rashid, President, and other members of the Bangledeshi Caterers' Association referred to this reluctance of second generation migrants to follow their parents into the catering industry as a key cause of staffing shortages, during the Committee's seminar in North Kensington. Jabez Lam of the Chinese Immigration Concern Committee agreed:

We are at a juncture whereby the first-generation Chinese have worked very hard to establish themselves in Chinese catering and their children, who are the highest education achievers across all ethnic groups, have their own aspirations and move on to other careers.[208]

IMPACT ON COMMUNITIES

176. Representatives of the Bangladeshi, Indian and Chinese catering and restaurant industries declared that an inability to recruit migrant labour, both low-skilled and skilled, into the sector would have a devastating effect on their communities in the UK. Ranjit Mathrani of Masala World said that, under the Points Based System, top end restaurants would "eventually close over time with attrition because they cannot replace [the chefs]…you are not going to produce high-quality Indian or Chinese chefs out of British soil".[209]Jabez Lam of the Chinese Immigration Concern Committee agreed, saying that one restaurant had "stated to us that the directors of the Board have made the decision not to invest in any further expansion in this country because of the problem of the labour shortage".[210]The CICC warned of

A real danger of a meltdown in the Chinese catering industry—a collapse in British Chinese catering industry will have negative impacts on the mainstream catering and tourist industry, and have serious knock on effects on the wellbeing of the Chinese community. Businesses and families who have lost their livelihood will have to rely on state benefits instead of making a positive contribution to the economy.[211]

LOW-SKILLED WORKERS

177. Under the previous system, caterers and restaurants were able to recruit low-skilled staff from overseas through the Sectors Based Scheme, which allowed people to enter the UK to take short-term or casual jobs on a quota basis. The Sectors Based Scheme has been phased out with the introduction of the Points Based System. Since the Government anticipates that all low-skilled labour shortages can be filled by EEA nationals, Tier 3 (low skilled workers for temporary labour shortages) of the Points Based System has been suspended indefinitely.

178. The sector was concerned that the low-skilled workers on which restaurants relied would not be eligible to enter the UK under the Points Based System, and that EEA nationals would not be willing to fill these vacancies. Bangloor Rashid of the Bangladeshi Caterers' Association told us that Bangladeshi workers were keen to work in the industry and were willing to work under poorer conditions and lower wages than their European counterparts. He argued that a significant improvement in wages and working conditions would be needed in order to attract Europeans to these roles.[212] London Assembly Member Murad Qureshi agreed that wages in the catering industry were typically low:

The average national hourly wage in restaurants is 40 per cent less than the national average wage. Although staff in London earn more than their counterparts outside the capital, and skilled groups like chefs and cooks attract better wages than porters or waiters, they still only earn about £8 per hour to work unsociable hours and often late into the night to satisfy demanding and frequently difficult customers.[213]

179. However, in oral evidence our witnesses were insistent that caterers and restaurants offered fair wages. Jabez Lam told us that "all workers in Chinese catering, whether restaurants or takeaway, earn above the minimum wage".[214] Ranjit Mathrani concurred: "to our knowledge, we have no evidence whatsoever that people are actually getting less than the minimum wage".[215] In terms of specialised chef positions, Mr Mathrani reported that "the average salary of a chef from India is £20,000 a year…apart from our head chefs and manager chefs who get between £30,000 and £45,000 a year. We pay our staff exactly the same as Gordon Ramsey pays his, if not more".[216]

180. The Chinese Immigration Concern Committee argued that jobs in the international catering and restaurant sector should be placed on the Shortage Occupation Lists to ensure that restaurants could continue to recruit from overseas:

CICC recommends that Chinese catering occupations [be included] on the Shortage Occupation List to enable Chinese catering to recruit from overseas. This will be the medium solution to find suitable skill workers to replace illegal workers eventually removed.[217]

However, Professor Metcalf, Chair of the Migration Committee, considered that:

Many in the restaurant sector would wish for a de facto Tier 3 scheme for less skilled workers to be able to come in. The skilled components of chefs, as it were, are on the shortage list subject to a certain earnings threshold and the profession is able to bring them in.[218]

SKILLED CHEFS

181. Ranjit Mathrani of Masala World drew a distinction between the British Asian catering industry, and high level Indian restaurants: "the catering industry is totally different from Indian cuisines".[219] He argued that skilled chefs specialising in international cuisines—who would be considered skilled workers under Tier 2 as opposed to other workers in the catering and restaurant industry who would be considered low-skilled labour—would struggle to meet points for certain attributes. He identified two barriers in particular:

One is the language, the requirement that people should have a certain level of English before they come to this country…The other is the fact that they set the level of salary where someone does not have qualifications, which most of them do not have, at £24,000 a year which actually is equal to a sous-chef in a French restaurant, and which would make things quite difficult in economic terms.[220]

Mr Mathrani reported that his restaurant chain currently employed 42 Indian chefs on work permits. He asserted that, had the English language requirement introduced under the Points Based System been in existence previously, only five of those 42 chefs would have gained a visa.[221]

182. It was also argued that skilled chefs would struggle to meet the qualifications requirement, set at a minimum of NVQ level 3 training. The Chinese Immigration Concern Committee concluded that "Chinese catering will not be able to meet the NVQ3 qualification".[222] This was reflected also in discussions during the Committee's visit to Bangladesh, in which participants in our community roundtable said that most Bangladeshi chefs had on-the-job training rather than formal training or qualifications.[223]

183. Both the Migration Advisory Committee and the Government drew a distinction between lower-skilled labour in the international catering industries and the case of highly-skilled chefs. The Minister for Borders and Immigration, Phil Woolas MP, broadly agreed with this analysis, and told the Committee that the Government had included the specific role of 'skilled chef' on the latest Shortage Occupation List:

The Shortage Occupation List contains skilled occupations in ethnic hospitality and catering, and the MAC took evidence from a number of organisations—the Academy of Oriental Cuisine, the Chinese Takeaway Association, Itihaas, which is the Bangladeshi and Indian restaurant, and a number of other organisations—and we did put that on the skill shortage list as a result of the advice from MAC, and indeed from this committee.[224]

'Skilled chef' is subject to the requirement that the individual is earning at least £8.45 per hour after deductions for accommodation, meals etc.[225]

TRAINING

184. We asked whether a shortage in low-skilled labour could be filled by recruitment within British communities. Given the high levels of unemployment within, for instance, the British Bangladeshi community, it seemed logical to turn to those communities before migrant labour. London Assembly Member Murad Qureshi stated that "these groups [Bangladeshi and Chinese communities in the UK] already suffer from higher levels of unemployment than the London average (a worrying 20.5 per cent in the Bangladeshi community against a London average of 6.7 per cent)".[226]

185. Our witnesses considered that better training provision could be made for British residents, although were wary about whether high-level skills required for skilled chefs could be incubated in this country. Ranjit Mathrani of Masala World told us:

We would be quite happy to participate in the establishment of training schools to enable the instruction of an intermediate-based level of skills. The trouble with Indian cuisine is that actually, even in India, craft schools do not exist which are teaching cooking to chefs in restaurants, but it is learnt with people mastering an apprentice skills-type of approach to life.[227]

Jabez Lam agreed that there was a distinction to be drawn between low and highly skilled workers, saying he believed that training the local labour force would "help in alleviating the lower-level skill requirement, but the higher-level, specialist level, we believe is still filled by more expert migrant workers".[228]

186. In Sylhet, Bangladesgh, we heard of proposals to establish a catering college there, which would assist Bangladeshi chefs to gain the requisite level of skills qualifications. During a visit by the Committee to the Chief Adviser—the head of the Bangladeshi caretaker government—the Chief Advisor expressed his support for the establishment of such a catering trades training institute in Sylhet, and emphasised that his Government attached priority to raising the skills levels of Bangladeshis seeking employment abroad.[229]

187. The evidence we received suggests that a qualitative distinction should be drawn between low-skilled labour—of which the international catering industry appears to be experiencing a shortage, attributable at least in part to unattractive wages and working conditions—and skilled roles, such as that of specialist chef.

188. Although witnesses argued persuasively that loss of migrant labour to fill low-skilled roles in international catering may well have a negative impact on communities overall, and in some cases lead to restaurant closures, these social aspects alone cannot make the case for including what are essentially low-skilled jobs on the shortage occupation lists. More attention needs therefore to be paid to alternative ways to fill these shortages, including through the active recruitment of UK and EEA nationals. In this endeavour two aspects will be important: first, the provision of specific training in international cuisine skills within training courses in the UK; and second, an undertaking by the industry to improve the basic rate of pay and conditions attracted by the low-skilled jobs.

189. During the course of our inquiry skilled chefs were included on the UK shortage occupation list, subject to a minimum wage requirement of £8.45 per hour. This should go a good way towards meeting the concerns of our witnesses, including those over difficulties in meeting salary requirements and formal qualifications under Tier 2. The shortage occupation lists are due to be revised in September 2009: we recommend that skilled chefs are kept on the list, since it is clear that the arguments made in favour of their inclusion were not linked to temporary fluctuations in the British economy so much as the need to replenish specialist skills from particular countries.

190. We note the establishment by the Bangladeshi Government of a catering trades training college in Sylhet, Bangladesh, which we consider would help formalise much of the experience currently gained on-the-job, and give those migrants the qualifications needed formally to recognise skill under the points system.

191. However, we have concerns, arising from our seminar in North Kensington, that there may be businessmen within the Bangladeshi community who prefer to employ Bangladeshi citizens from Bangladesh over Bangladeshis who have already received leave to remain in the UK, because the former are willing to work for lower wages.

192. Although we accept that English is often not the 'language of the kitchen', we reiterate our view, expressed earlier (paragraph 115) that it is not unreasonable to require those living in this country to possess a basic level of English.

Health and social care

193. We took oral evidence from Alastair Henderson of NHS Employers and Mandy Thorn of the National Care Association. In addition we received written evidence from Together Creating Communities, Welsh Assembly Member Janet Ryder, Welsh Assembly Member Mark Isherwood, Chris Ruane MP, the English Community Care Association, the British Medical Association, the Royal College of Nursing, and Nia Higginbotham.

CARE WORKERS

194. Many of the representations we received concerning the care sector expressed anxiety that Senior Care Workers from overseas would become ineligible under the Points Based System, causing a staffing crisis in care homes and associations. The English Community Care Association warned that "if non EEA staff are prevented from working in care homes there could be a crisis in terms of care home closures and reduced capacity in some areas of the country".[230]

195. The independent care sector is large and diverse. English Community Care Association estimated that it employed over a million workers, and that there were 27,000 organisations providing over 420,000 care beds and 800,000 recipients of community based services.[231] Independent care homes provide care for over 400,000 people[232] and 70 per cent of care in those care homes is funded through local authorities and the NHS, therefore provided by the state.[233]

196. More than 100,000 care assistant and home care workers—some 16 per cent of the registered workforce—were born overseas. Data from the 2006 Office for National Statistics annual population survey suggests that 68 per cent of care workers in London were born overseas. The same survey shows that Zimbabwe provides the highest percentage of the non-UK born social care workforce (12 per cent), followed by the Philippines (10 per cent), Ghana (7 per cent), Poland (7 per cent), Germany (6 per cent), Nigeria (6 per cent), India (5 per cent), Jamaica (3 per cent) and the Irish Republic (3 per cent).[234] Mandy Thorn of the National Care Association told us that "Skills for Care estimate that 12 per cent of the social care English workforce—so we are talking about non professionals, not nurses—is from outside of the EEA countries". She added that the Commission for Social Care Inspection estimated that "we are going to see the workforce increasing by 50-80 per cent between now and 2025".[235]

197. Representatives told us that they experienced great difficulty recruiting from the resident population. Mandy Thorn of the National Care Association reported that the three month moving average of notified vacancies for care assistants almost doubled between December 2006 and December 2008.[236] The English Community Care Association told us that:

Some providers have reported that during repeated adverts through Job Centre Plus, they have had no response whatsoever from EEA sources. Others report that whilst some jobs have been able to be supported by EEA immigrants there is not sufficient supply of EEA workers that are suitably qualified to undertake carer roles.[237]

The sector has instituted many recruitment and retention initiatives which include widespread advertising including in Europe, the care ambassadors scheme, close working with local authorities, and supporting people back into the care workforce.[238]

Labour market data analysed by the Migration Advisory Committee in April 2009 found that, for senior care workers:

JobCentre Plus data show that the vacancy-to-unemployment ratio for the period February 2008 to January 2009 is much higher than the ratio for all occupations (1.88 compared with 0.38).[239]

198. Our witnesses insisted that the roles of care worker and senior care worker were skilled jobs, as well as in shortage, though they did not meet the points requirements for qualifications, or earnings, for Tier 2. Many of our submissions judged that the requirement for a minimum qualification at NVQ level 3 was prohibitive and unfair to care workers, citing other skills and on-the-job experience as more relevant. The English Community Care Association told us:

Carers and senior carers have many other skills over and above NVQ2. They must adapt and learn to provide care meeting new and changing policy requirements for example around dignity, nutrition, infection control and Mental Capacity Act requirements…the MAC [Migration Advisory Committee] should be required to consider carer skills in the round rather than simply rule out access to Tier 2 because of a national minimum standards framework set out by government.[240]

199. Together Creating Communities (TCC), Janet Ryder AM, Mark Isherwood AM and Chris Ruane MP pointed to the Filipino community as being particularly hard hit. TCC stated:

Care homes have relied on this quiet, compliant and dedicated work force for years and vulnerable older people know, love and are used to them. Anecdotal evidence given to us is that when these Senior Care Workers are replaced by others from eg. the EU there is a huge turnover in staff as the new workers do not remain in post for long.[241]

200. In terms of the salary requirement, the English Community Care Association pointed to long and unsociable hours and low wages as a deterrent to UK residents taking up care posts, but argued that these conditions were simply unavoidable since the sector as a whole was under-funded:

Independent evidence around the country shows that care homes are seriously under-funded by council and NHS commissioners. The majority of care home costs relate to staff and the shortfall in funding forces the sector to pay low wages. The result is that UK and to a lesser extent EEA staff are sometimes reluctant to take jobs in care homes… the trade associations accept that higher wages could possibly ensure more UK and EEA recruits, but while state funding remains inadequate then this solution is simply not feasible.[242]

The Migration Advisory Committee, in its April 2009 report, concurred that it was difficult to recruit locally to this occupation:

COMPAS told us that they had surveyed employers and found that nearly half consider it difficult to recruit UK-born care workers, despite 9 in 10 home care organisations undertaking at least some actions to recruit from the local labour market.[243]

201. During the course of our inquiry the Government included Skilled Senior Care Workers on its November 2008 UK shortage occupation list. Inclusion is, however, subject to a minimum wage earning of £8.80 per hour after deductions for accommodation and meals etc. The current statutory minimum wage for UK residents is £5.73 an hour.[244] Together Creating Communities and Janet Ryder AM pointed out that the £8.80 minimum wage requirement created the danger of a two-tier pay scale within the sector which would make it less likely for homes to pay it:

While supporting the principle of a living wage for all workers, it seems anomalous of the UK Government to introduce this piecemeal for foreign workers. This is considerably higher than the minimum wage for workers from the UK and EU, and it places care homes in a very difficult position. They cannot give one rate of pay to some workers and not others.[245]

202. The Migration Advisory Committee reviewed the occupations of care assistants and home carers for its April 2009 UK shortage occupation list, on the request of the Government. It concluded:

We believe that more could be done to attract workers from within the UK and the wider EEA. We accept, however, that much of the problem is down to low pay, and employers are often unable to pay more because of constraints imposed by local authority funding…In the short term we accept that it would be sensible to fill some of this shortage using non-EEA immigrant labour.[246]

The MAC therefore retained the occupation of Senior Care Worker on its April 2009 UK shortage occupation list, but reduced the salary requirement to £7.80 per hour, and the qualification requirement to 'a relevant NQF [National Qualification Framework] level 2+ or equivalent qualification', plus at least two years' relevant experience, plus supervisory responsibility in the role to which they are being recruited.[247] With respect to these new criteria, it noted that:

One-fifth of workers in the occupation [senior care worker] in the Labour Force Survey earn £7.80 per hour, have an NQF level 2+ qualification and have two years' or more experience.[248]

NURSES

203. In order to practice in the UK, nurses must register with, and be approved by, the Nursing and Midwifery Council (NMC). NHS Employers told us that "the current number of effective practitioners from overseas (non EEA) is 73,900. This is 11 per cent of the total Nursing and Midwifery Council registrants (663,078)".[249] The figure covers nursing homes and the residential sector as well as the NHS. Alastair Henderson of NHS Employers noted that:

There has been a fairly significant decline in the number of nurses outside the EEA that the NMC has registered. In 2004 they registered 14,000 which was roughly the same number as UK registrants. Last year they registered 4,800 which was only a third of the number of UK people they were registering.[250]

He suggested that this decline in international recruitment was due to increased training and recruitment initiatives by the NHS whereby it had "increased the number of qualified nurses that it has very significantly".[251]

204. The Migration Advisory Committee came to a similar conclusion in its April 2009 UK shortage occupation list, stating that "overall, recruitment to the nursing profession remains buoyant and vacancy rates have decreased significantly since 2003. There is not strong evidence to support nurses going on the shortage list for the UK".[252] It therefore included only two nursing specialties—theatre nurse and critical care nurse—on the list.[253]

205. Alastair Henderson did not consider that the minimum salary requirement under Tier 2—set at £17,000—would prove a problem for nurses, noting that "the basic pay for a qualified nurse now begins at £20,225. If you are in London you will get an additional £4,000".[254]

206. The Royal College of Nursing had a specific concern, that nursing qualifications were not adequately recognised under the Points Based System—including nursing diplomas taken in the UK, and both nursing degrees and nursing diplomas taken overseas:

The Diploma in Nursing is not recognised under the points-based system and appears to achieve no points.[255]

Under Tier 2 of the Points Based System neither nursing degrees nor nursing diplomas awarded overseas attract any points according to the UK Border Agency's points-based calculator.[256]

207. The Royal College of Nursing pointed out that access to professional nursing posts in the UK was only available following acceptance onto the Nursing and Midwifery Council (NMC) Register of Nurses, and that this tested the professional skill of a nurse, not whether they held a degree as opposed to a diploma.[257] It reported that, although the points calculator on the UK Border Agency website "appears to award NMC registration ten points…the UKBA has confirmed to the Royal College of Nursing via the Department of Health that they do not award points for registration with the NMC".[258]

208. We put these points to the Minister of State for Borders and Immigration, who told us that:

Points are awarded for any qualification at NVQ3 and above and this includes nursing diplomas and degrees. However nursing salaries differ around the UK and in some regions the points attributed for those salaries combined with the points attributed to a diploma (rather than a degree) do not suffice to meet the points requirements of Tier 2. This is clearly an issue that bears closer scrutiny and my officials are working with the Department of Health to assess the impact it has regionally and what, if anything, should be done to address it.[259]

DOCTORS: AGE REQUIREMENT

209. The British Medical Association wrote to us that doctors would lose out on the age criteria under Tier 1, which only awards points on a sliding scale for a narrow age range between 28 and 32:

The fact that points are not awarded to anyone over the age of 31 does not take into account the lengthy training doctors go through. Those starting medical school at the earliest opportunity (age 18) will not complete the Foundation Programme until age 25. Those who have undertaken another degree before applying to medical school will not complete the Foundation Programme until at least the age of 28 at which point their points allocation for age decreases.[260]

However, when we put this to Alastair Henderson of NHS Employers in oral evidence, he did not feel that the age requirement presented a significant barrier:

It strikes me that certainly for doctors coming in there are likely to be other factors in terms of earnings that may well give them compensatory points, and certainly there are other doctors who can come in on Tier 2 for specific posts where they will get the required number of points.[261]

210. The evidence we received suggests to us that there is a sustained and chronic shortage of care workers within the UK and EEA. This conclusion is supported by JobCentre Plus data showing that the vacancy-to-unemployment ratio for the period February 2008 to January 2009 stands at 1.88, compared with 0.38 for all occupations, and the conclusions of the Migration Advisory Committee. It is also clear that much of the sector has long depended on certain immigrant communities—such as the Filipino community—to fill many of these posts.

211. We were pleased to hear that the nursing sector does not appear to be suffering from a shortage, due in no small part to improved training initiatives for the resident population. However, we note the concerns of the Royal College of Nursing that the nursing diploma in the UK and certain nursing qualifications overseas do not seem to be recognised adequately under the Points Based System. It is clear from the Minister's response that lower points awarded to a diploma rather than a degree, combined with lower salaries in some parts of the country, are proving prohibitive to some nurses. We note that the Government is already reviewing this situation, but recommend that it specifically recalibrates the awarding of points for nurses to ensure that all nurses who possess a diploma and are registered with the Nursing and Midwifery Council attract the same points as those holding a degree and registration.

212. We do not consider the loss of points for doctors under the Tier 1 age category to present an insurmountable obstacle and believe that qualified doctors should have no difficulty gaining compensatory points in other categories.

Information and communications technology

213. We received written evidence from the Indian National Association of Services and Software Companies (NASSCOM). In addition we held roundtable discussions whilst in India with representatives of global IT and telecommunications businesses, including: Tata Consultancy Services, NASSCOM, Perot Systems, Genpact, Expertus, and HCL Technologies.

214. Investment by, and trade with, the Indian IT sector is clearly very profitable to the UK. The British High Commission in Delhi estimated that the Indian IT sector in the UK was worth approximately £3-4 billion annually. Last year 18 per cent of the business of NASSCOM members was conducted in the UK, representing £7.2 billion annually. In 2007, 29,000 UK work permits were issued in India, predominantly for the IT sector. Tata Consultancy Services and others told us that the impact on their business of a reduction in the number of UK work permits issued annually would be severe. Som Mittal of NASSCOM said that Indian business in the UK would be seriously reduced and that most probably companies would seek to move instead into Eastern European countries or to carry out work remotely from India. He considered that there would be a particularly significant impact on medium-sized companies who could not afford to set up offshore centres.[262]

SHORTAGE AREAS

215. Sector representatives told us that, although they sought employees within the local labour market first, their companies frequently required specialist ICT skills which they could not find within the UK workforce. Thomas Simon of Tata Consultancy Services gave the example of specialists such as experts in actuary insurance, or in Bluetooth technology.[263] However, Professor Metcalf of the Migration Advisory Committee presented a slightly different picture of skills shortages. He reported that the Sector Skills Council for IT had argued not to be included on the Shortage Occupation List because "they thought that many of the jobs could indeed be filled from the UK. So the IT occupations are not on the shortage list".[264]

216. We asked witnesses what initiatives existed to increase the skills of the resident population. Mr Simon told us that Tata Consultancy Services had developed bilateral initiatives with several British universities to develop skills currently lacking amongst British engineering and ICT graduates, but noted that there was no wider framework for engaging British higher education on skills development.[265]

INTRA-COMPANY TRANSFERS

217. International firms can bring company workers into the UK for temporary periods under the Intra Company Transfer scheme under Tier 2 of the Points Based System. The Professional Contractors Group described the purpose of the scheme:

ICT work permits were intended to allow a company to bring into the UK an employee based outside the European Economic Area, without having to go through the time consuming hoops of advertising, when that employee has company-specific skills not available in the UK.[266]

218. The number of approved applications for intra-company transfers increased by 47 per cent between 2004 and 2008. Of the total number applied for over those five years, 97 per cent were granted, as set out in the following table:

2004 2005 2006 2007 2008 Total

Applications made 32,770 33,745 43,050 48,735 48,010 206,305

Applications approved 33,645 34,680 43,950 50,230 49,710 212,215

Figure 9: Number of individual work permit intra-company transfer applications made and approved for the period 1 January 2004 to 31 December 2008.[267]

219. Six industry sectors have consistently had the highest number of companies who obtained an approval for an intra-company transfer over the last five years. These are administrative, business and management services; computer services; financial services; manufacturing; retail and related services; and telecommunications.[268] International IT firms account for a large proportion of intra-company transfers. Professor Metcalf of the Migration Advisory Committee told us that, for instance, Tata Consultancy Services brought in about 3,000 workers under ICT in 2008.[269]

220. We heard some evidence that the intra-company transfer route might be subject to abuse. Professor Metcalf told us that:

People coming in to do IT jobs are disproportionately coming in under the intra company transfer route…I am sure it is legitimate for people to be brought in to do the IT projects under the intra company transfer but it is possible that the original intention for that was more like Honda bringing people in from Japan to work at Swindon for a bit, and so we will have a proper look at that route. Clearly, to the extent if there were some real elements for example of displacement or levels of undercutting, then we will report on this.[270]

This view was echoed in written evidence from the Professional Contractors Group (PCG), who argued:

The intra-company transfer work permits are being used to facilitate the offshoring of work from the UK…the provision of ICT work permits must therefore be kept under careful control, and ICTs should only be available in sectors where there are actual shortages in the UK's workforce.

As entry-level jobs in sectors such as IT are offshored, the bottom rung of the career ladder is removed from the reach of the UK's IT graduates.[271]

221. The latest report from the Migration Advisory Committee (April 2009) noted that in the second quarter of 2008, over half of non-EEA migrants reported having a job offer before coming to the UK, and for around half of these, the job was with their current employer: an intra-corporate transfer.[272] That means that about one quarter of all non-EEA migrants interviewed in that period entered the UK on an intra-company transfer.

222. Professor Metcalf told us that the Migration Advisory Committee had been asked by the Home Secretary to review the case for the continuing existence of the intra-corporate transfer route, on which he expected to report by July 2009. He told us that, if the Migration Advisory Committee were to recommend closure of the route the impact would be substantial:

If the committee were to decide, for example, that there was less of a case for intra-company transfers, and by definition those using them presently are people in information technology—we have referred to Tata, for example—then it would be very much more difficult for Tata to bring people in.[273]

223. The Professional Contractors' Group recommended that "the Government [should] alter its current policy, to ensure that ICT workers coming to the UK do indeed have relevant company-specific knowledge. Above all, the number of points needed to obtain an ICT permit under the Points Based System should be revised if it becomes apparent that the current level of provision of ICTs is not in the best interests of the UK economy".[274]

224. We were presented with conflicting evidence on the requirements of the information and communications sector in the UK and internationally. On the one hand, the global businesses we met in India argued persuasively for the need to allow skilled workers to transfer between their different international offices, and that they could not always locate certain specialist skills from within the UK graduate workforce. On the other hand, evidence to the Migration Advisory Committee from the Sector Skills Council for IT denied the existence of any serious shortage, and the Professional Contractors' Group suggested to us that the use of intra-company transfers was removing jobs from the UK workforce.

225. The figure cited by the Migration Advisory Committee, that around a quarter of non-EEA migrants surveyed in the second quarter of 2008 were found to be in the UK on a form of intra-company transfer, certainly raises a suspicion that this route is being used disproportionately. We also note that the number of intra-company transfers granted went up by 47 per cent between 2004 and 2008, whilst the economy has moved into recession, which we consider to be a striking increase. We note that intra-company transfers give a significant amount of discretion to individual companies to determine who may enter the UK to work and possibly to settle and become citizens. We therefore conclude that urgent and rigorous investigation is needed into the intra-company transfer and possible abuses of this route, and agree that, at the very least, more stringent tests of company-specific knowledge may be required. In this context we welcome the review currently being undertaken by the Migration Advisory Committee, and keenly await the results in July.

226. We underline however, that investment in the UK by major international companies is of huge benefit to the UK economy. We caution that it is very much in the UK's interests to ensure that good relations with global businesses continue. The imposition of unnecessarily prohibitive restrictions or administrative burdens should therefore be avoided.

Legal services

227. We took oral evidence from Des Hudson of The Law Society and Sarah Lee of Slaughter and May, Solicitors. In addition we received written evidence from The Law Society. Witnesses reported difficulties with two specific aspects of the new scheme: the ability to take on short-term secondees from international law firms, and the way in which international graduate exchanges would operate under Tier 5.

GOVERNMENT AUTHORISED EXCHANGE SCHEMES

228. Des Hudson of the Law Society described the way in which the legal and financial sectors frequently required specialist lawyers to move between international firms:

The transaction of international law means that law firms in England and Wales must have a wide range of connections if they are to operate in a highly competitive global market and deliver cross-border international transactions. They will do that either because they have employees in their office in another city and jurisdiction or—it is very important and so I stress it—because they have a relationship with, say, a firm of lawyers in Shanghai and want to bring people from that office to spend some time in London because the interchange and flow of ideas is critical to their ability to provide a seamless service across all of those markets.[275]

Sarah Lee of Slaughter and May agreed:

We operate the "best friends" model whereby we have close relationships with law firms in different jurisdictions where we need to develop very close relationships with them because the kind of advice we give is often concerned with cross-border deals where legal advice is required from many different jurisdictions. We are English lawyers and we cannot provide that advice on our own and therefore we need relationships with other law firms so we have access to their legal services.[276]

229. The Law Society noted the value of the legal sector to the UK and the impact that reducing the competitiveness of law firms could have on its economy:

The legal services sector contributes £18 billion (nearly 2 per cent) of UK GDP, with annual international earnings of £4 billion. Much of these earnings are generated by large City firms that operate in a global marketplace. London has 20 per cent of the global legal market and is home to four of the world's top six law firms.[277]

230. Tier 5 of the Points Based System contains the Temporary Worker category which allows people to travel to the UK to satisfy primarily non-economic objectives. One of the five subcategories of the Tier is Government Authorised Exchange Schemes, which are intended for migrants coming through approved schemes aimed at sharing knowledge, experience and best practice. Migrants entering under this category are granted a maximum of 24 months' leave. Individual employers are not allowed to act as a sponsor under this scheme. Instead, there must be an overarching body that runs and administers the exchange scheme. This overarching body acts as the sponsor. The scheme and the overarching body must have the support of a UK Government department.

231. Des Hudson described the benefit of graduate lawyer exchange programmes:

We run something called International Lawyers for Africa. Every year about 30 or so lawyers from Africa come over here and spend about three months with firms in England and Wales. That interchange has two benefits. First, it is a jolly good thing that we help lawyers in those countries to gain experience of international law in leading global firms, but, second, we are also socialising them to choose to use English law and firms in international activity^..[278]

232. The Law Society reported problems with designating and getting approval to be an overarching sponsor body for such exchange schemes. In written evidence it stated:

Tier 5 offers a mechanism for firms which move secondees between firms in a network of partnerships. This model has not been well understood by UKBA which had focused on intra-company transferees between offices of a PLC operating in several countries…Previously, UKBA policy required a "direct link by common ownership or control", which does not apply to such networks. Following representations, UKBA has indicated that international networks of partner organisations operated by law firms will be recognised as linked companies for the purposes of intra-company transfers.[279]

233. Des Hudson expanded on this in oral evidence, saying that the process for registering as an overarching sponsor was "very problematic". He knew of only one other organisation which had been able to achieve overarching body status: the British Council, and expressed "doubts about whether professional bodies in [other] areas would want to go through the hassle we have experienced".[280]

234. However, giving oral evidence, the Minister for Borders and Immigration, Phil Woolas MP, later told us that the UK Border Agency was in discussion with the legal sector to solve the problems it was encountering with registering as a Tier 5 sponsor. He told us "we are listening carefully to those concerns, have potentially got a way forward and are waiting for them to make further representations about how they would want to".[281] The Law Society subsequently confirmed to us that the difficulties with registration had been mitigated through negotiation with the UK Border Agency.

235. We welcome the changes made by the UK Border Agency to the registration process for Tier 5 overarching sponsor bodies, to enable international legal and financial firms to continue to run exchange schemes and maintain partnerships with international law firms in other jurisdictions.

Higher education and students

236. We took oral evidence from Professor Wellings of Universities UK and Simeon Underwood of the London School for Economics and Political Science (LSE). In addition we received written evidence from the University of Oxford, Universities UK, the LSE, the National Union of Students, and the University and College Union. The Higher Education sector had concerns about the system of sponsoring short-term academic researchers, and several other areas on which they agreed concessions with the UK Border Agency during the course of our inquiry.

237. Phased implementation of Tier 4 (students) of the Points Based System began in March 2009, and is due to be completed by February 2010. Non-EU students wishing to study at a UK higher education institution will have to be enrolled on a course at Level 3 or above on the National Qualifications Framework (NQF) or its equivalent. Under the sponsorship arrangements, international students will only be able to apply for a visa if they are sponsored by an accredited further or higher education institution, and issued by them with a Certificate of Sponsorship.

238. In order to sponsor students, institutions must register with the UK Border Agency, and be approved as a legitimate institution. In addition they must prove that they hold valid accreditation from one of the UK Border Agency approved accreditation bodies. As with the system of sponsorship under the other tiers, educational institutions are asked to take on greater responsibility for the students they sponsor, including reporting failure of students to enrol or attend courses, and keeping personal details updated. Institutions will issue prospective students with a Confirmation of Acceptance for Studies certificate, via the Sponsorship Management System. This is a database run by the UK Border Agency. Students are awarded 30 points for a visa letter/Confirmation of Acceptance for Studies, and must score 10 points for maintenance (fees and living expenses) to pass the points-based assessment and be able to apply for a visa.

239. As of 27 April 2009 just under 1,600 educational establishments had been accepted onto the Tier 4 register of sponsors. Around 30 applications from educational establishments to become sponsors had been unsuccessful.[282]

INTERNATIONAL STUDENTS IN THE UK

240. There are 240,000 international students registered at UK universities.[283] At the LSE, 30 per cent of students are from the UK, 20 per cent from other EU countries, and 50 per cent from non-EU countries. The LSE gets graduate applications from 177 countries; 67 per cent of which are from non-EU countries.[284]

241. International students provide a major income source for British universities. Simeon Underwood told us that, for the LSE:

In the financial year 2007-08 we have £60 million in tuition fees from international students, compared for example to £29 million from the Funding Council in our block grant. The tuition fees that we receive from international students amounts to about one-third of our income.[285]

He explained that:

Universities only have a limited number of sources, other than direct government funding, to look at. At a time of recession those sources become even more difficult to access…industry is a willing partner but not in a position to give us much help at the moment.. So, in this context, the income we get from international students is critical to us, but I do not think it would be true to say that we have prioritised this over our responsibilities to home students.[286]

TIER 5 SPONSORED RESEARCHERS

242. Under the Points Based System, researchers visiting UK universities to take part in formal research projects but who are not contracted employees of the host organisation have to enter under the Government Authorised Exchange scheme of Tier 5. This requires them to be sponsored by an overarching body which is not the individual educational institution. Several universities criticised the illogicality of this position. The University of Oxford pointed out that sponsored researchers made up a large proportion of their work permit holders: in 2007 76 of 216 initial work permits obtained were for sponsored researchers.[287] The University wrote that:

We are very concerned about the requirement that individuals entering the UK under the Tier 5 "Government Authorised Exchange" category must have a single UK-wide sponsor…Giving responsibility for these researchers to a third party rather than their host institution seems to work against Home Office policy to make institutions responsible for migrants in other categories.[288]

Universities UK added that "there are no existing national third party organisations that would be able to act as sponsors for this group of migrants".[289]

243. The University of Oxford recommended that higher education institutions themselves, rather than an overarching body, should be able to act as sponsors for sponsored researchers under Tier 5.[290] Universities UK agreed,[291] as did the LSE.[292]

244. We conclude that it is illogical for sponsored academic researchers to fall under Tier 5. Academic researchers, perhaps unlike other temporary workers under Tier 5, typically come to a specific institution for a specific project and specific time period. Given that the institutions to which they will be attached will already hold a licence to sponsor students, requiring researchers to obtain sponsorship from an entirely unconnected third party simply seems to be reinventing the wheel. In addition there currently exists no such suitable overarching body. We therefore recommend that the Government revise the sponsorship provisions of Tier 5 to allow higher education institutions to sponsor their own academic researchers.

VISA LENGTH; CERTIFICATES OF ACCEPTANCE FOR STUDY; VISITING ACADEMICS

245. We had representations from the sector that the maximum visa length under Tier 4, four years, was less than the length of some courses, such as those in medicine or veterinary science. However, Professor Wellings and Simeon Underwood were able to confirm in oral evidence that they were "very pleased to receive notice last week from the Minister for Immigration who has now accepted our representations on issues to do with students who are studying on courses for periods of time longer than four years".[293] The Minister for Borders and Immigration, Phil Woolas MP, confirmed to us that "we have been able to give that decision to them precisely because the points based system gives us better assurances about genuine student attendance, about genuine colleges etc".[294]

246. Similarly, the sector was initially critical that only one institution could issue the Certificate of Acceptance for Studies—needed to apply for a visa—to each student. The LSE remarked that this was at odds with the practice of student recruitment, whereby students applied to several different institutions and very often considered several offers before deciding which one to accept. The LSE stated that:

The first Learning Provider to issue a CAS [Certificate of Acceptance for Studies] blocks all other Learning Providers from issuing a CAS for the same or any overlapping period…the student visa is Learning Provider specific so students can only enrol at the Learning Provider that has issued them with a CAS.[295]

However, in oral evidence Simeon Underwood reported that the UK Border Agency had responded to universities by allowing multiple certifiates to be issued to one student. He considered that this was "certainly better than the original proposal" and they could "certainly live with the compromise we have".[296] The LSE also wrote to us to say that:

UKBA have, in response to concerns raised by us and others in the HE sector, amended several elements…in particular we welcome the move to a phased implementation, development of functionality to upload student data into the Sponsor Management System, the system of attendance monitoring based around points of contact and acceptance of the principle of multiple CASs.[297]

247. The University of Oxford reported that some academics visiting for short periods had experienced difficulties in obtaining visas, for example:

One group of senior academics, invited to a 2-day workshop in Oxford, were asked by the visa post to provide, as well as their letters of invitation, their marriage certificates, certificates of employment and salary, plus bank statements and payslips for the previous 3 months, all translated into English, and to supply both the original documents and photocopies. This level of bureaucracy is wholly disproportionate for a 2-day visit to attend a well-documented meeting.[298]

In oral evidence, Professor Wellings noted that he had heard of isolated incidents where academic visitors had been refused, but said that the sector would have difficulties if such refusals proved to be more widespread.[299]

248. We welcome the flexibility shown by the UK Border Agency in meeting the concerns of the higher education sector over visa length, and the issue of multiple certificates of acceptance for study to the same student. We heard of incidents where visiting academics had been prevented from attending events at UK universities by overly-bureaucratic requirements for paperwork. Although there does not appear to be widespread concern in the sector over this issue, we recommend that the UK Border Agency investigate the extent to which such cases are occurring.

Arts and entertainment

249. We took oral evidence from Ruth Jarrett of the Royal Opera House, Louise De Winter of the National Campaign for the Arts and Malcolm Clay of the Association of Circus Proprietors of Great Britain. In addition we received written evidence from the Royal Opera House, the Arts Council England, the Association of British Orchestras, the First Contact Agency, the National Campaign for the Arts, the Association of Circus Proprietors of Great Britain, and Asgard. We also visited the Royal Opera House in Covent Garden to discuss their experience of the Points Based System in relation to international ballet dancers, singers, and other artists.

250. International performers and artists are a vital part of the success of the internationally recognised UK arts scene. In a recent survey of its 550 members, the National Campaign for the Arts found that 76 per cent of respondents had hosted artists from outside the EEA in the past two years: 55 per cent considered it vital to their business; and that only 2 per cent of respondents stated that they would work with fewer non-EEA artists in the future.[300] The Association of Circus Proprietors (ACP) stated that:

Certain countries have traditionally been the source of particular circus acts e.g. flying trapeze acts are often from Mexico or occasionally from the USA, acrobatic troupes are often from Russia or other former Soviet countries because there has been a long tradition of circus training schools, high wire walkers are often from Colombia, Kenya produces a very distinctive acrobatic tumbling act which incorporates traditional dance and China has its own culture of acrobatics.

These performers are usually on an international circuit in that they will work within Europe for several years taking contracts with different circuses for summer and winter seasons which may involve moving countries.[301]

251. Under the Points Based System artists and performers can enter either via Tier 2 (skilled migrants with a job offer) or Tier 5 Creative and Sporting. Louise De Winter of the National Campaign for the Arts considered that "the vast majority of artists will come in under Tier 5. Those would probably only be coming in for a tour or a gig or to attend a festival or event".[302]

252. Our witnesses highlighted a number of problems with the new system, including difficulty for certain groups of artists in meeting the qualifications requirement, and the need to get emergency visas for replacement performers at short notice.

BALLET DANCERS

253. The Royal Opera House and others argued the case for a special exemption for international ballet dancers, who, they argued, would fail to meet the points requirement for Tier 2 since they did not possess formal qualifications. The Arts Council England stated in written evidence that:

There are few dancers in the UK qualified to be engaged by our flagship companies, such as The Royal Ballet and the Birmingham Royal Ballet as Principal Dancers, and it is common practice for dancers to be engaged from abroad. At present only one of The Royal Ballet's 19 Principal Dancers comes from the UK. Across the rest of Arts Council England's regularly funded touring companies, 23 per cent of dancers come from outside of Europe. Most have trained professionally to conservatoire level, but do not always hold degrees.[303]

254. We discuss the broader issue of measuring skill by professional experience and training as opposed simply to qualifications above, in Chapter 6. However, we note that the Migration Advisory Committee included 'skilled ballet dancers'—who must be trained to the standard required by internationally recognised UK ballet companies—on the UK shortage occupation list for November 2008, and in the April 2009 list added 'skilled contemporary dancer'. This was welcomed by the sector. Ruth Jarratt told us "we think it is the simplest, cleanest and most appropriate solution. We are very pleased".[304]

255. Industry representatives remained concerned that similar problems with gaining recognition for training or professional skill where a performer did not possess formal qualifications also applied to other artists.[305] Louise De Winter of the NCA acknowledged that the UK Border Agency had indicated it might take levels of training or a record of performance into account, but remained anxious that "we do not entirely know yet how many points they will allocate for those".[306] The April 2009 UK shortage occupation list also included 'skilled orchestral musician'.

256. As discussed earlier (paragraph 111-112), we consider the use of formal qualifications as a proxy for professional experience and training to be inadequate, and we reiterate our position that the Government must recalibrate the allocation of points to recognise professional experience and training. However, we welcome the inclusion of 'skilled ballet dancers', 'skilled contemporary dancers' and 'skilled orchestral musician' on the latest UK shortage occupation list as an interim measure.

EMERGENCY VISAS

257. Arts organisations argued that they frequently had to replace leading artists at short notice, such as when an opera lead was taken ill and a replacement had to be found, sometimes with under 24 hours' notice. The National Campaign for the Arts (NCA) argued that the requirement to make a visa application in person and in the applicant's normal country of residence was prohibitive to finding replacement artists in such cases:

In February 2008 when Anna Netrebko feared she would be unable to perform the lead role in Traviata the next day the ROH were faced with having to find a replacement for one of the greatest opera stars. Netrebko had received outstanding reviews and the replacement needed to deliver a performance which would not disappoint an audience who had in large part booked specifically to hear her. The Albanian Ermonela Jaho had the right artistic credentials and was reported by her agent to have an Italian passport but it transpired that she merely had Italian residency. Again, high level Home Office help made it possible to resolve the issue, otherwise the performance would have had to be cancelled and around £200,000 worth of tickets refunded. This pragmatic action would not be possible under the new system.[307]

258. The Royal Opera House agreed, explaining that:

Singers of international standing are booked for leading roles in each production (a run of around 4-10 performances). Each opera singer has a collection of roles in their repertoire; some roles are quite specialist due to technical difficulty or rarity of performance. A significant proportion of the singers we book are visa nationals. It is a risk with live opera performance however that singers get sick, notably with sore throats, and have to cancel at the last minute. This happens at The Royal Opera on almost a weekly basis.

In the event that this occurs to one of the lead singers, we have to scout the world for a top-calibre singer who knows the role and is free to fly immediately to London. Sometimes we find a European or non-visa national. Sometimes however the only person or persons available are visa nationals. In this situation in the past the singer has been able to enter the country as a visitor and with Home Office help a work permit has been organised in time for their entrance on stage. However under the new arrangements a singer will not be able to board the plane until full clearance has been arranged. The problem here is the quick turnaround that The Royal Opera needs on these occasions - usually hours, certainly less than 24 hours in most cases, and often at weekends. We have to get the singer straight to the airport but the new system will require a visa national to apply for a biometric visa before they leave the country they are in and this could take days and may require them to travel to a city some considerable distance from where they are at the time.[308]

259. The Royal Opera House noted that "the alternative would be to cancel performances with all the loss of revenue (up to £225,000 in refunded tickets for a single performance) and damage to our reputation which would go along with that".[309] The Association of British Orchestras (ABO) and the Barbican in written evidence expressed very similar concerns regarding the need to obtain visas for replacement of lead performers at short notice.[310]

260. The Minister for Borders and Immigration, Phil Woolas MP, felt that the number of cases in which this would be a problem "would be, in my view, extremely limited". He considered that "the concerns of the arts sector are exaggerated" and argued that, in the event of a major international tournament or performance being jeopardised, "the Minister would be able to exercise discretion".[311]

261. We agree that the time delays associated with obtaining biometric visas make it almost impossible for international artists and performers to be recruited in an emergency situation, in which they might require a visa to be issued within 24 hours. Although the industry has in the past appealed in such situations directly to Ministers, this seems an extremely cumbersome process to be adopted as routine. We therefore recommend that a specific exemption be made to enable fast-tracking of visas for exceptional emergency cases such as international artistic replacements.

Agriculture and horticulture

262. We took oral evidence from Paul Temple of the National Farmers' Union and James Davies of HOPS Labour Solutions. In addition we received written evidence from the National Farmers' Union and HOPS Labour Solutions. We took evidence from representatives of the agriculture and horticulture industries about their ability to recruit seasonal low-skilled labour, and on recruiting skilled workers under other tiers.

LOW SKILLED LABOUR

263. At present, Tier 3 (low skilled labour) is suspended indefinitely, since the Government believes it can meet the UK's low skilled labour needs from within the EEA workforce. Witnesses reported a shortfall in seasonal labour, despite an increase in the quota for SAWS. James Davies of HOPS Labour Solutions told us "we are currently looking at about a 5,000 shortfall. We have had an increase in our SAWS quote for this year of 5,000 but that has only gone part of the way".[312] He attributed this to the economic downturn, which was driving workers to other EU countries or back to their home country.[313] The National Farmers' Union noted that the Home Office had reported "declining A2 applications to work in the UK from 10,420 in Q1 2007, to 8,205 in Q1 2008".[314]

264. Both the National Farmers' Union and HOPS Labour Solutions argued for the implementation of a circular migration scheme to replace the Seasonal Agricultural Workers' Scheme,[315] which they argued could fall under either Tier 3, or under Tier 5. HOPS Labour Solutions recommended that:

The continuation of the SAWS or its replacement would best fit in Tier 5 of the Points Based System. This returns SAWS, or a replacement, to its origin of being a circular migration cultural exchange scheme which in turn helped to meet the unmet demand for seasonal labour.[316]

SKILLED LABOUR

265. The Youth Mobility Scheme under Tier 5 allows young people to work in the UK for up to 24 months. Individual countries must qualify and register for the scheme by demonstrating that they meet a number of criteria including having acceptable levels of immigration risk, having effective returns agreements with the UK, and providing reciprocal youth mobility arrangements for UK nationals. Migrants require 50 points to qualify under the YMS, including 30 points for a certificate of sponsorship (issued by their national government), 10 points for being between the ages of 18 and 30, and 10 points for demonstrating that they have £1,600 to maintain themselves for the first two months following arrival in the UK.[317] As of 19 June 2009, only Australia, Canada, Japan and New Zealand had registered under the scheme.

266. The National Farmers' Union considered that the Youth Mobility Scheme under Tier 5—which replaces the Working Holidaymaker Scheme—could also facilitate skilled and semi-skilled workers, such as skilled sheep shearers and experienced arable harvest workers, in particular those from Australia, New Zealand and South Africa.[318] HOPS Labour Solutions agreed:

Historically our client employers have utilised the Working Holidaymaker Scheme as a source for more senior supervisory/lower management personnel and higher skilled positions such as machinery operation…The removal of the Working Holidaymaker Scheme and the introduction of the Youth Mobility Scheme…will assist to meet the demand for more highly skilled positions.[319]

However, Paul Temple of the National Farmers' Union argued that the £1,600 maintenance requirement for Tier 5 was proving a deterrent to international students taking up this route.[320] He suggested that a better figure would be £500, "as a figure higher than this would be prohibitive to many young people".[321]

267. The National Farmers' Union reported that it also expected to recruit skilled labour under Tier 2, stating that the skill level and salary thresholds for Tier 2 were "set at a level which allowed small numbers of skilled agricultural and horticultural workers to be recruited".[322]

268. The Government needs to make explicit to the agricultural and horticultural industries what provision it intends to make for low-skilled labour to replace the Seasonal Agricultural Workers Scheme, and must do so well in advance of the anticipated closure of the Scheme in January 2010.

269. The economic downturn has already created shortages in seasonal labour for these sectors. The Government should consider how temporary seasonal labour needs could better be met through Tier 5, in particular making the Youth Mobility Scheme more user-friendly. This should begin with reducing the maintenance requirement, currently set at £1,600, which is an unrealistic sum to expect students entering the UK for temporary periods to possess.

202 Ev 86 Back

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204 Ev 88 Back

205 Q 82 Back

206 Presentation given to the Home Affairs Committee seminar on the Points Based System in North Kensington by Bangloor Rashid, President of the Bangladeshi Caterers' Association, on 23 June 2008. Back

207 "Not too many cooks", The Guardian (Education), 6 May 2008 Back

208 Q 99 Back

209 Q 103 Back

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211 Ev 87 Back

212 Presentation given to the Home Affairs Committee seminar on the Points Based System in North Kensington by Bangloor Rashid, President of the Bangladeshi Caterers' Association, on 23 June 2008. Back

213 Ev 86 Back