from ABIL Global Immigration Update

(1) UK Immigration: Open and Ready for Business?

A Statement of Changes in Immigration Rules, detailing changes that came into force on April 6, 2011, was laid before Parliament on March 16, 2011. Among other immigration categories, the statement announced changes to the Tier 1 category of the Points-Based System as expected, and in particular to the Tier 1 (Investor) and Tier 1 (Entrepreneur) categories, but with more changes than anticipated. A definite Tier 1 (Exceptional Talent) category was established and so the Tier 1 category seems to have been redesigned in accordance with recommendations published by the Migration Advisory Committee (MAC) in their report of November 2010: the Tier 1 (Investor) and (Entrepreneur) categories were changed with the aim of attracting direct foreign investment as well as creating jobs, and the Tier 1 (Exceptional Talent) category seeks to attract the brightest and the best, a recurring theme throughout Parliament's amendments.

On March 22, 2011, changes to the Tier 4 category of the Points-Based System were announced by Home Secretary Theresa May. The Tier 4 category, which deals with non-European Economic Area student migrants, will be redesigned by April 2012 with the stated goal of serving the brightest and the best students. The Home Secretary has also promised a new entrepreneur route aimed at students that would allow those with business ideas and a potential to create wealth an opportunity to remain in the UK after graduation.

These changes seem to be consistent with the Coalition Government's objective of supporting a private-sector-led economic recovery while reducing net migration from hundreds of thousands to tens of thousands. However, while they do send the message that the UK is open and ready for business, Britain must be careful not to favor only those willing to invest large sums in the country or those who are ready to develop businesses, and should provide ways for those who will contribute to UK economic recovery in other ways to enter the country also.

Tier 1 (Investor)

Beginning April 6, 2011, migrants who apply under the Tier 1 (Investor) category of the Points-Based System enjoy increased flexibility in their status and require less time to be able to settle in the UK. Initial leave is granted for three years and four months. After investing £5 million in the UK, an investor may settle in the country after three years, and after an investment of £10 million, after two years, both significantly shorter periods of time than the current minimum of five years required for settlement. In addition, investors are permitted to be absent from the UK for up to 180 days in any 12 months without jeopardizing their right to settle, which is double the current limit of 90 days.

Tier 1 (Entrepreneur)

Tier 1 (Entrepreneur) migrants are also granted an initial leave of three years and four months, with a potential extension of two years and settlement after five years. Entrepreneurs are now able to accelerate settlement after three years in the UK, however, if they generate a turnover of £5 million or create ten jobs in a three-year period. As with investors, entrepreneurs are permitted absences from the UK for up to 180 days in any 12-month period. Most important, while the standard investment threshold will remain at £200,000, businesses that the UK Border Agency considers as "high-potential businesses" may enter the country with £50,000, as long as the sum is provided by registered venture capitalists regulated by the Financial Services Authority, registered UK entrepreneurial seed funding competitions, UK Government Departments, or a combination of the three. Entrepreneurs may enter the UK with business partners if they have access to joint funds.

Prospective Entrepreneurs

Prospective entrepreneurs may enter the UK with a new type of visitor visa designed especially for those looking to set up businesses in the UK. Unlike those who enter the country with a business visitor visa, prospective entrepreneur visa holders are permitted to apply for a Tier 1 (Entrepreneur) entry clearance or visa while they are in the UK.

Tier 1 (Exceptional Talent)

As of August 9, 2011, the UK Border Agency (UKBA) started accepting applications for the new Tier 1 (Exceptional Talent) Category. Tier 1 (Exceptional Talent) is for those foreign nationals who are "internationally recognized as world leaders or potential world-leading talents in the fields of science and the arts." During the first year of this category, there is a limit of 1,000 grants of entry clearance (700 in science and 300 in the arts), and the limits will be reviewed by April 2012. These foreign nationals will not require employer sponsorship but will need a Unique Reference Number (URN) from the UK Border Agency and a nomination from a Designated Competent Body (DCB) before applying for the entry clearance visa at the UK consular post in their country of residence. The Designated Competent Bodies and their allocations are:

1. The Royal Society: 300 nominations;
2. The Arts Council England: 300 nominations;
3. The Royal Academy of Engineering: 200 nominations; and
4. The British Academy: 200 nominations

There will be a cap on the number of visas available in the Tier 1 (Exceptional Talent) category, with the UK Border Agency allotting a total of 1,000 spots between August 9, 2011, and April 5, 2012. The first 500 are available for use between August 9 and November 30, 2011, and the second 500 between December 1, 2011 and April 5, 2012. The UK government will reassess the need for additional visas in March 2012.

Tier 1 (Exceptional Talent) visa holders will initially be permitted to stay in the UK for up to three years and four months. They will be able apply for an extension, allowing them to stay for two additional years. If these individuals complete five years of residence in the UK under this status, they will qualify for Indefinite Leave to Remain (permanent residence).

Tier 4

Changes to the Tier 4 category, designed for student migrants, will be implemented starting April 2012. The category will be changed to cater to and "protect" only the best and brightest students, in the words of the Home Secretary. In her statement on March 22, 2011, Theresa May expressed her goal of making the student category a route through which migrants would come to the UK "for a limited period," "to study, not work," and to "make a positive contribution" to the UK.

To realize this goal, more responsibilities will be placed on both academic institutions and students. Beginning in April 2012, institutions must be classified as "Highly Trusted" sponsors and be accredited by statutory education inspection bodies by the end of 2012 before they can sponsor students. Students will lose their right to work unless they are at universities and publicly funded further education colleges and will no longer be able to bring dependents unless they are postgraduate students at universities or government-sponsored students (currently all students on longer courses are permitted to bring dependents). The overall time that a migrant can spend in the UK on a student visa will also be reduced for some. While the limit will remain at three years for lower-level courses, it will be reduced to five years at higher levels (at present, a limit for study at or above degree level does not exist). Students will also have to demonstrate a proficiency in English at a higher level: at the B2 (upper intermediate) level instead of at the B1 (lower intermediate) level.

See below for more details on changes to Tier 4.

The Tier 1 (Post-Study Work) category, which will close in April 2012, allows students to seek employment in the UK for two years after the end of their courses. Students may find alternative routes to stay in the UK after graduation if they receive an offer of employment (and apply under the Tier 2 category) or if they qualify as "innovative student entrepreneurs"; the Home Secretary has expressed plans to create a new entrepreneur route for students with business ideas and plans to create wealth in the UK.

Conclusion

Through changes in the Tier 1 (Investor) and (Entrepreneur) and Tier 4 categories as well as plans to establish Tier 1 (Exceptional Talent), a prospective entrepreneur visitor visa, and a new entrepreneur route for students, the UK seems to be sending quite an eager message that the country is open and ready for business, at least to those who qualify under the changed Immigration Rules. However, if Britain is to live up to the Coalition Government's aim of a private sector-led economic recovery while also reducing net migration, it must be cautious that the Immigration Rules do not merely favor those with large sums to invest, those who have been internationally recognized for their endeavours, or even those who show promise to do so. It must be especially cautious not to penalize legitimate migrants who wish to enter the UK to contribute to the country for the reason that they are unable to demonstrate significant wealth or the clear potential to create wealth at the time of their application, such as recent graduates. Universities and employers have already noted that many talented students choose to study and work in the UK following their studies rather than in the U.S., Australia, or Canada because of the country's unique immigration system. Britain must not be blinded by the simple goal of reducing net migration, but should consider who will truly and most significantly make a contribution to UK economic recovery, and provide ways for them to enter the country.

(2) UK Government Struggles to Reduce Net Migration

Following the United Kingdom's changes to the Immigration Rules implemented on April 6, 2011, including the execution of an annual cap of 20,700 migrants to work in skilled professions under Tier 2 (General) of the Points-Based System, the coalition government continues to identify further restrictions to achieve its stated aim of reducing annual net migration to below 100,000 by 2015.

Changes to Tier 4 of the Points-Based System

A major public consultation on the reform of Tier 4 of the Points-Based System took place from December 7, 2010, to January 31, 2011. Initial changes to the Immigration Rules were subsequently implemented on April 21, 2011, including the introduction of an interim limit on sponsors who did not meet new accreditation criteria and changes to the English language requirement so that those coming to the United Kingdom (UK) to study at the degree level must demonstrate their ability to speak English at an upper intermediate level. Further amendments set forth before Parliament by Immigration Minister Damien Green in a written ministerial statement on June 13, 2011, took effect on July 4, 2011. These revisions include:

• restricting work entitlements to those studying at higher educational institutions and publicly funded further education colleges only;
• restricting the sponsorship of dependents to those studying at post-graduate levels at a higher educational institution and on a course lasting for 12 months or longer and government-sponsored students on courses lasting six months or longer;
• requiring institutions to vouch that a student's new course represents genuine academic progression;
• ensuring that maintenance funds are genuinely available to applicants by introducing a declaration on visa application forms;
• committing to publish a list of financial institutions that are considered not to have verified financial statements to a satisfactory standard in the majority of a sample of cases;
• introducing a streamlined application process for those considered to be "low risk" nationals (including Australian and U.S. nationals) applying to attend a course at a highly trusted sponsor. Applicants under this route will be required to submit fewer evidentiary documents;
• extending the list of courses for which students must receive Academic Technology Approval Scheme (ATAS) clearance;
• restricting the ability to offer accounting courses accredited by the Association of Chartered Certified Accountants (ACCA) to those sponsors accorded platinum or gold status; and
• clarifying the position of overseas universities with campuses in the UK.

Although a number of these changes appear to have been implemented to restrict abuse of the student migration system, it is equally apparent that changes to working entitlements and the sponsorship of migrants' dependents in particular are provisions primarily motivated by the coalition government's commitment to the reduction of net migration. Indeed, the UK Border Agency has stated that it is expected that these new policies are likely to lead to a net reduction of around 230,000 student migrants over the full term of the current government, a figure inconsistent with the commitment of an annual reduction of 70,000 to 80,000 student migrants given by Home Secretary Theresa May on March 22, 2011.

The forthcoming changes have led to comments from the higher education sector that the coalition government is jeopardizing an industry worth £40 billion annually to the UK economy. Additionally, an official UK Border Agency published impact statement indicates that reforms will cost more than £3.2 billion over the next four years in economic output and a further £330 million in lost tuition and immigration application fees. Jonathan Portes of the National Institute of Economic and Social Research has expressed concern that the impact statement shows that "changes to student visa rules will reduce growth and exports." It certainly appears that the amendments due to be implemented to the student migration system are inconsistent with the coalition government's priority of economic recovery, as well as with the stated aim of continuing to attract "the brightest and the best" migrants to the UK.

Consultation on Employment-Related Settlement

A 12-week public consultation on reforms to the routes to indefinite leave to remain in the UK -- commonly referred to as settlement -- available to employment-based migrants began on June 9, 2011. The consultation will address Tiers 1, 2, and 5 of the Points-Based System and Overseas Domestic Workers. Damien Green has asserted that the consultation is focused on breaking the link between temporary and permanent migration and expressed the concern that "settlement has almost become automatic for those who choose to stay." The consultation document outlines a number of proposals for consideration:

• Defining Tier 2 as "temporary" to end any assumption that settlement will be available for migrants who enter the UK under this category;
• Considering whether certain categories of Tier 2 migrants of particular economic or social value to the UK should retain an automatic route to settlement;
• Creating a new category that would allow the most exceptional Tier 2 migrants to apply for settlement after three years. Other Tier 2 migrants would be allowed to stay in the UK for a maximum period of five years, after which they and their dependents would be expected to leave;
• Introducing a new English language requirement for adult dependents of Tier 2 migrants applying to switch into a settlement route;
• Considering restricting the maximum period of leave in Tier 5 (Temporary Workers) to 12 months, as well as removing their ability to sponsor dependents and raising the minimum skill level in the government-authorized exchange scheme to graduate level; and
• Abolishing the route for overseas domestic workers or considering restricting leave to a six-month period as a visitor or 12 months where accompanying a Tier 1 or Tier 2 migrant, as well as ceasing to grant settlement to domestic workers in diplomatic households.

It is apparent that these proposals have the potential to restrict significantly the routes to settlement for those who have entered the UK under employment-based routes, although further details on the implementation of such proposals will not be available until the conclusion of the consultation on September 9, 2011, and parliamentary approval of the subsequent statement of changes to the Immigration Rules.

There continues to be disquiet in the business community that the coalition government's economic policies restrict business growth because of the lack of flexibility in recruitment that they have caused, a perspective previously corroborated by Business Secretary Vince Cable. Although the proposals outlined in the consultation document would be unlikely to be of relevance to businesses seeking to employ overseas migrants on a short-term basis, they would certainly be of concern to organizations with long-term business strategy and recruitment considerations. It is arguable that multinational organizations may be discouraged from establishing and continuing overseas businesses in the UK as a result of the restrictions that these proposals would impose.

Conclusion

It is apparent that the coalition government continues to implement robust changes to UK immigration law to achieve its commitment to reducing net migration to the tens of thousands by the next general election. However, the success of these policies to date may be questioned. The Office for National Statistics figures published on May 26, 2011, state that net migration to the UK has increased by almost 100,000 to 243,000 in the past 12 months. This is partially due to a reduction in levels of emigration. While these figures indicate that attaining an annual net migration to the UK of fewer than 100,000 is unlikely to be an attainable target within the stated timeframe, it additionally indicates that increasingly forceful immigration policies are likely to be implemented if the government is to continue to pursue its stated aim.