Government response
I am writing in response to your Committee's report
about the Immigration Cap, which was published on 3 November.
Although I appreciate the Government would normally respond to
a Committee Report by publishing a Command Paper, in this particular
case, as the information in our response is already now largely
in the public domain, along with the Migration Advisory Committee's
Report, I hope you will accept a reply by Ministerial letter.
We would of course be happy for you to publish this letter as
our response in the future.
I would like to begin my remarks by thanking the
Committee for producing such a balanced report and I hope that
you have since found much to reassure you following the Home Secretary's
statement to Parliament on 23 November.
As the Home Secretary made clear, this Government
believes that migration has enriched our culture and strengthened
our economy. In today's global economy we need to be able to attract
the best and the brightest to ensure our companies remain competitive
and our standard of living remains high. But unlimited migration
places unacceptable pressure on public services. It is therefore
our aim to reduce the level of net migration to sustainable levels.
On 23 November she therefore announced
a package of measures, to be implemented from April next year,
which will help achieve this whilst at the same time protecting
those businesses and institutions which are vital to our economy.
As you will be aware, we consulted extensively with business and
other interested parties on how the limit should work and also
asked the independent Migration Advisory Committee (MAC) to consult
on what the actual limit should be, taking into account economic
and social impacts.
As you now know, the annual limit across Tiers 1
and 2 of the Points Based System on the number of people coming
here to work from outside the EU in 2011-12 will be 21,700. This
will consist of 20,700 under Tier 2 but will exclude intra-company
transfers. We will also make Tier 2 a graduate only route and
increase the English language requirement to ensure that Tier
2 caters for the skilled workers this country needs. On ICTs,
those coming for less than 12 months will be allowed here with
the same minimum salary level as now, £24,000, but those
coming for longer will be expected to be earning a minimum of
£40,000. This will ensure the route is used for its intended
purpose of facilitating senior managers and key specialists and
not become a Trojan horse.
Tier 1 will be re-launched as a route for high-value
entrepreneurs, investors and persons of exceptional talent. Investors
and Entrepreneurs will be exempt from the limit. There will be
a 1,000 limit on a new category within Tier 1 for persons of exceptional
talent.
The limit heralds a new more selective approach;
one which will bring in more of the brightest and the best who
can make a real difference to our economy whilst at the same time
reducing the overall number of people coming to Britain through
the economic routes. In addition of course we are clear that the
reductions in net migration we are seeking cannot be achieved
by tackling the economic migration routes alone. Other key migration
routes such as students and family and routes to settlement will
also need to change.
On 7 December we published our consultation paper
setting out the ways in which we believe the system for international
students should operate in the future. The UK's education system
is world-renowned and we remain a global destination of choice
for many thousands of higher education students who choose to
study abroad. We want a system which continues to attract the
top students to our top universities but which is more selective
and more robust. The consultation will close on 31 January 2011
and seeks views on a range of measures to reduce the number of
students that can come into the UK. Proposals include:
- Reducing the number of people
coming to the UK to study at below degree level.
- Introducing a tougher English language requirement.
(minimum level of proficiency)
- Ensuring students wishing to extend their studies
show evidence of academic progression.
- Limiting students' entitlements to work and their
ability to bring in dependants.
- Improving the accreditation process for education
providers, alongside more rigorous inspections.
I know the Committee will wish to comment on this
area and we would of course be pleased to receive your response.
Next year we also plan further consultations on family and settlement.
Turning to the Report's specific conclusions and
recommendations, I would now like to provide a more detailed response
to the main issues your Report raises.
Immigration figures
In the report, you have discussed the fact that there
is no single source of migration data. Sources obviously include
the International Passenger Survey, Long-Term International Migration
data and the Control of Immigration data. You therefore urge "the
Government to implement exit checks as soon as possible to ensure
that immigrants leaving the country can be matched with those
entering it".
The Coalition Agreement states that "We support
e-Borders and will reintroduce exit checks". However
exit checks will not be a suitable alternative to the ONS method
of measuring inflows and outflows—and hence calculating
net migration—on a yearly basis.
Whom will the cap affect?
The report highlights the fact that net migration
is affected by inflows and outflows of British, EEA and non-EEA
migrants, in particular Professor Metcalf's evidence on this point
and that changes will take time to have an impact. The report
recommends "that the Government commissions a programme
of research better to understand the likely path of British and
EEA migration".
We think this is an interesting recommendation but
there is little that the Government can do to affect the decisions
of British citizens to leave the UK and those in the EEA have
the right of free movement. The latest net migration figures show
that British and EEA migration broadly cancel each other out,
so we believe our focus is rightly on non EU migrants.
The report also urges "the Government not to
treat the routes it can control too stringently in order to compensate
for the routes it cannot control". And that "other immigration
routes would also need to be examined".
I believe we have been clear that limiting non-EU
economic migration is the first step in a wider programme of work
where all the other main immigration routes will be reviewed.
I hope the Committee will also welcome the fact that the reduction
to the economic routes we have announced is proportionate to their
impact on net migration.
Impact on business and services
I note that the report considers the evidence given
by witnesses from a number of sectors— including law, universities
and academic staff, IT sector, public sector and business in general—
who raised a number of concerns about having a limit. It therefore
raises many of the same issues we heard as part of the consultation
or saw in the press, in particular that business needs to be able
to recruit migrant workers. Since the Home Secretary's announcement
I hope the Committee will be reassured to know that our initial
meetings with a number of key sectors including science, education,
health and social work have all commented positively on our planned
changes and in particular welcomed our decision to prioritise
Tier 2 ahead of Tier 1.
I also note that the report recommends "that
intra-company transfers under 2 years' duration should be excluded
from the cap" and I hope therefore that you will welcome
our decision to exclude them completely but also to make some
changes to the ICT route so that it cannot be used to undermine
the recruitment of the resident labour force.
I would however disagree with your conclusion that
it is "totally illogical that professional sportspeople
should be exempted from the cap, but elite international scientists
are not". Elite sportspeople will continue to be covered
by a separate route under Tier 2 of the Points-Based System. They
have been accorded this status because the Governing Bodies of
the sports concerned have agreed an approach which controls the
quality of those entering the UK under this route, and will also
limit numbers, as too many foreign players undermines the national
teams. We have no plans to extend this type of provision to cover
any other categories of skilled worker but the Home Secretary's
announcement made it clear that we also have no intention of creating
an immigration system that denies the British economy the services
of international calibre scientists, researchers or academics.
Making Tier 2 a route for graduate level entry only
will create further space for the highly skilled scientists, researchers
and academics who will be more favoured than they were in the
past. Re-designing the operation of Tier 2 will ensure that priority
for the allocation for Certificates of Sponsorship, in the event
that the monthly allocations are over-subscribed, is given to
workers filling the most valuable jobs. Jobs which require a Doctorate
will be prioritised, expressly to ensure that the jobs with very
specialised skills, but typically lower pay, are pushed towards
the front of the queue. We also propose to retain some Tier 1
provision for the exceptionally talented. This will also cover
those who have achieved a high degree of eminence in the field
of science. Together we believe these routes will better serve
the science community in this country.
The report also concludes that the level of the cap
will be key in determining the effect it will have on businesses
deciding whether to leave the UK, and that "the Government
must closely study the recruitment needs of businesses when determining
the level at which the cap is set".
I do not believe that the limit is the only reason
a company may or may not choose to locate here. Other key issues
such as tax, planning and employment laws, as well as the general
environment and infrastructure will inform these choices. However,
I would also contend that the new limit has actually been designed
in a way to help business, by giving more allocation in Tier 2,
thus meeting business needs.
I am pleased that the report welcomes our plans to
exclude investors and entrepreneurs from the limit and to encourage
more of them and we are currently working with some of our key
corporate partners to finalise details of these routes to make
them more attractive to the high value migrants we want.
Dependants
I also note that the report recommends that "Tier
1 and 2 limits should apply to main applicants only".
I hope therefore that you will welcome our decision that dependants
will not form part of the limit. As the number of main applicants
is limited we can expect that the number of dependants will also
decrease.
Level of the cap
In its conclusions the report states "If the
Government is to be judged on its success or otherwise in reducing
net immigration to within the 'tens of thousands' within this
Parliament, given the current basis of compilation the figures
on which it will be assessed in May 2015 will be an extrapolation
from data available for the calendar year 2013. We recommend that
the Government make explicit the basis on which it will calculate
this extrapolation".
The Office of National Statistics (ONS) is the authority
on calculating net migration figures and their methodology has
been in place since 1991. There are no plans to put a new system
in place to measure this. There is an understandable time lag
between the end of the calendar year and the ONS being in position
to present a robust measurement. While we may not have the final
net migration figures for 2015, until November 2016, based on
the current reporting schedule of ONS, we believe the number of
visas being issued for work, study or family formation will be
moving in the right direction.
The report also urges caution over the permanent
cap in order to mitigate problems experienced with the interim
limit, such as the reduction of certificates of sponsorship being
based on previous usage, rather than future need. The Committee
is also concerned that the MAC were asked to advise on the level
of the limit, without knowing what the mechanism is and urges
the "Government to ensure that the limit is delivered
in a joined up way".
We are aware of the concerns raised over the operation
of the interim limit, and believe that lessons have been learned
for our proposed mechanism for operating the new limit (see below).
We simply do not agree that the MAC's ability to provide advice
about the limit was reduced by not knowing how the limit would
work and received no adverse comments from the MAC about this.
Administering the cap
The Report recommends that the cap should be administered
more frequently than annually and that a number of visas should
be held in reserve in case of emergency.
I hope therefore the Committee will welcome our decision
not to pre-allocate Certificates of sponsorship to employers based
on their previous year's allocations. Instead applications will
be considered on a monthly basis, to ensure an even spread throughout
the year. The CBI also supports this approach. If the monthly
allocation is oversubscribed, applications will be ranked firstly
by shortage occupations, then by academic qualification and finally
by salary. We do not expect to be oversubscribed given the level
of the limit and the other policy changes on skills level and
salary, but if that were the case, we will give higher priority
to those in shortage occupations, researchers and then those paid
higher salaries.
Finally, I note the report also states that "the
Government must ensure that Parliament be given the opportunity
to fully scrutinise all significant changes to the immigration
system before they are introduced". Having reported to Parliament
on 23 November on the outline of the limits policy we believe
the Immigration Rules are the appropriate means of making changes
to the immigration system. I would like to reassure the Committee
that the new Rules to give effect to the changes will be laid
before Parliament in due course and Parliament will have time
to scrutinise them.
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