Thank you for your letter of 30 November 2010 to the Home Secretary enclosing comments from readers of your website about the Intra-Company Transfer (ICT) route. Your letter has been passed to me to reply. I am sorry for the delay in responding to you.
We are clear that the UK can benefit from immigration, but not uncontrolled immigration. Over the summer we consulted on our proposals to ensure that we took a wide range of views into account. One of the key questions that we asked was whether ICTs should be included in the limit.
The ICT route makes a substantial contribution to inward investment in the UK, boosting our economy and creating jobs for resident workers, not just migrant workers. UK workers also benefit from working with the most highly skilled workers from around the world and sharing expertise. We are also bound by our international trade commitments which do not allow us to, for example, require that ICT posts be advertised or that workers must have more than one year’s experience with their company before being transferred.
However, ICTs account for a significant proportion of Tier 2 numbers and those who come to the UK for an extended period will inevitably draw on public services. We have also taken on board concerns that the route has been used by some companies to undercut and fill jobs that could be done by resident workers, particularly in the IT sector. It would be remiss of us not to consider how ICTs should be accounted for in a policy for controlling migration.
Whilst we have decided, on balance, that ICTs will be excluded from our limit, we are making other reforms to the route to ensure that it is used as intended. We will raise standards by only allowing senior managers and specialists, the people who the route was originally intended for, to enter for up to five years. These staff will need to be earning at least £40,000. We will allow other ICT workers earning between £24,000 and £40,000 to enter the UK, but only for up to 12 months, after which they will need to spend a minimum period overseas before they will be allowed to return. In addition, we will remove a loophole that currently allows long-term transferees to stay in the UK for more than five years.
The minimum salary rates above apply to all ICT posts, not just the IT sector (where salaries are relatively high compared to many other sectors). In addition, for each individual type of job, employers must pay the appropriate salary rate that would be paid to resident workers, as specified in the UK Border Agency’s guidance for sponsors.
We do not think that employers should be penalised for ensuring their workers are properly accommodated in the UK. Accommodation, through rent or mortgage payments, makes up a significant proportion of most workers’ expenditure, and we think that it is right that some level of accommodation allowances should be included. We do not take into account business expenditures, such as travel to and from the migrant’s home country.
Salaries also cannot be artificially inflated on the basis of tax not paid. If a sponsoring employer states that they are paying £40,000, then that is what they must actually be paying to the worker. If the company does not pay the stated salary, they risk losing their sponsor license.
Many of the points raised by your readers relate to international tax agreements, which are not part of the Home Office’s remit. Migrant workers benefit from international tax agreements in the same way that UK workers benefit when employed overseas. Further information is available on the Directgov website at: www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/LeavingOrComingIntoTheUK/DG_10026136.
The changes we are making will help to stabilise the numbers coming through ICTs, which had previously been rising. The changes apply to all ICTs, including those covered by the EU-India Free Trade Agreement. They will ensure that we continue to give certainty to businesses that they will be able to recruit people with the skills they need, without admitting migrant workers to do jobs that could be done by resident workers.
Damian Green MP