Immigration loophole ‘exploited’ by companies

The Government’s immigration cap has been labelled a “sham” as new figures reveal that companies will be able to bypass the restriction to bring in thousands of foreign workers.

Theresa May, the Home Secretary, announced last week that the number of migrant workers coming to the UK from outside the European Union will be limited to 24,400 a year

Theresa May, the Home Secretary, announced last week that the number of migrant workers coming to the UK from outside the European Union will be limited to 24,400 a year

Theresa May, the Home Secretary, announced last week that the number of migrant workers coming to the UK from outside the European Union will be limited to 24,400 a year, fulfilling a Conservative manifesto pledge.

However, the Home Office has admitted that the interim cap will not apply to a system known as “intra-company transfers”, or ICTs, which allows firms to bring in non-EU nationals who are already on their payroll.

New figures reveal the extent to which companies are able to use the ICT system to import foreign staff on a massive scale.

One Indian company, Tata Consultancy Services (TCS), sponsored 4,600 of its employees to come to Britain in 2008 through ICTs, according to Home Office data.

Although there is no suggestion that TCS has broken the rules, the scale of immigration from India through the intra-company transfers is startling.

Another Indian company, Infosys Technologies Limited, sponsored 3,235 foreigners to come to the UK in the same year, while a third, Wipro Technologies, brought in 2,420.

While the Home Office has said that there were 30,000 arrivals under the ICT system last year, this was down from a total the previous year of 46,000 – suggesting that the use of ICTs could rise again when the global economy recovers.

In 1992 there were only 7,000, rising by 1997 to 15,000.

Indians make up 70 per cent of the migrants brought to Britain on ICTs, while others are from nations including the US, South Africa, Japan and China.

Although the system is intended to help companies which cannot recruit suitable candidates within the UK, critics claim that in practice much of the work could easily have been done by Britons.

The Home Office has disclosed the names of around 20,000 employers which are registered to bring skilled migrant workers into Britain on so-called “Tier 2” visas.

Names on the list, published on the UK Border Agency website last week, range from Chelsea Football Club and Conservative Campaign Headquarters to hundreds of Thai restaurants, Indian takeaways and kebab shops.

Among the companies on the list, around 4,700 are permitted to use ICTs. Yet the UK Border Agency only has 125 staff responsible for visiting sponsor companies and keeping checks on them.

Unions and professional bodies claim that ICTs are being manipulated by some companies as a source of cheap labour, undercutting British employees and forcing them out of work.

The Government is still considering the details of the permanent annual cap on non-EU migrant worker numbers, which will replace the interim cap announced last week.

It has yet to decide whether to include or exclude ICTs from the permanent cap.

One British IT worker described how his contract at Lloyds TSB was cut short after the bank hired a dozen Indian trainees through the ICT system.

“There was a team of about 20 people, most of whom were contractors like myself, but Lloyds brought in 12 to 15 Indians to be trained by us to do the work,” said the expert, who did not want to be named.

“The company said the Indian employees would only do low-level work but then the British workers’ contracts were cut short, with just a couple kept on to supervise the Indian employees.

“These jobs would have been ideal for someone coming off a computing degree in the UK, but the company was shipping in people from abroad.

“People there did not like it at all – they could see the writing on the wall. If you went to the offices about 80 per cent of IT workers were Indian.”

The IT specialist, who has 20 years’ experience in the industry, said use of ICTs was widespread in the banking industry.

“ICTs are used to bring large numbers of people in for the purposes of cheap labour,” he said.

“I’m shocked that the Government are exempting ICTs from their cap. It makes their promise a complete sham.

“Surely they understand that it is leaving the door wide open for this type of abuse?”

A spokesman for Lloyds TSB declined to comment on the claims.

George Anastasi, policy adviser at the Professional Contractors Group which represents freelance and contract workers, said: “Some large companies are exploiting the loophole offered by ICTs and we want to see the system changed so it cannot be abused in this way.

“We believe that intra-company transfers have displaced lots of British IT workers, putting some of them out of work.

“We are hoping the Government will do the right thing and tighten the rules. Something needs to be done – ICTs cannot be ignored forever.”

Peter Skyte of the trade union Unite said: “Our prediction is that the ICT will remain after the interim period because of pressure from multinationals and from embassies.

“We are very concerned about displacement of UK resident workers and its potential for undercutting pay rates. We think its use should be limited to senior management, key personnel and people coming to the UK for training programmes.

“There should also be a defined annual minimum salary of £40,000.”

Applicants for an ICT must earn above a minimum salary level, to ensure that they are skilled workers, but the level has been set at only £24,000 a year, or only £20,000 a year for those with a degree.

A previous requirement for companies to prove that staff being brought in under ICTs had specific knowledge and that jobs could not be filled by Britons was relaxed at the end of 2008.

Although the rules state that a worker brought in on an ICT must not “be directly replacing a settled worker”, many in the IT industry report that this requirement is not adhered to in practice.

Sir Andrew Green, chairman of the pressure group MigrationWatch, said: “The ICT is being abused on a very significant scale. It is very easy to ‘game’ the system and ensure that your applicant just fits within the requirements.

“Policing of the ICT needs to be strengthened to ensure it is not being manipulated.”

One reason for bringing applicants to Britain was to “prepare the ground” for moving operations overseas, such as moving call centres and data processing to India, he said.

A report by the Government’s Migration Advisory Committee (MAC) last summer expressed concern about ICTs and recommended that the Government should “consider both the level of resource it devotes to enforcement and the transparency of these activities”.

Other countries with equivalent systems to the UK’s ICT require candidates to be more senior employees, or to have been with their employer for longer.

The MAC recommended extending the required period of employment from six months to 12.

Damian Green, the immigration minister, said: “It is important that we attract the brightest and the best people who can make a real difference to our economic growth, but immigration is too high and needs to be reduced.

“The Government has announced it will introduce a limit on economic migration from outside the EU as part of work to scale back net migration to the levels of the 1990s, to the tens of thousands rather than hundreds of thousands.

“Our consultation contains proposals for restricting the ICT route by bringing long-term transfers within our annual limit.”

Gepos Bon Carolyne Ahiambo Ngara vlugtelinge in Suid-Afrika Blog

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Immigration cap loophole sees massive surge

Britain's Prime Minister David Cameron and Home Secretary Theresa May walk through Terminal 5 during a visit to UK Border Agency staff at Heathrow Airport

Britain’s Prime Minister David Cameron and Home Secretary Theresa May walk through Terminal 5 during a visit to UK Border Agency staff at Heathrow Airport

Home Office statistics reveal that the number of foreigners arriving on “intra company transfers” (ICTs), which do not count towards the cap total, rose sharply following the Coalition’s announcement of an interim cap in mid-July.

There were 30 per cent more ICTs handed out in between July and September this year than in the same period last year.

Experts said the increase showed that companies were to continuing to import cheap labour despite the Government’s clampdown, and warned that numbers would continue to rise even after a permanent cap on migrant numbers comes into force next April.

Peter Skyte, of the trade union Unite, said: “It is a massive loophole. Our prediction has always been that the immigration cap would be all smoke and mirrors.”

The ICT scheme allows firms to bring non-EU nationals who are already on their payroll into the UK. It is widely used in the IT industry.

One Indian company alone, Tata Consultancy Services, sponsored 4,600 employees to come to Britain in 2008; another, Infosys Technologies Limited, sponsored 3,235 in the same year.

Theresa May, the Home Secretary, has said she will fulfil a Tory manifesto pledge by capping the “skilled worker” routes at 21,700 a year, but she agreed to exempt ICTs from the new restrictions following pressure from business leaders and Vince Cable, the Lib Dem Business Secretary.

In the third quarter of this year, as the Home Office was restricting other immigration routes, more than 8,000 foreigners came to work in the UK under ICTs – up from 6,000 in the same period last year.

If the current ICT rate is sustained, more than 32,000 immigrants would arrive under the route each year, meaning the true number of migrant workers would be about 54,000 a year when capped routes and ICTs are added together.

Mr Skyte said Unite feared there were significant loopholes in limits imposed on ICTs by the Home Secretary last week.

Under the terms of the permanent cap, ICT workers earning between £24,000 and £40,000 a year will only allowed to remain in Britain for 12 months.

Mr Skyte said: “We think companies will simply transfer lower-paid staff for 11 months and three weeks, for example, and then they will be sent home for a few weeks and re-apply under a new ICT.

“There doesn’t seem to be anything in the rules to stop it.

“In other words, the number of people coming on ICTs could actually rise.

“The Home Office has also failed to take the chance to prevent companies counting allowances for things like accommodation as part of their gross pay, and it looks like some employers have sought to make as much use of the route as possible while current rules are in place.

“The Government’s announcement has squandered a golden opportunity to tackle abuse and misuse of ICTs.”

Sir Andrew Green, chairman of the pressure group MigrationWatch, said: “There is clearly a build-up of ICT applications this year.

“While it is essential that staff who are seriously needed can get into Britain, this route will have to be watched very closely to avoid it becoming a loophole in the whole system of economic migration.”

On the possibility of workers exploiting the 12-month ICT rule, he said: “We have yet to see the details of this scheme but if it allows people permitted to come for a year to go home for a few weeks and return then it will rapidly become absurd.”

One British worker, who declined to be named but is employed in IT by a well-known bank, said: “Employers will find plenty of ways to abuse the system.

“Where I work now there are British workers being made redundant and at the same time ICTs are being brought in to replace them. The Government’s measures have had no effect whatsoever.”

Another IT worker said: “Sadly the IT business in this country is doomed, primarily because they have printed ICTs and other visas like confetti.”

Damian Green, the immigration minister, said: “The new immigration limit clearly sets out which workers we will allow into the UK job market.

“It has been drawn up following extensive consultation with businesses and reflects their views. But our view is clear: we need employers to look first to those who are out of work and already live in this country.

“The limit will allow us to protect those businesses which are vital to our economy, allowing them to attract the best and the brightest, but more importantly it will bring immigration down to sustainable levels.”

In the whole of last year there were 22,030 ICTs but in just the first nine months of this year the figure had already reached 22,520.

The quarterly total of ICTs has crept up incrementally since the beginning of last year, when there were 4,355 applications between January and March.

In comparison, in 1992 there were just 7,000 ICTs handed out during the whole year.

Gepos Bon Carolyne Ahiambo Ngara vlugtelinge in Suid-Afrika