The Government has rushed in changes designed to help employers fill skills
gaps with overseas talent. But there are still major policy issues to be
resolved, warns Julia Onslow-Cole
On 28 September, the Department for Education & Employment posted a
notice on its web site heralding the most dramatic changes to the Work Permit
Scheme in 20 years. The notice preceded any formal government announcement and
caught the media and most employers completely unawares.
The changes followed a major shift in the past few months in the Government’s
attitude to immigration. This was highlighted in September when the Home Office
minister, Barbara Roche, called for a fresh debate on immigration policy in a
well-publicised speech made at an Institute of Public Policy Research
conference. Roche emphasised the need to look afresh at immigration in the
context of a global economy. She referred to the fact that there was now an
international scramble to attract experts and wealth creators and to fill
skills gaps. She stressed that UK immigration policies had to be in tune with
the reality of the 21st century and the globalised economy.
Immigration experts considered the minister’s speech an important step in a
long-term process of persuading the public of the need for more immigration.
Privately, civil servants working in the Home Office were talking about two
years for major Home Office changes. At the same time the DfEE, which
administers the Work Permit Scheme, had been undertaking a review of the work
permit process. This review came out of the White Paper on Competitiveness and
was encouraged by the Department of Trade and Industry.
Within weeks of Barbara Roche’s call for a fresh look at immigration, the
DfEE had announced sweeping changes to the Work Permit Scheme. Whether it was a
case of joined-up government in action or a happy coincidence, the DfEE had in
one step made the Home Office minister’s vision a reality.
One of the DfEE’s most important moves was to lower the skills criteria at
the heart of the Work Permit Scheme. From now on the basic qualification an
overseas national must have to obtain a work permit is a degree, a relevant HND
occupational qualification, a general HND qualification plus one year’s
relevant experience, or three years’ "high-level relevant specialist skills"
for a job at NVQ Level 3 (which is in essence A-level standard). A graduate
with no work experience can now meet the skills criteria of the new Work Permit
Scheme. Until October, to meet skills requirements overseas nationals had to
have at least a degree and two years’ relevant senior level experience,
normally gained outside the UK; or, if they had no degree, five years’ relevant
senior level experience.
The changes are obviously welcome. In particular they will give employers
significant opportunities to hire talented overseas nationals to fill jobs in
all industry sectors. Furthermore, the changes are welcomed by overseas
students who have been encouraged to study in the UK after the relaxation last
year of some immigration measures.
Foreign students can now study for a degree and then go on to obtain a full
work permit allowing them to stay in the UK.
However, as well as the overseas national fulfilling the skills
requirements, an employer applying for a work permit must demonstrate that
no-one else is available in the labour market to fill the position. The
relevant labour market includes everyone in the UK who has the right to live in
the UK permanently, plus nationals of the wider European Economic Area.
However, there are cases where the DfEE is likely to waive the requirement to
test the resident labour force. These include cases where employers have
conducted a thorough graduate recruitment process, or where the position is on
a "skills shortage list" maintained by the DfEE. Many of the jobs in
the information technology sector fall into the latter category.
Intracompany transfers, where employees have worked overseas for the same
employer for more than six months, will also be given particular exemptions
from testing the resident labour force. However, in most other cases it is
difficult to see how employers could demonstrate that there are no other
suitable candidates for the position, given the relatively low level of skills
necessary in the new Work Permit Scheme.
If the application for a work permit is in a category which means it must be
advertised, the employer will have to advertise the vacancy in a national
medium which has a European circulation or, in some cases, on the Internet. How
will employers be able to advertise a job at new graduate level and show as a
result of the advertisement that there is no-one else available who can do the
job in the resident labour market? They may well have some difficulty.
The recent changes include a provision for employees to move with relative
freedom to similar jobs with a different employer. At present it is not clear
whether this exemption applies to employees who originally came to the UK as
the result of an intracompany transfer. These and other issues are being
clarified with the DfEE.
Another live issue which must be resolved quickly concerns people in the
Training & Work Experience Scheme, many of whom now qualify for a full work
permit. Apart from for those who want to work in a genuine supernumerary
capacity, the Training & Work Experience Scheme is now effectively
redundant. Can trainees in the middle of their scheme switch to full work
permits? The DfEE is also considering this issue.
The DfEE has introduced a pilot self-certification scheme whereby employers
or their representatives will be given work permits which they themselves can
issue in straightforward cases of intracompany transfers, where employees have
been working for the company overseas for six months or more. This will run for
six months as a pilot scheme in 15 companies, but if it is successful it is
likely to be implemented more widely. However, it is unlikely the scheme will
outlive the pilot stage, because electronic processing of work permit applications,
which will be implemented later this year, will streamline the application
process and reduce the advantages of self-certification. Furthermore,
self-certification is costly for the DfEE to maintain, as site visits and close
monitoring are essential to ensure permits are issued only in accordance with
the strict requirements of the scheme.
From this month work permits can be issued for up to five years. This is a
welcome change. After four years on a full work permit an overseas national can
apply for indefinite leave to remain. The five-year permit will give employees
or their representatives time to apply for permanent residence at the four-year
point without worrying that they will run out of time to stay in the UK. This
is an area which can cause great strife for business travellers.
The changes have been introduced at breakneck speed: consultations did not
begin until shortly before last Christmas. It will be interesting to see their
effect. It is hoped they will boost the economy and give a welcome fillip to
However, there are concerns about the speed with which the changes have been
made. There are major policy questions which the DfEE must resolve urgently,
and the department is aware it must ensure there are adequate checks and
balances to preserve the integrity of the system.
If this is not done and there is obvious abuse, public opinion will not
permit the continued relaxation of our immigration policies that is so
essential for our success in the global economy.
Julia Onslow-Cole is partner of CMS Cameron McKenna and head of global