The statement
“Businesses have told me that intra-company transfers should not be part of the annual limit. We have listened carefully to this advice, as the PM announced earlier this week.”
Home Secretary Theresa May, 5 November, 2010

The background
The Home Secretary confirmed today that foreign companies will be allowed to move staff to their British offices – with no risk that these people could be hit by the immigration cap.

The Government has decided that these so-called intra-company transfers (ICTs) won’t be included in its cap on immigrants from outside the European Economic Area (EEA).

This type of immigration accounts for a significant number of people coming into the country – in the year to June, 26,480 people arrived in the UK, as a result of being transferred by their companies.

When it was elected, the Coalition Government said it would introduce an annual limit on immigration from outside Europe.

Ms May told the Commons in June: “It is this government’s aim to reduce the level of net migration back down to the levels of the 1990s – tens of thousands each year, not hundreds of thousands.”

A temporary cap of 24,000 is already in place; it hasn’t yet been decided what the annual cap will be, but that will be introduced in April 2011.

The analysis
The latest official figures, released in August, show a 20 per cent rise last year in net migration – the difference between people leaving the country and those arriving – up from 163,000 to 196,000.

This includes people from outside Europe – who account for 55,000 of the 196,000.

This week, the Commons home affairs select committee published a report saying that 80 per cent of long-term immigrants coming to the UK won’t be affected by the annual cap.

“Consequently to achieve anything approaching the reduction in overall immigration sought by the Government, other immigration routes – such as international students and those joining family members in the UK – will also have to be examined.”

It went on to discuss ICTs, saying that “to make any significant reduction in non-EEA economic immigration, a cap would have to include intra-company transfers”, which in 2009 accounted for 50 per cent of skilled workers allowed to settle here.

So, the decision not to include ICTs in the cap seems to make it much more difficult to achieve significant reductions in the numbers coming to the UK.

The independent Migration Advisory Committee (MAC) has been asked by the Government to come up with a proposed cap limit. In a consultation paper in June, it said it was “working on the basis that our limit should cover the intra-company transfer route, although we note that the Government is consulting on whether this route should be included in the limit”.

The MAC may now have to go back to the immigration cap drawing board.

The verdict

The Government has listened to the concerns of business about its immigration cap – and taken action to exclude international staff from the numbers.

The issue now is whether ministers can reach their migration target of “tens of thousands” a year, given that the cap will not include about 25,000 immigrants (based on last year’s figures) transferred here by their companies. The home affairs select committee has its doubts.