UK announces permanent skilled immigration cap: Tier 1 for the select few and an overall reduction in immigration

The UK Government has announced a permanent cap of 21,700 on skilled immigration to take effect in April of 2011. Moreover, Tier 1 will be restricted to entrepreneurs, investors and 'exceptionally talented' individuals and Tier 2 will be restricted to graduate level occupations.

The new 'exceptionally talented' route will be limited to 1,000 applicants a year with the rest of the annual cap being allocated to Tier 2 visas. Currently, the cap on Tier 1 (General) applicants is set at 13,000.

There will be no limit on the number of entrepreneurs and investors that can come to the UK. Tier 2 Intra-company transfer visas will also be outside the cap: If you are staying in the UK for longer than 12 months you will need to be earning £40,000 a year or more to qualify: In addition, Tier 2 intra-company transfer visas will be restricted to five years; It will not in future lead to indefinite leave to remain.

In 2009, 50,000 visas were issued to non-EU citizens under Tier 1 (General) for highly skilled workers and Tier 2 for skilled workers with a job offer . Almost half of those came under the intra-company transfer route.

The large reduction in Tier 1 (General) visas follows Home Secretary Theresa May remarks that many Tier 1 visa holders are working in low-skilled jobs.

"At least 30 percent of Tier 1 migrants work in low-skilled occupations such as stacking shelves, driving taxis or working as security guards and some don't have a job at all," May said.

The Government decision is especially surprising considering recent advice they received from the Migration Advisory Committee (MAC), a government commission set up to study immigration levels into the UK. A cap of approximately 44,000 was recommended by the MAC.

The immigration cap announcement comes after tense negotiations between Tories and Lib Dems. Tory leader David Cameron campaigned on reducing immigrationlevels; Lib Dems are more liberal and do not want an immigration cap at all.

Business secretary Vince Cable has openly criticised the immigration cap.

"It's no great secret that in my department and me personally, we want to see an open economy, and as liberal an immigration policy as it's possible to have," Cable said while on a trip to India.

Home affairs select committee chairman Keith Vaz said that the cap on skilled migration will not work.

"There are going to be so many exemptions, from the education sector to elite scientists to football players to business, that there are going to be so many holes... that it actually won't be a cap at all," said Mr Vaz.

The UK Government seems to be convinced that they must reduce overall immigration including skilled immigration. If you qualify now for a Tier 1 visa or Tier 2 visa it may be worth applying now for your visa. This is especially true if you wish to apply for a Tier 1 (General) visa as a highly skilled worker; Very few people will meet the requirements for a Tier 1 (General) Visa after March 2011.