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The State of ImmigrationUnited Kingdom

Question Time for Immigration

Despite controversies over asylum seekers, immigration and EU membership, the U.K. maintains immigration policies that are “mostly favorable” to economic growth. That will remain the case if the U.K. stays in the EU and keeps good policies toward high-skilled foreign nationals, permanent residence, attracting foreign entrepreneurs and transferring employees into the country.

"Popular unrest about immigration to the U.K. [United Kingdom] is largely caused by low-skilled EU [European Union], family and refugee migration. Skilled migration is much less of an issue,” said immigration attorney Emily King of Berry Appleman & Leiden in London. “The premise of economic growth in London is based on attracting talent from around the world, and I don’t see that changing.”129 The key question is whether political promises will interfere with good policies.

Advisers often tell elected officials not to promise things beyond their control. In the case of immigration, the U.K. government does not control the annual level of immigration. But in a 2010 election pledge British Prime Minister David Cameron and his Conservative Party pledged to reduce net migration to the U.K. to the “tens of thousands.”

The problem with such a promise is that, as a member of the EU, the U.K. is legally bound to permit citizens of the EU the opportunity to work in the U.K. Since the U.K. economy has performed better than most of its neighbors, it has attracted more EU citizens into the country. In short, without violating its pledge as an EU member, the only direct way the U.K. government can control immigration levels is by reducing non-EU migration. An alternative the U.K. government has proposed is to reduce welfare rights as a way to discourage immigration from the EU. Separately, German Chancellor Angela Merkel has said limiting welfare rights could constitute common ground for reform.130

David Cameron has pledged, if the Conservative Party remains in power, to hold a referendum in 2017 on whether the U.K. should stay in the EU. That has made the question of immigration from the EU more urgent, particularly in light of the unexpectedly high vote tallies of the populist U.K. Independence Party in local elections in 2013, as well as 2014 elections to the European Parliament. Currently, the percentage of the population that is foreign born in the U.K. is 12 percent, just below the level of the United States.131 The U.K. government has made gaining permanent residence harder for families and asylum seekers, including by requiring them to “demonstrate knowledge of the language and life in the United Kingdom.”132

Economists have pointed out that dramatically reducing immigration to the U.K. would harm the U.K. economy, causing gross domestic product to fall by 11 percent and requiring a tax increase to make up the budget shortfall.133 Ironically, between December 2011 and December 2014, even as more British politicians started voicing concerns about immigrants “taking jobs” because of increased immigration, the unemployment rate in the U.K. dropped significantly, from approximately 8.4 percent to 6 percent.134

Cameron has appeared to step back from earlier statements about seeking to impose quotas on EU migration to the U.K., which would violate the “freedom of movement” principle central to EU membership. “David Cameron has beat a retreat over Tory plans for Britain to impose a cap on numbers of European Union migrant workers in response to soaring levels of immigration, confounding hopes among many of his backbench MPs,” reported The Independent.135 British Home Secretary Theresa May has conceded the inevitable — the net migration target of “tens of thousands” pledged in 2010 is unlikely to be met.136

Except for some minor rule tightening, the government has not made hiring highly skilled foreign nationals more difficult for employers. Temporary workers for high-skilled positions gain approval with few denials, according to attorneys, although the process can take more than a month when positions require advertising. While monthly quotas for high-skilled foreign nationals exist, they have never been reached, although the numbers have gradually increased and observers think the quotas could be reached if the U.K. economy continues to perform well. The points-based system for temporary workers only ratified existing requirements by assigning points to such things as a job offer. Anyone with English language skills who is also qualified for a high-skilled job should meet the points threshold.137 Those unable to meet it may qualify as intracompany transferees, requests for which are usually granted.138

129. Interview with Emily King.
130. Arne Delfs and Patrick Donahue (January 7, 2015), “Merkel Said to Offer Cameron Common Ground on Immigration,” Bloomberg.
131. Organisation for Economic Co-operation and Development.
132. Ibid.
133. Katerina Lisenkova, Miguel Sanchez-Martinez and Marcel Merette (December 2013), “The Long-Term Economic Impacts of Reducing Migration: The Case of the UK Migration Policy,” National Institute of Economic and Social Research, NIESR Discussion Paper Number 420.
134. Trading Economics.
135. Nigel Morris (November 28, 2014), “Cameron Forced to Retreat on Immigration: ‘Game-changing’ Speech Makes Unexpected Concessions to EU leaders,” The Independent.
136. Nicholas Watt (November 23, 2014), “Theresa May Says ‘No Ifs, No Buts’ pledge on Migration likely to Fail,” The Guardian.
137. Interviews with Emily King and Supinder Sian.
138. Ibid. The U.K. government must deem the position highly skilled and within the Standard Occupation Codes, which are published and available for public review.

Score Breakdown: United Kingdom vs. United States

Attracting Foreign Entrepreneurs
Attracting Foreign Entrepreneurs
4.0 (vs. United States 1.5)

Entrepreneurs from the EU can set up businesses without immigration processing. Non-EU citizens, including international students, can submit plans to gain temporary visas as entrepreneurs provided they can show evidence of sufficient funds to invest in the new businesses.

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Hiring High-Skilled Foreign Nationals
Hiring High-Skilled Foreign Nationals
4.0 (vs. United States 2.0)

The monthly quota on high-skilled foreign nationals has never been reached and causes only minor delays. Employers must pay the market wage and conduct a labor market test (but exemptions exist). Since the United Kingdom (U.K.) is a member of the European Union (EU), employers have access to 500 million citizens to hire without immigration processing. 

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Hiring Lower-Skilled Workers
Hiring Lower-Skilled Workers
3.5 (vs. United States 1.5)

The U.K.’s membership in the EU provides access to 500 million people who can work without any immigration processing and provides much of its lower-skilled labor needs. In practice, there are no temporary visas for non-EU lower-skilled workers, although Tier 5 allows access to interns.

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Lawful Permanent Residence For High-Skilled Workers
Lawful Permanent Residence For High-Skilled Workers
4.0 (vs. United States 2.5)

There is no quota. Individuals on temporary visas and EU nationals can become permanent residents after five years. They must pass a test on knowledge of life in the U.K. and can apply to become British citizens one year after attaining permanent residence.

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Retention of International Students Postgraduation
Retention of International Students Postgraduation
3.5 (vs. United States 3.0)

Employers can obtain work visas to hire international students without a Resident Labor Market Test. Also, international students from EU countries can work in the U.K. without immigration processing. International students are granted four months to find employment postgraduation, down from two years pre-2012. A controversial policy proposal to require international students to apply for work visas outside the country was shot down by Tory political leadership. 

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Transferring High-Skilled Employees Across Borders
Transferring High-Skilled Employees Across Borders
4.5 (vs. United States 3.0)

EU citizens can transfer into the U.K. without immigration processing. Denials are considered rare if the U.K. government recognizes a position as highly skilled, which is sometimes an issue.

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About the Report

Business Roundtable selected the evaluated countries based on five criteria:

1. Worldwide university rankings;
2. Per-capita income;
3. Gross domestic product growth rate;
4. Net migration rate; and
5. Research and development investment.

After comparing each advanced economy relative to the five criteria, the top 10 countries (including the United States) were selected for the study: Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom (U.K.). Not coincidentally, these are the countries with which the United States competes most for foreign talent, particularly in science and technology fields.

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