Oliver O'Hanlon
26 March 2013

Policy Update: UK Immigration Reforms

Parliamentary Select Committees’ joint letter on Overseas Students and Net Migration and Prime Minister’s Response

In January the Chairs of the House of Commons Business, Innovation and Skills, Home Affairs and Public Accounts Select Committees, as well as the House of Lords EU Sub-Committee F: Home Affairs, Health and Education, and Science and Technology Committee wrote to the Prime Minister outlining their concerns over the Government’s policy on including overseas students in the net migration figures. Each of these committees had undertaken inquiries into the Government’s immigration policy and all had made recommendations to remove overseas students from the net migration figures.

The Prime Minister’s response published in March stated that the Government “will place no cap on the number of genuine students coming from across the world to study in this country”. The letter stated that university graduates are eligible to stay through the Graduate Entrepreneur scheme or if they are in employment paying £20,000 or more, and that the Government had put in place a package of incentives for overseas student to remain in the UK: 1,000 places for MBA graduates to stay in the UK and start a business; and PhD students would be entitled to stay in the UK for up to 12 months to find work as a entrepreneur.

The letter confirmed that overseas students would continue to be counted in the UK's net migration figures, because it argues that changing the way migration is measured would have no impact on the current student migration policy, and that tackling abuses of the system was a more pressing issue.

Migration Advisory Committee Review of the Recommended Shortage Occupation List for the UK and Scotland

Following consultation last year the Home Office’s Migration Advisory Committee published its review of the recommended shortage occupation list for the UK and Scotland in February. The review was tasked with addressing shortage occupations for skilled workers in the Tier 2 category (degree-level), which is the level required by foreign nationals from outside the European Economic Area who have been offered a skilled job in the UK. The current annual limit in Tier 2 migration is 20,700.

The review set out to address 2 key issues:

  • Whether an occupation should automatically be removed from the shortage occupation list after two years (the Sunset Clause)
  • Revising which occupations and job title should be included in the shortage occupation list for the UK and Scotland from February 2013

Below is a summary of contributions from the Science Council and Member Bodies, and the Committee’s conclusions and recommendations.

Automatic removal from shortage occupation list after two years (the Sunset Clause)
The Committee was asked to provide advice to the Government on a standard period after which an occupation should be automatically removed from the shortage occupation list, with the suggested period being two years. The majority of responses expressed concern about introducing a Sunset Clause, seeing it as disproportionate; failing to take sufficient account of specific needs of different sectors and the time required to train domestic workers; and failing to reflect the complexity of the economic conditions.

The report quoted from the Science Council’s submission that “...a two-year time frame does not adequately take into account the length of time required to attract, educate and train a resident workforce for the highly skilled roles that the UK economy will need in the future” in response to the question of whether two years was a reasonable amount of time to enable mitigating action to be put in place and to have effect before an occupation or job was removed from the list.

After finding that respondents were universally opposed to the principle of automatically ‘Sun-setting’ occupations after two years, the Committee decided that imposing an automatic two-year Sunset Clause would be a “disproportionate response” citing that the total inward migration via the shortage occupation list is currently around 1 in 20,000 UK jobs (0.26% of total immigration), and concluded that a ‘one-size fits all’ approach would not be an appropriate course of action as it would fail to recognise different sectors’ circumstances and skills requirements.

Engineering Sector Occupations and Job Titles
The Committee recommended the retention of the majority of the job titles currently on the shortage list and recommended new job titles relevant to the aerospace, railway, electronics, mining, automotive manufacturing and design and the civil nuclear industries be added to the shortage occupation list.

Joint evidence provided by the Geological Society and the Royal Astronomical Society was sufficient for the Committee to recommend a number of occupations in the ground engineering industry be retained on the shortage occupation list. Their submission argued that: “There is widespread concern in industry that the future supply of MSc graduates is threatened by the withdrawal of government funding for MSc studentships, the increase in undergraduate student fees (meaning that those who might enter MSc programmes would do so with much greater levels of existing debt than previously), and the fact that Masters students do not have access to the student loan system or any other affordable source of credit.”

Evidence submitted by the Institution of Chemical Engineers and others lead to the Committee recommending that the title of ‘Chemical Engineer’ should be retained on the shortage occupation list. Their submission argued that the: “Inclusion of chemical engineers on the shortage occupation list has given an important signal to employers and to individuals that the UK is an attractive and successful place for investment … and a favoured place to locate centres of engineering and design excellence.”

The Committee concluded that the increasing demands for specialist engineering skills continues to exceed supply and that “there is insufficient joined up activity in this sector on the part of employers and relevant public bodies aimed at addressing its skills deficit.” The Committee further stated that future reviews will scrutinise the efforts made in the education sector to increase the production of more chemical engineering graduates.

Alleviating UK Skills Shortages
Evidence received by the Committee in respect of measures taken to alleviate skill shortages was mixed. A number of partners stated that they consider the role of the Government as being critical to alleviating skill shortages. The report quoted from the Science Council’s submission that “The UK Government must ensure that the country has the workforce with the appropriate knowledge, skills and experience to enable it to compete internationally, and create an environment which helps businesses to flourish. This will require a long term commitment across government, to ensure that programmes are effective in addressing issues of recruitment, retention and training.”

The Committee further stated that it “did not receive evidence relating to an overall national strategy”, echoing the Science Council’s concern “that the message the UK is “open for business” is not being consistently applied across government departments” and that conflicting announcements across different areas of government policy “has led to a perception that non-EU workers and students are not welcome.”

The Committee concluded that a “continued need for coordinated, concerted action by the Government - in particular the Department for Education, BIS, the UK Commission for Employment and Skills, and Sector Skills Councils - and employers will be required to encourage more young people to study relevant courses, such as Science, Technology, Engineering and Mathematics (STEM) subjects”.

The Scope of Future Reviews
The Committee expressed on a number of occasions that the evidence it had received in respect of measures taken to alleviate skill shortages were mixed. The conclusions made clear that future reviews will stakeholders’ to supply the Committee with compelling evidence to keep an occupation or job title on the shortage occupation list. The Committee also stated that it wanted to see evidence of “the effectiveness of more strategic, joined up efforts between Government, industry and sectoral bodies in tackling long-term high-end skill shortages.”

The Committee proposed that the next full review of the shortage occupation list take place in two years’ time.

House of Commons Business, Innovation and Skills Select Committee Report on Overseas Students and Net Migration

In February the House of Commons Business, Innovation and Skills Select Committee published the Government’s response to its report on Overseas Students and Net Migration.

The Select Committee’s original report, published in September 2012 stated that while the Government has set a clear political commitment to reduce net migration, the inclusion of overseas students at accredited institutions in overall migration numbers was “misleading” and that “the Government’s policies in respect of student immigration have played a significant part” in the decline of the UK’s market share of overseas students.

Its key recommendations were that the Department for Business, Innovation and Skills should as a matter of urgency develop an “active strategy to support the expansion of this important and lucrative market”, and that overseas students should be recorded in a classification apart from the overall net migration count.

The Government’s response, published on 26th February stated that “worldwide demand for education is increasing and the UK is well-placed to capitalise on this” and confirmed that a joint strategy with industry and other sectoral organisations would be published in summer 2014. The response also confirmed that there would be no cap imposed on the number of “genuine students” from overseas but that overseas interviews would be extended rapidly to crack down on illegal students.

The Select Committee published a response to the Government on 28th February criticising the Government’s proposed timetable for a higher education strategy in the summer of 2013 as “unacceptable” and that its policy decisions were based on a weak evidence base.

The Committee’s response concludes that “The Government’s Response was late, woefully short on detail and fails to take account of recent developments. It seeks to underplay the urgency of the problem and thus excuse the failure to act decisively to address this serious matter. The Government should listen, think again and change course.”

Sector reaction:

  • Universities UK: “we are concerned that the government's response to the select committee report today is not justified by the evidence”
  • Universities and College Union: “chaotic approach risks doing real damage to our standing on the global stage”
  • University Alliance: “confusing and conflicting messages”
  • Million: “The Home Office’s approach is harming the UK’s higher education market”

Office for National Statistics: Migration Statistics Quarterly Report February 2013

The Office for National Statistics released its latest migration statistics report in February 2013. The report shows that in the year to December 2012, 20% fewer student visas were issued compared to the previous year. A large proportion of this has been put down to a fall in study visas issued to students from Pakistan (down 69%), India (down 50%), Sri Lanka (down 72%) and Bangladesh (down 53%). However there was an 8% increase in the number of visas issued to Chinese nationals.

The statistics show that all visa applications fell by 22% in the year ending December 2012. While there was a 3% increase for the university sector, there was a fall of 62%, 69% and 14% for further education, English language schools and independent schools respectively.