Further changes afoot…

The Migration Advisory Committee (MAC) today published its report on the limits for tiers 1 and 2 of the Points Based System.

MAC’s report however consists of a lot more than just recommendations for the limits for 2011-2012. Instead it goes on to dish up proposals for reforming tiers 1 and 2 of the PBS with a view to meeting those limits. It also of course represents a welcome addition to the existing literature on the impacts of immigration on the UK.

MAC’s recommendations are based on the Government’s objective of reducing overall net migration to an annual level of tens of thousands by the end of the Parliament. As such they have been tasked with finding a way to do this. The Financial Times reports that the Cabinet is due to meet next week with a view to deciding upon these.

Key findings on the impacts of Tiers 1 and 2 migration

Whilst there remain difficulties with statistics upon which analysis is based, employing an average/aggregate approach to quantification MAC finds:

1. All things being equal, T1/ 2 migration clearly has a positive impact on Gross Domestic Product (GDP)

2. T1 and T2 make a small but positive contribution to GDP per head.

3. The above effects will accumulate over time and become more significant.

4. The impact on GDP per head will also be influenced by dynamic factors such as the impact of migration on productivity, trade, investment and skill development of resident workers.

5. There is no evidence, at the aggregate level, of adverse labour market impacts.

5. T 1/2 migrants, in the short term at least, and on average, almost certainly make a positive net fiscal contribution.

6. T 1/ 2 migrants, and their dependants, do consume public services, such as health and education services. They also contribute to the provision of key services as members of the workforce.

7. The impact of T1/T2 migrants on broader outcomes affecting the whole of society, such as crime, congestion and housing, is difficult to estimate. Through their effect in adding to the UK population they will inevitably have an effect on such outcomes. The impact per head is likely to be smaller than that of the migrant population as a whole in relation to some impacts, such as crime. In relation to others, such as congestion, it may be larger.

MAC acknowledges that its approach (aggregate/averages) is representative of the majority of evidence available, as such it obscures for example the fact that there is some evidence that T1 and T2 migrants have displaced some UK workers in the IT industry even though quantitative evidence for the labour market as a whole does not generally show that migrants displace resident workers, and that not all T1 and T2 make positive net fiscal contributions.

Recommendations for limits for 2011-2012

Speaking today Professor Metcalf said that yearly net migration will need to be cut by 146,000 in order to reduce migration to tens of thousands. As workers make up 20% of non- EU migrants each year, they should contribute 20% of the cut but that students who account for 60% would also need to be cut accordingly given that it would not be possible to meet the target by limiting work based migration alone. Accordingly MAC recommends:

1. a reduction of between 6,300 and 12,600 visas split across T 1/2 to be issued in 2011/12.

2. Limit for out of country T1 General and T 2 combined is 37,400- 43,700 (excludes dependants in-country switchers and extenders, with the possible exception of those switching from T 2 routes whose previous visa duration was below 12 months.) The limit is calculated on the basis that all visas, including those of less than 12 months are covered by it.

3. if visas lasting for less than 12 months are excluded, the levels of the limits need to be adjusted to account for this.

4. In the medium to long term T1/2 extensions, switching and settlement may also have a significant impact on net migration and may need to be addressed.

Recommendations for tier 1

1. For T 1 General route a reduction in the number of entry clearance visas issued, compared to 2009, in the range of 3,150 to 6,300; and a limit on the number of Tier 1 entry clearance visas in the range of 8,000 to 11,100 and

2. periodic recalibration of T1 General points table in order to select the most skilled migrants; and

3. introduction of a requirement of being employed in skilled graduate-level occupations at the extension stage.

4. revision of the method for updating the multipliers and putting in place new salary multipliers as quickly as possible.

Recommendations for tier 2

1. reduction in the number of entry clearance visas issued, compared to 2009, in the range of 3,150 to 6,300; and a limit on the number of Tier 2 entry clearance visas in the range of 29,400 to 32,600 in 2011/12 (this limit excludes extensions, switchers and dependants but see below).

2. exclusion of T 2 visas issued for less than 12 months duration from the limits on the assumption that: • such short-term migrants will not be permitted to switch in-country to other work-related routes; or • if T2 migrants are permitted to switch in-country to other routes, the in-country visas issued in these cases count towards the (otherwise out-of country) limits on T 1 and 2;

3. changing the points calibration for T 2 so that only skilled migrants can come to the UK under this tier;

4. scaling down the allowances used for points purposes in relation to the required points for earnings for intra company transfers;

5. application of criteria at the extension stage for intra-company transfers that are more stringent than those applied at the point of initial entry;

6. strengthening the RLMT route through the introduction of a certification regime

7. asking MAC to reconsider the criteria used to identify skilled occupations under the shortage occupation route, and to rigorously review the occupations currently on the shortage occupation list in the context of the limits.

Other options

MAC thought that the options below would not have major impacts on t1/t2 migration but that the Government should consider them in the longer term. These are:

1. putting in place arrangements to auction a portion of those visas included within future annual limits and;

2. reviewing policy in relation to settlement and;

3. considering whether explicit economic criteria should be applied to decisions regarding whether or not migrants are allowed to settle permanently in the UK.

About jcwi

Joint Council for the Welfare of Immigrants is a key campaigning voice in the field of immigration, asylum and nationality law and policy. It is completely independent from government funding, remaining entirely free from government influence. View all posts by jcwi

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