TUC submission to the Migration Advisory Committee review of Tier 2 migration

TUC submission to the Migration Advisory Committee review of Tier 2 migration 

Introduction

1.1      The Trades Union Congress (TUC) has 52 affiliated unions, representing almost six million members, who work in a wide variety of sectors and occupations. 

1.2      The TUC believes in a managed migration system where non-EU migrants with skills needed by the economy have a route into the country and are treated on equal terms and conditions to the resident workforce.

1.3      The TUC welcomes the Migration Advisory Committee (MAC) call for evidence on the Tier 2 route[1] as it provides an opportunity to examine current shortages in the labour markets and ways that migration policies, as well as investment in training and engagement with trade unions, can be used to address them.

1.4      The TUC has concerns, however, about the overall framing of this consultation. The government has stated it wishes the MAC to review Tier 2 in order to ‘advise on what more can be done to reduce levels of work migration from outside the EU’.^[2]  This forms part of the government’s stated aim to cap net migration to a figure below 100, 000.[3]

1.5      The TUC is opposed to setting a cap on the number of non-EU migrants that can enter the country, firstly, because it suggests that migration is a problem that should be limited across the board.  We believe this approach scapegoats migrants for social and economic problems that can only be solved by action by employers and government to invest in decent jobs and services. The government’s current hostile approach towards migration will not solve the problems workers face, rather it will fuel discrimination and social tension.

1.6      Capping the number of migrants that can enter the country also limits the recruitment of migrant workers that are sometimes urgently needed to fill skills gaps in the jobs market, as in the case of the health sector, discussed below.

1.7      Furthermore, limiting the number of migrants entering the country on skilled worker visas from outside of the EU will not address the most serious cases of undercutting which are largely taking place in low-skilled occupations where employers use mostly migrants from the EU to undercut local workers. The TUC welcomed the in-depth discussion of this issue provided by the MAC’s 2014 report Migrants in low skill work.[4]

1.8      One of the reasons the Home Secretary has stated there is a need for the net migration cap is due to pressure on services[5], however the TUC does not believe there is evidence to support this claim. Rather, research from Professor Dustmann suggests migrants that have arrived from non-EU countries have made a net positive contribution to public finances.[6]  Pressure on services has been created by the deep cuts in spending the previous government carried out in public services, which the present government has committed to continue.

1.9      Rather than being used to pursue an anti-immigration political agenda, migration policies should be informed by the needs of the labour market and the need to protect the rights of all workers from exploitation. The TUC values the independent analysis of these issues provided by the Migration Advisory Committee.

1.10   We believe changes to migration policies should be developed through consultation with trade unions and employers and, once agreed, should be introduced with adequate lead-in time to allow employers and workers to plan for the future.

1.11   Any changes to the rules, especially concerning salary thresholds, should only apply for new entrants to Tier 2, as applying them to migrants already on the Tier 2 route (for extension and settlement applications) would be unfair and cause a great deal of unexpected disruption, both to migrants and their employers. Even if the revised arrangements only apply on renewal of visas, or on individuals’ settlement, transitional arrangements will be required to minimise the risk of people having to leave the country should their salary not be as high as new salary thresholds that are introduced.

1.12   In the TUC’s response to the MAC’s consultation document, we will answer the questions we are best placed to answer. This submission should be read in conjunction with the evidence the TUC supplied to the MAC’s review on salary thresholds for Tier 2 submitted in July.

Response to consultation questions

Skills shortages

What criteria should be used to select jobs and occupations that are genuine skills shortages and people that are highly specialist experts? What use should be made of selection criteria such as salaries, points for particular attributes, economic need, number and length of vacancies and skills level? What other criteria should be considered?

2.1      The TUC believes a sensible policy towards migrant recruitment should address short-term gaps in the labour market whilst taking other measures to address long-term training needs in the resident labour market.

2.2      A sensible approach towards migrant recruitment would also be one that is ‘rights based’, with migrant workers hired on the same pay and terms and conditions as found in the resident labour market.  This is essential to ensure that migrant workers are not being hired as a cheaper alternative to local workers and do not undercut terms and conditions in different sectors.

2.3      An important barrier to having a ‘rights based’ approach is that, even if migrant workers in Tier 2 are aware that they are being treated unfairly, they have great difficulty in enforcing their rights. This is due particularly to the indentured nature of the employment relationship where a migrant worker is required to leave the UK if they lose their job. This results in very few Tier 2 migrant workers raising concerns with either their employer or the Home Office regarding how they are treated.  The TUC believes all workers should be able to claim their fundamental right to be treated decently at work, regardless of immigration status.

2.4      We have concerns about pay levels being used as a criteria for jobs to be eligible for listing on the Shortage Occupation List.  This is due to the fact that increasing number of workers are not paid at levels commensurate to their skill level. 

2.5      Workers in the public sector have been subjected to a pay policy based on a two year pay freeze from 2010, followed by a 1% pay cap. ASHE data reveals that pay in the public sector has fallen in real terms by 8.4% in the last four years.^[7]

2.6      In the Summer Budget 2015, the government announced that it will “fund public sector workforces for a pay award of 1 per cent for 4 years from 2016/17”, which will mean levels of pay will become further divorced from the skill level of the job, as well as creating further hardship and low morale for workers.

2.7      The TUC has concerns about the removal of national pay scales in education and the increasing number of academies and free schools being created which means that increasing numbers of teachers fall outside nationally agreed terms and conditions.

2.8      Pay for workers in the private sector has fallen almost as dramatically as pay in the public sector, dropping by over £2,000 a year in real terms from 2010-2014.^[8]  Only 15% of workers in the private sector belong to a union which means workers have little voice to challenge low levels of pay and employers have increasingly been able to employ workers on precarious contracts without prospects of a pay increase.

What will be the impact of restricting Tier 2 (General) to genuine skills shortages and highly specialist experts?

2.9      The TUC believes the Tier 2 (General) route should only be used for recruitment of non-EU migrants where there are skills shortages in the labour market.  We believe the route should not be used by employers to take on workers when there are workers with the required skills already present in the resident labour market.

How could a restricted Tier 2 (General) route maintain flexibility to include: a) high value roles; b) key public service workers?

2.10   The TUC believes the Migration Advisory Committee should regularly seek evidence from trade unions on skills shortages in key public service and high value sectors to establish where the Tier 2 (General) route should be used to allow workers to enter.

What occupations would you expect to see on an expanded shortage occupation list? How does the occupation or job title you are suggesting satisfy each of our criteria in relation to “skilled”, “shortage” and “sensible”? Alternatively, what other criteria does the occupation or job title satisfy that meets the requirement of being in a genuine skills shortage or for highly specialised experts?

2.11   As stated in our evidence to the Migration Advisory Committee’s partial review of the Shortage Occupation List (SOL) submitted in December 2014, the TUC believes shortages in the recruitment of nuclear waste inspectors and linesworkers suggest they should remain on the SOL.

2.12   The TUC believes there is a case for considering the addition of nurses, paramedics and occupational therapists to the SOL as there is evidence of staff shortages in these sectors that is causing a strain on the service.

2.13   The joint staff-side NHS trade unions found that 85% of ambulance staff reported that staff shortages have occurred on a frequent basis in the last 12 months. Staff shortages in health services in turn fuel problems with staff retention.  The joint staff-side NHS trade unions found that 62% of NHS staff reported staff shortages as their main reason for leaving the NHS.^[9]

2.14   There are also shortages of teachers that necessitate overseas recruitment.  Teacher shortages that has been driven both by the 1% cap on public sector pay and the insufficient number of training places being made available for some subjects, particularly as maths, physics, chemistry, design and technology, information and communications technology (ICT), computer science, business studies, geography and English.   

2.15   The introduction of the School Direct training route has made it more difficult to establish how many teacher training vacancies are being filled in comparison with the higher education-based Postgraduate Certificate of Education (PGCE) route.  This is due to the fact that applicants to School Direct training may apply – and be offered places at –multiple individual schools at a time, meaning that it cannot be established until trainees actually start if there are enough training places available.

2.16   There is also a need to address staff retention and development in education.  Government figures from the School Workforce Census (SWC) suggest that approximately half of trainee teachers are no longer in teaching five years after they have finished training

2.17   The TUC believes that schools which recruit and employ Overseas Trained Teachers (OTTs) to fill vacancies should also be required to show how they are training and recruiting teachers from the resident labour market, as well as supporting all teachers in the school.

2.18   The TUC is concerned that Overseas Trained Teachers who are recognised as holding Qualified Teacher Status (QTS) only have to be paid a minimum of £22,244 on the pay framework. This means schools could use staff shortages of teachers to bring in qualified teachers from overseas on lower pay levels that resident teachers would expect.

Intra-company transfers

The Tier 2 (Intra-Company Transfer) category is the most used route under Tier 2. The Government has asked that the MAC consider the scope for action to tighten the intra-company transfer provisions:

a. What criteria should be used to determine eligibility for the intra-company transfer route?

3.1      The TUC believes that the intra-company transfer (ICT) route should be limited to occupations where there are genuine shortages in the resident labour market. We also believe that ICTs should not be used to displace resident workers.

3.2      The TUC is concerned that the current UKBA guidance^[10] on Tier 2 does not contain references to safeguards that were present in the 2013 guidance on Tier 2 and 5 which stated ‘a migrant sponsored under any Tier 2 category must not displace a suitable settled worker’ and that a worker on an ICT visa ‘must not be used to fill UK vacancies or to displace resident workers by, for example, filling positions in a UK-based project or by rotating the admission of skills transferees to effectively fill long-term positions in the UK’. Such safeguards need to be re-stated, widely publicised, and properly enforced.

b. Subject to legal requirements, how can the Government tighten the Tier 2 (Intra-Company Transfer) provisions? Should this route be limited to genuine skills shortages and highly specialised experts only?

3.3      The TUC believes that the intra-company transfer (ICT) route should be limited to occupations where there are genuine shortages in the resident labour market. 

3.4      We have consistently raised concerns that the ICT route does not currently require employers to conduct a Resident Labour Market Test (RLMT) and has been used heavily by employers.  In 2014, more than double the number of workers were brought into the country through the ICT route than through the Tier 2 General route. 

3.5      This has meant that a significant number of workers are being brought into the country without a demonstrable skills shortages, predominantly in the IT and telecommunications sector, as discussed above.

3.6      It is important for the MAC to monitor the education sector’s use of ICTs as some multinational academy chains may use this route as a way to bring in teachers from outside the EU at lower rates of pay than those in the resident labour market.

c. What will be the impact on businesses and the economy of tightening the intra-company transfer provisions?

d. What will be the impact of a cap on the number of migrants a sponsor can employ based on the percentage of each organisation’s UK workforce?

e. What impact does the Tier 2 (Intra-Company Transfer) route have on the domestic labour market?

3.7      The TUC believes that resident workers are being disadvantaged by the use of the Tier 2 ICT route given its widespread use on what is frequently a “body shopping” basis, and often on inferior terms and conditions.

f. Should allowances continue to be included in the salary threshold for the Tier 2 (Intra-Company Transfer) route? If allowances were excluded from the salary threshold, what would be the impact?

3.8      The TUC is concerned that allowances may be being used by employers to lower salaries for employees on Intra-Company Transfer visas.  This is particularly concerning in the IT and telecommunications sector which has brought in a large number of workers into the country through the ICT route. The minimum pay level for ICT visas is set at £24,800 for short term staff and £40,000 for long term staff which in general constitute low salary levels for these jobs.

3.9      It would be useful for the Migration Advisory Committee to look into the number of ICT visa applications that only pay the minimum threshold salary as this would suggest this visa route is being used systematically to hire workers on cheaper rates than resident workers.

g. What is the impact on existing UK companies and UK resident workers of the current intra-company transfer provisions in relation to companies outsourcing contracts with third parties?

3.10   Companies, and their UK resident employees, without a significant offshore presence are disadvantaged by difficulties in competing for outsourcing contracts with offshore-headquartered employers whose UK workforce is mainly made up of Tier 2 visa holders who can be used more cheaply.

h. What would be the impact of putting tighter intra-company transfer restrictions on companies which outsource contracts with third parties?

3.11   The TUC supports the intra-company transfer visa routes being restricted to those occupations where there are demonstrable skills shortages.  This would prevent this route being abused by employers as a means to bring in cheaper workers to undercut resident workers.

i. What is the impact on existing UK companies and UK resident workers of the use of the current intra-company transfer provisions in relation to the IT sector?

j. What would be the impact of putting tighter intra-company transfer restrictions on the IT sector specifically?

3.12   As the IT sector makes most use of the ICT visa route, the TUC believes it is important for occupations in this sector to be restricted to those where there are demonstrable skills shortages. However, we believe all sectors recruiting via the ICT route should also be restricted to occupations where there are genuine skills shortages.

k. Is there a case for requiring intra-company transfer migrants to pay the immigration healthcare surcharge? What are your reasons for or against this? What would be the impact of making these migrants pay this surcharge?

3.13   The TUC is opposed to the imposition of health surcharges for non-EU migrants due to serious concerns about their impact on public health and vulnerable groups, which we raised with the Department of Health in August 2013 when the charges were proposed.[11]

3.14   The TUC believes it is not fair to make non-EU migrants pay for health care.  The NHS is funded from general taxation which everyone in the country contributes to, including non-EU migrants, through tax contributions whilst working or simply through paying VAT in everyday consumption.

3.15   The TUC believes health care should be free at the point of need and to refuse to treat someone on the basis that they have not produced evidence of payment goes against the UK's obligations as a signatory to the Universal Declaration of Human Rights which includes a right to medical care and the International Covenant on Economic, Social and Cultural Rights which requires states to take the necessary steps to create conditions ensuring access to healthcare for all.

3.16   The TUC is concerned that the health charges may lead to discrimination in frontline service delivery to individuals with the protected characteristics of gender, race and ethnicity. People who are not white or do not speak English fluently are more likely than their white English-speaking counterparts to have their immigration and payment status questioned by those administering the system. This would compound inequalities already experienced by ethnic minority citizens who are already marginalised in their ability to access care due to issues of language and lack of accessible information. 

3.17   The TUC is also concerned that a patient may be denied access to care under this system, as the database being introduced to keep track of whether a patient has paid the surcharge may not accurately reflect their current immigration statuses if they have renewed or changed their visa. 

3.18   There are public health risks if migrants are discouraged from seeking treatment or are refused treatment for communicable diseases such as TB or HIV.

3.19   The health charges are also likely to have a negative impact on disabled people who require ongoing medical treatment for their condition and people with mental health issues. These conditions require long-term treatment which non-EEA migrants that become undocumented will no longer be able to fund, leaving them without the critical care they need. 

3.20   The health and wellbeing of non-EEA migrant women who are pregnant and their babies will also be compromised as women who whose payment or immigration status is not accurately recorded in health databases or who become undocumented, will be faced with charges they cannot pay.  This might mean they are not able to access timely antenatal care which a wealth of medical evidence shows is vital to fight against maternal and infant mortality.  Women who are unable to meet the charges may choose to avoid midwifery and obstetric services altogether at significant risk to their own health and that of the child.

Skills levy

The Government has asked that the MAC consider to which businesses a skills levy should apply and the impact this may have, balancing the need to maximise the incentive for employers to recruit and train UK workers with the ability of businesses to access the skilled migrants they need. The proceeds of the levy would fund apprenticeships in the UK.

a. What would be the impact of different levels of levy on your occupation or sector? Would a skills levy affect the way you recruit?

b. Should a skills levy apply to all businesses recruiting from outside the EEA? If not, to which businesses should a skills levy apply and why? Why should other businesses be exempt from the levy?

c. Should a skills levy be a one-off payment at the point of recruitment of a Tier 2 migrant or should it be on an annual basis for the duration of the migrant’s stay under their initial Tier 2 visa?

4.1      The TUC is a longstanding advocate of a levy on all employers to increase investment in skills.  We welcome proposals which will drive up employer investment in skills.  However, this levy proposal should be considered in light of the government’s announcement in the summer budget to introduce an Apprenticeship levy on employers.  We believe there should be an integrated levy system to ensure there is synergy; having two levies operate alongside each other could cause additional confusion and increased bureaucracy. 

4.2      The TUC has welcomed the government’s announcement in the summer budget to introduce an Apprenticeship levy on employers.  The TUC believes this levy should be extended to as many employers as possible, both to increase employer investment and participation in delivering skills and to avoid a two-tier funding system emerging. There is a danger this could lead to increased tensions between larger employers who contribute to the levy and those employers who are excluded from the scope of the levy.

4.3      We believe that levies can incentivise long term investment by employers in skills which is needed to address skills gaps in the economy and prevent the recruitment of migrants being used as a substitute for training resident workers.

4.4      We believe a levy on all employers provides a more comprehensive way to deal with investment in training than the proposed skills levy targeted at employers that recruit via Tier 2 only.  Furthermore, applying a levy on all employers avoids appearing to penalise the recruitment of migrants and add to the stigma faced by migrant workers.