Immigration: skill shortages Contents


1.The Government have two numerical immigration limits. The first is the overall ambition to reduce immigration to the tens of thousands, which serves to focus attention on controlling those aspects of immigration that could contribute to reducing the overall number. The second is the cap on Tier 2 (General) visas—for high skilled workers to come and work in the UK if they have a definite offer of a job.

2.Following the 2010 election, the Coalition Government reviewed the Points Based System for non-EEA migrants. The Coalition Agreement of 2010 committed the then administration to an annual limit on the number of non-EU economic migrants admitted into the UK to live and work. In designing the limit, the Government consulted with employers and sought advice from the Migration Advisory Committee (MAC). Following the publication of the MAC report on this in 2010, in which they advised on a range of options for limiting inflows, the Government introduced an annual limit on Tier 2 (General) of 20,700, applying from 6 April 2011.1 They also introduced reforms on minimum skill levels, and salary and language requirements.

3.Shortly after the May 2015 general election, the Government asked the MAC to advise on further changes to restrict the numbers of Tier 2 migrants. This followed from a commitment in the 2015 Conservative party manifesto to “Maintain our cap at 20,700 during the next Parliament. This will ensure that we only grant visas to those who have the skills we really need in our economy”.2

Tier 2 and the Points Based System

4.Tier 2 is part of the Points Based System for controlling migration from non-EEA countries. Other routes within the Points Based System available for work reasons are Tier 1 (investors, entrepreneurs and exceptionally talented migrants) and Tier 5 (youth mobility and temporary workers).3 Within Tier 2 there are four routes: Tier 2 (General), Tier 2 (Intra Company Transfer (ICT)), Tier 2 (Minister of religion) and Tier 2 (Sportsperson). The number of visas issued in 2014 for each route were:

Table 1: Number of Tier 2 visas issued in 2014

Tier 2 category

Number of visas

Tier 2 (General)


Tier 2 (Intra Company transfers)


Tier 2 (Ministers of religion)


Tier 2 (Sportsperson)


5.The most used option is the Tier 2 (ICT) route. Of the 15,000 Tier 2 (General) visas issued in 2014, only 1,400 were for the shortage occupation route. The Home Office submission said the demand for Tier 2 visas for skilled workers is still rising,4 and recent figures show that the number of Skilled Tier 2 visas granted increased by over 9% in the year ending June 2015.5

6.There are important exceptions to the 20,700 limit on Tier 2 (General) visas. Of the four Tier 2 work visas only the General category is subject to the cap. Exclusions from the cap include:

Nor does the cap relate to EU migration.6

Certificates of sponsorship

7.Tier 2 applicants have to be sponsored by an employer, and the employer must have a Certificate of Sponsorship (COS) before bringing in a worker. Migrants with a Tier 2 (General) visa can work for the specific sponsor in the job described in the COS, bring dependants to the UK, and can stay for a maximum of 5 years and 14 days (or the time given on the COS plus one month if shorter). It is possible to apply for an extension to the visa. Someone on a Tier 2 (General) visa cannot start working before they get the visa. If they want to start a second job in a new sector they have to make a new application.

What happens when the cap is reached?

8.The cap operates by restricting the number of Restricted Certificates of Sponsorship to sponsoring employers to an annual limit of 20,700.7 The number of certificates issued since 2011 grew in each year until 2014–15 when it reached 20,492—200 below the cap.

Table 2: Number of Restricted Certificates issued in each year


Number of certificates issued









9.While the cap is for an annual figure, the limit is applied on a monthly basis: 2,550 places are available in the first month of the financial year (April) and 1,650 in each following month. In February 2015, the number of applications was 2,454. The cap did not apply straight away because spare COS had carried over from previous months, but the limit was over-subscribed in June, and again in July and August. The table below shows applications for places over the period April to November 2015. Since June, 3,110 applications for COS have been refused.8

Table 3: Restricted Certificates of Sponsorship applications 2015–16

Places available



Minimum points score









































Home Office (ISS0038), Allocations of restricted certificates of sponsorship 12 Nov 2015.

Note: there may be an element of double counting in the figures as refused applicants may reapply the next month

The Shortage Occupation List and the Resident Labour Market Test

10.When the cap is reached, a points system is used to give priority to certain applications, notably: those for a job that cannot be filled from the domestic UK market and which has therefore passed the Resident Labour Market Test; those on the Shortage Occupation List (SOL); and those for a PhD-level job. Shortage occupations are ones where there are not enough settled workers to fill available jobs in particular sectors. A list is drawn up and reviewed regularly by the Migration Advisory Committee,9 with a separate list of shortage occupations in Scotland. If the post is on the SOL, then the sponsor does not have to carry out the Resident Labour Market Test. If the post is not on the SOL, then the employer must advertise the job domestically and be able to show that no suitable settled UK worker could fill the post. For the next six months, the employer can fill the post with someone from outside the EEA. If the post is unfilled after six months, the employer has to re-advertise in the UK.

Minimum salary requirement

11.All applications must be for posts with a minimum salary of £20,800. In addition, there are different minimum salaries according to different occupations, and whether the person applying is an experienced worker or a new entrant employee.10 The pay thresholds in the health and education sectors are based on national pay scales. Points are awarded to the application according to the salary on offer, so applications for occupations with a higher starting salary will stand a better chance of being successful. In June 2015 an applicant needed to score 50 points to be successful, which means a non-PhD occupation that is not on the Shortage Occupation List would need to have had a minimum salary of £46,000.

Table 4: Criteria for points awarded in COS applications

Type of job




Shortage occupation






PhD-level occupation code and job passes RLMT or an exception applies










Job passes RLMT or an exception applies














£20,800 (the minimum threshold for Tier 2 (General)+


12.It should be noted that the bar for securing a Tier 2 (Intra Country Transfer (ICT)) visa is higher in terms of the required minimum salary: £24,800 for a short-term ICT and £41,500 for a long-term ICT visa.11 (This compares to £20,800 for a Tier 2 (General) visa). People who come to the UK on Tier 2 (ICT) visas are much less likely to apply for an extension to their visa in the UK than Tier 2 (General) visa holders.

The Migration Advisory Committee (MAC) reviews

13.The Migration Advisory Committee (MAC) is an independent, non-statutory, non-time limited, non-departmental public body that advises the government on migration issues.12 Since 2008, they have carried out periodic reviews of the Shortage Occupation Lists, most recently in February 2015. In their 2013 review of the Shortage Occupation List, the MAC noted that many consultees mentioned “consultation fatigue”, and the MAC “tentatively” suggested that the Shortage Occupation List should be reviewed about every two years.13

14.As we have mentioned, in June 2015, the Government asked the MAC to advise on changes to restrict the numbers of Tier 2 migrants. The MAC were asked to report on two areas: the possibility of increasing the minimum salary levels for Tier 2 (General) and Tier 2 (ICT) visas, and a wider review of the operation of Tier 2 visas. Their initial report on minimum salary thresholds was published in August 2015 and recommended that the Government should be cautious over raising the minimum salary requirement before the result of the second wider review.14

15.The wider review of Tier 2 was to look at reforming the Shortage Occupation List to restrict Tier 2 (General) recruitment to genuine skills shortages and particular specialisms, while making allowances for key public service workers; possible changes to the intra-company transfers and the position of those switching from Tier 4; and whether there should be a time limit on how long occupations are on the Shortage Occupation List. The MAC was also asked to consider:

The Government asked the MAC to complete their broader review of Tier 2 by mid-December 2015 with a view to publication early in the new year.

1 There had been an interim limit in place from 19 July 2010 to 5 April 2011 set at 5,400 for Tier 1 (General) and 18,700 for Tier 2 (General). The interim limit was introduced to stop a last minute rush of applications while the Government consulted on permanent arrangements.

3 Tier 3 is for low skilled workers and has never been opened. Tier 4 is for students.

4 Home Office (ISS0038)

5 UK Government Immigration Statistics, April-June 2015; Home Office (ISS0038)

6 Q16

7 Restricted COS are those issued each month for applicants for a specific job under Tier 2 (General)

8 Home Office (ISS0038), See PQ 15141 on Engineers and Scientists: Visas, answered on 17 November 2015

10 A new entrant employee is a full time employee who has left full time education within the last three years, or an entrant to a graduate recruitment scheme, or a trainee barrister entering pupillage

11 Q63

13 MAC, Skilled Shortage Sensible, 2013, Full review of the recommended shortage occupation lists for the UK and Scotland, a sunset clause and the creative occupations

© Parliamentary copyright 2015

Prepared 16 December 2015