Select Committee on Economic Affairs Minutes of Evidence

Supplementary memorandum by the Home Office

How did you select and determine the relative weight (ie the maximum points) of the various criteria in the new points-based system (especially in Tiers 1 and 2). How will this mechanism respond to changing economic conditions such as an economic downturn?

  In tier 1, the points scoring structure is flexible and is based on criteria that will indicate success in the labour market. For tier 2, qualifications and prospective earnings are used to identify the best migrants to fill gaps in the UK labour market. If an applicant claims fewer points in one area, they can make up for it by claiming more points in another. This inherent flexibility will enable us to be responsive to changing economic conditions by amending either the criteria themselves or the relative points weighting of criteria. We will be monitoring the impact of the Points Based System (PBS). Our policy will also be informed by advice from the Migration Advisory Committee and the Migration Impacts Forum to ensure that the system continues to benefit the UK economy and that it takes account of the wider impacts.

  The proposed points table for highly skilled migrants, tier 1, was published last year in the Statement of Intent. We analysed a sample of Highly Skilled Migrant Programme Further Leave to Remain (FLR) applications taken from the first quarter of 2005. At this point we were able to get an indication of what the migrants were doing in the UK and thus whether the scheme was bringing in migrants who are both highly skilled and able to successfully integrate into the UK labour market. The data clearly demonstrated that the previous earnings criterion was the strongest predictor of labour market success.

  We are satisfied that people with qualifications at degree level and above will best meet the aims of this category to attract those who through their skills (human capital) contribute to increasing productivity and, as a result, raise the trend rate of economic growth.

  Tier 2 is for those skilled workers who have received a job offer from a UK employer. Having undertaken analysis of work permit applications and modelled a number of scenarios the Government published an illustrative points table for tier 2 in the Command Paper "A Points Based System: Making Migration Work for Britain".

  The figures in this table are still undergoing further modelling against up to date figures on work permit applications and earning rates and qualifications in the wider economy. This work will help us select weightings for the tier 2 criteria, particularly qualifications and earnings, that help maximise migrants net benefit to the British economy.

  The Government will be publishing a Statement of Intent for tier 2 in March 2008. This will provide further detail on the weighting that will be given to the criteria for this tier.

15 January 2008

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