Immigration Cap - Home Affairs Committee Contents

1  Introduction

The Government's immigration policy

1. The Government announced in May 2010 its intention to implement an annual limit—a cap—on net immigration to the UK. In a statement to the House on 28 June, the Home Secretary said:

    It is this Government's aim to reduce the level of net migration back down to the levels of the 1990s—tens of thousands each year, not hundreds of thousands.

    Of course, it is necessary to attract the world's very best talent to come to the UK to drive strong economic growth, but unlimited migration has placed unacceptable pressure on public services and, worse, severely damaged public confidence in our immigration system...It is important that the Government take full account of the views of business and other interested sectors. We want to ensure that we can properly weigh the economic considerations against the wider social and public service implications.[2]

As a first step, the Government proposed to introduce an annual limit on the number of non-EEA economic migrants coming to the UK to live and work. The Home Secretary announced that a permanent cap on numbers would be implemented from April 2011, with an interim temporary cap in place from 19 July 2010.[3]

2. The Home Office launched two simultaneous public consultations to inform the permanent cap. One, run by the UK Border Agency (UKBA), to consider mechanisms for implementing the cap (with a deadline of 17 September); the other, run by the Migration Advisory Committee (MAC), to advise on the level at which the cap should be set for the first year of its operation (with a deadline of 7 September). The Government intended to publish its confirmed plans for the permanent cap "as soon as possible thereafter and certainly by the end of the calendar year".[4]

3. Non-EEA migration is currently controlled through the Points Based System (PBS), under which those wishing to work or study in the UK must gain points for certain attributes in order to qualify for entry. The PBS was phased into operation by the previous Government between February 2008 and March 2009, and consists of five tiers (only four of which are currently in operation), each of which represents a possible route for non-EEA nationals to enter the UK to work, train or study, as follows:

Tier 1: Highly-skilled migrants

Tier 2: Skilled workers with a job offer

Tier 3: Low skilled workers (indefinitely suspended)

Tier 4: Students

Tier 5: Temporary Workers and Youth Mobility (primarily non-economic routes)

4. Points are allocated according to specified attributes, with a different number of points required for each tier. Tiers 3 and 5 are temporary routes, and immigrants are not allowed to switch out of them once in the UK. Tier 1, 2 and 4 immigrants are eligible to switch between tiers, provided they meet the requirements of the tier they switch into. Dependents are allowed under all four tiers in operation. Tiers 1 and 2 can currently lead to settlement, but Tiers 3, 4 and 5 do not do so directly.

5. Both the temporary and permanent cap will apply to economic immigrants only, those in Tiers 1 and 2. Tier 1 (General) is for highly-skilled immigrants only—they must achieve 100 points based on specific criteria relating to age, previous earnings and qualifications, as well as general criteria relating to savings and English language skills. Tier 2 (General) is for skilled immigrants who hold a job offer in the UK and are sponsored by their employer. Applicants must have a job offer—which has previously been advertised to the Resident Labour Market or is listed as a national Shortage Occupation—from an employer registered with the UK Border Agency, and meet points criteria relating to savings and English language.

6. The temporary cap, introduced by the present Government, was set at 24,100 for non-EEA economic immigrants under Tiers 1 and 2 of the Points Based System. It consisted of three measures:

  • An interim limit on the number of out-of-country main applicants to Tier 1 (General), held flat at the level of the equivalent period of July 2009 to March 2010.[5] This meant the cap would only come into effect if the volume of applications between July 2010 and March 2011 exceeded that in the same period of July 2009 to March 2010, which was 5,400 visa approvals. Tier 1 routes for investors, entrepreneurs and post-study routes were not affected.
  • Raising the Tier 1 (General) pass mark by five points for all new applicants (from 95 to 100 points).
  • A reduction of 1,300 non-EEA economic immigrants who could be offered jobs by sponsor employers through Tier 2 (General). This entailed a 5% reduction from 20,000 Tier 2 visas issued between July 2009 and March 2010, to some 18,700 in the equivalent period in 2010-11. Tier 2 routes for intra-company transfers, ministers of religion and elite sportspeople would not be affected.

The temporary cap did not apply to dependents in either Tier, and excluded those who extended a Tier 1 visa in-country or who switched into Tier 1 from another Tier.

Scope of the Committee's inquiry

7. On 29 July 2010 we announced our intention to conduct a short inquiry into the Government's proposals for a permanent cap on non-EEA economic immigrants. In particular, we wished to investigate:

  • The impact a cap on non-EEA economic migration would have on the ability of UK business and industries to recruit the skills and staff they require;
  • The numbers of skilled and non-skilled migrants likely to be affected by a cap on Tiers 1 and 2;
  • The impact and effectiveness of a 'first come, first served' or a pool system for highly skilled migrants under Tier 1; and of a 'first come, first served', a pool, or an auction, system for skilled migrants under Tier 2;
  • Whether and how intra-company transfers should be included in a cap;
  • The implications of merging the Resident Labour Market Test and Shortage Occupation Lists;
  • Whether dependents should be included in the cap, and the effect of including them.[6]

8. We recognise that the concept of an immigration cap is a vexed and contentious one. However, our intention in conducting this inquiry was not to review the policy basis for applying a cap, but to scrutinise to what degree the Government's proposals might achieve its aim of reducing overall migration, what impact a cap might have on business and services, and how any cap could most fairly and effectively be administered.

9. We took oral evidence on three occasions in July and September 2010, and received 41 written memoranda. A full list of those who gave evidence is annexed. We thank all those who gave evidence for their assistance in our deliberations.

2   HC Deb, 28 June 2010, Col 585-6 Back

3   IbidBack

4   IbidBack

5   The period of July 2009 to March 2010 was chosen to mirror the months of the year that the temporary cap would be in operation: the temporary cap came into force in July 2010 and will run until the implementation of the proposed permanent cap, at the start of April 2011. Back

6   Immigration Cap-Terms of Reference, Home Affairs Committee Press Notice, 29 July 2010,  Back

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