Comment: How the coalition effectively scrapped points-based immigration
By Erica Consterdine
Speaking at UKIP's spring conference, Nigel Farage stated that the UK should adopt an Australian-style points system. This was a somewhat odd remark given that the UK has officially had a points-based system (PBS) since 2008.
The Labour government established the PBS in 2008, following a long internal review in the Home Office as to how to achieve a managed migration system. The impetus for the PBS was a need to simplify an incredibly bureaucratic system, while increasing the competitiveness of a highly skilled global labour pool, and creating an immigration regime which was responsive to the labour market.
The PBS consolidated the previous 80 routes of gaining entry to the UK into one system which is composed of five tiers: highly skilled migrants, skilled workers with job offers, low skilled migrants, students, and temporary workers. Prospective migrants were awarded points on the basis of their human capital: qualifications, future expected earnings, sponsorship, and English language skills.
So where has the points based system gone? At the heart of the lamented PBS is the coalition government's, now abandoned, net migration target. Such a pledge resulted in the Home Office tackling many so-called 'misuses and abuses' of the system, and major curtailments in eligibility criteria across all migration streams.
Such draconian measures have been much debated and discussed over the years. Yet while such reforms have been piecemeal over the last term, the tinkering with what was a flexible system has culminated in a system which is anything but points based. All supply side logic has dissipated, the admission system is now rigid, high skilled immigration has all but disappeared from Britain's knowledge economy, and far from enhancing tourism as the design of the PBS was intended, the tier five visitor visa has become so convoluted it is labyrinthine in its complexity.
The high skilled visa option, which did not require a job offer before arrival, was closed in 2010. The coalition instead created four new categories. However, the eligibility criteria is incredibly stringent and with the exception of millionaires, it leads to a maximum of 3,000 admittances per year for all highly skilled workers. Of the scant remaining visas available under tier one, the revised eligibility criterion reflects a shift in terms of who is valued by the government.
Tier one has been recast from high skilled to what the government term 'high value' migrants, transforming this channel from a way of attracting the 'brightest and best', to encouraging investment from prosperous individuals. While other categories have strict criteria in order to be eligible for settlement which is usually a minimum of five years residence, this specific category is by contrast very generous.
The period of time required before being eligible for settlement depends upon the wealth of the applicant, and can be a mere two years after arrival. This is a significant development, as it represents a first move towards 'citizenship for sale' in the UK.
Such liberal naturalization opportunities stand in stark contrast to the government's rhetoric of making immigration an exclusively temporary phenomenon, or 'breaking the link'. According to the former UK Border Agency the curtailing of settlement rights will 'discourage over-reliance on foreign workers', yet past experience strongly suggests otherwise. As Matt Cavanagh puts it "the more likely result is a shift to a constantly churning population of temporary working migrants," because while Britain's labour and skill shortages are permanent, the government is choosing for that need to be met by people who stay only temporarily, a theme consistent in other Western states as the ongoing Temper (temporary versus permanent migration) project is unveiling. Such reliance on temporary workers who have no incentive or indeed mechanisms offered to integrate into society will surely not be conducive at a time when community cohesion is so fragile.
At the same time the tier two visa for skilled migrants has also seen major restrictions, with an annual cap imposed of 20,700 visas per year. Yet such quota is not even close to being filled. In the year to April 2012 only half the annual quota was being taken up, the equivalent to under two per cent of the International Passenger Survey inflows. This is due to the eligibility criterion being significantly raised so that almost all tier two applicants now need to possess tertiary education, coupled with a ratcheting up of English language requirements. These are the very people who are most likely to contribute to economic growth by way of knowledge transfer and consequent inward investment. In a context of chronic skill shortages, such stringent requirements on skilled individuals could have major ramifications for Britain’s knowledge economy.
A further objective in designing the PBS was to increase tourism by creating a simpler system. Far from streamlining, the government have once again created a complex admission framework for temporary migrants. Tier five is explicitly for temporary workers, and thus includes mainly visitor visas, as well as some anomaly categories. What we have seen is an increase in visitor visas – 60% of people admitted to the UK in 2012 were on a visitor visa with a further 320,000 students visitors – creating a 'balloon effect' in which restrictions on one type or source of immigration – tiers one, two and four – lead to an increase in immigration through another path.
But institutionally what we have also witnessed is a formidable increase in the types of tier five visas, a common theme across the tiers since 2010. At the time of writing there are 16 types of temporary worker visa, not including the youth mobility scheme or domestic workers. Each visa has different eligibility criteria and rights attached. Far from a transparent and simple system, the PBS has become more cumbersome and more elaborate than the work permit system it replaced.
The UK still applies the term 'points based system' to describe its migration selection system, but as Madeline Sumption from the Migration Policy Institute observes 'it no longer has a points system as the term is generally understood'. The supply side of the PBS has completely dissipated; there are no points to be gained from human capital, indeed there are no real points to be acquired across the board, since almost all work visas require a job offer.
Against the global race for talent going on elsewhere in the Western world, where we see states grappling with how to attract more high skilled individuals, the coalition's policy seems to have been aiming for the antithesis, in the hope that somehow the native population will acquire the skills needed, and even more problematic the assumption that Brits will fill labour market shortages in sectors long dominated by migrants.
The essence of any points based system is flexibility. The UK system has all but lost this element. In turn, the transparency and simplicity, which was a major motivation for overhauling the admission system, has likewise waned. Indeed the National Audit Office has concluded that the PBS is not yet delivering value for money, and enquires with stakeholders found many unsatisfied sponsors.
A major advantage of the PBS is that it allows governments to finely tune entry criteria in consideration of changing economic circumstances. Opportunely, the current structure of the PBS is certainly not set in stone, therefore it is possible that the incoming government could tinker and simplify it. Drastic reform is needed to equip the UK labour market for the future.
Underlying the dismantlement of the PBS was the political motive to reduce net migration, which has unequivocally failed. Hopefully future administrations will learn the lessons of this government, and set a policy that does not hinder the economic needs of the country in favour of populist promises which cannot be met.
Erica Consterdine is a research fellow at the Department of Politics and Contemporary European Studies at the University of Sussex.
The opinions in Politics.co.uk's Comment and Analysis section are those of the author and are no reflection of the views of the website or its owners.
