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April 2012 Volume 19 Number 2
UK: Migration, Tiers
The British Labor government in power between 1997 and 2010 opened doors wider to migrant workers between 2000 and 2005, but sought to restrict the entry of especially low-skilled migrants from outside the EU in 2008 with a five-tier system, including three tiers for migrant workers.<< back
The Conservative-Liberal Democrat coalition government elected in 2010 maintained the five-tier system and pledged to reduce admissions "from the hundreds of thousands to the tens of thousands" by 2015. Immigration was about 250,000 in 2011, and the government is trying to reduce net migration below 100,000 by 2015.
In a bid to reduce the immigration of non-EU family members, primarily women from Pakistan, India and Bangladesh, the government is proposing that a UK sponsor of non-EU spouse have an income of at least œ25,700 a year, up from the current œ13,700. Sponsoring a spouse and child would require a UK income of at least œ37,000 a year. Some 48,000 family unification visas were issued in 2010.
About 40 percent of the migrant inflow in recent years has been students, and universities have resisted reducing their intake of foreign students.
Tiers. Tier 1 admits highly skilled non-EU foreigners who are expected to contribute to British growth. Tier 1 migrants do not need to have a British job offer, and are selected because of their education, foreign earnings and other factors. However, the number of Tier 1 migrants was reduced from 15,000 a year to 1,000 in 2012 (with seven applicants in the first two months), and the post-study work category (for foreigners who earn advanced degrees from UK universities and stay to work) was abolished in April 2012 in part because some South Asians who earned advanced degrees worked in British supermarkets.
Tier 2 admits up to 20,700 skilled workers who have a job offer from a British employer who has been unable to recruit a local worker (including EU nationals living in Britain). Intra-company transfers paid between L24,000 and L40,000 a year are not counted and can stay in the UK 12 months; those earning more than L40,000 a year can stay three years. Tier 3 allows other non-EU migrants to enter the UK to fill seasonal jobs, but it has not been used because the government believes there are sufficient workers in the UK and EU to fill such jobs.
For example, the cap on Tier 2 admissions was reduced to 20,700, but intra-company transfers (ICTs) were exempted if they were paid at least L40,000 a year, that is, employees of a multinational transferred from a foreign operation to a UK subsidiary, and 29,700 ICTs arrived in 2011. Some point to Indian-based IT firms that move IT workers from India to the UK.
In an effort to break what the government calls an almost automatic link between working and settling in the UK, non-EU foreigners who want to settle in the UK after April 2016 will have to earn at least L35,000 a year. Previously, almost all non-EU foreigners who lived in the UK at least five years could become permanent residents. PhD-holders will be exempt from the L35,000 a year requirement, but those who do not qualify for settlement must leave the UK for at least a year after six years of Tier 2 work.
Impacts. The UK opened doors for migrants between 1998 and 2008, a period during which the migrant share of the labor force doubled from seven to 13 percent.
There is much controversy over the impacts of migrants on British workers. For example, over a million Britons aged 16 to 24 were jobless in Fall 2011, the most since 1992, and they were almost half of the total 2.3 million or 8.3 percent of British workers who were unemployed.
Many British employers say they prefer Eastern European rather than British youth. Hotel chain Malmaison and Hotel du Vin in February 2012 reported that only 40 percent of its 2,300 workers were British, and that it could not find British workers to fill over 100 vacancies because the British did not want to start at the minimum wage and work their way up the job ladder. Sandwich chain Pret a Manger in 2011 said that it hired mostly Eastern European youth because it could not find qualified British youth to fill jobs.
The Migration Advisory Committee released a report in January 2012 that reviewed migration impact studies. The MAC concluded that the most appropriate measure of migrant impacts was the effect of migration on the per capita GDP of Britons, that non-EU migrants displaced some British workers (especially in times of high unemployment), and that it was very hard to measure and evaluate the non-economic impacts of migration.
In particular, the MAC concluded that the arrival of 700,000 non-EU migrants between 2005 and 2010 was associated with the employment of 160,000 fewer Britons. The arrival of 100 non-EU migrants during such times was associated with 23 fewer British workers being employed, a 4-1 displacement ratio. However, there was less displacement when the unemployment rate was low.
Ireland. Ireland has since 2006 granted green cards to foreigners who earn at least E60,000 a year in the country. Qualified non-EU foreigners can arrive with their families and apply for permanent residence after two years of employment in Ireland.
Helen Warrell and George Parker, "Minister seeks balance in borders debate," Financial Times, March 5, 2012. Migration Advisory Committee. 2012. Analysis of the Impacts of Migration. January. www.ukba.homeoffice.gov.uk/aboutus/workingwithus/indbodies/mac/