Investor News

24 August 2010

UK Visa cap could “choke economic recovery”

Many employers are looking to recruit from overseas with one in six saying they will bring in migrant workers in the third quarter of this year, a study by Chartered Institute of Personnel and Development (CIPD) and the accounting giant KPMG.

Gerwyn Davies, public policy adviser at CIPD and author of the report, said a radical UK Visa cap would "choke economic recovery" at a time many Employer Sponsorship Licence-holding employersare still struggling to fill skilled vacancies despite the high unemployment rate.

"The training of local or British workers to fill skilled jobs currently occupied by migrant workers will not happen overnight. [A radical cap] could potentially cut off a labour supply and impede growth in UK companies, which will be devastating given that the government's hopes for reducing unemployment hinge solely on the private sector growing jobs," said Davies.
A temporary UK Visa cap now applies to all new applicants under Tier 1 (General), except for extension applications and in-country applications. Applications under Tier 2 (General) will be limited by the number of sponsorship applications allocated to licensed employers. A permanent UK Visa cap will be put in place in April next year.

Davies said the current points-based system for UK immigration is working as it only allows in highly skilled migrants.

The study also found that  almost one in 10 companies plan to relocate jobs abroad in the coming year with call-centre, IT and finance jobs are most likely to be taken overseas with the majority of jobs to be moved to India.


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