House of Commons - Home Affairs Committee

Immigration Cap - Home Affairs Committee Contents

Memorandum submitted by Immigration Law Practitioners' Association

The Immigration Law Practitioners' Association (ILPA) is a professional association with some 900 members (individuals and organisations), the majority of whom are barristers, solicitors and advocates practising in all aspects of immigration, asylum and nationality law. Academics, non-governmental organisations and individuals with an interest in the law are also members. Established over 25 years ago, ILPA exists to promote and improve advice and representation in immigration, asylum and nationality law, through an extensive programme of training and disseminating information and by providing evidence-based research and opinion. ILPA is represented on numerous Government, including UK Border Agency, and other "stakeholder" and advisory groups and has provided written and oral evidence to many parliamentary committees, including to the Home Affairs Committee's last enquiry into the Points-Based System.

EXECUTIVE SUMMARY

— There is a serious risk that the cap will be the subject of successful legal challenges (with costs orders) on basis of vires and rationality.— Perceptions of migrants and businesses as to how the cap will affect them should be studied alongside the detailed empirical analyses of the Migration Advisory Committee.

— ILPA makes available to the Committee the quantitative data provided by the Migration Advisory Committee.

— The first come, first served, pool and auction systems risk discriminating unlawfully given the way in the UK visa system operates across the globe, and constraints inherent in the three models. Equalities impact assessments are required.

— Intra-company transfers should not be included in the cap; they have the potential to provide at least some buffer against perverse and unintended consequences of the imposition of a cap.

— The resident labour market test and shortage occupation lists should not be merged: to do so will make essential jobs impossible to fill. The resident labour market test is designed to identify a very particular shortage: that of a worker to do the job in question. If there are concerns about the test and/or the list these should be addressed directly.

— Dependants should not be included in the cap and should be allowed to work: to do otherwise risks creating a perverse system and discriminating on the grounds of age and gender. An equality impact assessment is essential.

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

1. The Immigration Act 1971 (the Act) 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.

2. There have been a number of successful legal challenges to changes in the immigration rules including the cases of HSMP Forum,[9] BAPIO,[10] Pankina[11] and English UK[12] amongst others.[13] ILPA foresees similar successful challenges to the proposed cap, the methods of implementation and the consultation process. One of the successful arguments advanced on behalf of migrants is legitimate expectation.[14] The principle of legitimate expectation arises where a public body has made a promise or adopted a practice that represents how it proposes to act in a given area.

3. Recent years have seen instances of changes to the immigration rules with almost immediate effect, failing to respect the parliamentary convention of 21 days.[15] The current tendency to change the Points-Based System requirements with almost no notice is very difficult for prospective migrants and their proposed employers attempting to plan for the future, in particular where they have prepared applications.

4. ILPA members are well aware of the strength of feeling among their clients that the proposed cap is irrational and anticipate legal challenges as to its lawfulness, including on the grounds of irrationality.

5. ILPA members advise migrants and employers working and operating across all industry sectors. The view expressed overwhelmingly by members' clients is that the imposition of an immigration cap will stifle economic growth, result in greater burdens on employers and affect the delivery of key public services. The perception of migrants and businesses that businesses will be unable to recruit the staff and skills they require is a key to their future behaviour. ILPA can report on these perceptions. The underlying economic data has been studied by the Migration Advisory Committee.[16]

6. The clearest messages put forward to members is that migrants with a choice of destination will go to other countries rather than to the UK, while multinationals will give serious consideration to leaving the UK to set up their European headquarters elsewhere, pulling out existing investment in the UK, taking some of their employees abroad and making others redundant.

7. Members highlight the effect on small businesses. Often, such businesses will have only obtained a sponsorship licence to appoint one or two key strategic roles, so the limit is likely to have a disproportionate impact on these businesses.

The numbers of skilled and non-skilled migrants likely to be affected by a cap on Tiers 1 and 2

8. The Migration Advisory Committee figures[17] indicate that in 2009:

— Visas were granted as follows—

14, 120	Tier 1 General, Investor, Entrepreneur
04, 245	Tier 1 Post-Study Work
00,335	Pre Tier 1 Highly Skilled Migrant Programme
91,195	Tier 2 Resident Labour Market Test, Shortage occupations, sportspeople, ministers of religion
22,030	Tier 2 Intra Company Transfers
05,165	Pre Tier 2 Work Permits
00,105	Pre Tier 2 Other categories

— Some 15,015 dependants were granted entry under Tier 1 and predecessor schemes, some 26, 990 under Tier 2 and predecessor schemes.

— Some 65,925 Tier 1 in-country applications (including extensions) and some 20, 145 Tier 2 in-country applications (including extensions) were granted.

9. ILPA highlights that the figures on the basis of which the interim cap[18] was set were taken from a period of recession and one during the summer months when recruitment is often at a low.

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

10. A cap that may be unlawful for the reasons described above cannot be effective. Its impact will be determined by the outcome of litigation.

11. Systems must be evaluated in terms of their effect on migrants, their effect on the companies who want to benefit from their skills and the resources required to administer them. ILPA foresees bureaucracy, delay, expense and risks.

12. Contrary to what may be assumed from the UK Border Agency consultation paper,[19] there is not a neat separation between Tiers 1 and 2. The consultation paper is misleading insofar as it suggests that Tier 1 migrants have no job offer; Tier 1 does not require the applicant to have a job offer., however it is commonly the case that applicants'' employment or business commitments/opportunities are the very reason for their application. Many migrants who have a job offer nonetheless enter via Tier 1. This may be because a migrant much in demand can negotiate not to be tied to a particular company or because a company has decided not to go down the route of being a UK Border Agency licensed sponsor (in the case of small businesses, and some larger ones, this may be because hires from outside the Resident Labour Market are very infrequent). The disadvantages of uncertainty for migrants and employers created by the "first come, first served" system and the risks of being unable to identify workers with the skills required to fill a particular post therefore also affect Tier 1.

13. The UK Border Agency consultation paper suggests a pool system is fairer for Tier 1 than a "first come first served" system. The pool system suggested creates delay and uncertainty, skimming off the highest scoring applicants in a certain period so that the points required to qualify are unknown at the time of application and leaving applicants for up to six months (by which time the employment or business opportunity that attracted then to the UK is likely to have passed), thereby deterring those who have other options. It appears to ILPA members unlikely that a pool system will be capable of linear ranking of all candidates. Some elements for which points are awarded, such as satisfying maintenance requirements, are simply mandatory criteria to which an arbitrary number is attached. Others, such as degree equivalences, divide into broad bands. Salaries are ranked in bands, and to do otherwise and let minor differences play a part does not appear equitable and is open to manipulation. There are additional disadvantages if extra points are awarded according to level of English over and above the skilled level required for Tier 1 as this appears to create a bias toward candidates from countries where English is the main language. The need for adequate equality impact assessment is apparent.

14. There is a suggestion that it would be reasonable to require a fee to be paid to enter the pool. Yet candidates within the pool are not, by inclusion in the pool alone, permitted to enter the UK and may find their application rejected after six months due to circumstances wholly beyond their control: the points that other candidates applying at the same time have scored. The proclaimed efficiency of the system would appear to lie in creating revenue for the UK Border Agency and little else; effort is devoted to providing immigration employment documents to persons who may never be permitted to enter the UK and use their skills. For migrants, the prospect of paying a fee for no return and six months uncertainty is likely to be an invitation to look to other countries, in particular those where a successful application would lead at once to settlement.[20]

15. The "first come, first served" system, preferred in the consultation paper for Tier 2, is random in its operation. It's perceived "fairness" is that it is equally unfair to all migrants. But this is not the case. If will affect persons of different nationalities differently. Processing times vary in different posts around the world,[21] creating a disadvantage for applicants in countries with slower processing times. In some countries, such as the United States of America, UK consular posts offer premium and priority service applications (Tier 4 same day service and 48 hour premium service,[22] services which now incur a fee—as to the questionable legal basis for this see Annex 1). In other countries applications take several weeks. Some posts are not connected to the Agency's central IT system, causing further delays. In addition, problems with the Agency's information technology system are far from unknown.[23] The point at which the cap is reached is determined by the number of allowed applications. If consular posts in, for example, Australia, have more staff and work fastest, they may have allowed sufficient applications to reach the cap before applications from, for example, India, have ever been considered. The potential for inequitable treatment is high. Similarly if each post is given a quota, where the size of the quota will affect the chances of nationals from that country. ILPA members are also aware that those companies with a larger migrant workforce are likely to develop the most intricate knowledge of the workings of the system, to the advantage of their prospective employees, of whatever Tier. A global "first come first served" system is logistically complex and open to charges of operating in a discriminatory manner just as is a system that allocates quotas of visas to posts. An equality impact assessment is required.

16. The first come first served system, besides being discriminatory, is not easy to operate, including if applications exceed the limit at which the cap is set on the first day of its operation. There is, ILPA suggests, a limit to the fee that can be charged to a migrant who does not even have any certainty that his/her application will be studied.

17. As to Tier 2, we are at a loss to see how a wholly random system provides certainty for businesses, or enables them to recruit the migrants most needed. There may be certainty within a short period for those whose envelope happens to be at the top of the pile; for the others there is only the uncertainty and difficulties that come with having a key post unfilled, and no means to fill it. The UK Border Agency consultation paper envisages that one could have a post that it has been impossible to find a resident labour market worker to fill, that is in an occupation where there is a shortage and yet be unable to recruit to the post because of the time of submission relative to other applicants, a matter largely beyond the applicant's, or their sponsors' control.

18. As to an auctions system, we rate the chances of this being applied fairly very low indeed. The ability to tender higher fees has no necessary correlation with the need of the business for the worker, indeed it raises the question of whether, had the funds been invested in efforts to make the job more attractive to persons in the resident labour market, it could have been filled. Businesses with lower profit margins, not for profits and voluntary organisations, as well as smaller businesses just starting up, risk being the most adversely affected.

19. There are two reasons why a post may go unfilled from within the resident labour market. One is that no one can do the job; the other is that no one who can do the job wants it. If no one in the resident labour market can do the job, then, if a migrant worker cannot be recruited, the post will go unfilled. If no one in the resident labour market wants the job, then if a migrant worker cannot be recruited the employer has the option of leaving the job unfilled or endeavouring to make it more attractive to those in the resident labour market, for example by increasing salaries and job-related benefits. If the employer cannot afford to do these things, the job will go unfilled. The greater the shortage in the resident labour market, the more difficult it is likely to be to persuade the reluctant to apply. The effect of the proposals appears to be to put the greatest pressure on areas of the labour market where shortages are already most acute.

20. Neither the efficiency nor the effectiveness of the first come first served, pool or auction systems have been demonstrated and all run counter to the analyses of the Migration Advisory Committee as to the net economic benefits of migration,[24] at a time when the UK can ill afford to place its economy in jeopardy.

Whether and how intra-company transfers should be included in a cap

21. Intra-company transfers should not be included in a cap. For the reasons set out above, the effects of a cap on the ability to fill essential roles may be enormous.[25] Caps are untried and untested. The exclusion of intra-company transfers provides, at the very least, a necessary buffer in this climate of uncertainty during the period in which the effects of the cap can, if the will and resources are there, be understood.

22. In recent years and months the intra-company transfer system has been substantially changed and calibrated so that migrants who have spent different periods with the company overseas can come to the UK for different periods.[26] Intra-company transfers of less than 12 months do not count toward net migration, because net migration is measured in terms of those who remain in the UK for 12 months or more. But any attempts to manage the figures by limiting intra-company transferees to short stays in the UK would come at a price: intra-company transferees who come to the UK only for a period of two years or less are often not subject to UK tax.[27] It is unclear why the UK would wish to deprive itself of revenue from taxation at this time.

23. A cap on intra-company transfers is likely to put pressure on the business visitor route, and increase existing confusion about when it can properly be used.

24. There will be concerns that caps on Tiers 1 and (in particular) 2 will lead to efforts to make increased use of the intra-company transfer system as a way to work around the cap.[28] The priority in addressing this must be to examine how the caps are to operate for Tiers 1 and 2: a business needing to fill a key post should not need to be seeking a "work-around". Another important safeguard is to ensure that those who enter by this route can, when the relevant criteria are met, switch into other categories. This could help to ensure that workers move out of the intra-company transfer route when it is no longer the appropriate basis for their stay in the UK. Finally, the Migration Advisory Committee recommended that the Government undertake more robust monitoring and, if this was shown to be required, enforcement of the Intra-Company transfer route.[29] ILPA is not aware that this recommendation has been implemented and suggests that the Committee question the Government on this.

The implications of merging the Resident Labour Market Test and Shortage Occupation Lists

25. Any suggestions that shortage occupation lists are the sine qua non of tests for a need for migrant labour and the Resident Labour Market test a poor relation stand to be refuted.

26. Shortage occupation lists look at general shortages, regardless of whether it might be possible to fill a particular post from within the resident labour market (British citizens, the settled and those exercising EU free movement rights). The Resident Labour Market Test is intended to identify whether there is anyone in the resident labour market who can do the particular job that is advertised. The Resident Labour Market Test is thus intended to be the more precise tool. We recall that the Resident Labour Market Test demands that no one within the resident labour market can be found to fill the vacancy rather than that the resident labour market worker be the best person for the job.

27. The proposal set out in the UK Border Agency consultation paper is not that the tests be merged, but that both tests be applied to each vacancy. In the case of the Resident Labour Market Test, the proposal that a job for which no resident labour market worker can be found cannot be filled unless the job is also on a shortage occupation list will result in vacancies going unfilled. While there may well be good reason to monitor which jobs are being filled from outside the resident labour market, to better understand where there is a need to "skill up" the resident labour market, work will not wait until a worker is skilled up to do it. Indeed, the only hope of "skilling up" the resident labour market may be to bring in those that have the required skills. It is also likely to be the only way to keep businesses operating in the meantime. If the Government is not satisfied that workers able to do the jobs within the resident labour market are being identified, then it should re-examine the resident labour market test. The Migration Advisory Committee recommended that the route be retained.[30]

28. As to shortage occupation lists, the work of the Migrant Advisory Committee to identify which occupations should be included on the list is well-documented.[31] The logic behind the lists is, as we understand it, that shortages are sufficiently widespread that it is reasonable to assume that no resident worker can be found to fill the vacancy and not reasonable to put the would-be employer to the expense, time and trouble of looking for a resident labour marker worker who is most unlikely to be out there. Similarly to the resident labour market test, the solution to any perceived problems would appear to lie in examining the criteria for inclusion on the lists, perhaps in particular their ability to be sensitive to rapid changes in the labour market, rather than demanding that businesses go to the expense, time and trouble of fruitless recruitments.

29. Employing migrant workers has become, under the sponsor-licensing system, an onerous burden for employers. Becoming a sponsor is costly and entails taking on extensive new responsibilities. Responsibilities increase with each migrant worker employed. We are not aware of evidence that has demonstrated that employers prefer to hire migrant workers and against the back-drop of current responsibilities we should be surprised to find such evidence. The notion that migrant workers are preferred because they will work for lower pay has not been shown to apply to those jobs qualifying for inclusion in Tier 2[32] and salary guidelines[33] are designed to ensure that this does not happen.

Whether dependents should be included in the cap, and the effect of including them

30. Dependants should not be included in the cap. Measuring the effect of the cap and adjusting it to meet the needs of the economy, as is the stated intention,[34] becomes complex if not impossible if some included in the limit are skilled workers and others babies.

31. If a cap that includes dependants places pressures on businesses, this could give rise to incentives to recruit single people without caring responsibilities. In ILPA members' experience whether family members can accompany a migrant is an important factor in choice of destination for those with partners and children. It may also be a factor in length of stay, which in its turn could put pressure on the cap, with the need to recruit arising more frequently if people stay for a shorter time. Younger people are less likely to have formed families than older ones. Studies show that more women than men have caring responsibilities.[35] Questions of discrimination on the grounds of age and gender thus arise.

32. The evidence available already suggests that more dependent spouses and partners are women than men,[36] following male primary applicants. When the Migration Advisory Committee examined the question of dependants (in the context of examination of their entitlement to work) it noted that:

33. The Home Secretary (and Minister for Equalities) has indicated that, where the cap is concerned, this indeed the Government's intention:

34. An equality impact assessment, covering, inter alia, age and gender, is thus essential.

35. We pause to observe that articles 8 and 12, read with Article 14, of the European Convention of Human Rights, incorporated into UK law through the Human Rights Act 1998, protect the rights to respect for family and private life, and to marry and found a family, without discrimination. If the UK were to propose to treat migrants differently, as to initial grant of leave or extensions, on the basis of marital/partnership status or their having children, for example by rewarding the migrant with no dependants with extra points, this could engage the Convention.

36. ILPA members advise many migrant workers who have a choice of destination, because their skills are in demand worldwide. Members advise many businesses that employ migrant workers, not because they feel a particular desire to do so, but because they can find no one else to do the job. The responsibilities of being a sponsor are onerous and no responsible director undertakes them lightly. As ILPA understands it, one reason why the UK Government wants a cap is so that it can demonstrate to a (frequently hostile) public that migration is "under control."[39] ILPA suggests that no Government can lay claim to exercising control over migration for work without demonstrating that it understands such migration and the wider effects of its interventions. The Migration Advisory Committee has provided Government with considerable research on these matters; we see no evidence in the UK Border Agency consultation paper that this has informed thinking on the cap. Migrants and their employers have a significant contribution to make to such understanding and their voices have been raised[40] against the UK Border Agency's current proposals.

August 2010

Annex 1

EXTRACT FROM ILPA NOTE OF THE UK BORDER AGENCY INTERNATIONAL GROUP USER PANEL MEETING ON 22 JULY 2010

PRIORITY AND PREMIUM SERVICE FEES

I asked what was the legal basis for charging for this given that it is contained neither within the Consular Fees Order 2010 [SI 2010/238] nor the Immigration and Nationality (Cost Recovery Fees) Regulations 2010 [SI 2010/228]. The Acting Chair said that it is an extra service offered by commercial partners not the Agency—so like photocopying, no need for it to be in fees regulations. She said that the fee was not mandatory. It was for a priority service. It has no bearing on the outcome of the application. Where service falls below published standards it is not offered as people should not have to pay to get a service within published standards.

She said that they had looked at including it in fees regulations but it could not be a local fee and it was too complicated to set out different fees for different countries in a schedule.

So it is done by commercial partners and therefore Agency says they do not need to put it in regulations.

[...]

I protested that it was all very well talking about administrative convenience and complicated regulations but that sidestepped the main issue in making it something the partners charged for rather than putting it in the fees regulations meant that it was not subject to parliamentary scrutiny. I suggested that this was unacceptable and also asked that the UK Border Agency revisit the question of legality in the light of the judgment in Pankina.

The Acting chair emphasised that it is not a mandatory fee, but agreed to seek advice on legality post Pankina.