The Immigration Cap

11 Nov 2010


In the early noughties our then Government started planning its third consecutive election victory.  Although the economy appeared to be in good shape, focus groups indicated a growing concern amongst voters about the number of migrants entering the country.  There were worries about migrant labour undercutting UK wage rates (thereby making it more difficult for unskilled workers to move off benefits into work) and for the social cohesion of communities which attracted large numbers of migrants.

At the same time, many employers were finding it difficult to recruit workers with the outlook and skills they required to compete in an increasingly competitive global marketplace.  Short term skill shortages were a serious problem, while mobility and flexibility seemed to be in short supply amongst the indigenous workforce.

A New System

A new immigration system was launched in 2008.  Its implementation was phased-in over a period of about 12-15 months.  A key feature of the new system was the sweeping away of the old work-based immigration categories. These were replaced by a points based system in which migrants scored points for a range of attributes, including their age, qualifications, prospective earnings, English language skills and current financial resources.

At the same time, employers wanting to take on workers from outside the European Economic Area were required to obtain a licence from the UK Border Agency (workers from EEA states make use of the exemptions conferred by accession to the EU).

The Licence is, in effect, a seal of approval enabling employers to issue a specified number of sponsorship certificates each year for a period of 4 years.  The Sponsorship Certificate is the key document required by most migrant workers seeking entry clearance into the UK from outside Europe.  More than 22,500 employers and 2,000 educational institutions have obtained Licences.

The new criteria are objectively measurable, so much of an Immigration Officer’s discretion has been removed.  This, of course, makes the system much easier to administer, though whether it is any fairer is an open question.  It is also easier for the Border Agency to move the goal posts, which is exactly what happened on 19 July.

The Immigration Cap

The Coalition Government announced early on that it intended to introduce an annual cap on the number of migrant workers let into the UK.  In July, it introduced an interim monthly limit to prevent crowds of people coming in to beat the cap.  The interim cap applies until 31 March 2011 and is intended to reduce the number of entrants by 5%, compared to the same period last year.

For highly skilled workers applying under Tier 1 of the points based system (a form of personal licence which is not tied to a particular employer) the limit is set at 600 visas per month.  When that limit is reached, the gates literally close (in October they closed on the 21st of the month) though there is an exception for those already in the country under Tier 1 who need an extension.

It is not quite so simple under the more popular Tier 2 in which visas are tied to a particular employer.  Licensed sponsors under Tier 2 have been informed of the revised number of Sponsorship Certificates they are permitted to issue in the period 19 July 2010 to 31 March 2011.  In many cases, allocations were reduced and we are aware that some sponsors have had their allocation reduced to zero.  Tier 2 employers are left to make their own allocations between extensions for existing staff and new certificates for external recruits.

For the time being the cap does not apply to students under Tier 4.

Exceptional Circumstances

It is clearly unsatisfactory that an employer goes to the trouble and expense of jumping through the procedural hoops set by the Government only to find the point of the exercise withdrawn shortly afterwards.  Further limits will be imposed next April so, in the meantime, employers who do not have available Sponsorship Certificates have been thrown a lifeline; they may apply for a Licence citing exceptional circumstances.

These requests are ranked against criteria which favour extensions of existing visas, then new applications for posts in which there is an acknowledged national shortage.

Requests pleading exceptional circumstances are considered by a panel of Border Agency Managers on the first working day of each month, when they take requests received before the 25th of the previous month.  Requests received after the 25th are rolled over to the following month.  There is no appeal from the Panel’s decision.

A legal challenge to the interim cap is being mounted through an application for Judicial Review.  In our opinion, the application has a reasonably sound basis but the Government will fight it tooth and nail.  Frankly, it seems unlikely that the Government will want to throw away a high profile populist policy just because a Court tells it to think again.  We will see but, for the time being, the tide is running against non EEA migrants so if you need skilled workers, the message is train them yourself or find them in Europe.