By Claire West

The CBI today called for the Government to ensure that the migration system is designed in a way that supports the economic recovery. It must ensure that companies can operate in an international environment and call on specialist skills from abroad when necessary, the UK’s leading business group said.

In its submission to the Government’s consultation on limits on non-EU economic migration, the CBI says that keeping the UK “open for business” is crucial to supporting the recovery.

From next April, the Government will introduce an annual cap on non-EU economic migration, which will supplement the existing Points-Based System (PBS). Meanwhile, interim arrangements are already in place ahead of the introduction of the permanent cap.

John Cridland, CBI Deputy Director-General, said:

“As the economy gears up for growth, the UK must demonstrate that it is open for business. Companies must be able to access the best and brightest talent from around the world.

“Interim arrangements are understandable to prevent a spike in applications ahead of the permanent cap. But the system is being poorly managed and proving a real headache for firms trying to keep on valued foreign members of staff, or recruit specialists from overseas.

“These problems are undermining confidence that the permanent cap will work. The migration system must support, not hamper growth. To do this, it should prioritise skilled workers with a job offer. This relatively small pool of workers doesn’t just earn money and pay taxes here, but also keep major employers and projects here, supporting many more UK jobs.”

While CBI members have no ideological opposition to a cap on overall migration, the inflexibility of the interim arrangements has caused serious problems for many companies by preventing them from extending the stay of existing valued members of staff and recruiting additional specialist workers from overseas. The CBI is therefore calling for an immediate review of the interim arrangements to ensure they are not hampering the economy at this crucial time.

When the permanent cap is introduced next year, the CBI argues that skilled migrants with a job offer should be prioritised. These workers currently enter the UK through “Tier 2” of the Points-Based System; are relatively small in number; generate taxes and do not place a strain on public services. They will also play a critical role in the recovery by allowing companies to plug domestic skills shortages, resource international projects and train UK-based staff.

The migration system must also allow companies to move their own staff across international bases to transfer knowledge and skills that are not available in the UK. These Intra-Company Transfers (ICTs) enhance the UK’s attractiveness as a global location for investment and jobs, and should be exempted from the cap for an initial period. But it is right that these transfers are temporary and should not lead to permanent settlement in the UK.

Many firms base their international headquarters in the UK. Having an environment in which world-beating teams are able to use home-grown and international skills enables UK firms to compete globally.

The CBI is calling for the Government to look carefully at how numbers entering the country could be reduced elsewhere in the system, particularly from those areas which offer limited economic benefits. For example, almost half of entrants through the “Tier 4” student route of the Points-Based System are studying at below degree level.

The CBI’s proposals for an effective migration system include:

• Prioritising applicants sponsored by an employer, known as Tier 2 applicants, over the rest of the system

• Exempting Intra-Company Transfers (ICTs) from the cap for a time-limited period to protect genuine knowledge and skills transfers and allow multi-national companies to manage global workforces effectively

• Ensuring the UK’s leading universities can continue to attract high-calibre students from outside the European Union, while moving swiftly to limit the numbers coming from abroad to study at below degree level

• An immediate review of the interim cap.

A copy of the CBI’s response to the UK Border Agency consultation on limits on non-EU economic migration is attached.