The post-election immigration policy landscape

As the dust settles on the most unpredictable general election in decades, it appears that very little has in fact changed. The immigration policy landscape looks remarkably similar to the way it looked in April. Following endless discussions about coalitions, agreements, hung parliaments and pacts, the Conservatives now have an overall parliamentary majority and have eased back into power without much anxiety or negotiation, leaving their former coalition colleagues floundering with just a handful of parliamentary seats and a looming leadership election.

What does all this mean for immigration policy? The simple answer is not very much. Maintenance of the status quo is the order of the day.

Under the coalition government, the Home Office was resolutely Conservative territory. Theresa May was unwavering in her determination to project a tough stance on immigration policy and to reduce net migration to the tens of thousands before the end of the last parliament. The message was that Labour had let immigration get out of control, particularly following the accession of eastern bloc countries to the EU and the Tories would sort the mess out. The net migration target was however missed spectacularly. Net migration reached 298,000 in the last year of the coalition government, which was broadly where it had been five years previously.

Despite this failing, Theresa May has remained in post, becoming one of the longest serving home secretaries in memory. This in itself is an extraordinary achievement given the number of political careers that have crashed and burned at the Home Office. Furthermore, Mrs May is still publically committed to the net migration target. This is perhaps a dangerous strategy for her political credibility. She remains convinced however that the inherent message behind this totemic policy that the ‘immigration problem’ will be dealt with robustly is a valuable one, even if the actual target is highly illusive.

What can we expect over the course of the next five years? The Conservative party only has a small, outright, majority. The government will therefore need the support of the whole parliamentary party in order to pass key legislation. Previously they had a large majority made up of moderate Liberal Democrats. There is a significant group at the right of the Conservative parliamentary party that is hostile to the European Union and to human rights legislation. Both of these issues will be at the forefront of national and parliamentary debate in the near future. The government will therefore have to work with other parties to have a majority on matters where it does not have the support of the right of its parliamentary party. We can expect to hear much more from the Tory right who will consider their ability to influence legislation to be significantly enhanced.

The Conservative party manifesto commits the government to repealing the Human Rights Act 1998, to introducing a British bill of rights and to curtailing the role of the European Court of Human Rights, in particular where deportation cases are concerned.

The manifesto commitment is also to delivering annual net migration in the tens of thousands and to maintaining the cap at 20,700 (for Tier 2 migrants) during the next parliament. Changes to the student visa system are promised including reviewing the highly trusted sponsor status for student visas and increasing sanctions for colleges and business who fail to ensure that their students or workers comply with the terms of their visa. Those regularly using the shortage occupation list will need to provide long-term training plans for training ‘British workers’.

Regarding the European Union, it is proposed to renegotiate rules on access to benefits so that those exercising treaty rights will have work in the UK for four years before they can claim benefits or tax credits (this will involve renegotiation as it would not be permitted under the current terms of EU law) and there will be no access to job seeking benefits at all. The intention is that EU nationals will have to meet residency requirements for social housing and those EU migrants who have not found a job within six months will be required to leave. The aim is to make the UK a less attractive destination for ‘benefits tourists’ and to see a drop in the net migration figures as a consequence. The government also hopes to negotiate stronger powers to deport EU nationals who have committed criminal offences and impose longer re-entry bans. Furthermore, there is an intention to impose English language tests and income thresholds on EU nationals.

Whether David Cameron will be able to persuade his EU counterparts of the merits of these changes remains to be seen. He has acquired a position of enhanced credibility in Europe as a consequence of his majority election victory on the back of a manifesto that made a clear commitment to an EU referendum. He can justly say that the British people have mandated the renegotiations. Heads of EU member states and governments will be compelled to make concessions to the British position. As with all EU matters the resulting agreement will be a collection of compromises. The Prime Minister will however need substantial and credible changes to justify advocating a Yes vote in the forthcoming referendum on the question ‘Should the United Kingdom remain a member of the European Union?’

The government is committed to the referendum on EU membership, following these negotiations, by the end of 2017, although in practice they may try to bring it forward to 2016 in order to lance a political boil that threatens to dominate the agenda of the first half of the new parliament.

Also on the immigration agenda for the new government are further commitments to enhancing border security and to strengthening the enforcement of immigration rules. There will be tougher labour market regulations to tackle both illegal working and exploitation. These changes will be incorporated within an Illegal Working Bill to be published in 2015. One of the primary measures will be the creation of a criminal offence of illegal working. This means that salaries earned while working illegally will be the proceeds of crime and will be recoverable from the migrant under the Proceeds of Crime Act. A new controlling migration fund will be introduced for authorities experiencing high and unexpected volumes of immigration, some of which will go to enforcement.

It seems likely that the main framework for immigration control under the points-based system (PBS) will remain in place for the foreseeable future. There does not appear to be an appetite in government for a complete overhaul of the schemes despite their various failings. The dreaded ‘cooling-off period’ preventing former Tier 2 migrants (particularly intra-company transferees) from returning to the UK for a period of 12 months following completion of their period of stay under Tier 2 is likely to remain in place.

There is however a likelihood of reform of the Tier 1 (Entrepreneur) route which provides for entrepreneurial individuals with money to invest in a UK business and a genuine business plan to obtain an entry visa for the UK to set up or join a company.

The government has commissioned the Migration Advisory Committee (MAC) to review this route with a view to ensuring that the potential economic benefits of the route are maximised. The MAC wishes to receive evidence from interested parties and in particular, from entrepreneurs themselves. Specifically, they wish to assess the economic costs and benefits that the route currently provides to UK residents, and assess what level of benefits the route should be delivering to the UK economy.

Evidence of benefit to the UK economy may include direct benefits resulting from the establishment of a business in the UK such as employment, turnover and profit. They could also include indirect benefits such as wider expenditure from the entrepreneur migrant and their dependants on goods and services in the UK or by way of dynamic competition impacts, knowledge sharing or productivity gains.

Regarding the costs to the UK economy of the route, the MAC is interested to know whether entrepreneur migrants put more pressure on public services than other migrants and whether or not the entrepreneurial activity would have taken place without the involvement of migrants. Further, they would like to know whether the business activities of migrants cause any problems for existing UK businesses. An example of this might be increased competition, which could stunt the growth of UK entrepreneurs’ businesses. They therefore wish to consult on whether or not the design for the scheme is appropriate and consider whether there should be different visa schemes offered for different types of businesses. It is likely to be the autumn before the MAC publishes its report and recommendations to government.

With the most recent net migration figures (post election) showing an increase to 318,000 for the year, there is no doubt that immigration will remain a dominant political topic in the months to come.

By Ben Sheldrick, partner, Magrath LLP.