1

Migration Advisory Committee: Review of Tier 2

Final UUK response

Contents

Executive summary ............................................................................................................. 2

Introduction .......................................................................................................................... 4

Part 1: Background .............................................................................................................. 4

The importance of international staff and students to UK universities ............................... 4

International students at UK higher education institutions ................................................. 5

The UK’s performance in the international student market ................................................ 7

Non-EU staff in UK higher education institutions ............................................................... 8

Research ............................................................................................................................ 9

Part 2: Issues ...................................................................................................................... 11

Impact on the UK HE export market ................................................................................ 11

The Resident Labour Market Test (Q2) ........................................................................... 19

The efficiency of the current points mechanism (Q3) ...................................................... 20

Revised Shortage Occupation List (to include definition of 'highly specialised experts'

(Q4, 5, 7, 8, 10, 11, 12, 13, 15) ........................................................................................ 22

Evidence of the need to recruit highly specialised experts .............................................. 24

The impact of restricting recruitment to genuine skills shortages and highly specialised

experts for migrants switching from the Tier 4 student route and other categories ......... 25

The introduction of a skills levy (Q17) .............................................................................. 27

Tier 2 Dependants (Q18) .................................................................................................. 29

Tier 2 design (Q19, 20) .................................................................................................... 31

2

Executive summary

- Students and staff from outside Europe make a vital and business-critical

contribution to UK universities.

- International students enhance the diversity of UK universities and contribute

over £7bn to the UK economy.

- In the face of growing international competition, it is crucially important that the

UK remains an attractive destination for international students. An important

component of an attractive offer is the availability of accessible post-study work

opportunities.

- The closure of the Tier 1 Post-Study Work route has had a significant impact on

international student recruitment, particularly felt in certain markets, such as

India, Pakistan and Nigeria. Even in markets where the availability of post study

work options is not such an important factor in deciding where to study, the

perception of the UK as ‘unwelcoming’ to international students is nevertheless

highly damaging.

- Academics and researchers from outside Europe are a vital component of the

workforce within UK universities comprising 11.7 per cent of academic staff alone

and significantly higher proportions in a number of subject areas.

- It is paramount that the UK remains able to attract the most talented academics

and researchers to its universities – failure to do so will impact upon the global

reputation and ranking of UK universities, the UK’s research base and staffing

levels within strategically important subject areas.

- The Resident Labour Market Test (RLMT) works well overall for HEIs and the

exemption for switchers from Tier 4 to Tier 2 is welcomed, although more

flexibility for employers is needed.

- The recent breaches of the Tier 2 cap are of real concern to the sector. Care

must be taken to ensure Tier 2 migrant workers of greatest value to the economy

are prioritised within the system, for example by continued prioritisation for those

employed within PhD SOC codes.

- Universities UK has presented a strong case for researchers and academics

employed within Higher Education Institutions (HEIs) under a PhD SOC code to

be contained within the ‘shortage occupation’ or ‘highly specialised expert’

categories. It should, however, be recognised that restricting recruitment within

the Tier 2 visa route to these two categories would severely restrict the ability of

graduate employers to hire talented and highly skilled non-EEA staff. UUK would

therefore urge caution on the adoption of such an approach.

3

- UUK is concerned that the introduction of a skills levy is likely to present an

additional disincentive for businesses to employ international graduates.

- Should a skills levy be introduced, it is suggested that UK universities, in

recognition of their significant contribution to education, training and skills

development, might be exempt from such a charge.

- The ability for dependant partners to work whilst in the UK is a significant factor

for academics in deciding whether or not to come to the UK, and many

dependants of Tier 2 workers employed in UK universities are themselves

working in highly skilled occupations.

- Restricting the rights of dependant workers would not only compromise the UK’s

ability to attract highly skilled academic staff, but the UK economy would also lose

out on the valuable skills sets that their dependant partners may bring.

- UUK therefore believes that the right approach is to enable highly skilled

dependants of Tier 2 workers to retain unfettered access to the UK labour market,

provided they are employed in a NQF6 level role, whether full- or part-time.

- Overall, notwithstanding concern about the recent breaches of the cap,

the current Tier 2 mechanism generally works fairly well for HEIs. Universities

would therefore resist any immediate further changes, as constant rules

amendments are unhelpful and destabilising for all employers. Any future

changes to the Tier 2 (General) route should take into account the general

principles of fairness and the significant existing restrictions inherent in this route.

- Universities UK would urge the Migration Advisory Committee to consider the

evidence provided in this response alongside Universities UK’s and UCEA’s

responses to the Tier 2 salary threshold consultation rather than in isolation. The

UUK response is attached at Annexe A to this submission.

4

Introduction

1. Universities UK (UUK) is the representative organisation for the UK’s

universities. Founded in 1918, its mission is to be the definitive voice for all

universities in the UK, providing high quality leadership and support to its

members to promote a successful and diverse higher education sector. With

132 members and offices in London, Cardiff and Edinburgh, it promotes the

strength and success of UK universities nationally and internationally. Its

current President is Professor Dame Julia Goodfellow, Vice Chancellor,

University of Kent and its Chief Executive is Nicola Dandridge.

2. We have been pleased to work closely with the Higher Education Careers

Services Unit (HECSU) in the preparation of this response, which is submitted

on behalf of the UK university sector.

3. We also support the response submitted by the Universities and Colleges

Employers Association (UCEA) which covers, in detail, the likely impact of the

proposed changes for the recruitment of non-EEA staff to UK universities.

4. UUK and UCEA have previously responded separately to the MAC’s Tier 2

Salary Thresholds Consultation. The previous response from Universities UK

has been included as Annexe A to this submission for ease of reference –

please note that Figures 7, 10 and 11 have been updated to reflect the most

recently available data which has become accessible subsequent to our

previous response.

5. This formal response is divided into two parts. Part One will focus on

background and context; Part Two will cover detailed responses to the MAC’s

questions which are of most concern to the UK HE sector (organised by

theme).

Part 1: Background

The importance of international staff and students to UK universities

6. Universities and their research are a major UK industry with a growing

economic impact. An independent report commissioned by Universities UK

shows that in 2012, the UK’s universities generated £73 billion in output (up

24% from £59bn in 2009), contributed 2.8% of UK GDP (2.3% in 2007) and

generated 2.7% of UK employment (757, 268 FTE jobs). In research

specifically, every pound of UK government money leveraged another pound

of non-governmental research funding across the sector.

5

7. On an international scale, UK universities currently feature prominently in all

world university rankings. The UK has 9 universities ranked in the top 100

overall. They include the University of Cambridge at 4 and the University of

Oxford at 5. Almost one in ten of the world's top 500 universities are based in

the UK1.

8. It is universally accepted that students and staff from outside of Europe are

vital to the strength of the UK’s universities. Indeed higher education itself is

now a global phenomenon, and universities, wherever their location in the

world, are increasingly judged on the strength of their international outlook.

For example, the QS University Rankings include the percentage of staff and

students abroad directly as one of the metrics used to rank universities in

order of prestige from around the world2.

International students at UK higher education institutions

9. In 2013/14, there were 310,195 non-EEA students (by domicile) enrolled in

UK universities (13.5 per cent of all students) with 51 per cent studying at

postgraduate level and 49 per cent at undergraduate level. The top sending

countries of students were China and India3. Students from outside the EU

contributed over £7 billion in export earnings in 2011–12, comprised of £3.2bn

in tuition fees and £3.9bn in off-campus expenditure4. A number of students

come via government sponsored programmes, cementing links between the

UK and many regions of the world, supporting mobility and collaboration.

International students are also vital to the financial health of the sector, with

non-EEA student fees accounting for 13% of all university income. As

graduates and in future years, they play an important role in boosting our

trade and diplomatic impact 5.

1 Cube rankings (available at http://cuberankings.com/uk-universities.html ) compile Consensus World

Rankings for the UK and its main competitors based on QS World University Rankings, Times World University Rankings, Shanghai Academic World Ranking of World Universities, Webometrics Web Publishing World University Rankings 2 The QS University Rankings can be found at http://www.topuniversities.com

3 The top 10 sending countries in 2013/14 were China (87,895), India (19,750), Nigeria (18,020),

Malaysia (16,635), United States (16,485), Hong Kong (14,725), Saudi Arabia (9,060), Singapore (6790), Pakistan (6,665), Canada (6,350) 4 Universities UK (2014) The impact of universities on the UK economy

5 BIS research on soft power suggests that international students who come to the UK develop an

‘allegiance’ to British brands, promote tourism to the UK, and become UK ambassadors resulting from their positive understanding of British culture and values: BIS (2013) The wider benefits of international higher education in the UK

6

Figure 1: Non-EU students by level of study 2013/14 (Source: HESA)

Level of study Non-EEA students

Undergraduate First degree 137,450

Other undergraduate 14,905

Postgraduate Taught 124,960

Research 32,880

TOTAL 310,195

10. As shown in Figure 2 overleaf almost 36% of international students are

studying STEM-based subjects providing vital support to the provision of

strategically important subject areas. A further 32.7% are studying business

and administrative studies.

Figure 2: Non-EU students and main subjects studied

Enrolments of students at UK higher education institutions by subject of study and domicile, 2013-

14

Subject % of non-EEA students

studying specific subjects

Non-EEA students as

a % of total student

body in specific

subjects

Business & administrative studies (inc. MBA) 105,575 34.0% 31.4%

Engineering & technology 39,580 12.8% 24.9%

Social studies 26,985 8.7% 12.8%

Law 16,180 5.2% 18.1%

Creative arts & design 16,035 5.2% 9.5%

Languages 13,445 4.3% 11.4%

Subjects allied to medicine 13,170 4.2% 4.8%

Computer science 12,435 4.0% 13.6%

Biological sciences 11,315 3.6% 5.5%

Physical sciences 8,605 2.8% 9.2%

Architecture, building & planning 8,410 2.7% 17.1%

Medicine & dentistry 7,830 2.5% 11.6%

7

Education 7,010 2.3% 4.1%

Mass communications & documentation 6,955 2.2% 14.0%

Mathematical sciences 6,505 2.1% 15.4%

Historical & philosophical studies 5,645 1.8% 6.3%

Veterinary science, agriculture & related 2,500 0.8% 10.3%

Combined 2,020 0.7% 3.6%

Total - All subject areas 310,195 100.0% 13.5%

STEM subjects 110,340 35.6%

STEM subjects excl. subjects allied to

medicine 97,175 31.3%

Source: Higher Education Statistics Agency 2013-14

The UK’s performance in the international student market

11. OECD figures show that the UK is the second most popular destination (after

the United States) for international students and its market share in 2012 was

12.6% (up from 10.7% in 2000).

Figure 3: Shares of the international student market [Source: OECD]

8

12. Historically, the UK higher education sector has occupied a position of

strength internationally. However, the UK faces increasing competition to

attract genuine international students. A number of countries including

Australia, Canada, New Zealand and Germany are adopting ambitious

strategies to attract talented students and are setting ambitious growth

targets. In many cases this has resulted in enhanced post-study work

opportunities for international students, which form an important part of the

overall country offer to prospective students.

13. The UK must therefore work increasingly hard to present itself as an attractive

and welcoming destination to prospective students, not only in terms of its

education offer, but also its offer to international students after they graduate.

This is of fundamental importance as the international student market is

growing rapidly and offers significant opportunity for economic growth

(UNESCO estimated that the number of globally mobile students in tertiary

education would increase from just over four million in 2010 to seven million

by 2020).

Non-EU staff in UK higher education institutions

14. As well as being recruiters of international students, universities are

significant employers of non-EU staff with 30,110 individuals employed in

higher education institutions in 2013/14. 7.8 per cent of all higher education

staff are from outside of the EU and amongst academic staff this figure rises

to 11.7 per cent.

15. Staff with a non-EU nationality are highly likely to have an academic role – 73

per cent are either teaching, undertaking research, or both. Furthermore, non-

EEA academic staff contribute significantly to the teaching of strategically

important subject disciplines particularly within science, technology,

engineering and maths. 20.1 per cent of the sector’s academic workforce in

engineering and technology are from non-EU nationalities and 14.1 per cent

of those in biological, mathematical and physical sciences. Within engineering

& technology, 20 per cent of academic staff were from non-EU countries in

2013/14.

9

Figure 4: Higher education staff by nationality and cost centre, 2013-14 (HESA)

Country of origin

Cost centre UK EU (exc. UK) Non-EU Unknown Total

Engineering &

technology 61.3% 17.0% 20.1% 1.5% 100.0%

Administrative &

business

studies 67.2% 14.6% 15.4% 2.8% 100.0%

Biological,

mathematical &

physical sciences 62.6% 21.1% 14.1% 2.1% 100.0%

Humanities &

language based

studies &

archaeology 64.8% 20.6% 12.2% 2.4% 100.0%

Social studies 69.5% 16.2% 11.8% 2.5% 100.0%

Architecture &

planning 73.1% 13.0% 10.3% 3.4% 100.0%

Medicine,

dentistry & health 75.9% 13.2% 8.6% 2.3% 100.0%

Agriculture,

forestry &

veterinary science 75.2% 15.8% 8.1% 0.6% 100.0%

Administration & central

services 84.4% 5.8% 5.6% 4.2% 100.0%

Design, creative

& performing arts 79.3% 7.8% 5.4% 7.5% 100.0%

Total academic services 85.3% 8.4% 4.0% 2.2% 100.0%

Education 88.0% 6.4% 3.5% 2.0% 100.0%

Premises

100.0

% 0.0% 0.0% 0.0% 100.0%

Total all

cost centres 70.9% 15.0% 11.4% 2.7% 100.0%

Research

16. The UK is a highly productive research nation and punches well above its

weight internationally. With just 0.9% of global population, 3.2% of R&D

expenditure, and 4.1% of researchers, the UK accounts for 9.5% of

downloads, 11.6% of citations and 15.9% of the world's most highly-cited

10

articles. Amongst its comparator countries, the UK has overtaken the US to

rank first by field-weighted citation impact (an indicator of research quality).

Moreover, with just 2.4% of global patent applications, the UK’s share of

citations from patents (both applications and granted) to journal articles is

10.9%6.

17. Attracting high-calibre international academics and researchers is

fundamental to maintaining the UK’s world-class reputation for research. The

contribution of non-EEA staff to the UK research base should not be

underestimated. A report from the Higher Education Funding Council for

England (HEFCE) shows that over 10% of staff in Higher Education that were

in the Research Excellence Framework (REF)7 2014 were from countries

outside the EU8.

18. Moreover, there is strong correlation between international collaboration and

research quality. In total, 48% of all UK research is internationally co-authored

(second only to France at 50%) and it is acknowledged that internationally co-

authored articles are more frequently cited, thus enhancing the UK’s overall

position9. In the International Comparative Performance of the UK Research

Base report by BIS/Elsevier, it is acknowledged ‘[it is likely] that recent

increases in UK research productivity have, at least to some extent, been

driven by the increase in UK collaborations’.

19. According to the BIS report, international research collaboration and

international researcher mobility can be considered as ‘two sides of the same

coin’. Countries exhibiting high levels of research collaboration typically also

have high levels of researcher mobility, and this is certainly true of the UK.

The report finds that international collaboration and researcher mobility are

core to the maintenance and further development of the UK’s world-leading

position as a research nation, especially in light of the relatively limited inputs

to the UK research base in terms of R&D expenditure and the number of

researchers. However, the same report notes that ‘it may not be possible [for

the UK] to sustain its position as a world-leading research nation on this basis

indefinitely’ and its status, as well as that of the US, which remains the world’s

leading research base, may ‘erode under pressure from the emerging nations

of the East: most notably China’. The report further notes that with ‘China’s

slowly increasing rate of international collaboration and a net Total Inflow of

6 BIS/Elsevier (2013) International Comparative Performance of the UK Research Base 2013

7 Research Excellence Framework (REF) is the new system for assessing the quality of research in UK

higher education institutions 8 http://www.hefce.ac.uk/news/newsarchive/2015/Name,104986,en.html

9 Reference as above.

11

researchers, it seems likely that quality will follow [an expected increase in

outputs]’10.

20. There is therefore no room for complacency. For the UK to maintain its

position as a research leader in the future, it is vital that we continue to attract

highly skilled researchers from around the world. Any further restrictions on

the ability of non-EEA researchers and academics to be employed in UK

universities would significantly impact on the strength of the UK’s research

base and would compromise the UK’s position in an area where it currently

enjoys a strong competitive advantage.

Part 2: Issues

This section of Universities UK’s response explores the issues of most

concern to the UK HE sector in further depth, organised by theme. Where

relevant, two responses are provided - 1) exploring the impact of the proposals

on UK HEIs as employers of Tier 2 staff; and 2) the likely impact on the

recruitment of international (non-EEA) students (by HEIs) and the recruitment

of non-EEA graduates (by employers outside the HE sector).

Impact on reducing the level of Tier 2 migration on the economy (Q1)

21. Universities UK is concerned about the impact on the UK economy of

introducing a far more restrictive immigration regime at a time when the UK

economy is well on its way to recovery, the UK is approaching full

employment and the supply of suitable domestic workers is reaching its limit.

Employers are increasingly hiring highly skilled non-EEA migrant workers

under Tier 2 to fill roles that they are unable to fill from the domestic and EEA

labour market. An inability to do so, through a policy which restricts the ability

for employers to hire from a wider, global talent pool, would simply mean that

many vacancies were left unfulfilled, with a corresponding widening of

existing skills gaps. This would be highly detrimental to the future growth of

UK Plc.

Impact on the UK HE export market

Impact on the recruitment of international (non-EEA) students by HEIs

22. The UK higher education sector is one of the UK’s most successful exports

and makes a highly valuable contribution to the UK economy. UUK’s own

publication, The impact of universities on the UK economy11, showed that, in

10

BIS/Elsevier (2013) International Comparative Performance of the UK Research Base 2013 pp2-3 11

Universities UK (2014) The Impact of universities on the UK Economy

12

2011–12, the UK higher education sector generated £10.7 billion in export

earnings. The vast majority of this impact (£7.2 billion) came directly from

non-EU students through their off-campus expenditure (£3.4 billion) and in

payments to universities in the forms of tuition fee and accommodation

payments (£3.8 billion). This £7.2 billion was enough to generate around

137,000 full-time equivalent jobs. As of 2013–14, the economic impact of non-

EU students is likely to have increased to around £8 billion.

23. The UK is the second most popular destination for international students,

after the United States. However, we cannot afford to be complacent and the

UK must work hard to sustain its market share of international students in the

face of growing international competition. Even a 1% drop in the number of

international students enrolling in the UK – as occurred in 2012–13 – would

equate to foregone export earnings of £80 million.

24. To understand the potential impact on specific regions as opposed to the

high-level national impact, Universities UK has considered the North West

region as an illustrative example. In the North West, the higher education

sector generated £848 million of export earnings in 2011–12, and institutions

there enrolled 34,270 students from outside the UK. Within this, international

student off-campus expenditure was £387 million, which generated £473

million of output for the North West region and 4,052 local jobs. A 10%

reduction in student intake could lead to around a £25 million reduction in

student expenditure in the North West economy alone.

25. In recent years, a number of changes to UK’s post-study work regime have

been made, which have impacted significantly on our share of the

international student market.

26. It is widely accepted that an attractive post study work regime is influential in

international students’ decision making and a recent NUS study has found

that 47% of international students identify the idea of working in the UK for a

short period as being attractive.12 Given the impact of these previous

changes (explored more fully below), UUK members would be extremely

concerned about the impact of restricting post study work opportunities further

through the tightening of the existing Tier 2 route, particularly in light of recent

moves by our key competitor countries (Australia, New Zealand, Canada,

Germany and the US) to provide or expand generous e post study work

opportunities in order to enhance their ‘offer’ to international students. Any

further restrictions on post study work available to non-EEA students in the

12

NUS (2014), Submission to the APPG on Migration Inquiry into the PSW route, available at: http://www.nusconnect.org.uk/resources/open/international/NUS-Submission-to-the-All-Parliamentary-Group-on-Migration-Inquiry-into-the-Post-Study-Work-Route/ (accessed 26 September 2014)

13

UK is likely to have a highly detrimental impact on the ability of UK

universities to continue to recruit genuine, high calibre international students.

As well as having a damaging impact on the UK HE sector, it would be likely

to have a devastating impact on the UK economy as a whole, as illustrated

above.

27. The UK currently has some of the strictest conditions for accessing post study

work compared to key competitor countries. Since the closure of the post-

study work visa route in 2011, the UK gives graduating students (through the

main Tier 2 route) just four months to find substantive employment that meets

a range of requirements, including a minimum salary threshold (currently £20,

800), which many international graduates struggle to meet. The niche Tier 1

(Graduate Entrepreneur) route was introduced in 2012 for international

students who wish to start up their own business following graduation, with

only 286 students switching into this route in 2014. There are also options for

internships of up to 12 months under Tier 5 provided students are paid at

least the minimum wage. For PhD students, the Doctorate Extension scheme

(launched in April 2013) enables graduates to remain in the UK for a year to

look for work or establish a business. Again, this route is extremely limited

with just 434 graduates switching to the Doctorate Extension scheme in 2013.

28. In stark contrast, in many of our key competitor countries, such as Canada

and New Zealand, a minimum salary is not specified for their international

graduates in order to take up employment, nor indeed is a job offer required

in order to secure a post study work visa. Recognising the economic

contribution of international students, the importance of PSW opportunities to

attracting international students to their shores, and the valuable skills and

contributions they can bring to their national economies, Canada, Australia

and New Zealand have in recent years enhanced their post study work

opportunities, at the same time the UK has been restricting its post study

work offer. A table setting out the UK’s post-study work requirements for Tier

2 and comparing them to other countries’ systems can be found at Annexe B.

29. Further tightening of Tier 2 rules exacerbates existing negative perceptions

that UK is unwelcoming to international students and further advantages our

competitors. This is likely to have a negative impact on international student

recruitment. The House of Lords Science and Technology Committee in its

report on International Science, Technology, engineering and Maths (STEM)

students noted that it was ‘not the immigration rules as such that were

deterring students but their perception of the rules as a result of overblown

rhetoric from Ministers and sometimes inflammatory media coverage in the

14

UK and in overseas countries. For young, inexperienced students, perception

is key’13.

30. The closure of the Tier 1 Post-Study Work route has previously had a stark

impact on the numbers of international students remaining in the UK to work

post-graduation. In 2011, there were 46,875 former students across all parts

of the education sector who switched their visa category into a work-based

category, the majority of whom switched into Tier 1 Post-Study Work. By

2013, this number had fallen to 6,238 – an 87% drop in just two years,

significantly higher than the government’s own estimates that the policy would

reduce those securing visas by 49%.

31. Directly alongside this reduction in post study work opportunities, which

formed part of a wider package of immigration reforms, there has been a

marked change in international student recruitment patterns to the UK.

Figure 5 shows a rise in international student registrations to 2010-11, then a

decline for two consecutive years (2011-12 to 2012-13) before a small rise in

2013-4. However, Figure 6 shows the numbers of new Indian students

coming to the UK have fallen by 53% in just two years. In contrast, Australia

has made its post study work opportunities so attractive to potential students

(offering two to four years post study work), that it has not only dramatically

addressed falls in international recruitment levels earlier this decade but has

effectively ‘picked up’ the UK’s share of the declining Indian market. In 2014,

the number of Indian students enrolled in higher education in Australia

increased by 58% to 26,337. More recent data suggests that this growth is

continuing.

13

House of Lords Science and Technology Committee (4th report of session 2013-14) International

Science, Technology, engineering and Maths (STEM) students

15

Figure 5: New overseas entrants to UK higher education, 2007 to 2014

Figure 6: Trends in Indian student entrants to UK higher education, 2007 to

2014

16

Figure 7: Indian Students enrolled in the UK and competitor countries

[Sources: Institute of International Education; Citizenship and Immigration

Canada; Australian Education International; Higher Education Statistics

Agency]

Notes: Figures for Canada are for students across all providers (not just HE) and are one year behind

(i.e. 2014 = 2013 etc.)

32. The drop in Indian registrations at UK universities in the past four years has

been sharply felt in particular subjects. In 2010–11, Indian students made up

18% of all non-EU student entrants in engineering and technology; in 2012–

13 this had fallen to 10%. In spite of a slight rise in enrolments from other

countries, the total number of non-EU students studying these subjects fell as

a result of the sharp decline of students from India. The Royal Academy of

Engineering argues that demand for engineering expertise exceeds graduate

supply:14 We can ill afford to lessen the pool of graduates further in science,

engineering and technology by dis-incentivising international students from

choosing the UK, or making it difficult for them to meet that sector’s

employment needs.

33. Returning to the House of Lords Science and Technology Select Committee

report the Committee maintains that ‘attracting able STEM students from

overseas is of vital importance to UK HEIs, domestic students and UK Plc.

International students enrich the experience of domestic students , can

provide skills needed for growth and future of the UK economy and also help

to cast the UK in a good light when they return to their country of origin –

14

HECSU (2013), What do graduates do? available at: http://www.hecsu.ac.uk/assets/assets/documents/WDGD_Sept_2013.pdf (accessed 23 September 2014)

17

contributing to the UK’s ‘soft power’’. The Committee also acknowledges the

significant contribution of non-EEA students to the financial health of UK

universities, recognising that in some areas, not least within certain STEM

disciplines, they may even help to sustain ‘some subjects of importance to the

UK that would not be viable without their participation’.

34. The Committee recognises that the provision for STEM students to work in

the UK following completion of their studies also has an impact on employers,

particularly SMEs, who are losing out on highly valued and scarce skills and

states that ‘it must be paramount that the UK economy harnesses the skills of

international STEM students as they complete their studies and seek

employment. The UK desperately needs engineers, for example, to help grow

the economy. It is self-defeating to have a system in place which deters

international STEM students from contributing to UK Plc’15.

35. Anecdotal evidence has shown that, even in markets such as Japan, where

post study work opportunities may be a less important factor in deciding

where to study, the perception remains that the UK is unwelcoming to

international students which is still highly damaging.

36. Home Office data shows that, in 2014 5,639 students were granted an

extension of stay in the UK under Tier 2 after ‘switching’ in country. To reduce

the number of those able to switch from Tier 4 to Tier 2 even further, with

higher minimum salaries and more restrictive categories, would damage the

UK higher education sector and would not result in the government meeting

its net migration target.

37. However, this will be perceived as a further reduction of opportunity for

international graduates in the UK, which could have a further negative impact

on how competitive the UK remains as a study destination for the most

talented and ambitious students. This would be a significant loss to both UK

universities and the wider UK economy.

Impact on the recruitment of non-EEA staff within UK HEIs

38. A strong international presence within UK universities is critical in order to

retain our world leading position. Academics and researchers from outside

Europe are a vital component of the workforce within UK universities

comprising 11.7 per cent of academic staff alone and significantly higher

proportions in a number of subject areas, including many of the STEM

disciplines. Furthermore, universities are increasingly being directly judged 15

House of Lords Science and Technology Committee (4th report of session 2013-14) International

Science, Technology, engineering and Maths (STEM) students, pp. 5-6

18

on their ‘internationalism’ in the global university rankings. The percentage of

students and staff from abroad is now used by QS, for example, as a

measure by which universities are ranked globally in order of prestige. It is

therefore paramount that the UK remains able to attract the most talented

academics and researchers to its universities – failure to do so will impact

upon the global reputation and ranking of UK universities, the UK’s research

base and staffing levels within strategically important subject areas.

39. As we have already seen, over 10% of research staff in the 2014 Research

Excellence Framework were from countries outside the EU. One Universities

UK member, a research intensive institution, directly attributed its success ‘to

our ability to attract the best research talent from around the world’. In another

large, research intensive university, non-EEA nationals comprise over 200

members of its academic staff. Restrictions on HEIs’ ability to recruit highly

skilled academic staff from around the world is likely to have a significant

impact on the future stability of the UK research base, especially in certain

fields (including, but not restricted to, STEM disciplines) which are highly

dependent on non-EEA staff for their very survival. Without the ability to build

capacity in these areas through research and teaching, HEIs will struggle to

train the next generation of specialists to degree level and above in order to

address current skills shortages in the UK.

40. This general observation is borne out by the experiences of individual

universities. One university reported to Universities UK that disciplines

requiring a strong mathematical background (engineering, photonics, some

areas of computer science) or a strong biochemical background (pharmacy,

drug delivery, biomedicine) appear particularly dependent on researchers and

academics from outside the EEA with more than 40% of posts in these areas

being filled by non-EEA staff at the university. Any restriction on Tier 2

employment would seriously curtail the university’s ability to undertake high

impact research in these areas.

41. Other universities have reported that within many STEM subjects and foreign

languages (where there is a preference for native language speakers), they

would struggle to run courses should Tier 2 recruitment be restricted further.

For many academic positions within the more specialist STEM subjects, it

would not be uncommon to have no UK/EEA applicants for an advertised role

rendering recruitment from outside the EEA absolutely essential.

42. Many UK universities also employ a high number of clinical academic staff

from overseas, due to known shortages within the UK. If the number of

clinical academic staff that universities are able to recruit is restricted as a

19

result of the Tier 2 route being further limited, this would impact on clinical

training and clinical practice which would be detrimental to the NHS and

health research.

43. Many Tier 2 staff are Principal Investigators (PIs) on grants who employ a

number of junior staff to work on their grant, with the majority of junior

researchers being UK citizens. If universities are unable to recruit these highly

specialised PIs through the Tier 2 route, this would result in a significant loss

of funding to the detriment of the UK economy. For example, analysis by the

University of Cambridge’s Research Strategy Office indicates that its current

non-EEA staff (which does not include non-EEA staff who have left the

University who held grant funding) hold a total of 238 funding awards, totalling

over £122m in funding. Considerably less jobs would also be created which,

again, would have a negative impact on the UK economy.

44. In summary, further restrictions on access to the Tier 2 route would seriously

hamper the ability of universities to continue to recruit highly skilled academic

talent from around the world, and the UK would be in danger of losing highly

talented academic staff to our strongest competitors. It would have a

detrimental impact on the strength of the UK research base and compromise

the international standing of UK universities, which together contribute £73bn

to the UK economy.

The Resident Labour Market Test (Q2)

Impact on the recruitment of non-EEA staff within UK HEIs

45. The Resident Labour Market Test (RLMT), though at times overly complex

and bureaucratic, works well overall for the HE sector. The test is generally fit

for purpose and the RLMT exemption for Tier 2 switchers (from Tier 4) is

welcomed.

46. For universities, the RLMT allows HEIs to test the market fairly. The removal

of the need to advertise PhD level occupations with Job Centre Plus

(Universal Jobsmatch) is important for HEIs, allowing them to recruit the best

candidate for the role, regardless of nationality and must remain in place.

The acceptance of two online websites is also useful.

47. More flexibility would however be welcomed as to whether an employer is

required to undertake the Resident Labour Market Test. For example, the

London School of Hygiene and Tropical Medicine (LSHTM) has reported that

responding to global health crises (e.g. the recent Ebola outbreak) requires a

20

quick response which is not always possible due to timescales inherent in

undertaking the RLMT. It is noted that the requirement to undertake a RLMT

can sometimes cause undue delay in recruitment when a faster response is

needed. For areas of urgent and strategic national importance, or when

responding to a global health crises of this scale, a more pragmatic approach

is therefore needed, with greater flexibility built into the system.

48. A reduction in the length of the advertising period would be welcomed by

HEIs (from the current 28 days to 14 days, for example, to avoid unnecessary

delays in recruitment). Further simplification as well as more clarity and fine

tuning of guidance would also be helpful.

49. The RLMT exception for graduates seeking to ‘switch’ in-country from Tier 4

to Tier 2 is welcomed and must remain.

The efficiency of the current points mechanism (Q3)

Impact on HEIs as employers of non-EEA staff

50. The current points mechanism which awards additional points for PhD level

SOC codes prioritises individuals fulfilling these criteria and allows

universities to recruit the most effective talent available from outside the EEA.

It is essential that this prioritisation, for restricted Certificates of Sponsorship

(CoS), remains in place going forward in order for HEIs to continue to recruit

the best candidates for roles which are often highly specialised and in niche

areas of research.

51. For unrestricted CoS, points are awarded for having sponsorship from an

employer, salary, maintenance and English language competence.

Universities UK would favour a focus on qualifications in appropriate

occupational codes, and less focus on salary, which would again serve to

deliver a mechanism which prioritises migrants of greatest benefit to the UK.

Such a distinction is important given that researchers employed by HEIs are

likely to be paid less than their private sector counterparts and salaries within

academia are restricted due to salary bands negotiated on a sector-wide

basis.

Recent breaches of the Tier 2 Cap

52. In June 2015, for the first time, the monthly immigration cap of 2, 650 newly

hired workers under Tier 2 was breached. At least 400 applications were

consequently rejected and the unsuccessful applicants forced to re-submit.

The cap was again hit in July and August of this year.

21

53. Recent economic growth combined with a restricted labour market (as the UK

moves towards full employment16) has led many firms to recruit from

overseas thereby increasing uptake within Tier 2 (General) from 8,552 in

2009 to 15,255 in 2014 (78.3%) (as demonstrated in Figure 8 below – the

unemployment rate is included for illustrative purposes as a general indicator

of labour market tightness). With the UK economy now well on the way to

recovery, universities are concerned that a breach of the Tier 2 cap may

become a more regular occurrence, whether or not the actual visa

requirements are met by high-quality applicants.

Figure 8: The increase in Tier 2 (General) applications 2009-2014

2009 2010 2011 2012 2013 2014

Increase

from

2009

Tier 2 General 8556 9914 7764 9420 11779 15255 78.3%

Tier 2 General

(extensions) 12900 14306 11295 20185 28377 26700 107.0%

Unemployment rate 7.9 8 8.5 8 7.4 5.8

54. Any further breaches of the cap could present a significant problem for

academics in the future. The knock on effects of a number of applicants being

pushed back from previous rounds and having to re-apply, may mean that

non-EEA academics seeking employment within UK HEIs, despite being

prioritised due to their PhD level qualifications, may start to fall foul of the cap

themselves.

55. UUK would therefore strongly oppose any moves to place further limits on

Tier 2 entrants by tightening the cap any further. Further prioritisation may be

necessary to ensure that UK universities are able to continue to recruit highly

skilled researchers from around the world, where recruitment from within the

domestic labour market and the EEA has been proven to be unsuccessful, to

ensure the continued future success of the UK research base. Universities

are concerned that the current additional points awarded for PhD level SOC

codes may be in insufficient to ensure that highly skilled and highly talented

university researchers, - many of whom may be in receipt of substantial

research funding, as well as meeting or exceeded entry criteria - are not

refused Tier 2 visas due to the maximum number of allocations already

having been breached. This could have a highly detrimental impact on the

wider UK economy, particularly should these researchers be active within

16

The Bank of England and the Office for Budget Responsibility have defined ‘full employment’ at a level of unemployment level falling at or below 5% of the labour force.

22

areas of strategic importance to the UK or within emerging cutting-edge

research. This scenario could be prevented by placing PhD level roles within

the shortage occupation category (as explored more fully below).

Impact on the recruitment of non-EEA graduates from UK HEIs

56. Universities welcome international graduates’ exemption from the Tier 2 cap,

with the ability to proceed with an in-country application from Tier 4 to Tier 2.

The ability of employers to continue to recruit from a global talent pool of

highly skilled workers would be seriously compromised should graduates

have to return home before applying for a Tier 2 visa. Recognising the

undoubted importance of being able to work for, in the main, a short period

before returning to their country of origin, the cost (of the visa itself, flights

home, etc.), complexity and bureaucracy involved in taking up any post study

work opportunities in the UK would be likely to deter many talented individuals

from applying to study at British universities at all. Such a move is likely to

have a highly detrimental impact on the UK’s share of the international

student market, which is of national importance given the vital contribution

international students make to UK universities and to the UK economy as a

whole.

Revised Shortage Occupation List (to include definition of 'highly specialised

experts' (Q4, 5, 7, 8, 10, 11, 12, 13, 15)

Impact on the recruitment of non-EEA staff within UK HEIs

57. Universities UK would assert that those employed within any of the seven

PhD level SOC codes should be classified as ‘highly specialised experts’ on

the basis of existing criteria:

SOC 2010 Job Title

Code 2111 Chemical Scientists

Code 2112 Biological Scientists & Biochemists

Code 2113 Physical Scientists

Code 2114 Social & Humanities Scientists

Code 2119 Natural and Social Scientists not elsewhere

classified

Code 2150 Research & Development Managers

Code 2311 Higher Education teaching professionals

58. Individuals employed within these SOC codes are skilled or educated to PhD

level, they have developed specialist knowledge in their particular subject

areas over many years to become leading academics in their field or (for early

23

career and new entrants) they have shown outstanding promise. This means

that there are a limited number of people who have the skills and knowledge

to do the job in question and there are no sensible alternatives to address the

shortage of supply. In certain fields, there exist only a handful of experts in

the world, and there is global competition to recruit and retain these

individuals, so that the hosting institution, and ultimately the national

economy, can benefit from these individuals’ expertise.

59. Universities UK would be extremely concerned about any move to limit Tier 2

sponsorship to ‘shortage occupations’ and ‘highly specialised experts’ should

academic staff and researchers not be included within these categories.

60. Universities UK would also advise extreme caution in the consideration of

whether the selection criteria should be amended to limit ‘highly specialised

experts’ to specific fields or subjects. As well as being too restrictive, this

would require regular review to ensure the criterion reflected the current

labour market. Other evidence such as the number of vacancies, duration of

advert and whether they were advertised more than once, as well as the

number of applicants who meet the essential criteria could be used to

determine whether a ‘skills shortage’ exists, but this would create an

additional and unnecessary administrative burden to collect across all

sectors.

61. In terms of using salary as an appropriate measure, UUK’s previous response

to the salary consultation has highlighted the significant damage that would

result to the HE sector from an increase in salary along the lines of what has

been proposed. The ability to recruit international talent, remain competitive

and deliver world class research would be severely compromised. This is

explored in more depth in Annexe A to this response, which has been

previously submitted as UUK’s submission to the previous salary threshold

consultation.

62. As well as identifying PhD roles (which accounted for less than 7% of net Tier

2 migration in 2014) within the ‘highly specialised experts’ category, UUK

would also argue that there is a strong case to place PhD level roles within a

revised shortage occupations list. UUK would concur with the points

presented by the University of Cambridge within their response in support of

this position, as follows:

- In a global higher education sphere, there is a strong case for employing non-

EEA nationals (within PhD roles) to support and maintain the international

competitiveness of the UK HE sector.

24

- Non-EEA nationals employed in the UK HE sector do not displace resident

workers, as proven by the RLMT and the often highly specialised nature of

university research.

- Within the UK HE sector, there are no alternatives to employing non-EEA

nationals where there are skills shortages in certain fields.

- The decision to impose further restrictions on PhD level occupations within

the Tier 2 route would have wider and significant implications for the UK

economy. This is explored in more detail in our response to question 1 at

paragraphs 38-44 above.

63. It is worth noting that universities do seek to employ settled/resident workers

to fill their vacancies wherever possible. However, the reality is that there is a

shortage of applicants with the appropriate skills from within the UK and EEA

for certain vacancies as we have seen above and the ability to recruit from a

wider, global talent pool is essential to ensure the continued success of the

UK HE sector.

Evidence of the need to recruit highly specialised experts

Impact on the recruitment of non-EEA staff within UK HEIs

64. The need to recruit highly specialised experts within the HE sector from

overseas is not in doubt. In one research-intensive university, whilst recruiting

for 14 positions in their School of Computer Science and Electronic

Engineering, just 43 candidates were invited to interview. This low number of

applicants shortlisted for interview (on average just three for each post)

indicates the specialist nature of the roles in question. Of the 43 shortlisted

applicants, 42 disclosed their nationality. Of these, the majority were non EU

applicants (23) with just 7 from the UK and 12 from the EU. Of the 14

applicants who were offered posts just one was from the UK, 3 were from the

EU and 11 were non EU. The university reported that had they been unable

to recruit international candidates for these posts it is likely that the majority of

the posts will have been left vacant. Many university research posts are

funded externally and should these posts be unfilled, the funding and

recognition for the projects concerned may well move to universities abroad

who are able to access the skills required to undertake the research in

question. Should this be amplified on a wider scale, further restrictions would

not only be to the detriment of the UK research base but to the UK’s

economic competitiveness and performance as a whole.

25

The impact of restricting recruitment to genuine skills shortages and highly

specialised experts for migrants switching from the Tier 4 student route and

other categories

Impact on the recruitment of non-EEA graduates from UK HEIs

65. As we have seen above, the UK higher education sector occupies a position

of strength internationally. OECD figures show the UK is the second most

popular destination for international students, with a market share of 12.6% in

2011 (up from 10.8% in 2000). Furthermore, the international student market

is growing rapidly and offers significant opportunity for economic growth.

UNESCO has estimated that the number of students seeking an overseas

tertiary education experience would increase from just over four million in

2010 to seven million by 2020. Despite this predicted rise, the UK’s global

standing is not assured. It faces growing competition from a number of other

countries, which are seeking to attract talented students and staff. In recent

years many of these competitors, such as Canada and Australia, have set

ambitious targets for growth, and students and staff seeking an international

experience now have more choice than ever before. The UK must therefore

work increasingly hard to present itself as an attractive and welcoming

destination.

66. As illustrated at paragraphs 25-37, an attractive post-study work environment

is essential to sustaining our current position and ensuring future growth

potential in a valuable export market in which the UK already excels. As we

have seen from the closure of the Tier 1 Post Study Work route in2012,

restricting the ability for non-EEA students to remain in the UK to work post-

graduation can have a dramatic effect on international recruitment,

particularly in some of our strongest markets. Even for those who do not wish

to work in the UK following graduation, the negative perception of the UK as

an ‘unwelcoming’ destination for international students is highly likely to

impact on their decision as to whether or not to study in the UK. Further

tightening of the Tier 2 route, such as by restricting switching from Tier 4 to

Tier 2 to ‘highly specialised experts’ and any moves to remove the ability for

students to switch to a Tier 2 employment visa in-country following

graduation, is likely to result in a further loss of competitive advantage in a

high performing area for the UK. UUK would be extremely concerned about

the impact of such a move.

67. We therefore cannot emphasise enough the need to retain and prioritise work

rights for Tier 4 students, who already face considerable challenges in

securing graduate-level employment within a short timeframe and at a higher

26

level than their UK and EEA counterparts in order to obtain a Tier 2

employment visa. It is critical that Tier 4 students are able to continue to

switch to Tier 2 under existing rules and this route should not be restricted

further for ‘switchers’. This is especially pertinent given that the recent breach

of the Tier 2 cap means that it has become significantly more difficult for non-

EEA graduates to apply for a Tier 2 visa from outside the UK.

68. It is also extremely important that the current exemption from the Resident

Labour Market Test for Tier 4 switchers remains in place. UUK is concerned

that restricted opportunities for international students to switch into Tier 2 after

their studies would make the UK a much less attractive place to study and

would greatly affect the UK’s position in the highly valued international

student market.

69. A decline in international student numbers is likely to have a significant impact

on recruitment to STEM courses and on the future sustainability of highly

specialised areas, many of which are dependent on a strong international

student presence for their survival. This will have the undesirable effect of

compromising our ability to build future capacity within these disciplines. One

research intensive university submitted evidence to Universities UK which

noted that out of the 186 Tier 2 ‘new starters’ employed in the current

academic year 2014/15, 52 were Tier 4 switchers. From this number, 96%

moved into a PhD level role.

70. Given the importance of the Doctorate Extension Scheme (DES) as a pipeline

for the next generation of researchers, Universities UK is concerned about

any further restrictions placed upon graduates seeking to switch to a Tier 2

visa once their DES visa expires. The scheme currently allows Tier 4 student

holders to undertake any work (skilled or unskilled) for a 12 month period. If

they were undertaking skilled work, it is possible that they could still switch

into Tier 2, as they would hold a PhD. However, whether they would qualify

as ‘highly specialised expert’ at the start of their academic career is unclear.

Universities UK would strongly suggest, at the least, including all staff

employed within PhD SOC codes within this definition, however if the

definition of ‘highly specialised’ was to exclude those who were highly

qualified but starting out in their career, this is likely to have a serious and

damaging impact on all migrants switching from the Tier 4 student route.

71. This would particularly impact on the higher education sector as many of

these migrants (particularly those under the Doctorate Extension Scheme)

are likely to be employed subsequently by HEIs in academic roles. Similarly,

the ability of those under the Tier 1 (Graduate Entrepreneur) scheme (still a

27

niche, through growing route) to switch to Tier 2 skilled employment should

they fail to meet the strict criteria necessary for the main Tier 1 Entrepreneur

Scheme (which requires securing a significant £50k investment to their

business, a challenge for even the most talented young entrepreneur to

achieve) must be retained. Failure to maintain the ability of such applicants to

switch in-country to the Tier 2 route could result in losing a large number of

highly talented individuals with the potential to make a significant contribution

to the wider UK economy.

72. The ability for graduate employers to recruit highly talented non-EEA

graduates would also be compromised should further restrictions be placed

on the ability for students to switch from Tier 4 to Tier 2 on graduation. As a

result of the high number of unfilled vacancies (more than 700 graduate

positions were left unfilled last year according to the Times Top 100 Graduate

Employers Survey 2014). With the anticipated future growth in vacancies

across a number of key sectors, employers are keen to access a larger,

international talent pool. This need is particularly acute where there are long-

standing skills shortages, for example for graduates with STEM skills, an area

of particular concern amongst employers, as demonstrated in a recent CBI

survey17. Whilst employers are keen to hone and encourage ‘home grown’

talent, this must be accompanied by the ability to continue to recruit home,

EEA and non-EEA graduates from UK universities, at realistic salaries taking

into account sector-specific and relevant occupational recruitment trends.

Failure to do so would have a highly detrimental impact on the ability of

employers to respond to skills shortages and would be damaging to the UK

economy as a whole.

The introduction of a skills levy (Q17)

Impact on the recruitment of non-EEA staff within UK HEIs

73. It is difficult to comment fully on the proposed levy in the absence of any

detail about the cost, structure or how the money will be spent. It should be

noted, however, that UK universities fully support the government’s

commitment to driving up the skills base of the country and the HE sector

already contributes significantly to education, training and skills development

through offering courses up to highest academic level. We would therefore

welcome discussion about how higher education’s position can be understood

within the development of this initiative and we would suggest that UK HEIs

might be exempt from such a charge, in recognition of their role in higher level

skills delivery,

17

CBI/Pearson (2015) Inspiring Growth: Education and Skills Survey 2015

28

74. The ability of universities to recruit into SOC 2311 and 211x contributes to

addressing skills shortages in the UK in the medium to long term by training

new specialists to degree level and above. In the education and training of

students to degree level, UK HEIs already supply the UK economy with high

calibre graduates who possess knowledge and skills that can be applied

practically within businesses to drive innovation. Universities promote

graduate employment extensively, including through Graduate Business

Partnerships and Knowledge Transfer Partnerships. UK HEIs are also highly

involved in training and educating the academics they employ throughout

their career, offering a wide range of courses both to PhD students and to

staff, including post-doctoral and early career researchers, specifically to

further develop their skills and abilities.

75. Furthermore, universities are already directly involved in delivering the

apprentice schemes which it is suggested the monies raised by the levy

would fund. According to the forthcoming UCEA/HEFCE Workforce Survey

2015, 61 per cent of HEIs currently employ apprentices or have done so in

recent years and a further 20 per cent intend to do so in the near future.

76. It is worth noting that most of the funding to HEIs for academic posts comes

directly or indirectly from public funds. It therefore may not make business

sense to impose a system whereby HEIs were obliged to pay this money

back to the government in the form of a levy. Additionally, as the funds HEIs

receive from research grants only cover the necessary research and staff

costs, there is no source of income from which to draw the levy, thus placing

an additional financial strain upon UK universities.

77. Should a skills levy be applied to higher education, it is unlikely to change the

way in which universities recruit. Universities, as with all employers, when

recruiting a Tier 2 employee have already satisfied the Resident Labour

Market Test. They therefore have no alternative but to employ a non-EEA

candidate having failed to identify a suitable candidate within the domestic

market with the specialist skills requirements of the role to which they need to

recruit. Indeed, for some extremely specialist roles within academia there may

only be a handful of candidates globally with the level of expertise sought,

with UK HEIs being placed in a competitive situation not just between other

UK universities but with universities across the world seeking to access that

high level of specialism to the benefit of their national economy. Universities

would therefore have no choice but to pay the levy, although this would pose

additional financial challenges for a sector which has already suffered from a

significant loss of public funding.

29

78. If it is decided to implement the proposed levy, UUK would argue that HEIs

should receive a significant amount of the proceeds to invest in educating

students where there are skills shortages, for example, but not limited to,

within STEM subject areas. This would help to secure the future sustainability

of these areas with the provision of higher level skills training.

Impact on the recruitment of non-EEA graduates from UK HEIs

79. Universities UK is concerned that introduction of a levy is likely to present

additional challenges for employers, especially SMEs, in employing

international graduates. It can already be expensive, time consuming and

bureaucratic for many employers to recruit from outside the EEA, and the

imposition of any additional charges or penalties may, depending on the

amount charged and its regularity, prevent some employers from accessing a

wider talent pool and the skills they require for their businesses. Should

employers fail to recruit amongst the domestic workforce or within the EEA,

and within the context of a restricted labour market, employers will be

reluctant to compromise on quality by hiring domestic workers who are simply

unqualified to fulfil the demands of the role. In reality, many vacancies may

simply be left unfilled. This could hamper economic growth to the detriment of

UK Plc, particularly in areas where serious skills shortages already exist.

80. Furthermore, evidence from the CBI has shown that some of the same

companies that are consistent users of the Tier 2 route for bringing skilled

workers into the UK have also increased their investment in graduate

schemes and apprenticeships in recent years – not least because by the time

the additional costs of bringing a worker to the UK are factored in, it is always

significantly more expensive to hire overseas than to hire a UK national. Such

employers, who are already investing significantly in skills training to the

benefit of the domestic workforce, may then be unfairly penalised for hiring

from a wider international talent pool when they have no choice but to do so

to meet the skills requirements of the role to which they need to recruit18.

Tier 2 Dependants (Q18)

Impact on the recruitment of non-EEA staff within UK HEIs

81. As demonstrated in a recent UCEA/ Permits Foundation study, the majority of

dependants of Tier 2 workers employed in HEIs are themselves working in

18

CBI response to Home Affairs Select Committee Inquiry into the Tier 2 Skilled Workers System (July 2015)

30

highly skilled occupations, with 79% dependants working in professional,

technical or managerial roles19.

82. According to one London university, a third of Tier 2 academics they sponsor

have dependant partners in the UK. All are educated to Bachelor’s degree

level, and many are educated to Masters’ level. They work in professional

jobs, including Physiotherapist (SOC 2221), Civil Engineer (SOC 2121),

Relationship Manager for a Foreign Exchange Brokerage Company (SOC

3538), and Not-for-profit Management.

83. A Scottish university noted that over 80% of the migrants they employed with

a dependant visa were working in PhD level posts. Another research

intensive university cited eight Research Fellows in STEM subjects who had

been employed as dependants of relevant UK visa holders, many of whom

were accompanying a Tier 2 visa holder. All were active within the Faculties

of Science, Engineering and Medicine, whose areas of research expertise

included Applied Epidemiology, Drug Discovery and Infectious Disease

Modelling. A further nine dependant workers held a variety of academic,

research and technical positions within STEM disciplines.

84. A further research intensive university provided several case studies of

dependant workers employed as academics or researchers in hard-to-fill

posts or where the level of specialism required had not been possible to find

amongst domestic applicants, for example Research Fellows employed within

the areas of Health Care Informatics and Swallowing Biomechanics. In the

latter case, this involved a close collaboration with an overseas research

centre, partnering medical doctors, in an important research project which is

likely to impact positively on the wider economy as well as the university.

85. The ability for dependant partners to work whilst in the UK is a significant

factor for academics in deciding whether or not to come to the UK. As well as

the obvious challenges of surviving on a single income in a country with a

relatively high cost of living, dependants of highly skilled academic staff

working in highly skilled roles may be understandably reluctant to give up

their ability to earn and develop their own careers (whilst at the same time

contributing to the national economy of the ‘host’ country directly through

taxes and increased spending power).

86. UUK therefore believes that the right approach is to enable highly skilled

dependants of Tier 2 workers to retain unfettered access to the UK labour

market provided they are employed in an NQF6 level role, whether part or

19

Data extract from survey by Permits Foundation to access the mobility and social impacts of restricting the right of dependants of Tier 2 visa holders to work in the UK (September 2015).

31

full-time. Flexibility in terms of working hours is important, given the childcare

commitments a dependant partner may have and this would necessarily

affect the salary levels inherent in the opportunities they may be able to take

up.

87. The right of dependants to work also currently offers the UK a significant

competitive advantage over the US in attracting the best candidates to highly

skilled roles. This, however, could be removed as the US is now moving

towards a position of allowing dependant partners to work whilst the UK is

simultaneously considering a move in the opposite direction. Moreover, the

UK’s other main competitor countries – Canada, Australia and New Zealand –

all currently allow the spouses and partners of skilled migrants to work.

Restricting the rights of dependant Tier 2 partners to work would not only

compromise the UK’s ability to attract highly skilled and highly talented

academic staff – often, as we have seen, in extremely specialised areas, who

are usually few in number and highly sought after by prestigious employers

and institutions across the world - but the UK economy would also lose out on

the valuable skills sets, and hence economic contribution, that their

dependant partners may bring.

88. It is also worth noting that Tier 2 migrants and their dependants are not

permitted to access public funds, although they do contribute to the

Exchequer through tax and National Insurance deductions as well as directly

through the NHS surcharge. A restriction on the ability of Tier 2 dependants to

work is likely to significantly reduce this contribution thus reducing this

revenue stream. The social impacts may also be significant. Being able to

work allows for further social integration, a greater understanding of UK

culture and the ability to contribute positively to society. A restriction of this

ability may compromise the obvious social and economic benefits to the UK

as a whole.

Tier 2 design (Q19, 20)

Impact on the recruitment of non-EEA staff within UK HEIs

89. For HEIs as employers, the current Tier 2 mechanism works fairly well

overall. Universities would resist any immediate further changes. Constant

rules amendments are unhelpful and destabilising for HEIs and other

employers.

90. However, we have noted above our concerns about the recent breaches of

the Tier 2 cap and we will re-iterate these here. We cannot stress highly

32

enough the need to at least maintain the current Tier 2 allocations at the

current level and we would argue that there is a strong rationale for increasing

the monthly limits. The recent breaches and the likely knock-on impact

through future rounds are a real concern, conflated with the increased need

for employers to recruit under Tier 2 within the context of a restricted

domestic labour market. In order for the UK economy to continue to benefit

from highly skilled academics and researchers, it is essential that prioritisation

continues to be given to those in PhD roles, notwithstanding any future

changes to the Tier 2 system. Similarly, the ability of talented non-EEA

graduates to seek employment under the Tier 2 route must not be

compromised further. UUK would resist any move in this direction, such as

imposing tighter salary thresholds, by removing the right to apply for a Tier 2

visa whilst in-country, by increasing visa fees to prescriptive levels or by

subjecting graduates to the Resident Labour Market Test.

Impact on the recruitment of non-EEA graduates from UK HEIs

91. For employers as a whole, the rules surrounding employment under Tier 2

are often viewed as prohibitively restrictive, specifically in the employment of

non-EEA graduates. Not only does an employer have to become a Tier 2

sponsor (at a significant expense and with considerable resource

implications, especially for smaller businesses); in order to employ a non-EEA

graduate, they will often need to remunerate that applicant at a considerably

higher rate than a UK domiciled graduate in order to meet the necessary

salary thresholds. Rather than under-cutting, what we are beginning to see, in

effect, is the reverse. This undermines the ‘equal pay for equal work’ mantra

as employers would be forced to pay a salary premium for highly skilled non-

EEA graduates, to the detriment of UK-domiciled graduates with the same

skills and qualifications. For smaller businesses, the increased difficulties

inherent in recruiting international graduates to fill their available roles may

present a real disincentive in employing non-EEA graduates.

92. This has been reinforced by the recent findings of the All Party Parliamentary

Group on Migration (APPG) report (Feb 2015) confirming that ‘the restrictive

nature of Tier 2 (General) has prohibited some employers from being able to

recruit skilled non-EEA graduates under this route. In particular, sponsor

licencing requirements generating costs and bureaucracy for employers; the

short time periods afforded to non-EEA graduates prior to expiry of leave; and

the salary requirement for Tier 2 (General) have variously prevented some

employers – including SMEs and large companies undergoing graduate

33

recruitment rounds – from recruitment of skilled non-EEA graduates under

Tier 2 (General)’.20

93. For smaller businesses, the impact for their business of not being able to

recruit from a larger international talent pool, especially where there are an

increasing number of unfilled vacancies, may be significant. In an SME-

dominated economy, the cumulative effect of companies subsequently failing

to recruit to graduate-level roles, - especially where there are current skills

shortages and where a potentially large talent pool of international students

may exist, such as in the STEM-based industries - is likely to have a

detrimental impact on the UK’s international competitiveness as a whole.

94. Universities UK would stress that consideration of any changes to the Tier 2

(General) route, including any tightening of the salary thresholds, should take

into account the general principles of fairness and the significant existing

restrictions inherent in this route. Universities would urge the MAC to consider

the impact of any further changes fully, without prejudice and with resource to

all the available data and evidence.

20

The All Party Parliamentary Group on Migration: UK post study work opportunities for international students (February 2015) available at http://www.appgmigration.org.uk/sites/default/files/APPG_PSW_Inquiry_Report-FINAL.pdf