LONDON, UK: Britain will cut the number of workers it allows in from outside the European Union by a fifth, introducing a cap as part of efforts to slash immigration levels by 2015, the government said Tuesday.
But the Conservative-Liberal Democrat coalition, in power since May, said there would be no visa cap on staff earning more than 40,000 pounds a year who were transferred to Britain from a company post elsewhere (like India).
Business lobby groups, opposition politicians and some Lib Dems have warned the government that limiting migration flows into Britain will take its toll on the economy, holding back productivity and potentially driving up wage costs.
However, social tensions over high levels of immigration played a crucial role in this year's election campaign and all main political parties made pledges to take a tougher stance.
Unemployment in Britain is running at 7.7 percent and spending cuts mean that almost half a million public sector workers risk losing their jobs.
Conservative interior minister Theresa May said the government wanted to bring net migration -- immigration minus emigration -- down from almost 200,000 to tens of thousands by 2015, when the next parliamentary election is due.
"We must tighten up our immigration system," May told parliament. "It is possible to reduce numbers while promoting growth and underlining the message that Britain is open for business."
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Cap from 2011
The number of workers entering Britain from outside the EU will be capped at 21,700 a year, compared with around 28,000 in 2009. The measures will take effect from April 2011.
As part of the European Union, Britain has an "open door" policy for economic migrants from most of the 27-nation bloc.
Those allowed to enter without a job offer will be slashed by 13,000 from last year's level to 1,000 and permits will be limited to "exceptional talent" such as scientists, academics and artists.
The number of workers with job offers allowed in will be increased by nearly 7,000 to 20,700, although permits will be restricted to graduate-level jobs, May said. There will be no limit on investors and entrepreneurs.
May also said she would stop temporary workers coming to Britain and settling permanently.
"We will end the link between temporary and permanent migration," she said.
Business groups welcomed the decision not to limit company transfers for those earning more than 40,000 pounds a year but warned the government that a cap on non-EU skilled workers could mean that Britain would lose out on attracting talent.
"We are still concerned that the lack of flexibility inherent in a cap will have a detrimental effect on London's competitiveness and productivity," said London Chamber of Commerce and Industry chief executive Colin Stanbridge.
Though Indian IT companies are likely to be hit by the new visa cap, industrial body NASSCOM welcomed the approach of the UK government and said that there is no cap imposed on Intra Company Transfers (ICTs) of skilled professionals and it is good for the industry.
Ameet Nivsarkar, VP, Global Trade Development, NASSCOM, said the organization is are assessing the impact of the salary requirement on longer term visas.
“However, we feel that there may be a marginal cost impact both for the providers of these services and the customers. We will continue to work with the industry and the UK Government to ensure that the rollout of the new system is smooth and with minimal impact,” he said.
Indian IT companies have been often accused of 'misusing' the intra-company transfer route, after it was revealed that the maximum number of intra-company transfers went to them last year.
(With inputs from CIOL)