Memorandum submitted by Association of
the British Pharmaceutical Industry (ABPI)
ABOUT THE
ABPI
The Association of the British Pharmaceutical
Industry represents more than 70 companies in the United Kingdom
producing prescription medicines. Its member companies are involved
in all aspects of research, development and manufacturing, supplying
more than 80% of the medicines prescribed through the National
Health Service.
The ABPI has consulted with its members on the
issues that limiting non-EEA migration might have to their UK
business, they have responded with significant concerns, outlined
below.
EXECUTIVE SUMMARY
1. Any restriction on movement for key roles
would have a major adverse effect on the economic health of companies
based in UK and is strenuously opposed. The impact of imposing
restrictions on intra-company transfers (ICTs) and recruitment
of highly skilled scientists and engineers is likely to be in
direct conflict with Government and UK business aspirations for
economic growth in the life science sector.
2. Companies have invested in the UK, in
many cases making the UK their European headquarters or European
research and development hub. International headquarters of global
companies and centres of research excellence need to employ staff
from around the world and, where necessary, recruit globally.
3. Many of the key scientific areas where
pharmaceutical companies need to recruit world leading scientists
are niche areas which do not currently feature in the Shortage
Occupation list. Merging of the Resident Labour Market Test and
Shortage Occupation List would be hugely restrictive and require
significant and regular expansion of the list.
4. Individuals are brought in to the UK
through ICTs for many different reasons; including professional
development to learn about the ethos of UK businesses. It is costly
to the company to bring these people to the UK; hence ICTs are
only used when there is a strong business case or management development
requirement. Any restriction in ICTs would be of major concern
to pharmaceutical companies in the UK.
5. Many opportunities for UK employees exist
as a result of ICTs. These include career development opportunities
to transfer out of the UK; to manage an individual who brings
fresh ideas to the organisation, to work in partnership with them,
or to learn new skills from a migrant with expertise in a niche
area.
6. Companies generally take full responsibility
for employees entering the UK as ICTs and hence these individuals
draw only minimally on public services whilst on assignment.
The impact a cap on non-EU economic migration
would have on the ability of UK business and industries to recruit
the skills and staff they require
7. Pharmaceutical companies have major concerns
over potential restriction on ICTs at the same time as limiting
migration through other routes.
8. ICTs cost a company, on average, three
times the equivalent UK employee, and hence are only used when
there is a genuine business need.
9. As international businesses pharmaceutical
companies need to be able to recruit the best people to a role
irrespective of their country of origin. For example, Pfizer's
global research into pain, allergy and respiratory diseases is
currently based at its hub in Sandwich, Kent. Pfizer needs to
be able to employ well qualified, experienced specialists in these
therapeutic areas in Sandwich, and specialists in regenerative
medicine for their centre in Cambridge. If they were unable to
employ the person in the UK and had to employ the person at another
site in a different country; then specialist areas of work might
then be moved to that site. There have been multiple recent examples
where companies have moved R&D in specialist disease areas
away from the UK.
10. The impact of restricting non-EEA recruitment
and ICTs on individual companies will, in many cases, be significant.
It will make it particularly difficult to get the right expertise
into a Headquarters or global function located here. One major
pharmaceutical company's global marketing function is scheduled
to transfer to their new London Head Office. Such a move would
be logistically difficult or, indeed, impossible if their ability
to bring people to the UK was further constrained. Both current
and future inward investment could be at risk with consequent
job losses for UK nationals.
11. The specialised skills that many non-EEA
migrants and ICTs provide must be recognised. The possibility
of creating a category of "elite scientist" should be
considered to avoid the scenario where companies move specialist
functions out of UK because they cannot bring in the specialists
required to establish that function and to share their knowledge
and skills with their UK colleagues. The definition of "elite"
should not be based solely on qualifications as technical and
academic knowledge and experience are equally vital to our sector.
12. The reasons for companies wishing to
recruit from outside the EU and for relocating employees to the
UK are multiple and could not normally be met by up-skilling UK
citizens. The issue is not that UK workers do not possess the
right skills but that opportunities are needed for international
assignees to be able to broaden their skills base through working
in the UK and UK top talents are able to work in other countries
to enhance their professional and personal development. In practice
this means that individuals hired in different countries will
be rotated through different markets to gain valuable experience
and training not available in their home country.
13. The well documented concerns over shortages
of high quality science, technology, engineering and maths (STEM)
graduates in the UK is unlikely to be rapidly reversed especially
if, in the current tighter economic climate, funding for teaching
of these expensive subjects is not maintained, and existing programmes
to encourage young people to study these key subjects are curtailed.
14. Speed of response is paramount for business
success. For example when Lilly needed to implement a global IT
operation system in the UK technical experts had to be brought
in for short periods (less than six months). Other short term
assignments might include cover for maternity leave where an individual
with key product knowledge and pharmaceutical industry experience
would be required to maintain the required level of support to
meet the business plan.
The numbers of skilled and non-skilled migrants
likely to be affected by a cap on Tiers 1 and 2
15. The major concern of our member companies
is intra-company transfers; some companies make little use of
Tier 1 migration; others find it currently an essential route
to secure the highly skilled workforce they require. Companies
are, however, concerned that if ICTs are restricted at the same
time as limits are imposed in Tier 1 and other categories of Tier
2 migration, this would be hugely detrimental to their business.
The current interim allocation of very small numbers of certificates
of sponsorship for the period up until April 2011 are causing
significant problems for a number of our member companies.
16. Several large pharmaceutical companies
have commented that their overall migration is well balanced in
terms of migrants in and out of UK and the overall numbers of
migrants entering the UK in our sector is believed to be relatively
small. For example:
— AstraZeneca currently has about 75 non
EEA nationals working in the UK, and 77 UK employees based in
other countries. Their global workforce is 63,000; 9,000 of whom
are based in the UK.
— Pfizer has a relatively small number
of migrant workers in the UK. In the year to March 2010 Pfizer
received 25 permits under Tier 1 and 2 for non-EEA nationals to
enter UK, these individuals brought with them 21 dependents.
— GlaxoSmithKline (GSK) only recruits around
five people a year from outside the EU, however much larger numbers
transfer to the UK from GSK sites overseas. In July 2010, a typical
month, 87 employees left the UK on transfers and 43 came in. This
movement of personnel is essential for the efficient working of
a major global company with its headquarters in the UK.
17. The UK pharmaceutical industry is increasingly
entering into research and development partnerships with small
and medium sized biotech companies (SMEs). Many of these small
companies are made up of international scientists, drawn to the
UK as a hub of scientific excellence. If the UK became a less
attractive location for these SMEs, there would be a significant
knock-on effect.
18. Relatively small numbers of migrants
are likely to be affected by any new restriction but these people
are vital to the companies that employ them. Restrictions on migration
are likely to have an impact that is in direct conflict with Government
and UK business aspirations for economic growth in the life science
sector.
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 auction system for skilled migrants under Tier 2
19. We have not been able to collect and
collate many companies' views on the alternative proposed mechanisms
in time to respond to this question. However the following concerns
have been raised:
— Any kind of quota system would make it
harder for employers to plan effectively for the future; if allocations
were made infrequently (quarterly or longer) this would increase
uncertainty for both the company and potential employee.
— Any delay in recruitment of a highly
skilled specialist under tier 1 (General) would significantly
impact the ability of the business to operate out of UK and would
delay key projects.
— It is vital to avoid US-style "closed
periods". It has been suggested that a Points Based System
with a pass mark that ensures that the limit is unlikely to be
exceeded, be used. The allocation of points for qualifications,
experience, salary and other factors should be reviewed to ensure
that it does not discriminate against the niche specialists who
are essential to maintain a flourishing life sciences industry.
— A "first come first served"
approach is not supported by companies who have shared their views
with us.
20. Companies have also stressed the need
for flexibility in the system with differentiation according to
value-added and scope for fast-tracking to enable urgent appointments
to be made. For example, during the recent H1N1 swine "flu
pandemic" Novartis wished to bring in specialists in influenza
manufacture and also recruit (temporarily) associates with experience
of Good Manufacturing Practice (GMP) processes. Should such a
situation recur, international experts would most likely need
to be brought to the UK to advance provision of a vaccine as quickly
as possible.
Whether and how intra-company transfers should
be included in the cap
21. ABPI member companies are strongly opposed
to any restriction in the numbers of intra-company transfers they
sponsor.
22. Intra-company transfers include short
term (up to six month) and longer term assignments (typically
three years). The numbers involved are usually small, but they
are vital to the business.
23. Companies wish to provide opportunities
for secondment/job rotation as a tool for career development,
talent management, helping with retention and sharing best practice.
Other reasons include sharing information on technologies, training
in specialist scientific issues and helping to address peak workload.
The latter is especially important in the current economic climate
where headcount restrictions are in place.
24. Several companies have commented that
any reduction in the ability to move people in to the UK would
mean fewer career development opportunities for UK employees outside
of UK. This would impact on the ability of a company to actively
grow its talent pipeline and develop future UK and global business
leaders. These may be technical experts, scientists, researchers,
health economists and other specialists, as well as commercial
business leaders.
The implications of merging the Resident Labour
Market Test and Shortage Occupation Lists
25. The current shortage occupation route
list does not include many of the roles crucial to life science
research which are hard to recruit into. An ABPI report in 2008
identified a substantial number of areas where companies were
having difficulty in recruiting the people they needed, even allowing
for global recruitment. The situation has not improved although
restructuring and closing of UK sites has temporarily impacted
on the urgency for these skills gaps to be addressed.
26. Since the report was published, other
major concerns have come to light. One of these is a shortage
of veterinary pathologists. Companies have found that, although
the job of a veterinary surgeon is listed as a shortage occupation,
this closely related role is not included and the Home Office
does not allow veterinary pathology experts to enter under this
category. A recent survey indicated a requirement across the UK
industry for 25-28 veterinary pathologists over the next five
years and given the lack of home-grown veterinary pathologists,
this cannot be met without recruitment from abroad.
27. The shortage occupation list would have
to be substantially expanded to fully cover shortage roles within
the life sciences sector if this became the only route for non-EU
individuals to be recruited. It would be difficult to predict
every occupation where urgent global recruitment of individuals
with specialist skills might be required.
Whether dependents should be included in the cap,
and the effect of including them
28. Pharmaceutical company employees, including
migrant employees and intra-company transfers, frequently have
private healthcare insurance and many of the children of ICTs
attend private schools. Hence they make minimal demands on public
services.
29. The economic and social impact can only
fully be assessed if the demographics and contributions of different
groups of migrants are known. The highly skilled people, predominantly
scientists, middle and senior managers entering the UK as Tier
2 migrants sponsored by pharmaceutical companies make huge contributions
to the UK economy; not only in the taxes and National Insurance
contributions that they pay, but in the knowledge and skills that
they bring.
30. Although many spouses of ICTs do not
work whilst in the UK, others do contribute their skills to the
UK economy. It has not been possible to accurately estimate the
proportion of spouses who are employed in UK, but it is thought
to be approximately 30%.
31. Any restrictions on allowing dependents
to enter the UK with ICTs would be viewed negatively and, if recruitment
was limited to those without dependents, this would be discriminatory.
People entering UK for short term training normally come without
their family currently, but those entering for several years would
wish their dependents to accompany them.
September 2010
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