Immigration cap complaints fall away

Complaints by business that the government’s immigration cap was stifling growth have fallen away amid persistent stagnation in Britain’s poor labour market, according to new research by employment analysts.

The number of companies planning to hire migrant workers from outside the European Union fell by a quarter in the three months to December 2011 according to a survey of over 1,000 employers by the Chartered Institute of Personnel Development.

The drop in demand is most prevalent in highly-skilled jobs such as engineering, IT, finance and accountancy – roles which have historically seen high levels of recruitment from countries such as India, Singapore and the US.

Many companies initially balked at home office restrictions on the number of skilled non-EU workers who could enter the country, after ministers imposed an annual limit of 20,700 visas in April. However, the cap has been undersubscribed by about 50 per cent a month since its introduction, and CIPD researchers said that the economic crisis and resulting suppression of the labour market had helped reverse business opposition to the policy.

The Institute’s research – published on Thursday to coincide with the end of a consultation by the government’s migration advisers on the effect of the visa cap – shows that the number of employers reporting difficulty filling engineering vacancies fell from 24 per cent to 19 per cent in the three months to December, while those experiencing problems recruiting for IT jobs declined by almost half from 19 per cent to 10 per cent over the same period.

Gerwyn Davies, public policy adviser at the Institute, told the Financial Times that the drop in demand for non-EU workers came as employers were looking to take advantage of the growing supply of skilled workers in the UK and the EU, especially eastern Europe. “With employment prospects set to deteriorate further in the next year, there is scant evidence that the cap is hampering or will impact on employers’ ability to fill vacancies with skilled workers in the short to medium term,” Mr Davies said.

But he also warned against suggestions that the home office may reduce the cap for the next financial year – especially given the impending closure of the work route currently open to students who have just finished their studies. “A freezing of the current visa limit for April 2012-13 would already amount in real terms to a 25 per cent decrease in the total number of non-EU skilled workers available to employers,” he said.

Caron Pope, managing partner of law firm Fragomen LLP, agreed that lowering the limit would be damaging and keeping it where it is would “send out the message that the home office does have the interests of UK business at heart”.

However, Ms Pope pointed out an additional problem: a likely spike in visa uptake before the London Olympics, since support workers in jobs such as corporate hospitality, engineering and drugs testing are not allowed to apply for the special Olympic visa open to athletes, coaches and accredited media. She said that these short-term workers should not be allowed to take up the visa allocation needed by companies making longer-term recruitments.

“It would be a real shame if an unrealistically low annual limit led to very short term Olympics workers squeezing out skilled workers who would have made an ongoing contribution to the UK,” Ms Pope warned.