Memorandum submitted by Tata Limited
TATA IN
THE UK.
— Tata established in the UK in 1907.—
Tata currently employs just under 41,000 people across the UK.
— Tata generates over £11 billion
revenues in the UK.
— Tata is the largest manufacturer in the
UK.
— Tata is one of the biggest industrial
employers in the UK.
— Tata is the 6th largest industrial investor
in UK R&D.
TATA INVESTMENTS
IN THE
UK (QUOTED IN
US$)
Tata has made a total investment of $15 billion
through the acquisitions of:
— Corus Steel—$12.1 billion; 2007.
— Jaguar Land Rover—$2.3 billion;
2008 .
— Tetley—$407 million; 2000 .
— Brunner Mond—$180 million; 2005
EMPLOYMENT
— Tata employs just under 41,000 people
across the UK.
— Directly and indirectly Tata's activities
in the UK support a total of over 166,000 jobs.[48]
— Tata has a nationwide industrial and
manufacturing presence.
— Tata's major centres of employment are,
in order:
— Yorkshire & The Humber.
— Tata is the biggest Indian employer in
the UK.
RESEARCH & DEVELOPMENT
— Tata is the 6th largest[49]
UK industrial investor in R&D .
— Tata is the 8th largest UK investor in
R&D.
— In the year ending 2009 Tata invested
over £496 million in R&D, ahead of many well-known companies
in the UK.
— In the UK automobiles and parts sector,
Land Rover and Jaguar Cars were ranked 2nd and 3rd respectively.
— Tata Steel is by far the largest R&D
investor in UK industrial and mining, accounting for 94% of total
R&D in the sector.
EXPORT SALES.
— Tata is a major UK exporter. Tata's UK
ratio of exports to total sales is 57%, which compares with 27%[50]
for the UK as a whole, and 37%[51]
for the UK manufacturing sector.
OVERALL COMMENTS
The Tata group has serious reservations about
the impact of proposed caps on the UK economy. In particular,
we urge that Intra-Company Transfers continue to be excluded from
the capping policy.
IMPLICATIONS—FROM
THE INDIVIDUAL
TATA COMPANIES
Tata Consultancy Services (TCS)
TCS is the prime user of ICTs among Tata companies
in the UK—others include Tata Global Beverages and Tata
Steel Europe (Corus).TCS usage of ICTs as part of its business
model helps UK organizations enhance and transform their operations,
making them more competitive and efficient in the world economy.
Accessing and using the right blend of talent globally as well
as in the UK is crucial to UK organizations benefitting from IT
and technology. This requires labour mobility. Because ICTs enter
the UK on a temporary basis only, in response to demand from UK
organizations, there are no "settlement" issues. ICTs
should therefore continue to be excluded from any Government cap.
TCS deploys a tried and tested business model
to bring leading IT and technology to UK organizations. This model
combines UK skills in permanent positions; supported by ICT professionals
on a temporary basis. ICTs are temporarily based in the UK as
part of the overall project according to the business model. Most
ICTs stay for a period of 18-24 months; all depart the UK after
this, often to continue working on the project from outside the
UK.
While in the UK, ICTs are net contributors to
the UK economy, including spending money locally and paying income
tax on their UK earnings. As employees of the company, they are
independent in terms of housing and health provision. Far from
being a drain on UK infrastructure; the opposite is in fact the
case.
The number of ICTs coming into UK is determined
by economic demand. Numbers of ICTs coming into the UK dropped
significantly during the recession 2009/10; they have increased
again in recent months as UK organizations seek post-recession
IT strategies to renew sustainable, profitable growth.
Setting quotas for ICTs is therefore unnecessary
and artificial, given the natural supply and demand market correction
to numbers entering the UK on a temporary basis. Given this natural
market fluctuation, it would also be extremely difficult to set
and manage caps on ICTs.
The result of any cap on ICTs would be to damage
the ability of UK organizations to benefit from usage of IT services
and projects. The impact on population and usage of amenity would
be minimal, if not illusory, given the temporary, self-sufficient
and contributing nature of ICTs.
Tata Steel Europe (Corus)
This will affect Tata Steel Europe in two ways:
certain Engineering occupations are difficult to fill and there
are not enough good quality UK/EU nationals, so we typically recruit
some 20-25 non-EU nationals per annum, mostly direct from University
or through sponsorship through University. Indeed this is already
starting to impact us as, in anticipation of the new limits, we
are already restricted to a fraction of the permits we had last
year—and last year was artificially very low because of
the economic downturn. In fact we have three for the whole year.
Unless the UK/EU is able to produce more engineering
graduates, we will be unable to fill some vacancies, though I
would anticipate this would be dozens rather than hundreds. While
the UKBA will argue that they can identify so-called Shortage
Occupations and put these at the top of any list subject to quota,
data is inevitably going to be 12-18 months old.
Tata Global Beverages
If there is a cap on ICT—we will face
a severe blow to our global mobility strategy.
The global mobility strategy is key to developing
our organisation into a global player in the beverage world.
— By locating the HQ of our company in
the UK, even though we are owned and listed in India, we provide
high net worth individuals to the UK whose tax contribution to
the economy is inevitably significantly higher than the value
of the public services they utilise.
— TGB's decision to locate the company
in the UK also enhances our ability to employ local talent into
global functions—providing high quality jobs—especially
in an environment when young graduates in the UK face employability
issues.
— The migration and ICT flexibility, in
addition to an evolved personal taxation infrastructure, combined
with a comprehensive dual taxation environment, makes the UK an
attractive place to locate the HQ of an international company.
The higher personal tax rate that has been announced has already
taken away one advantage. An inflexible (capped) migration policy
will take away another advantage.
— There have been three cases of us hiring
senior leaders directly from the global market—an American,
an Indian and an Australian. The cap on Tier 2 (General) will
also be a big problem—for us and for the country. It will
stop the inflow of high level talent that adds value to the companies
based here.
Tata Elxsi
Tata Elxsi provides Product Design and Engineering
services and we are generally associated with the engineering,
research and product development teams of our customers. In the
current economic situation, the customers tend to innovate and
churn out new products quickly. Tata Elxsi helps these companies
with our services and IPs to bring the products quicker to the
market.
Customers in the UK also find it difficult to
find and employ engineers from different domains and skills. Tata
Elxsi is able to help our customers to bridge this gap and our
engineers come to the UK in various phases of product development
and research.
A cap would mean that the customers would be
restricted to avail the skills and the opportunity to design products
fast and at lower costs. Similarly, it would restrict our business
and revenues from the UK.
We currently have a design studio in Milton
Keynes and are planning to setup a design and innovation centre
either in Wales or Scotland. Limits to ICT would hamper the plans
too.
September 2010
48 Direct employment of 41,000 + indirect employment
of 125,000 = 166,000-re-absorption = 88,000. Back
49
According to BIS The R&D Scoreboard/09. Back
50
Export value over total GDP at current prices for 2009. Source:
ONS. Back
51
Export value over value of output of manufacturing sector for
2007. Sources: BERR/BIS; House of Commons, Economic & Statistics
Section. Back
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