Trade union Unite has reacted angrily to the government's decision to exclude intra-company transfers from its migration cap policy announced today, believing that it is already having a detrimental effect on the UK workforce, especially IT staff.
The introduction of a salary threshold of £40,000 for intra-company transfers of more than a year will lead to employers manipulating the system by transferring workers from outside the UK for less than a year, Unite said.
Employers can claim accommodation allowances of up to 30 per cent of the salary, or 40 per cent if the certificate of sponsorship is under 12 months. Pay and allowances are not taxed if the migrant worker is temporarily transferred for under two years.
This subsidy could act as an incentive to undercut domestic pay rates, Unite claimed. A resident worker earning £35,000, for example, could end up paying £10,000 more in tax payments than a similar migrant worker on an intra-company transfer visa.
Excluding intra-company transfers from the migration numbers is contrary to advice from the Migration Advisory Committee, which released a report last week highlighting the potential problems.
Businesses could abuse the system by manipulating tax and accommodation allowances to undercut UK resident workers, according to Peter Skyte, Unite national officer.
"The government has spectacularly squandered the opportunity to deal with misuse and abuse of the intra-company transfer scheme in its migration cap announcement in the face of largely empty threats by big business to withdraw investment from the UK," he said.
Skyte added that the government has also failed to stimulate job opportunities to reduce high unemployment among skilled computer science graduates.
"[Instead it has] provided employers with greater incentives to source labour from the domestic market as envisaged in its original consultation on the migration cap," he argued.
Anne Swain, chief executive of the Association of Professional Staffing Companies (APSCo), welcomed the government's "tightening up" of the rules on intra-company transfers but questioned whether imposing a £40,000 minimum salary limit would be effective.
“We will be seeking clarity from the government on how the £40,000 minimum will be reviewed," she added.
“About 80 per cent of non-EU IT workers come to the UK on intra-company transfers. The cap won’t significantly reduce that influx."
Swain called for greater transparency in the current immigration system detailing the pay and conditions of workers entering the UK on intra-company transfers.
“The cap is a blunt tool which could do more damage than good. The vast majority of foreign workers arriving in the UK are EU nationals who won’t be affected by the cap,” she explained.
“Worries over immigration centre on low skilled workers being undercut, so capping the flow of highly skilled workers seems a strange policy.”
She warned that by imposing an inflexible cap, the government "could be damaging high value sectors of the economy where skills shortages can hinder growth”.
Allen died from complications of non-Hodgkin's lymphoma
Stanford researchers made the discovery via data from Greenland
Created via a thin, flexible, and transparent hierarchical nanocomposite film
Rolls Royce will use AI powered by Intel's Xeon Gold processors and SSDs for memory