Skip to Navigation

The UK's points-based system and calls for an Australian-style one

Written by John Kelly, EIN, 25 July 2016

While the points-based system will be more than familiar to nearly all EIN members, anyone not working within the field of immigration in the UK could be forgiven for thinking that such a system was a purely Australian concept, based on the calls for the UK to adopt the Australian system by the Leave campaign in the EU referendum campaign.

A new briefing by the House of Commons Library this month provides a useful and easily readable overview of the current UK points-based system, and looks at what the many recent calls for the UK to adopt an "Australian points-based system" might entail.

You can read the briefing in full below:

________________________________

HOUSE OF COMMONS LIBRARY

BRIEFING PAPER
Number 7662, 18 July 2016

The UK's points-based system for immigration

By Melanie Gower

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | papers@parliament.uk | @commonslibrary

Contents
Summary
1. Introduction to points-based systems
1.1 What are they?
1.2 How do they compare against other selection models?
1.3 Why are there calls for a points-based system for the UK, if it already has one?
2. 2008/09: the UK's points-based system is introduced
2.1 How the system developed
2.2 The policy rationale
2.3 The role of the Migration Advisory Committee
2.4 How has the system changed over time?
Further changes in the pipeline
3. How does the points-based system work in practice?
3.1 The five 'tiers', and associated visa categories
3.2 Which categories are subject to quotas?
3.3 Applying for entry to the UK under the points-based system: an overview
Applying under the Tier 2 (General) visa category
4. Potential changes post-Brexit
5. Points-based systems in other countries
5.1 The Australian model
Is the Australian model suitable for the UK? Recent commentary
5.2 Canada

Cover page image copyright: Immigration by lcars. Licensed under CC BY 2.0/ image cropped.

Summary

Points-based selection systems and the alternatives

Points-based immigration systems select migrants on the basis of having certain valued attributes, such as qualifications, occupation and language skills. Advocates of points-based models tend to emphasise their transparency and flexibility. But the approach has been criticised on the grounds that it does not necessarily ensure that migrants find employment at an appropriate skill level after entry.

In recent years, many countries have moved away from simply relying on pure points-based systems. For example, Canada and Australia (both early adopters of points-based systems) have some additional work visa categories which are not points-based. Canada, Australia and several other countries have also moved towards "hybrid selection systems", which incorporate elements of different types of selection models. For example, some countries have adapted their points-based systems in order to include a greater role for employers in selecting suitable migrant workers.

Calls for an Australian-style system for the UK

The Labour Government introduced a couple of points-based visa categories in the early 2000s. It then launched an overarching "points-based" system for non-EEA national workers and students in 2008, which it described as an "Australian-style" system. Since 2008, there have been many further calls for the UK to adopt an "Australian points-based system", although it is not always obvious what specific features advocates are referring to.

These calls may partly be due to the fact that the UK's system has undergone many changes. It varies from other points-based systems in several respects and has always combined elements of different selection models. For example, most visa categories within the points-based system require the visa applicant to have a sponsor (e.g. an employer) and a fixed job/study offer, and there is no scope for flexibility over the number of points awarded, or the possibility to off-set points accrued in one category against those needed in another. Some commentators have questioned the whether the UK has a points-based system other than in name.

Some experts have questioned the assumption that the "Australian system" would be appropriate for the UK. They highlight the different demographic, economic and policy contexts in the two countries, and emphasise that Australia (and other comparable countries) operates a number of other work-based visa categories in addition to points-based schemes.

How the UK's points-based system works in practice

There are five 'tiers' to the points-based system. These cater for high skill/high value migrants; sponsored skilled workers; low-skilled workers; students; and temporary workers. Each tier contains several different

visa categories (and some sub-categories), with varying associated conditions and mandatory eligibility requirements. The tier for low-skilled workers has never been used, because it has been assumed that any need for low-skilled workers can be met from within the UK/European Economic Area (EEA) workforce.

Most categories within the points-based system require a visa sponsor (typically, a licensed employer or education provider). In most cases, applying for a visa is a two stage process which requires the sponsor and visa applicant to make separate applications to UKVI. Each mandatory requirement attracts a fixed number of points, therefore the 'points' assessment is arguably largely symbolic.

There are limits on the number of visas available in certain visa categories, notably the category for sponsored skilled workers (Tier 2 General). A separate points test is used to determine how to choose between applicants for restricted visas in the Tier 2 category.

The design of the points-based system was intended to promote simplicity, transparency, objectivity, robustness and flexibility. Some stakeholders have questioned whether it meets these standards in practice. For example, the Immigration Rules and policy guidance for each visa category are extremely lengthy and prescriptive, and often modified. The emphasis on 'hard' education and professional qualifications and salary thresholds, rather than 'soft' skills and experience, has posed particular difficulties for certain sectors .Various exceptions and workaround solutions have been introduced in order to accommodate the needs of specific sectors, but arguably at the cost of increasing the complexity of the system. Some trade-offs were perhaps inevitable given the inherent tensions between some of the objectives, and difficulties in designing a system which caters for such a broad spectrum of interests and sectors.

Might Brexit lead to further changes to the points-based system?

Brexit offers the potential to apply the same immigration controls on European and non-EU/EEA migrants, although this will depend on what kind of future relationship the UK has with the EU/EEA and whether it continues to be bound by the principle of free movement to any extent.

1. Introduction to points-based systems

1.1 What are they?

A recent briefing by the Migration Observatory, based at the University of Oxford, summarises:

A points system is a way of selecting labour migrants based on their characteristics, such as their educational qualifications, language proficiency, work experience and occupation. The best known examples of points systems are from Canada, Australia and New Zealand. Traditionally, the main feature of a points system has been that it admits migrants based on their qualifications rather than because an employer has selected them to fill a specific job (although some points systems do require or strongly prioritise people with a job lined up). [1]

Points-based selection systems are most closely associated with economic immigration categories (i.e. work visas).

Canada introduced the idea of a points-based system for economic immigration in the late 1960s, and Australia has had one since the 1970s. Several other countries have applied points-based systems in various forms, including New Zealand, Denmark, Singapore, Hong Kong, and the UK.

1.2 How do they compare against other selection models?

A June 2011 paper by the Migration Policy Institute, Rethinking Points Systems and Employer-Selected Immigration, summarises some of the perceived advantages and disadvantages of a traditional points-based approach to selecting economic immigrants:

Points systems appeal to policymakers because they are transparent, flexible and can be adjusted to meet evolving economic needs or respond to evidence on immigrants' integration outcomes. But since employers are not involved in selection, points systems often admit immigrants who are unable to find work at their skill level once they arrive. This undermines both integration and the long-term economic benefits of immigration.

The MPI paper goes on to explain how points-based systems compare against the alternative approach of employer-led systems:

Employer-driven systems, by contrast, allow employers to select the workers they need, subject to government regulations. Being selected by an employer is evidence that immigrants' skills are needed and thus guarantees that they will have a job when they arrive. However, it also raises concerns that employers may manipulate the system in order to access cheaper labor or that workers will be too dependent on their employers (and hence vulnerable to exploitation).

Moving beyond pure points-based systems

In recent years there has been a trend towards adopting "hybrid selection systems", which seek to combine elements of points-based and employer-led selection models, in recognition of their different strengths and weaknesses.

A December 2014 MPI briefing gives some examples of how various countries have experimented with this approach:

… countries that kept their points systems—or that have recently introduced them—have given the traditional model a thorough overhaul. Once seen as the alternative to employer selection, the largest points systems now embrace employer sponsorship. Since 2010, both Canada and Australia have scaled back the share of immigrants admitted without a job offer. They have also introduced "expression-of-interest" systems in which employers are encouraged to select from a pool of preapproved, points-tested candidates. These reforms follow the example of New Zealand, where the points system heavily prioritizes candidates with job offers or in-country work experience.

A New Generation of Hybrids

The most recent adopters have created a generation of hybrid systems that combine elements of both points-based and employer-driven immigration. This trend has taken various forms. One is the job-search visa. This model admits candidates with promising credentials, but only allows them to stay long term if they secure a job. For example, the Netherlands introduced an "orientation year" in 2009 for skilled migrants who meet various education and skill criteria. Austria followed suit in 2011 with a six-month points-tested job-search permit.

Other countries are selecting candidates from abroad using points tests in addition to employer sponsorship. The goal is to ensure that employers' chosen candidates meet a minimum threshold of education or skills considered necessary for long-term success in the labor market. Austria introduced such a policy alongside its job-search visa, for example. Japan jumped on board in 2012 with a similar system requiring both a points test and a professional job contract.

Finally, some countries now rely on employers to identify and sponsor candidates initially, but use a points test a few years later to vet "tried-and-tested" workers for permanent residence. (…)

In other words, the new generation of points tests looks very different from the supply-driven system first introduced in Canada almost half a century ago. [2]

1.3 Why are there calls for a points-based system for the UK, if it already has one?

The then Labour Government introduced a points-based system for the UK in 2008, which it said was inspired by the Australian model. Nevertheless, calls to introduce an Australian-style system have persisted. These were particularly prominent during the 2015 General Election campaign and the 2016 referendum campaign on the UK's membership of the European Union.

It has not always been obvious what advocates specifically have in mind when calling for an Australian style system for the UK, particularly since both countries' systems have undergone various reforms.

It is certainly the case that there are some significant differences between the UK's "points-based system for immigration", which covers most categories of non-EEA work and study immigration, and systems in other countries, including Australia (see section 6 of this briefing for more information on the Australian and Canadian systems).

The UK's system has always combined elements of points-based and sponsor-led approaches, and has undergone various modifications since it was first launched (discussed in section 2.4).

Some of the significant features of the UK's approach include:

• The 'points' assessment is arguably largely symbolic. Each visa category specifies certain mandatory criteria which must all be satisfied in order to be eligible for a visa. Each of the criteria have a fixed number of points attached. Therefore, a person who satisfies the mandatory eligibility criteria will automatically accrue the number of points required, and a person who cannot satisfy one of the criteria will not have the number of points needed.

• Generally speaking, there is no scope for flexibility over the number of points awarded, or the possibility to off-set points accrued in one category against those needed in another.

• Most points-based visa categories require the migrant to already have a job/study offer from an approved sponsor.

• People wishing to come to work in the UK have few alternative visa options to applying under the points-based system. Only a few other niche work/study visa categories are available.

• There are no separate streams for permanent and temporary economic immigration. People who enter the UK under the points-based system are given temporary permission to remain initially, and some of them become eligible to stay permanently.

• There is no overall central planning for the number of people to be admitted under the points-based system, although certain visa categories within it are subject to fixed quotas.

These changes have led some commentators to suggest that the UK now has a points-based system in name only. A 2015 opinion piece published on politics.co.uk argued that in particular, the pursuit of a target to reduce annual net migration to the tens of thousands since 2010 had led to the system becoming far detached from its original design and rationale:

the tinkering with what was a flexible system has culminated in a system which is anything but points based. All supply side logic has dissipated, the admission system is now rigid, high skilled immigration has all but disappeared from Britain's knowledge economy, and far from enhancing tourism as the design of the PBS was intended, the tier five visitor visa has become so convoluted it is labyrinthine in its complexity. [3]

Vote Leave's campaign proposal

Vote Leave issued a statement on immigration during the EU referendum campaign, which called for the introduction of "a genuine Australian-style points-based system". Rather than identifying specific elements of the Australian approach, the statement simply referred to a system in which EU citizens would be subject to the same immigration rules as non-EU citizens:

…by the next general election, we will create a genuine Australian-style points based immigration system. The automatic right of all EU citizens to come to live and work in the UK will end, as will EU control over vital aspects of our social security system. EU citizens will be subject to legislation made by those we elect in Westminster, not in Brussels. We could then create fairness between EU citizens and others, including those from Commonwealth countries.

Those seeking entry for work or study should be admitted on the basis of their skills without discrimination on the ground of nationality. To gain the right to work, economic migrants will have to be suitable for the job in question. For relevant jobs, we will be able to ensure that all those who come have the ability to speak good English. Such a system can be much less bureaucratic and much simpler than the existing system for non-EU citizens. [4]

The statement also said that Irish nationals' existing rights to travel to and from and live and work in the UK would be unaffected by the above arrangements.

As with any selection system, whether or not such a system would result in an increase or decrease in migration levels compared to the current points-based system would depend on how it was designed, i.e. how the system's architects manipulated the points requirements in order to reflect the quantity and type of immigration they wanted to encourage.

2. 2008/09: the UK's points-based system is introduced

2.1 How the system developed

Plans for a points-based system for non-EEA immigration were first published in February 2005, as part of the then Labour Government's Five Year Strategy for asylum and immigration, Controlling our Borders: Making migration work for Britain. [5] The foreword by the then Home Secretary, Charles Clarke, set out the then Government's intentions:

The system we have at present works well but it is complex and difficult to understand. We will bring all our current work schemes and students into a simple points based system designed to ensure that we are only taking migrants for jobs that cannot be filled from our own workforce and focussing on the skilled workers we need most like doctors, engineers, finance experts, nurses and teachers.

(…) We will set up an independent body to advise us on labour market needs. The system will be flexible and employer-led. This is what our economy needs, not a rigid, arbitrary quota.

Annex 3 to the Five Year Strategy set out in broad detail how the points-based system was intended to work. The design was developed through subsequent Home Office papers and consultations. [6]

When was the points-based system introduced, and what did it replace?

The points-based system was launched in phases between March 2008 and March 2009, through successive Statements of Changes to the Immigration Rules. Tier 1 (for highly skilled workers) was the first tier to be launched, in March 2008. Tier 2 (for sponsored skilled workers) and Tier 5 (for special categories of temporary migrant) were launched in November 2008 and Tier 4 (for students) was the last to be launched in March 2009.

The points-based system replaced a large range of work (and study) visa categories which had evolved over time on an ad hoc and uncoordinated basis. These included the Highly Skilled Migrants' Programme, work permit schemes, and quota-based schemes for certain types of low-skilled work. The Highly Skilled Migrants' Programme was itself an early precursor to the points based system (similar to the post-2008 Tier 1 categories). Applicants were awarded points against six criteria including educational qualifications, work experience and past earnings, and did not need to already have a job offer lined up. Different point thresholds were applied depending on the age of the applicant.

A small number of work and study visa categories remain outside of the points-based system, such as the short-term study visa, domestic worker in a private household visa, Turkish worker visa, Turkish businessperson visa, and representative of an overseas business visa.

2.2 The policy rationale

From the outset, the points-based system was presented as a simplified system which was nevertheless more stringent and objective than its predecessors. Successive Ministers were also keen to draw parallels with the Australian points-based system. A 2007 Written Ministerial Statement by the then Home Secretary, Jacqui Smith, contended:

One of the key changes to reform migration will include a firmer, faster and fairer Australian-style points system. The new system will be simpler and more transparent, ensuring that only those migrants Britain needs can come to work or study in the UK.

(…)The points system replaces subjective decision making with an objective transparent process that is more robust against abuse. Highly skilled applicants will need to show they have enough points to qualify to enter or remain in the UK. Highly skilled applicants will earn points for their skills and potential for economic success, competence in English language and ability to support themselves and their dependents. The points pass mark for the highly skilled tier of the points system will be informed by the work of the Migration Advisory Committee on economic needs and that of the migration impacts forum on the wider effects of migration. [7]

2.3 The role of the Migration Advisory Committee

The independent Migration Advisory Committee (MAC) is a non-departmental public body comprised of appointed economists. It was established at the same time as the points-based system. Its purpose is to provide independent and evidence-based advice to government on migration issues, including skills shortages within occupations, the functioning of the points-based system, and impacts of immigration. The MAC has published numerous pieces of research and consultations on migration. These are available from the MAC pages on the GOV.UK website.

2.4 How has the system changed over time?

By the time that it was launched in 2008/09, the points-based system differed to the outline in the Five Year Plan in some respects. Whereas the initial plan had not envisaged a two-stage process in which the sponsor (e.g. employer) and applicant (e.g. worker) were both required to apply for immigration permission, in fact this is required for most categories. Also, although the system includes a category for low-skilled workers, in practice this has never been used.

There have been many amendments to the rules and guidance underpinning the system since it was launched. Changes over the whole lifespan of the system have included:

• Strengthening the resident labour market test and successive updates to the Shortage Occupation List.

• A succession of changes to eligibility criteria and conditions attached to Tier 2 (Intra-Company Transfer) visas and Tier 4 (General) visas (mostly becoming more restrictive).

• Raising the minimum skill and salary levels for Tier 2 visas.

• Reintroducing some scope for officials to exercise discretion when determining applications.

• Changes to sponsor licensing requirements and entitlements – generally speaking, introducing more demanding criteria for sponsorship licenses, and restricting certain sponsorship rights to the most trusted sponsors.

Significant changes made since 2010 include:

• Closure of the Tier 1 (General) sub-category, which was arguably the closest example of a 'pure' points-based UK visa category, in December 2010. It enabled highly skilled workers to come to the UK without a job offer. The Coalition Government considered that it had not been effective in attracting highly skilled workers (Home Office sampling indicated that "a sizeable proportion" (29%) were working in unskilled employment).

• Closure of the Tier 1 (Post-Study Work) visa in April 2012, for similar reasons. It has been replaced by some new visa options for international graduates which are more narrowly focussed: Tier 1 (Graduate Entrepreneur); Tier 1 (Exceptional Talent) and Tier 4 (General - Doctorate extension scheme).

• Introducing limits on the number of visas available in certain categories.

• Changes to the eligibility criteria and associated conditions for Tier 1 (Investor) and Tier 1 (Entrepreneur) visas, such as by providing for faster eligibility for permanent settlement and allowing for longer periods of absence from the UK during the qualifying residence period.

• Restricting eligibility for skilled worker visas (Tier 2 General) to 'graduate level' jobs and updating the minimum salary requirement (£20,800 as of 6 April 2015), subject to some exceptions.

• New restrictions on eligibility to stay permanently in the UK, notably a £35,000 minimum salary requirement for settlement for sponsored skilled workers (Tier 2 General), with exceptions for scientists and researchers doing PhD level jobs, and workers filling vacancies on the shortage occupation list.

• Introducing new maximum lengths of stay and out of country "cooling off" periods for some workers.

• Amending the eligibility criteria and conditions for Tier 2 (Intra-Company Transfer) visas, such as by raising the minimum qualifying salary threshold and allowing for leave to remain to be granted for longer periods – up to nine years for the most highly-paid workers.

• Limiting international students' entitlements to work, bring dependent family members to the UK, extend their stay, and 'switch' into a work visa category.

Further changes in the pipeline

In 2015 the Government asked the MAC to review various aspects of Tier 2 and the Shortage Occupation List, as the Minister for Immigration explained to the House in March 2016:

(…). Last May, the Prime Minister set out our ambition to reform our immigration and labour market rules, and to reduce the demand for skilled migrant labour. The Government subsequently commissioned the independent MAC to advise on reducing economic migration from outside Europe. The MAC was asked to look at restricting skilled work visas to genuine skills shortages and highly specialist experts, raising Tier 2 salary thresholds to stop businesses using foreign workers to undercut wages, and a new immigration skills charge to invest in funding for training resident workers.

The MAC published their report on 19 January. It sets out a balanced series of proposals that aim to strike a balance between reducing reliance on non-EEA skilled workers while also supporting growth and productivity. The Government intends to accept the majority of the MAC's recommendations. [8]

The MAC reported in August 2015 and January 2016. [9]

A Written Ministerial Statement made in March 2016 gave details of the changes which will be made between autumn 2016 and April 2017. [10] The main changes announced were as follows:

Increases to the minimum salary for experienced Tier 2 visas, with exceptions for certain public sector occupations.

• £25,000 from autumn 2016

• £30,000 from April 2017

• Until July 2019, nurses, medical radiographers, paramedics and secondary school teachers in maths, physics, chemistry, computer science and Mandarin will be exempt, and those above occupations not on the Shortage Occupation List will be given extra weighting in the monthly limits for Tier 2 (General) visas. Nurses will remain on the Shortage Occupation List but employers will be required to conduct a resident labour market test before recruiting a non-EEA national nurse.

• The minimum salary for new Tier 2 workers will remain at £20,800

Changes to weighting within the Tier 2 (General) limit:

• From autumn 2016, businesses sponsoring international graduates will be given extra weighting within the Tier 2 (General) limit.

• From April 2017, extra weighting will be given where the application relates to the relocation of a high-value business to the UK or potentially supports an inward investment. The resident labour market test will also be waived for these applications.

"Simplifying and streamlining" the Tier 2 (Intra-Company Transfer) category:

• The four sub-categories of visa will be replaced by a single visa category for "senior managers and specialists", with a minimum salary threshold of £41,500.

• As an exception to the above, there will be a Tier 2 (Intra-Company Transfer - Graduate Trainee) category with a reduced minimum salary threshold - £23,000 as opposed to £24,800 as at present. There will also be an increase in the number of trainees that employers can bring to the UK, from 5 to 20.

• The changes will be introduced over a transitional period from autumn 2016 to April 2017, during which time changes will be made to existing visa sub-categories.

• From April 2017, the minimum salary threshold for intra-company transfer workers staying in the UK for 5 – 9 years will be reduced to £120,000, from £153,300 as at present, and the one year experience requirement for workers paid over £73,900 will be removed.

• From autumn 2016, all Intra-Company Transfer visa applicants will be required to pay the Immigration Health Surcharge. The Government will review the extent to which allowances can count towards salary, and consider the proposal for a review of skills in the IT sector.

The introduction of an Immigration Skills Charge to incentivise employers to reduce reliance on migrant workers and invest in training for UK workers:

• Tier 2 employers will be charged £1,000 per Certificate of Sponsorship per year.

• Small and charitable sponsors will pay a reduced rate of £364.

• Exemptions will apply for PhD level occupations, the Tier 2 (Intra-Company Transfer – Graduate Trainee) sub-category, and people switching from a Tier 4 visa.

Simplification of the Immigration Rules and associated guidance, "to make the system clearer and more user-friendly for employers and applicants".

3. How does the points-based system work in practice?

3.1 The five 'tiers', and associated visa categories

There are five 'tiers' to the points-based system. Each of these contain several different visa categories (and some sub-categories), with varying associated conditions and eligibility requirements. The current categories are as follows:

Tier 1: for high skill/high value migrants. Categories for entrepreneurs; investors; graduate entrepreneurs; and migrants with exceptional talents in science, humanities, engineering, medicine, digital technology or the arts.

Tier 2: for sponsored skilled workers (with a job offer). Categories for general skilled workers; Ministers of religion; sportspeople; and intra-company transfers (split into 4 sub-categories).

Tier 3: for low skilled workers. This tier has never been used because it has been assumed that any need for low skilled workers can be met from within the resident/EEA workforce.

Tier 4: for students. Categories for child students (age 4-17) and adult students (age 16 or over).

Tier 5: for temporary workers. Categories for Youth mobility (limited to certain nationalities) and five sub-categories for classes of temporary worker (with job offer/sponsor).

Visas are also available for dependent family members of points-based system migrants. Again, the eligibility criteria and associated conditions vary, depending on the sponsoring family member's visa category.

3.2 Which categories are subject to quotas?

There is a limit on the number of visa sponsorships available in some of the categories within the points-based system.

Tier 1 (Exceptional Talent)

1,000 visa endorsements are available in the current financial year. The allocation is split between the various organisations ('Designated Competent Bodies') who are authorised to issue endorsements to individual applicants:

• Arts Council England - 250 places;

• The Royal Society - 250 places;

• The Royal Academy of Engineering - 150 places;

• The British Academy - 150 places;

• Tech City UK - 200 places.

Tier 1 (Graduate Entrepreneur)

2,000 visa endorsements are available in the current financial year:

• 1,900 can be issued by authorised Higher Education Institutions

• 100 can be issued by UK Trade and Industry

Tier 2 (General)

20,700 Certificates of Sponsorship ('CoS') are available in the Tier 2 (General) category in the current financial year. However, only certain types of Tier 2 (General) application count towards the annual limit.

The following ('restricted CoS') count towards the limit:

• Croatian nationals; [11]

• People applying from overseas for a Tier 2 (General) visa, to take up a job paying less than £155,300; and

• People applying from within the UK to 'switch' into the Tier 2 (General) category from the Tier 4 (Dependent) category (i.e. family members of international students).

The following ('unrestricted CoS') do not count towards the limit:

• People applying from overseas for a Tier 2 (General) visa, to take up a job paying over £155,300; and

• People applying from within the UK to 'switch' into the Tier 2 (General) category from other immigration categories, and applications from existing Tier 2 (General) visa holders to extend their visa or change employer.

3.3 Applying for entry to the UK under the points-based system: an overview

The following is not intended to be treated as a guide for applicants or sponsors. Practical information about applying for a visa under the points-based system is available from the 'visas and immigration' section on the GOV.UK website. More detailed information is available in the Home Office's policy guidance to applicants and sponsors, and its Modernised Guidance for officials and members of the public.

Apart from the few categories that do not require a sponsor, applying under the points-based system requires separate applications to be made to UK Visas and Immigration (UKVI) by the visa sponsor and individual migrant:

Firstly, the sponsor (for example the employer or education provider) must apply for a licence to sponsor migrants under the relevant tier, and be put on the register of licensed sponsors. In order to obtain a sponsor licence, the sponsor must agree to perform certain duties and responsibilities, such as monitoring sponsored migrants' attendance and informing UKVI of relevant changes of conditions. Failure to comply with the sponsorship duties can lead to the sponsor's rating being downgraded, or the suspension or withdrawal of their licence (this can have consequences for their continued ability to sponsor further applications, and for the immigration status of migrants they have already sponsored).

Secondly, the migrant must apply to UKVI for a visa to come to the UK in the relevant immigration category. To qualify for a visa, they must demonstrate that they possess the range of skills and attributes specified for the visa category they fall under (such as qualifications, salary and English language ability). Each of these qualities attract a fixed number of 'points'. People who do not have the correct combination of attributes will be unable to obtain the overall level of points needed – there is no scope to award extra points for certain requirements and offset these against others.

They must also demonstrate that they already have a job or study offer from a licensed sponsor in the UK – again, this attracts a set number of points. In order to do this, they must quote the unique reference number for the 'Certificate of Sponsorship' ('CoS') or a 'Confirmation of Acceptance for Studies' ('CAS') issued to them by their sponsoring employer/education provider.

Applying under the Tier 2 (General) visa category

Tier 2 (General) is the main visa route for bringing skilled non-EU/EEA workers to the UK. Its design is intended to incorporate various protections for resident workers.

Before recruiting a skilled worker from outside the European Economic Area (EEA), the licensed employer must first seek to fill the vacancy with a resident worker (defined as an EEA national or person legally settled in the UK with permission to work). They must do this by advertising the vacancy for a specified length of time and in accordance with the terms of the resident labour market test and the relevant occupational code of practice (which specifies the skill level and appropriate salary for the job). [12]

It is not necessary to conduct a resident labour market test if the vacancy is on UKVI's shortage occupation list, although the conditions specified in the relevant code of practice (e.g. minimum salary and qualifications) must still be met. The shortage occupation list details the occupations which the Government considers cannot be filled by the resident workforce alone. One part of the list covers the whole of the UK, and the other cites some additional shortage occupations in Scotland. The lists are based on recommendations by the Migration Advisory Committee.

The Tier 2 (General) requirements are intended to protect the interests of resident workers, by ensuring that they have the first opportunity to fill a vacancy, and that they are not 'undercut' by foreign workers.

How is the limit on Tier 2 (General) visas currently applied?

Applications that count towards the limit

As previously noted, the number of Certificates of Sponsorship that licensed employers can issue for Tier 2 (General) applications in the current financial year is limited to 20,700, although there are some significant exemptions to the limit. The limit has been in place since 2011.

The limit is unevenly split into monthly allocations. Unallocated, returned or reclaimed allocations from the previous month can be carried over to the following month.

The limit is applied at the point when the employer requires a CoS from UKVI to issue to the prospective employee, rather than when the migrant worker applies for a visa.

The licensed sponsor must apply to UKVI for a 'restricted CoS'. [13] Only A-rated sponsors can apply for restricted CoS.

Applications for restricted CoS are ranked according to a separate points test. A minimum of 21 points are needed in order to be eligible for a restricted CoS.

Unlike the main points-based system, points are awarded on a sliding scale, in order to differentiate between eligible applications. The points table favours applications to fill shortage occupations, followed by PhD level jobs, over other resident labour market vacancies.

Points are also awarded for the salary of the job - the higher the salary, the greater the number of points awarded.

If the monthly allocation for restricted CoS is undersubscribed, the unallocated CoS are carried over to the following month.

If the monthly allocation is oversubscribed, the highest scoring applications are prioritised (and consequently, some lower scoring eligible applications miss out on a CoS, even if they score over 21). In the event of a 'tie' (i.e. there are more applications with the same number of points than available CoS), they will all be issued with a CoS if the monthly limit would not be exceeded by more than 100; otherwise they are all refused, and the following month's allocation adjusted accordingly.

Applications that do not count towards the limit

If a job offer does not count towards the annual limit (i.e. it has a salary of over £155,300, or is being made in-country), the licensed employer can allocate an 'unrestricted CoS' to a prospective employee without first obtaining permission from UKVI. Licensed employers are given an allocation of 'unrestricted CoS' when they successfully apply for a sponsorship licence. The exact quantity is determined by UKVI.

3.4 Some common stakeholder criticisms

There have been criticisms that over time, the points-based system has failed to live up to its stated objectives such as simplicity, transparency, objectivity and flexibility.

Applicants, sponsors, immigration lawyers and the judiciary have all highlighted the frequency of changes to the rules, policy and guidance which are seen to contribute to the system's complexity and regulatory burden. [14] Critics point out that the Immigration Rules, application forms and associated guidance for applicants and sponsors, and policy guidance for each visa category, run to hundreds of pages. There are very prescriptive evidential requirements and limited opportunities to correct errors or challenge refusal decisions through reviews or appeals.

Given the broad range of sectors that the system needs to cater for, it is perhaps unsurprising that there has been a proliferation in the number of visa categories and sub-categories within the points-based system. Each of these specify varying requirements, conditions and exceptions for particular groups.

There have been criticisms that the design of the points-based system has struggled to accommodate the needs of certain employment sectors. The emphasis on "hard" education and professional qualifications, as opposed to "soft" skills and experience, has posed particular difficulties for the creative industries for example. In response, some exceptions have been made. For example, a different set of criteria were introduced for employers wishing to recruit in certain creative occupations (e.g. dancers, performers, TV and film workers), in recognition of the fact that the standard Tier 2 "graduate level" skill and salary requirements were inappropriate.

The greater emphasis on salary as a means of choosing between applicants, in the context of a limited number of visas being available, has had a particular impact on certain public sector occupation sectors, such as nursing and teaching. This is one of the issues considered in the Home Affairs Committee's 2015 inquiry into Immigration: Skills shortages. [15] Again, some exemptions and workaround solutions have subsequently been introduced, although some would argue that this has been at the cost of introducing more complexity and uncertainty into the system.

The catering industry (particularly the ethnic cuisine sector) has been voicing concerns about its difficulties operating within the context of the points-based system since its inception. For many years the sector has been warning of a "curry crisis", which it has in part attributed to the immigration system. It has argued that it has difficulties in filling vacancies with resident workers due to a shortage of suitably skilled workers and lack of interest in working in the industry, but also struggles to satisfy the eligibility criteria for work visas for chefs (e.g. qualifications and salary thresholds), which they argue do not reflect the sector's circumstances. Skilled chefs are on the Shortage Occupation List, but subject to a number of conditions, including a minimum salary of £29,570 after deductions, that the job requires five or more years' relevant experience at the equivalent level, and that the job is not in an outlet which provides a fast food or take away service.

Concerns have also been raised that the system favours male applicants over females. Again, this is partly attributed to the emphasis on hard qualifications. Centre Forum has contended that the minimum salary requirement is another relevant factor, in light of gender pay differences. It also noted that many of the employment sectors making most use of the points-based system, such as IT, are heavily male dominated. [16]

There has also been some debate over whether the system has proved to be sufficiently robust against fraudulent applications. Some have argued that the strong emphasis on objective evidence and paper-based application processes left Home Office caseworkers powerless to prevent visas being issued to fraudulent applications (e.g. where there are doubts about credibility). Governments have identified particular causes for concern over the years in certain visa categories, such as Tier 4 (students) and Tier 1 (Investor/Entrepreneur). This has led to some changes, for example the introduction of "genuine entrepreneur" and "genuine student" tests, arguably resulting in an uneasy compromise between objectivity, transparency and firmness.

4. Potential changes post-Brexit

Questions are being asked about how the UK's immigration system might change as a consequence of the vote to leave the EU. Much will depend on the nature of the UK's future relationship with the EU/EEA, and in particular, whether the UK continues to apply the principle of free movement of people to any extent.

The following are some of the questions which might arise when considering the effects of extending controls to EU/EEA nationals.

Might some of the visa limits be adjusted?

If EU/EEA nationals became subject to similar controls as non-EU/EEA nationals, it is possible that there would be pressure to relax some visa restrictions or expand certain categories, depending on the needs of the economy. [17]

EU free movement law has ensured that UK employers have had easy access to labour from EU/EEA states. This has offset some of the obstacles to non-EU/EEA economic immigration imposed by the points-based system. For example, it has been assumed that any need for lower-skilled labour can be met by workers from within the UK and EU/EEA, and therefore there is no visa category for low-skilled work. If EU/EEA workers became subject to similar skill level requirements as non-EU/EEA workers, employers might call for visa options for low-skilled workers, if it is considered that the UK has an insufficient supply.

Might opportunities for non-EU/EEA nationals be extended?

Supporters argue that a points-based system for all migrants would end the current 'discrimination' against non-EU/EEA nationalities. Nationality would no longer affect eligibility to work in the UK. [18] Non-EU/EEA workers would be directly competing against EU/EEA workers. Also, employers would face the same administrative burden and cost to recruit an EU/EEA worker as they would for a non-EU/EEA worker. In that respect, employers would have less reason to favour recruiting skilled EU/EEA migrants over skilled non-EU/EEA workers than arguably exists at the moment.

Some have also suggested that post-Brexit, the Government could establish more favourable immigration rights for Commonwealth nationals (for example). This is also possible whilst the UK remains a member of the EU, although the policy objective of reducing net migration to the tens of thousands arguably acts as a disincentive to do so.

5. Points-based systems in other countries

The Library does not have specialist expertise in other countries' immigration systems. The following information is drawn from information in the public domain, from governmental and non-governmental sources. The Library cannot vouch for whether these sources remain accurate and up to date.

5.1 The Australian model

General information about the types of visa available, and their associated eligibility requirements, is available from the Australian Government's Department of Immigration and Border Protection website. This indicates that there are a large number of visa categories which allow the holder to work in Australia, not all of which have an associated points assessment.

A 2015 article in The Telegraph, written by a former senior adviser to a previous Australian Prime Minister, gave a broad overview of the Australian points-based system. [19] It noted that whilst the points-based system is used to select permanent migrants, there is also a heavy reliance on non-points-based temporary immigration categories (which can also lead to permanent rights to stay):

The points system allows us to target migrants that will help our economy and to fill our skills gaps. You get more points for being well qualified and in prime working age. You get more points for being 25-32 than over 40, and you can't even apply if you're over 50. You're disqualified if you don't have "competent" English, but only "proficient" or "superior" English will actually get you points. And you get points for intending to live in regional Australia.

The system relies on a "skills in demand list", the government's attempt to identify skills shortages in the economy. Your qualification needs to be on the list to apply. This list includes tradespeople, engineers, scientists, teachers, doctors and nurses, but also lawyers and accountants – none of whom seem to be in short supply on the high street or in the classrooms of our universities. Compiling the list is at times hit and miss, especially when it relies on job vacancy data which can show high job churn rather than inherent shortage. For many years hairdressing was on the list.

Yet this is only part of the story. Australia accepts, excluding visitors and tourists, around 650,000 temporary migrants a year – students, working holidaymakers and temporary skilled workers. None of these are points-based. Many offer a pathway to permanent residence, and from there to citizenship.

(…)

We granted 126,000 temporary skilled worker visas last year, mostly employer-sponsored. These "457" visas (as they are known) are designed to plug skill gaps and use the same flawed skills in demand list, although this can be circumvented by a special agreement. They are very contentious; until a few years ago employers didn't even have to advertise for locals before they sponsored workers from overseas on a 457 visa, and could employ them at below market-rate wages. Their families can come too. These visas are unlimited. (…)

In short, our migration system is not free from exploitation - far from it. It still relies on temporary overseas workers to do much of our low-skilled work, and some of our skilled work. So the points system can work well, but it's only part of the story, and it has its flaws. [20]

The Australian Government has initiated a review of its skilled work visa programmes. The objectives of the 'skilled migration review' are to establish a visa framework to support Australia's skilled migration needs over the next 20 years.

According to a September 2014 discussion paper, one of the issues under consideration is whether to retain a points-based approach to selecting migrants:

While the importance of attracting high quality migrants remains integral in any future settings, the intrinsic value of the ongoing application of a points test will be evaluated in this review. Specifically, it is possible the removal of the points test could still deliver a successful skilled migration visa programme if well-legislated and tailored. This could mean independent migration could be less process -driven and achieved through robust visa criteria requirements.

Alternatively, a purer human capital model could be implemented, one designed to attract higher-valued skilled migrants, such as those who are qualified in skill level 1 occupations. Consideration could also be given to making the points test more flexible and direct, imposing fewer burdens on prospective migrants. This could include retaining only the essential elements of human capital, such as age, English language proficiency, educational qualifications and employment experience. This would inject skills which contribute to the general growth and enhancement of Australia's labour force.

In order for Australia to remain competitive in the global market, comparisons will be drawn between the Australian skilled migration visa programme and those of other countries. Focus will be placed on how the selection of skilled migrants has evolved globally, and how the various points test systems which facilitate skilled migration continue to change. [21]

Is the Australian model suitable for the UK? Recent commentary

Some recent commentary has questioned suggestions that the UK should adopt an Australian-style points-based system. See, for example:

• The Conversation, Khanh Hoang, 'Explainer: What is Australia's 'points system' for immigration?' 22 June 2016

The article concludes that Australia's lesson for the UK is "to carefully consider to which visa categories [a points-based system] would apply and how it would [fit] into a broader policy approach on economic migration".

• LSE British Politics and Policy Blog, Randall Hansen, 'An Australian points system for immigration would be entirely inappropriate for the UK's economy', 3 September 2015

The author concludes that a "full-blown" points system would be "entirely inappropriate" for the UK, and that "the UK needs what it has: EU membership (which provides both skilled and unskilled migrants) and a work permit system that links the permits with educational and/or skills requirements".

• The Conversation, Alex Reilly, 'Explainer: Would Australia's immigration system work in Britain?', 5 March 2015

The article contrasts the different policy contexts in Australia and the UK.

• Migration Watch UK, 'The Points Based System in Australia – Appropriate for the UK?', 5 December 2014

Migration Watch concluded that the Australian system would be "thoroughly unsuitable" for the UK. It pointed to the different context in Australia (a general consensus in favour of increased immigration), and noted that system does not cover all the skilled immigration categories and is complex to administer. It also noted that Australia's effective border controls and accurate and exit records were unrelated to its points-based system.

5.2 Canada

The 'Immigration to Canada Overview' page (undated) on the non-governmental immigration.ca website, provides a brief overview of the Canadian immigration system. Various different visa categories appear to apply a points test:

Using a point system, an applicant is assessed under the federal skilled worker class according to various factors that will indicate whether there is a strong likelihood that the applicant and dependents will successfully establish in Canada. Ideal applicants under the skilled worker class will possess employment skills and experience compatible with occupations "open" to prospective immigrants to Canada. The selection rules particularly favour applicants with government approved job offers in Canada.

(…)

Canada also admits immigrants under the Business Immigration program which comprises three sub-categories including Investors, Entrepreneurs and the Self-Employed.

The Investor class is point based and confers permanent residence upon applicants who demonstrate an ability to become economically established in Canada on the basis of their business or management experience and personal net worth of at least $1,600,000. Approval is contingent upon the investor undertaking to commit an irrevocable, passive, non-interest bearing five-year investment of $800,000 in a government guaranteed investment fund. Under applicable programs, applicants can obtain financing and receive legal security on their investment. The Canadian government has placed a temporary hold on applications in this class.

The Entrepreneur class is point based and confers permanent residence upon applicants who demonstrate an ability to become economically established in Canada on the basis of their business experience and high personal net worth. Approval is contingent upon the entrepreneur undertaking to invest and become involved in the active management of a qualifying business operated in Canada that will contribute to the economy and create employment. The Canadian government has placed a temporary hold on applications in this class.

The Self Employed class is also point based and refers to applicants who have relevant experience as well as the intention and the ability to create their own employment and make a significant contribution to the cultural, artistic or athletic life of Canada, or to create their own employment by purchasing and managing a farm in Canada.

The Quebec government manages its own immigration programs providing for skilled worker and business class selection rules.

A separate page provides more detailed information about the eligibility assessment for Federal Skilled Worker visas. Passing the points test is one of the essential conditions that applicants must satisfy. Points are awarded against six factors: education, language, employment experience, age, arranged employment and adaptability. A maximum of 100 points are available and the pass mark is 67. There are different minimum and maximum point thresholds for each of the criteria:

Who Qualifies for Canadian Permanent Residence/Skilled Worker Immigration?

On January 1, 2015, the Government of Canada implemented the Express Entry Immigration system under the Economic Class including the Federal Skilled Worker Program. Under Express Entry, Federal Skilled Workers across 347 eligible occupations who meet minimum entry criteria, submit an expression of interest profile to the Express Entry Pool. The profiles of candidates in the pool are ranked under a Comprehensive Ranking System. The highest ranked candidates will be considered for an invitation to apply for permanent residence. Candidates receiving an invitation must submit a full application within a delay of 60-days. Federal Skilled Workers are persons with suitable education, work experience, age and language abilities under one of Canada's official languages and who are selected under the Express Entry Immigration system to apply for permanent residence.

To qualify for admission to the Express Entry Pool as a Federal Skilled Worker, applicants must meet the following conditions:

Essential Conditions:

Possess one-year of continuous full-time paid work experience or the equivalent in part-time continuous employment within the previous 10 years in one of 347 eligible occupations listed under the applicable National Occupational Classification system; AND

The work experience must be classified within Skill Type 0 (Managerial Occupations), Skill Level A (Professional Occupations), or Skill Level B (Technical Occupations and Skilled Trades) within the meaning of the National Occupational Classification system; AND

Score sufficient points under the skilled worker point grid comprising of six selection factors. The current pass mark is 67 points;

Undergo language testing from a recognized third party and demonstrate intermediate level language skills in English or French corresponding to the Canadian Language Benchmark of 7)

Possess suitable settlement funding;

Undergo a successful security background and medical examination.

Under the new rules, qualified applicants are evaluated against six factors to determine their eligibility for immigration to Canada. Applicants must obtain a total of 67 points out of a possible 100 in order to qualify. The selection factors are:

Education;

Language;

Employment experience;

Age;

Arranged employment;

Adaptability;

The new program seeks to select candidates with the highest probability of economic settlement success and contribution to Canada. It maintains previous criteria with modification to the relative importance and point structure for each selection factor.

The commentary goes on to note that:

CIC policy confirms that the Federal Skilled Worker Program, while well-tailored to select highly educated individuals, does not favour applications from the skilled trades. In an effort to ensure the Canadian labour market attracts sufficient trades workers, qualified trades' candidates may now apply for permanent residence under the Federal Skilled Trades Program.

The Canadian Government's Citizenship and Immigration Canada website has general information about the Canadian immigration system and visa requirements, including the 'Express Entry' system which has recently been introduced as a complement to the points test for certain visa categories:

As of January 2015, Citizenship and Immigration Canada (CIC) has a new electronic system called Express Entry to manage applications for permanent residence under certain economic immigration programs.

The Express Entry system is the first step to immigrate to Canada under these programs. Potential candidates can complete an Express Entry profile at any time. Note that there is no deadline to complete a profile and there are no caps on the number of candidates that will be accepted to the pool.

Anyone who is accepted into the Express Entry pool could get an Invitation to Apply for permanent residence. Rounds of invitations to invite candidates to apply will take place regularly over the course of each year. We will only pick the top ranking candidates no matter when they were accepted into the pool.

If you are invited to apply, you will have 60 days to submit a complete Application for Permanent Residence online.

As per Canada's Immigration and Refugee Protection Act 2002, the Canadian Government is obliged to table an annual report in Parliament on its immigration activities and activities. According to CIC Canada, the report also "serves as a vehicle for announcing Canada's immigration plan for the upcoming calendar year".

The 2015 annual report was published in March 2016, and includes details of the Canadian Government's 2016 immigration targets for the various different immigration categories.between 280,000 and 305,000 (target 300,000) new permanent residents to be admitted in 2016 (a 7.4% increase over the 2015 levels plan). The 2016 target for admissions under the economic visa categories is 160,600. [22] Overall, the Canadian Government anticipates

_____________________________________

About the Library

The House of Commons Library research service provides MPs and their staff with the impartial briefing and evidence base they need to do their work in scrutinising Government, proposing legislation, and supporting constituents.

As well as providing MPs with a confidential service we publish open briefing papers, which are available on the Parliament website.

Every effort is made to ensure that the information contained in these publically available research briefings is correct at the time of publication. Readers should be aware however that briefings are not necessarily updated or otherwise amended to reflect subsequent changes.

If you have any comments on our briefings please email papers@parliament.uk. Authors are available to discuss the content of this briefing only with Members and their staff.

If you have any general questions about the work of the House of Commons you can email hcinfo@parliament.uk.

Disclaimer

This information is provided to Members of Parliament in support of their parliamentary duties. It is a general briefing only and should not be relied on as a substitute for specific advice. The House of Commons or the author(s) shall not be liable for any errors or omissions, or for any loss or damage of any kind arising from its use, and may remove, vary or amend any information at any time without prior notice.

The House of Commons accepts no responsibility for any references or links to, or the content of, information maintained by third parties. This information is provided subject to the conditions of the Open Parliament Licence.

© Parliamentary copyright

(End)

[1] Migration Observatory, 'What would UK immigration policy look like after Brexit?', 9 June 2016

[2] MPI, 'Top 10 of 2014 Issue #9: The Points System is Dead, Long Live the Points System', 10 December 2014

[3] Politics.co.uk, 'Comment: How the coalition effectively scrapped points-based immigration', 25 March 2015

[4] 'Restoring public trust in immigration policy – a points-based non-discriminatory immigration system', 1 June 2016 (accessed via Vote Leave website, 27 June 2016)

[5] Cm 6472

[6] Home Office, Selective Admission: Making Migration Work for Britain, July 2005; A Points-Based System: Making Migration Work for Britain, Cm 6471, March 2006; A Consultation on Establishing a Migration Advisory Committee, November 2006

[7] HC Deb 5 December 207 c72-75WMS

[8] HCWS660, 24 March 2016

[9] MAC, Review of Tier 2: analysis of salary thresholds, 13 August 2015; Review of Tier 2, 19 January 2016

[10] HCWS660, 24 March 2016

[11] Croatian nationals remain subject to transitional restrictions on workers' free movement rights after joining the EU.

[12] As an absolute minimum, Tier 2 (General) visas are only available for jobs that are classed as 'graduate level' and pay over £20,800.

[13] The arrangements vary slightly for issuing CoS to Croatian workers, which also count towards the limit.

[14] See, for example, Free Movement Blog, 'Court of Appeal condemns complexity of Points Based System', 16 March 2015

[15] Home Affairs Committee, Immigration: Skills shortages, 18 December 2015, HC 429

[16] Centre Forum, Britain's points-based migration system, 2011 p.40

[17] See, for example, Migration Watch UK, UK immigration policy outside the EU, 27 January 2016, Annex A.

[18] Centre for Policy Studies, Post-Brexit Britain: a case for a points-based system, 4 July 2016

[19] See also, for example, The Guardian, 'What is Australia's points-based immigration system?' 1 June 2016; The Conversation, 'Explainer: would Australia's immigration system work in the UK?', 5 March 2015; Australian Government Department of Immigration and Border Protection, Discussion Paper Reviewing the Skilled Migration and 400 Series Visa Programmes, September 2014; Law Library of Congress, Points-Based Immigration Systems: Australia, March 2013 (page last updated 6 September 2015)

[20] The Telegraph [online], 'What should Britain copy from Australia's 'points-based' immigration system?', 4 May 2015

[21] Australian Government Department of Immigration and Border Protection, Discussion Paper Reviewing the Skilled Migration and 400 Series Visa Programmes, September 2014

[22] Government of Canada, Annual Report to Parliament on Immigration, 8 March 2016

Any views expressed are those of the author and do not necessarily represent the views of EIN