MAC’s “limits on migration” report

In a legal context having first encountered the acronym “MAC” in an exam where it meant “material adverse change” in a long contractual clause, one finds that the Migration Advisory Committee’s report on the “Limits on Migration” is quite limited in what it has achieved. Even within the limited terms of reference provided by the government, the report’s authors have not managed to comprehensively advise the government about future policy in relation to Tier 1 and Tier 2 visas.

The report is a major exercise in government bureaucracy and it is the product of a massive consultation which lasted from 30 June until 7 September 2010.  In its report MAC considered 400 written submissions and 1000 meetings, with businesses and organisations, which arose as a result of the consultation.

In paragraph 2 of the executive summary the Chairman Professor David Metcalf states that the government set its terms of reference as to understanding the levels at which limits on Tier 1 and Tier 2 of the Points Based System should be capped. In paragraph 3 the Chairman goes on to state that his report will be limited to considering only Tier 1 (General) and Tier 2 (General) visa policy as the rest of the routes in these two tiers remained outside the ambit of his report. Hmmm!

The MAC advised that the any changes to PBS would be for entry clearance applications only and that in-country applicants, transitional arrangements, switchers and extensions would be exempt from policy renewal and changes.

Despite all the demonic glosses put on the immigration debate by Tory bourbons during the election, after which they still failed to establish a majority government, the MAC Chairman found the government’s “tens of thousands policy” and their infamous “immigration cap” to be incompatible with the countries interests.

In fact Professor Metcalf said absolutely unequivocally that:

  • Even if Tiers 1 and 2 were shut down it is unlikely that net migration would fall to tens of thousands. This goal can only be achieved by also cutting net migration under the study and family routes
  • It is not possible to reduce net migration to the tens of thousand by limiting work-related migration alone. The Committee assumes that work-related migration takes 20 per cent of the total cut – its fair share – which implies that family and student migration must take the other 80 per cent.

His statements, do however, duck many questions about the PBS which require urgent answers. The Chairman stated that times were “uncertain” and that MAC was acting in a “broader context.” On page 2 he admits that within Tier 1 itself there is the issue of multipliers which can be used by nationals of poorer countries to uplift their earnings to reflect a UK equivalent. For MAC these require imminent amendment and Professor Metcalf said that “the issue of salary multipliers … needs urgent resolution.” However, he failed to say what he has in store for the multipliers.

In fact the multipliers are quite a fair way to incorporate differences in the standards of living which exist between countries into UK immigration law. Presently the bands which exist are 1, 2.3, 3.2, 5.3 and 11.4. Rich countries such as the US and Canada remain at the top of the scale with an earnings multiplier of 1 and countries such as Afghanistan and Somalia remain at the bottom and “benefit” from the multiplier of 11.4 which is currently accorded to them. All earnings multipliers are calculated on the day before an application is made using the UKBA’s appointed exchange rate as provided by Oanda.

The major policy flaw in the design of the Tier 1 (General) route is that prior to its departure the Labour government revised the earnings bands in its hope to bolster its election performance and consequently everyone who can demonstrate that they have an income of £150,000 and can pass an easy English test can come to this country and stay here. Their dependants can come to the UK without passing an English test and after the initial two years of their entry clearance they can apply for further leave to remain for another three years upon which they become entitled them to settlement. Now wasn’t it better to award more points for qualifications as was the case in the past? It surely was. “The best and the brightest” will stay: very unlikely.

The other solution offered by MAC is to limit the types of entry clearance which can be granted under the Tier 2 (ICT) route. This could involve amending the present rules in order to be more selective so that only some workers could come to the UK for a period of more than three years. MAC takes the view that more than Tier 2 (General), Tier 2 (ICT) is “undercutting” UK workers.

Only God knows what the government’s future plan for the Tier 1 (Post Study Work) (PSW) visa is but MAC said advised the government to be “more selective” about who such visas should be issued to. I guess they saw the Upper Tribunal case on “Cambridge College of Learning”.

In sum in relation to Tiers 1 and 2 MAC found that:

For the Tier 1 General route, in order to achieve the Government’s policy objective, the MAC suggests the following:

• 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 in 2011/12.

For the Tier 2 shortage occupation, RLMT and intra-company transfer routes, the following is consistent with the Government’s objective for net migration:

• a reduction 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.

Therefore, the best estimate is that the Government objective to reduce net migration to the tens of thousands over the lifetime of the Parliament implies a reduction, compared to 2009, of 6,300 or 12,600 visas to be issued in 2011/12. The total required limit for Tier 1 General and Tier 2 combined in 2011/12 is, therefore, between 37,400 and 43,700.

But the real meat of MACs findings is contained in chapters 9 and 10 which respectively set out the government’s future policy options and MAC’s conclusions.

In  the responses it received MAC said that the London School of Economics and Political Science favoured closing the Tier 2 (ICT) route as it allowed companies to carve out an exception to the Shortage Occupation Codes (SOC) and the Resident Labour Market Test (RLMT).

MAC has also reiterated that Tier 1 (General) and Tier 2 (General) migration to the UK is a source of tax revenue for the state and to limit it unreasonably would produce a decrease in tax revenue. Coupled with the recession and an annual dole bill of £193 billion less tax collected can’t be a good thing.

The Law Society advised that the SOC and the RLMT should not be merged and that entry is available here. In response to the government’s questions about the merger the CBI informed MAC that:

It is important to ensure that the labour market remains flexible. We cannot support the merging of the shortage occupation list (SOL) and the resident labour market test.

MAC affirmed the CBI’s view by saying that:

We do not favour combining the two routes, as they are distinct routes meeting different needs. The shortage occupation route provides special dispensation for occupations in national shortage. The RLMT route provides a useful release valve in the case of occupations where there may be a local shortage and where efforts to recruit from the local labour market have failed, and bringing in labour in sufficient quantity from further afield within the UK may be impractical.

MAC says that the PBS is experiencing congestion

But MAC did see in potential in amending the two routes as it understood the government’s concern over the upwardly spiralling trend of migration witnessed under Labour’s decade in power and, therefore, MAC took the view that reducing Tier 1 and 2 migration will lower total “congestion” which is currently experienced in London or other cities.

The report repeated its earlier statistics that Indian nationals make up the largest proportion of total granted applications for Tiers 1 and 2  (in the 15-month period ending in the first quarter of 2010) and it said that “41 per cent of Tier 1 General, 68 per cent of Tier 2 intra-company transfer and 24 per cent of Tier 2 General granted applications were for Indian nationals.” The Committee also elaborated that applicants from China, Pakistan and the United States were “strongly represented” in Tiers 1 and 2. Moreover, Nigerian nationals were found to contribute a significant proportion of approved applications for Tier 1 General and the PSW visas.

Sedley LJ: protector of the Convention

A wise view to take is that report is more than just some fact finding mission to limit entry to the UK through the Tier 1 (General) and Tier 2 (General) routes. It does, in reality, set a much more ominous tone which seems complaint with Mrs May’s 5 October 2010 speech in relation to the future of immigration law policy. Therefore, the report is studded with proposals to revise the thresholds tests connected to entry (such as earnings, qualifications, RMLT, SOC etc) into the UK. There is also talk of limiting the rights of PBS dependants to enter the UK against which the Law Society had warned (in August 2010) would open the floodgates in Article 8 litigation.

Despite stating the obvious fact that by meddling with the PBS the government will not achieve its objective of limiting immigration to the “tens of thousands”  target which it desires, MAC has still provided clues about all that is in store for dependants, students, workers and the immigration system over the life of this Parliament. The change, it seems, will be quite materially adverse to Britain’s immigrants.


About Asad Ali Khan, BA, MSc, MA, LL.B (Hons), LL.M

Senior Partner, Khan & Co, Barristers-at-Law
This entry was posted in Business, ECHR, Immigration Cap, MAC, PBS, Post Study Work, Settlement, Tier 1, Tier 2, Uncategorized and tagged , , , . Bookmark the permalink.

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