The Government’s announcement on the UK immigration cap is a lot to take in.

A load of new rules have been announced, but understanding the changes requires perspective.

Specifically: What were immigration numbers before the changes? And what did the experts recommend? Then we can look at what the government has actually changed.

Tier 1 UK Visa

Let’s start with the Tier 1 category of UK visas, which has undergone the biggest facelift.

Before:
The Tier 1 Visa was for “highly skilled workers”, granted permanent residency to any skilled workers who met eligibility criteria based on education, work experience and earnings. Approximately 14,000 Tier 1 visas were issued in 2009.

What the experts said:
The government’s Migration Advisory Committee (MAC) recommended that Tier 1 UK visas be limited to between 8,000 and 11,000 each year, a reduction of between 3,000 and 6,000 visas compared to 2009 figures.

What the government actually did:
First off, Tier 1 is no longer for “highly skilled” workers. It has been re-branded as the “exceptional talent” UK visa. It is now only available to entrepreneurs, investors and other people of exceptional talent, and the cap has been set at just 1,000 visas each year. All other skilled workers must now use the Tier 2 UK visa route.

Tier 2 Intra-Company Transfer

The intra-company transfer category (allowing international companies to move staff to their British branch) is exempt from the UK immigration cap, however the government has changed the eligibility criteria to make the visa more difficult to obtain.

Before:
The Tier 2 intra-company transfer allowed any staff with relevant skills or experience to move to the UK. Approximately 22,000 Intra-Company Transfer UK visas were issued in 2009.

What the experts said:
MAC ignored the government’s decision to exempt intra-company transfers from the cap, including the category in its calculations for a Tier 2 limit. Whether MAC supports an exemption for intra-company transfers is not known, but the decision to ignore the exemption only served to create more confusion (and work) for those of us trying to deconstruct the cap.

What the government actually did:
Both the duration and eligibility criteria for intra-company transfer have changed. It has effectively been split into two different products:

• For workers earning less than £40,000 per annum, this type of UK visa will only allow a stay of 12 months or less.
• For those earning £40,000 and above, the maximum stay extends to five years.

Tier 2 (General) UK Visa

Tier 2 now covers almost all pathways into the UK for foreign workers.

Before:
The Tier 2 category covers UK working visas (work permits) and requires applicants to already have an offer of employment from a sponsoring British business. It still comes under the points-based system, granting points based on factors such as skills and experience. In 2009, 14,000 Tier 2 (General) visas were issued (36,000 when you include intra-company transfers).

What the experts said:
MAC recommended Tier 2 visas are limited to between 29,400 and 32,600 per annum. That would shave between 3,000 and 6,000 visas from 2009 figures. However, these recommendations did not exempt intra company transfers. When we take out the 22,000 intra-company transfers issued in 2009 we can assume that MAC was recommending a limit of between 7,400 and 10,600 Tier 2 (General) visas.

What the government actually did:
The government placed a much heavier burden on Tier 2 (General) visas by setting the limit at 20,700. That’s 6,300 MORE visas than the 2009 tally. The reasoning behind the move is the fact that Tier 1 no longer caters for skilled workers, so all potential Tier 1 applications now come under Tier 2. The amended intra-company transfer criteria will also likely lead to higher demand for Tier 2 (General) visas. The limit will be a month-to-month prospect, and in months where the limit has been reached, the highest points-scorers will receive priority.

Overall

So what happens when we add all the stats together?

Before:
Approximately 50,000 employment-based UK visas were issued in 2009. This figure drops to 28,000 when we exclude intra-company transfers.

What the experts said:
MAC recommended an overall reduction of between 13 and 25 per cent. The Committee suggested a limit of between 37,400 and 43,700 employment-based visas each year. Again, this figure includes intra-company transfers. When we subtract 22,000 intra-company transfer visas (based on 2009 figures) we are left with a recommendation of between 15,400 and 21,700 visas.

What the government actually did:
The combined limit set by the government is 21,700. The figure is consistent with MAC recommendations, and is a reduction of 6,300 on 2009 figures.

When we take into account the government’s ambitious aim of reducing net migration to the UK from 196,000 in 2009 to the “tens of thousands”, the new cap hardly seems to make a dent. And that’s a good thing. Experts have warned that drastic cuts to foreign workers would have threatened Britain’s economy, education system and scientific research.

What’s next?

The government is still determined to reach its arbitrary “tens of thousands” aim for net migration. Now that the cap on work visas has been sorted, David Cameron and co will turn their attention to student visas (Tier 4 UK visas), which account for two thirds of all immigration to the UK. The government will soon start a consultation on the issue, with plans to introduce tight new restrictions for student visa eligibility criteria.

So what do you think about the cap?