Oops the (Tier 2 cap) did it again....

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As the Home Affairs Committee continues to gather evidence for its inquiry into the impact of the cap on Tier 2 (General) visas being met has on UK employers to find the skills they need - today’s blog looks at why the cap being met is going to have longer-term impacts….




The Government’s cap on highly-skilled non-EEA migrants

In April 2011, the Government introduced an annual cap of 20,700 Tier 2 visas. This set a limit on the number of workers that employers could sponsor (recruit) from outside of Europe.

This was a concern for EEF given some 11% of EEF members specifically recruit from outside of Europe to access the skills their businesses needed. In addition, almost a quarter use Intra-Company Transfers (ICTs) to access skills and knowledge. (ICTs are currently outside of the annual cap...but who knows what might come out of the wider Review of Tier 2).

When the cap was in its early stages the then Coalition Government argued that the cap was not directly impacting firms’ ability to recruit the skilled workers businesses needed as it was not being met. In fact it tended to run at about half its capacity. Now, we also argue that given that the UK’s migration system is so costly and complex that it actually deterred companies – particularly SMEs – from engaging so it was actually impacting on their ability to recruit….but let’s put that argument to a side for a minute.

As the economy picked up…the cap was always going to become a problem

EEF, and indeed the wider business community raised concerns that as the economy began to pick up, recruitment intentions would rise and the cap would eventually be reached. This is exactly what has happened. Manufacturing is growing, recruitment intentions have been pretty positive and employers are actively looked for specialist skills. However, they are not always able to find them – in fact four in five manufacturers say they are struggling to recruit.

The limit is currently set at 20,700 places a year. The Migration Advisory Committee (MAC) had recommended 21,700 however the Government applied 1,000 places to its Exceptional Talent Route – which does nothing to deliver the highly skilled engineers EEF members need – but again I’ll let that one pass.

Uh oh…the cap’s been met

In June this year the number of Restricted Certificates of Sponsorships (RCos), to which the annual limit of 20,700 is applied (divided into 12 monthly allocations) was reached. This was the first time the cap had been reached since its introduction and essentially meant that RCoS were effectively being granted according to salary – where the highest salaries have the most chance of success.

In practice, this means that even if an employer has gone through the full Resident Labour Market Test (tedious as it often is) and found nothing and therefore gone to recruit a highly skilled non-EEA engineer, with let’s say a salary of less than £75,000 – a RCoS may not then have been granted and the employer unable to sponsor (recruit) them.

Now I would argue that the cap is now absolutely impacting employers' ability to recruit the workers they need.

Oops it did it again…

Rumour has it that the cap was oversubscribed by approximately100% *shocked face* which would then have implications on subsequent monthly caps. Then July comes and surprise surprise the cap is oversubscribed again. And then in August it was oversubscribed for the third month in a row. We can probably expect these knock-on effects to continue for the remainder of the year.

Big problem huh? Anecdotally we are already hearing examples of companies’ struggling to be granted their required visas to bring over workers and no doubt these will accelerate if the monthly allocations continue to be met.

Action needed? Absolutely! Government needs to review the monthly and indeed annual limit. We need to ensure our immigration system allows employers to recruit highly-skilled and economically valuable non-EEA workers – it can’t be so heavily weighted towards salaries.

What’s also a concern is everything else potentially coming down the pipeline – a skills levy, tightening ICTs, increasing salary thresholds and reducing/reviewing/removing the shortage occupation list….but we’ll leave that for another blog.


You can read our full written evidence to the Home Affairs Committee here: http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/home-affairs-committee/immigration-skill-shortages/written/19029.pdf


Head of Education & Skills Policy

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