Immigration caps: it is now MUCH HARDER for non-EU juniors to break into the City
Business secretary Vince Cable is being nice about the City. In today's FT, he acknowledges that banks are 'quite an important source of economic activity.'
However, Vince also has some unfortunate news. He says that immigration caps are proving an issue for banks. Specifically:
""I was talking to people in the City and there were two investment banks that recruit hundreds of people from the non-EU area, Indians and Americans. They were allowed only 30-40 [visas]. They have moved some operations to Hong Kong."
Banks confirm that immigration is indeed an issue, particularly when it comes to hiring juniors from non EU countries.
"They've capped Tier Two General Visas," says the head of recruitment at one investment bank in London. "We're short of 80-100 certificates of sponsorship. We could bring them in under Tier One Visas, but not all juniors satisfy the requirements. "
This is bad news for Asian and Russian students hoping to start their careers in the UK.
The previous Labour government reformed the British immigration system in a manner intended to make it more simple, but which lawyers say actually made it more complex. The current coalition government has now imposed immigration caps on top of this complex system.
The immigration reforms
Under the coalition government, issuance of Tier 1 Visas for highly skilled workers has now been capped on a monthly basis. The number of Tier 1 Visas issued each month in the UK during 2010 must now be roughly equivalent to the number issued during each month of 2009. At the same time, highly skilled workers now need to achieve 5 extra points in the points based system to qualify.
Once upon a time, people who didn't qualify for a Tier 1 Visa might have come to work in the City under a more lenient Tier 2 Visa. However, Matthew Davies, an immigration partner at Fox Williams, says this is where the real problems lie.
"In the past, banks and other organisations would have advertised roles in the UK and if they were unable to fill them, would have had an allocation of certificates of sponsorship allowing them to bring qualified people in from outside the EU. That allocation has now been cut considerably, in some cases to zero," he says. "In theory, it's possible to request an exceptional additional certificates, but this is rarely successful."
Banks' recruiters point out, however, that the current system may change again. "The interim cap only lasts until March 31st," says one. "It's difficult to make any real decisions on non-EU hiring until then."
