The government’s cap on hiring skilled workers from outside European Union on Tier 2 visas has been ineffective in bringing down net migration to the UK, according to a damning report.
The all-party group of MPs said the 20,700 annual limit on the visas was “not fit for purpose” and had been “counter-productive” by stimulating employment from other EU countries while denying firms the ability to hire the skills they really needed from outside Europe.
Business groups in the UK have been urging the government not impose further Tier 2 restrictions, which ministers have threatened to do early in 2016 in a bid to meet Prime Minister David Cameron’s promise to bring net migration to below 100,000 a year by 2020. Latest figures show net migration is running at a record annual rate of 336,000.
Following release of the report, the Institute of Directors (IoD) called for a comprehensive review of immigration policy, accusing the government of imposing arbitrary targets that made it impossible to manage migration in a way that supported business and the national economy.
After months of investigation, the select committee said problems caused by the visa cap were the reason Home Secretary Theresa May was forced in October to place foreign nurses on the ‘shortage occupation list’, which is exempt from the cap, after health service bosses warned of a looming staffing crisis in hospital because of their inability to recruit nurses from overseas.
Keith Vaz, the MP who chairs the committee, said Mrs May’s “panicked” decision over nurses, though welcome, illustrated the fact that the Tier 2 system was not fit for purpose.
“When the cap was reached earlier this year, we saw the perverse effects of the system, as the cap prioritises higher-paid jobs,” Mr Vaz said. “In June, nurses were being prevented from working in the UK, which necessitated the government taking emergency measures to allow recruitment to continue.
“Whilst this was a very welcome move, it is clear to see that the system could have caused a crisis in the NHS this winter. A system which encourages panicked adjustments to be functional is not fit for purpose. Nurses should remain on the shortage occupation list.
“The government’s immigration cap does not fit, it may even be counter-productive. It is having no effect on bringing down net migration.
“The latest net migration figures show a third of a million people entered the UK last year, roughly the size of Cardiff, making the Tier 2 cap of 20,700 minimal in comparison.
“Yet it blocks the recruitment of vitally needed skills required by individual employers and the economy as a whole. When the monthly allocation is used up, employers are left with a stark choice between a nurse or an engineer. Britain must be open for business, to achieve this we need skilled workers.”
A spokesman at the Home Office said the MPs’ recommendations would be considered by ministers but added that, in the past, it had been “too easy” for businesses to bring in workers from overseas rather than to train up British workers.
“We want to ensure that businesses are able to attract the skilled migrants they need, but we also want them to get far better at recruiting and training UK workers first,” he said.
However, Seamus Nevin, head of employment and skills at the IoD, said that a “toxic” political debate over levels of migration had resulted in businesses being “caught between needing to address specific skills shortages to raise productivity, while being unfairly attacked for having to hire from overseas”.
He added, “The committee rightly points out that the cap has had ‘no effect’ on reducing net migration but has prevented businesses from recruiting people with the skills they need. The government must listen to the concerns raised by the Home Affairs Select Committee.
“The government’s bizarre and unachievable net migration target has not only caused great difficulties for British employers, but has also put off foreign businesses from investing in the UK.”
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