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UK to increase IT workers' salary in a bid to cut migration

Posted: 01 Feb 2016     Print Version  Bookmark and Share

Keywords:ICT visas  Tier-2 visas  IT workers 

The United Kingdom will increase the minimum wage of its IT employees, the Economic Times reported.

In an effort to limit the annual net migration from outside the European Union, the United Kingdom has proposed changes in its skilled-workers visa policy, increasing the minimum salary of IT employees to $59,313, The UK's Migration Advisory Committee (MAC) has announced on its website.

The National Association of Software and Services (Nasscom) has reported that the United Kingdom is the second-largest market for Indian IT companies, accounting for 18 per cent of the total export revenue, totalling to $19 billion annually.

MAC further seeks immigration health surcharge and skills charge for every successful employee who makes it to the United Kingdom, a change which will amount to $1,715 for every applicant yearly.

The MAC report states that it is the "government's ambition to reduce annual net migration to the tens of thousands (from the current level of 336,000)." U.K. Prime Minister David Cameron, as a consequence, urged the MAC to review the tier-2 visa system in 2015, in line with his oath to cut total net migration from outside the EU.

Intra-company transfer (ICT) visas -- part of the United Kingdom's tier-2 visas are heavily used by major Indian IT companies, including Tata Consultancy Services, Infosys and Wipro.

Nasscom asks for United Kingdom's reconsideration on the panel's proposals.

Nasscom President R Chandrashekhar, in a statement said, "We are disappointed that companies leveraging Indian talent in information technology domain are singled out in the report. The U.K. and India enjoy strong trading relationships: the commitment to increase trade was renewed when Prime Minister Modi visited the U.K. in 2015."

Tier-2 visas accounted for the arrival of 52,478 people into the UK in 2014, the MAC report said, while an estimated number of 36,762 Indian workers utilized the tier-2 visas in December 2014 according to by BackTheMac, a group campaigning against the use of ICT visas.

The MAC has reported that 90 per cent of migrants using ICT visas are Indian IT workers, and that the "price should be main mechanism" would likely reduce demand for migration through the tier-2 route. Sanjoy Sen, a doctoral research scholar at Ashton Business School in the UK said "In medium to long term, the battle will not be about costs, but about getting adequate numbers of technically skilled talent in Western Europe, given the increasing average age of workforce and eroding levels of technical skills."

He added that Indian IT firms should shift its focus on better innovation and providing high-value client solutions for its offshore and inshore delivery teams.

Due to the large number of migrators, the MAC has proposed the creation of a new category for third party contractors of IT firms.

The U.K. Home Office has oft been accepting of MAC's proposals.

Nasscom's Chandrashekhar remains skeptical of MAC's report, saying it fails to present evidence that an increase in costs would effectively reduce migration in the UK.

- Toni Urrutia

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