Theresa May has done the deed. The UK Border Agency has released details of its first annual limit on immigration into the UK. The results are scary.
"This is an absolute nightmare," says the head of lateral hiring at one bank in the City. "It's going to make it much more difficult for us to hire."
The frightening points are as follows:
· Tier One Migrant Visas, which were previously issued to highly skilled staff meeting certain points criteria, allowing them to enter the UK even if they didn't have a job to go to, are being totally abolished from April next year. Around 13,000 Tier One migrants are expected to come into the UK this year, so this is a BIG blow.
· Instead of Tier One Migrant Visas, a new "exceptional talent" category is being introduced for particularly spectacular individuals in fields like art and academia. It is unlikely that any financial services professionals will qualify for this.
· From April 2011 anyone hired into a bank in London from outside the EU will therefore need to come in under a Tier 2 General Visa. The number of Tier 2 Visas has been increased by 6,500 to take account of this. However, they haven't been increased enough. The loss of the Tier 1 General Visa means there will still be a shortfall of 7,400 Visas in total.
· From April 2011, it appears that Tier 1 Post Study Visas are being abolished. If you're from outside the EU and you study an MBA or MSc here, you may be obliged to leave immediately after your course.
Set against this are two positive points:
· There is absolutely no limit on the number of non-EU people who can be brought in on intra-company transfers, as long as the individual concerned is earning more than 40k and has been working overseas for that employer for more than 12 months.
· Anyone can come into the UK as long as they promise to invest 5m, preferably in schools and hospitals.
What this all means
From all of this, we draw the following conclusions.
1) The pool of talent available to banks in London is about to shrink DRAMATICALLY City banks are going to find it a lot harder to hire people from outside the EU. Pay for EU-originating employees could increase as a result. Maybe this is what the UK government intends.
2) Come quick! If you're thinking of coming into the UK as a Tier 1 Migrant, do so before April 2011. Demand is high: The quota for Tier 1 visas for November 2010 is already full, so apply as soon as possible. It's likely, but not guaranteed, that in April 2011 individuals already in the UK under a Tier 1 visa will be allowed to stay for a transition period.
3) Apply locally From April 2011, anyone from outside the EU who wants to work in London will be best off applying for a job locally and attempting to transfer within the bank. This could clearly be a nightmare if you want to work in cutting edge exotic products and are based, for example, in Kenya. More promisingly, the fact that only people earning 40k are allowed freedom to transfer could create some salary inflation as pay is hiked to meet this limit.
4) Non EU bankers already in London may struggle to change jobs What happens if you're a U.S. or Asian banker working for RBS in the City and you want to move to Goldman Sachs? If the limited quota of Tier 2 visas is already used up, this may no longer be possible.
"It's not clear whether the new arrangements will apply to people who are already in the country and are switching jobs," says Tony Haque from law firm Baker & McKenzie. "If it does, it could clearly restrict movement."
5) Several UK financial services MSc courses are facing extinction If students studying the many, many financial MSc courses in the UK aren't allowed to stay in the UK to look for work after the course finishes, they may think twice about coming here in the first place. MSc course annihilation could follow.
6) Banks will choose to base their international operations in Hong Kong Or somewhere else where they can actually hire people.