8 Administering the cap|
Raising the points requirement
88. It seems the Government intends to implement
the cap through the architecture of the existing Points Based
System. The advantage of the PBS is that it allows quotas to be
applied differently to the individual tiers, and possibly to different
sectors within those tiers. The Business Secretary has recently
argued for the cap to be applied flexibly so that it can be moved
up or down in line with economic circumstances.
This was echoed in evidence to us from the Confederation of British
Industry, which proposed that:
[The Migration Advisory Committee] recommend
to government both an appropriate level at which annual limits
should be set for the economic tiers and how the points requirements
of the PBS should be altered to ensure these limits were met but
not exceeded. In practice the limits would act more like targets,
with flexibility provided for the MAC and UKBA to adjust the pass
mark upwards or downwards in line with demand for permits.
89. The Points Based System removed discretion from
the visa-issuing process through the implementation of a transparent
points systemif an applicant met specific, objective criteria
relating to earnings, qualifications and skills, then they acquired
the necessary points and a visa was granted. Applicants could
check their eligibility via an online calculator, which told them
instantly whether they would meet the criteria. One consequence
of this process was the removal of a right of appeal against visa
refusals, which the previous Government argued was unnecessary
given the lack of discretion in decision-making. Our predecessor
Committee in the last Parliament welcomed the "aim of transparency
and the introduction of objective criteria" in its report
into the Points Based System in 2008.
90. We support the administration of the cap through
the structure of the existing Points Based System. This would
allow limits to be applied flexiblyas the Business Secretary
has called forand thus bear some relation to industry demand
and sectors where shortages are. Given that there is no right
of appeal under the Points Based System, it is also important
that decision-making should be as open and transparent as possible.
Currently, a visa is issued when an immigrant meets specific,
objective criteria, which are publicly available, and applicants
can check their eligibility against an online calculator. We caution
that, in determining how the cap will be administered, care must
be taken not to lose this transparency.
91. The UK Border Agency consultation proposed several
options for how the cap could be administered, which can be summarised
'First come, first served'
(operated in Australia and the US)
For Tier 1: Under these
systems applications are considered in order of receipt and would
succeed if they met the baseline criteria for qualification under
the tier until the limit was reached. Once the limit was reached
the tier would close to new applications. We believe that such
a system does not necessarily lend itself well to applications
from highly skilled individuals without a job offer as it is not
the most selective.
For Tier 2: A specified
number of visas would be released on a quarterly basis and applications
would be accepted against that quarterly quota. The existing Tier
2 points table, or a slightly revised version, could be applied.
Pooling system (operated
in New Zealand)
For Tier 1: Under such
an arrangement, migrants wishing to be considered for entry to
the UK would undertake a points test, as now. Those who passed
the points test would be able to make an "expression of interest"
by entering a pool of potential candidates. Individuals entering
the pool would receive an immigration employment document which
would confirm that they were in the pool. The UK Border Agency
would, at pre-determined intervals, invite the relevant number
of candidates from the pool to apply for entry to the UK. Those
candidates invited to apply would be the candidates with the highest
For Tier 2: A pool could
also be applied to migrant workers with a job offer who enter
through Tier 2. A specified number of visas would be made available
on a quarterly basis and applications would be accepted against
that quarterly quota.
For Tier 2 only, the consultation
also proposed a quarterly visa auction, under which employers
could make a 'bid' for an allocation of certificates of sponsorship
and the limit would be filled by those "willing to pay the
highest fee". 
92. The consultation stated "it is the government's
view that the fairest approach will be to operate a pool system
for highly skilled migrants entering through Tier 1 ... [and]
a first come, first served system for skilled migrants entering
through Tier 2".
FIRST COME, FIRST SERVED
93. Some witnesses were opposed to a first come,
first served systemthe Government's stated preference for
Tier 2for a range of reasons. Mr Mittal pointed out that
it was likely certain companies would have the ability to get
their applications in faster than others, which would create "distortions
in the system".
Mr Sharp agreed, commenting that it "sounds like chaos to
Watch thought that it risked "stimulating a high volume of
and the British Medical Association that "if the allocation
is not managed effectively then employers could face significant
delays in recruiting staff to the detriment of NHS service delivery".
The British Hospitality Association drew a parallel with "online
bookings for events such as concerts where the quickest on the
regardless of merit".
94. The Immigration Law Practitioners' Association
argued that different visa processing times for UK Border Agency
posts around the worldranging from a day to several weekswould
create bias in favour of certain nationalities. It was "logistically
complex and open to charges of operating in a discriminatory manner".
The Law Society told us that "allowing sponsors to indicate
peak recruitment periods will be essential to ensure that well-established
business planning practices are not disrupted".
On the other hand, the British Association of Social Workers considered
that "if the baseline criteria are right, a first come, first
served system is transparent, fair and workable".
95. Business witnesses were asked about their experiences
of a cap administered on a first come, first served basis in other
jurisdictions. Mr Mittal noted that in the United States there
was a rush of 180,000 applications for the annual quota of 65,000
visas, all of which were made within the first week. Visas were
allocated using a lottery system, which was "most ineffective
96. The Government's stated preference for Tier 1
met with a more mixed response. Migration Watch considered a pooling
system for Tier 1 to be "entirely feasible", suggesting
the limit could be adjusted in the light of other flows.
The British Medical Association agreed that a pool for Tier 1
"appears to be a workable proposal provided that its structure
allows for the identification and prioritisation of individuals
with the most sought-after skills at that time".
97. On the other hand, the British Chambers of Commerce
considered that "although the least worst option ... many
businesses expressed concern that the highly skilled, geographically
mobile individuals who would qualify for such a pool may decide
to approach a country where they will not have to wait around,
as their skills are so highly valued".
The Immigration Law Practitioners' Association argued that it
was not transparent, since the "points required to qualify
are unknown at the time of application" (under the current
system candidates can enter their attributes via an online calculator
and discover instantly whether they meet the points requirement
for a route). It noted that many Tier 1 immigrants, though they
did not require a sponsoring employer, nonetheless came to the
UK to pursue employment opportunities. Candidates entering the
pool would be left there for up to six months "by which time
the employment or business opportunity that attracted them to
the UK is likely to have passed".
The Immigration Law Practitioners' Association also questioned
the fairness of charging an application fee to enter the pool,
when immigrants then had no idea whether they would be successful.
Nicholas Rollason of ILPA told us that:
It is a myth that Tier 1 is a category where
people wonder whether they'd like to come to the UK and live here
for some sort of lifestyle changelooking for a job. Most
people have a job offer or a business opportunity that they go
on to pursue. That is our experience in 99% of cases.
98. Witnesses did not argue in favour of this option.
The Federation of Small Businesses told us that an auction system
would have a particularly adverse effect on the small businesses
which, it said, made up 99.3% of all businesses in the UK:
Instead of ploughing profits back into businesses...small
business owners would be paying money to Government in order to
employ staff who have the skills which the UK education system
has failed to deliver.
99. The British Medical Association was particularly
concerned about the ability of the public sector to engage in
an auction system:
The concept of organisations bidding for visas
with those prepared to pay the largest sums securing the visas
at the expense of less wealthy organisations does not constitute
an appropriate use of public funds. At a time when huge cuts are
being made in public sector budgets, forcing organisations to
use much-needed resources as part of a bidding war for staff does
not seem apt.
Universities UK echoed these fears:
Universities are in receipt of significant public
funding which it would be inappropriate to use to increase the
cost of certificates of sponsorship.
100. Mr Rollason told us that "we would have
these sort of eBay economics ... if the principle is that the
highest payer wins, there will be clear winners who will be the
wealthy companies who have no objection to paying £10,000,
£20,000 or £30,000 to get a banker to come and work
for an investment bank in the UK".
Ms Barrett-Brown added that "it's placing a relative value
on the heart surgeon and the investment banker. The investment
banking business can clearly afford a much higher premium for
an auctioned permit than the NHS".
101. The Minister acknowledged that, in relation
to an auction:
you need to make safeguards. If everything was
auctioned off you can imagine that banks and so on would be the
only people who could afford them and so we could not bring in
anyone in any other sector. There are clear commonsense constraints
which mean that you cannot just operate a completely free market
in this area.
102. We received mixed views on the merits of
allocating Tier 1 visas under a pooling system. Several argued
that it would be overly bureaucratic and uncertain for highly
skilled immigrants who could be held in the pool for up to six
months, only to be told that their qualification had expired.
There does not seem any reason why, rather than a pooling or other
new system, the Tier 1 cap should not be administered simply by
raising the points requirements to a sufficient level to match
the desired quota. This would allow a limit to be applied whilst
ensuring that the most highly skilled were not turned away, nor
kept waiting for months on end with no guarantee of a visa at
103. Tier 2 is more complex, since the particular
skills and individuals required by companies should be the key
determinant of whether a candidate is successful under this route.
It is vital that the Government finalises plans for Tier 2 in
very close consultation with business and service leaders, to
take full account of those needs. We do not consider an auction
workable with regard to Tier 2, since it would almost certainly
have a disproportionate impact on the skills recruitment to the
public sector and small businesses, neither of which could afford
to bid large sums. A first come, first served system for Tier
2the Government's preferred optionmet with multiple
objections, including that there would be a high volume of precautionary
applications and that releasing visas only at certain times in
the year would hamper business planning. Principally, some witnesses
felt that such a system took no account of an applicant's merit.
None was, however, able to propose a preferable alternative. It
may be possible to mitigate some of the criticisms of first come,
first served by stratifying the cap by Tier 2 sectors, to ensure
that some do not dominate to the exclusion of others, that market
needs are always recognised, and to release visas at regular intervals
during the year.
Timing of application
104. Witnesses were anxious about when in the year
visa allocations would be made. Dr Marshall of the British Chambers
of Commerce told us:
Our concern is over a company that comes to us
and asks: what if it needs an engineer with specialised skills
in October or November but the cap for that year has already been
exceeded? Does it mean it takes the decision not to expand its
business? Does it have other options open to it when it knows
that a British person with the same qualifications and levels
of skill may not be available for four or five years because it
needs to train up the individual from scratch?
105. Mr Mittal echoed this: "the cap might be
filled and that could be detrimental because how do you take demand
of what's required down the line for a year or three months?"
Universities UK noted that demand was high for academic staff
over the summer in preparation for the new academic year:
For the higher education sector people need to
start work at certain points in the year and asking employers
to apply again in the next period would be unworkable.
106. The Confederation of British Industry argued
strongly for introducing flexibility into the timing of visa allocations,
the annual cap is divided into monthly allowances,
to ensure that closed periods are avoided. This approach has the
benefit of ensuring that the extremely highly skilled will always
get a visa, as they will pass the higher points test mark.
The British Medical Association agreed that a monthly
allocation of certificates of sponsorship would be more practical.
107. The Law Society proposed that "an
allocation of certificates of sponsorship be kept separate in
each period to deal with exceptional circumstance applications.
Sponsors should be required to demonstrate a clear business case
for an exception to the quota".
Mr Rollason of the Immigration Law Practitioners' Association
noted that, although the temporary cap provided that such exceptional
applications could be made, there were "very hazy criteria
about how those additional allocations will be given. I can tell
you that of all the applications made by all the sponsors in the
UK which were considered by the panel on 1 September, none of
the non-EU nationals being hired were approved".
108. We recommend that the cap should be administered
more frequently than annually, particularly given the experiences
of businesses under the US system, where annual visa allocations
are exhausted within a day or two of opening. This would better
meet changes in sector needs over the course of the year, and
could be monthly, as the Confederation of British Industry has
proposed. We also recommend that a number of visas be held in
reserve so that where businesses or services can demonstrate a
clear business case for bringing in a migrant outside the usual
allocation period, they are able to apply for an emergency visa.
109. The Immigration Act 1971 as amended underpins
all UK immigration law. Section 1 (4) of the Act provides the
Secretary of State with the power to lay immigration rules before
Parliament. A significant number of recent changes to the immigration
system, both by the current and previous governments, have been
introduced in this way through the Immigration Rules, rather than
via primary legislation. Many of these changes have been complex
and controversial, and their implementation in this fashion has
meant that they were not subject to full parliamentary scrutiny,
were rushed through, and consequently attracted judicial review.
The Immigration Law Practitioners' Association told us that:
There have been a number of successful legal
challenges to changes in the immigration rules including the cases
of HSMP Forum,
and English UK
ILPA foresees similar successful challenges to the proposed
cap, the methods of implementation and the consultation process.
ILPA also pointed out that "recent years have
seen instances of changes to the immigration rules with almost
immediate effect, failing to respect the parliamentary convention
of 21 days' notice", noting that this had particularly been
the case in relation to changes to the Points Based System, and
warned that there was "a serious risk that the cap will be
the subject of successful legal challenges on basis of vires
110. There has been a consistent tendency, under
both the current and previous Governments, to rush through complex
changes to the immigration system via amendments to the Immigration
Rules, and we note that this has caused problems. In many cases
changes have been enacted with almost immediate effect, failing
to respect the parliamentary convention of 21 days' notice, and
leading to a spate of judicial reviews. Such unnecessary haste
leads to poor decision-making which is more likely to be challenged
in the courts. We recognise the need to institute a temporary
cap to prevent a rush of immigration applications ahead of the
creation of a permanent cap. However, the Government must ensure
that Parliament be given the opportunity fully to scrutinise all
significant changes to the immigration system before they are
125 BBC News 17 September 2010, Vince Cable criticises
temporary immigration cap. Accessed 20 September 2010. Back
Ev w13 Back
Home Affairs Committee, Thirteenth Report of Session 2008-09,
Managing Migration: The Points Based System, HC 217-I,
para 111 Back
UK Border Agency, Limits on non-EU economic migration: a consultation,
June 2010, p 7: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/aboutus/consultations/limits-on-non-eu-migration/limits-on-non-eu-migration.pdf?view=Binary.
Accessed 4 October 2010. Back
Ibid., pp 7-8 Back
Q 197 Back
Ev 50 Back
Ev w8, para 13 Back
Ev w34 Back
Ev 53 Back
Ev w34 Back
Ev 62 Back
Q 196 Back
Ev 50 Back
Ev w8 Back
Ev 64 Back
Ev 53 Back
Q 228 Back
Ev 46-47 Back
Ev w9 Back
Ev w16 Back
Q 217 Back
Q 57 Back
Q 13 Back
Q 187 Back
Ev w16 Back
Ev w13 Back
Ev w8 Back
Ev w34 Back
Q 204 Back
R (HSMP Forum Ltd) v SSHD  EWHC 664 (Admin); R
(HSMP Forum (UK) Ltd) v SSHD  EWHC 711 (Admin). See
Joint Committee on Human Rights, 20th Report of Session
2006-2007, Highly Skilled Migrants: changes to the immigration
rules, HL paper 173, HC 993, 9 August 2007. Back
R (BAPIO Action Ltd) v SSHD
 UKHL 27. Back
SSHD v Pankina et ors  ECWA Civ 719. Back
R (English UK) v SSHD  EWHC 1726. Back
See, for example R (Chong Meui Ooi) v SSHD 
EWHC 3221 (Admin), Odelola v SSHD  UKHL 25, R
(Limbu) v SSHD  EWHC 2261 (Admin). Back
Ev 52, paras 2-3 Back
Ev 52, para 4. Recent examples of statements of changes in immigration
rules that have come into force the day after they were made include
Cm 7929 (parts taking effect 20 August 2010); Cm 382 (parts taking
effect 23 July 2010), HC 96 was ordered to be printed on 15 July
2010 and took effect five days later; HC 439 was ordered to be
printed on 18 March 2010 and parts took effect on 6 April 2010. Back