Friday, 5 November 2010

The ICT immigration con

Our new coalition government promised to clamp down on immigration and restrict the number of work visas issued. And for a while it looked like they had done as they promised. Sponsoring organisations have been cut back on the number of foreigners they may bring into the country. The Universities have been particularly hit - top research jobs remain unfilled because the number of foreign scientists they can give jobs to has been halved.

Only premiership football has been exempt. Manchester United and friends still get to bring in as many foreign players as they like.

But unfortunately the government (probably deliberately) left the back door open and migrants are swarming through.

The back door is called ICT - Intra-Company Transfer.

If a multinational company has overseas staff it wants to bring into the UK for a couple of years the rules are very lax. The lucky employee needs to earn about £24,000 a year (from which travel and subsistence costs may be deducted so in reality they can be paid as little as minimum wage) and be an "expert", ie have a relevant degree, or three years' experience. The company then gets to employ this person in the UK and no taxes are paid either by the employee or the company for two years.

A big trade in "bodies" has been set up, bringing mainly Indian IT workers into the UK (and the USA under the L1 visa scheme.) These workers have no real connection with the British or American companies they work for, and they displace domestic workers who are more expensive, not least because they have to pay taxes.

Who gains? The employers, whose profits go up. Who loses? Almost everyone else. The domestic worker loses his job and the state loses the taxes the domestic worker would have paid and instead has to pay benefits.

After two years the ICT worker is expected to "go home". But all that happens is that the Indian company that supplied him moves him to another post in the UK or USA.

A number of service companies, eg Tata Consultancy Services, Infosys and Wipro, have got this operation down to a fine art and are effectively running an international trade in contractors, very much not in the spirit of ICT.

This back door needs slamming shut PDQ.

1 comment:

Anonymous said...

Spot on article. I see it happening with every client I visit.