UK employers near limit on recruiting skilled migrants

UK employers who recruit specialist workers from outside the EU face increasing curbs as an annual quota on skilled migrants edges closer to being breached, researchers warn.

New analysis by the Oxford Migration Observatory, based on data from Freedom of Information requests, shows that the 20,700 a year yearly cap was almost filled between April 2014 and March 2015. More applications were made than visas available and it was only due to some requests being withdrawn that the limit was not reached.

Business concerns about UK curbs on skilled workers have intensified after the Conservatives' election victory.

The OECD group of countries that aims to promote sustainable growth this year urged Britain to loosen its controls on highly qualified migrants, arguing that the rules were "too restrictive" and hampered productivity.

Liberal Democrat cabinet ministers in the previous government had appealed to their Tory coalition partners to increase the quota as the economy grew stronger, warning that the limit was damaging the recovery as companies tried to expand.

However, there is unlikely to be any easing of restrictions given that the Tory manifesto restated the party's aim of bringing net migration down to the "tens of thousands" from the most recent figure of just under 300,000.

The Tories have also committed to maintaining the cap on skilled workers at its current level for the entirety of the next parliament.

Madeleine Sumption, the observatory's director, said if recent trends continued, the annual allocation of visas would soon be oversubscribed.

"That will mean the government will start refusing visas to certain employers," Ms Sumption said.

"We know that if the cap is kept at 20,700 and demand keeps rising, then employers will find that fewer and fewer positions can be filled with non-EU skilled workers.

"How quickly that could happen and how many applications will be turned away is much harder to tell."

The cap was introduced four years ago. In order to qualify as a skilled migrant workers must earn more than £20,800, although those who are paid more than £155,300 are exempt.

The ceiling has never been reached and was often barely more than half-filled during the coalition government's term in office.

But in April the Home Office increased the monthly allocation by 825 to prevent the limit from biting. As a result, there will be 75 fewer visas each month for the rest of the year.

As demand for visas rises, priority will be given to workers on higher salaries and those who have PhD-level qualifications.

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Programmers, software developers and medical practitioners are safer since their median salaries are higher up the scale.

James Perrott, head of immigration at law firm Macfarlanes, pointed out a contradiction between the government's strategy of encouraging inward investment while at the same time making it more difficult for companies to bring in people with necessary skills.

"The prospect of the cap regularly being met is very concerning," he told the FT.

"At a time of historically high levels of employment, this will inevitably prevent or delay employers hiring migrant workers for roles which require skills which are locally in short supply which could impact UK economic growth."

Responding to the research, James Brokenshire, immigration minister, said he wanted to ensure that British citizens benefited first from the growing economy.

"We will continue to monitor the take-up [of the cap] but have no plans to change the limit."

Anxiety over the effect of the skills cap on productivity comes as the Bank of England has been drawn into a row over whether low-skilled migrant workers were depressing UK wages.

While some media reported that Mark Carney, the bank's governor, had blamed immigrants for sluggish wage growth, Mr Carney denied on Thursday that this was the case.

"I would really dampen down that explanation", he told the BBC, adding that there were more older people still in the labour market and that workers were requesting more hours.

"The real story is that British people have wanted to work more", he said.

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