PCG welcomes the Government's tightening of work permit

PCG, the voice of UK freelancers, has expressed disappointment at the findings of the Migration Advisory Committee’s (MAC) Report on the abuse of the Work Permit system. The Committee, tasked with advising ministers on immigration policy, has just released its recommendations on how to reform “Intra Company Transfer” (ICT) work permits, which are frequently abused by large companies. ICTs often lead to the displacement of skilled resident workers, such as IT contractors. Instead of tightening the rules to limit the use of ICT permits in the recession, the MAC called for stronger enforcement of the current rules. However the Government has decided to go one step further than this and now forbids the use of ICT permits where they will be directly replacing a settled UK worker.

“The Government is to be congratulated on taking a tougher line on the ICTs than the MAC recommendations, exactly what PCG has been calling for. This new measure seems to send a clear signal to those abusing the system: replacing highly skilled contractors with ICT workers will no longer be tolerated.

Mr Brazier continued:

“However, the new rules are still too vague and we will be seeking clarification from the Government on their exact implications. It must
be totally clear that firms cannot work round the system and seek loopholes.”

Though the MAC failed to recommend a significant tightening of the ICT rules, the body did express concern at abuses. It strongly recommended that more resources are deployed enforcing the current rules – something PCG originally called for in its submission to the body. The MAC also suggested changes to the way ICT migrants are paid, and recommended that ICT migrants should have worked for their company for 12 months prior to working in the UK rather than six as now.

Added Mr Brazier “These additional changes, though welcome, simply do not go far enough. It is certainly true that the Government needs to
take a harder line on enforcement, and we strongly urge they do so, but we wanted to see the MAC come up with more specific measures to protect the UK’s freelance workforce. Freelancers are key to the UK’s future economic recovery, and we will continue to campaign hard for more stringent ICT rules.”

--ENDS--

--NOTES TO EDITORS--

1. The Professional Contractors Group (PCG), www.pcg.org.uk, was formed in May 1999 to provide independent contractors and consultants with a representative voice in opposition to the original IR35 proposals. Since then, PCG has evolved from being a single-issue campaign group to being a fully fledged, not-for-profit professional body representing knowledge workers who choose to be self-employed.

2. PCG has over 18,000 members working in a wide variety of sectors including oil and gas, engineering, information technology, management
consultancy, marketing, telecommunications and pharmaceuticals.

3. The Migration Advisory Committee (MAC) was tasked by the Government to report on Tier 2, the “skilled worker route” of the immigration
system and suggest whether there was scope for tightening immigration rules, particularly regarding “Intra Company Transfer” Work Permits.
Their report was given to the Government on the 31/07/09 but only made public on the 18/08/2009.

4. Intra Company Transfer Permits are easier to obtain than other work permits, as no requirement exists for a firm to prove that no UK worker is eligible to work in the post being filled. Hence they are heavily used in the IT sector by consultancy firms to bring in staff in
preparation for future offshoring activities. This is explained on PCG’s abuse monitoring website at ictabuse.org.

5. 65% of all ICT permits go to the IT sector. Usually, large companies bring in 1000s of IT workers at a time. Tata Consultancy Service used
ICTs to onshore 3000 ICT workers alone last year. Thus, the route is disproportionately used by one sector, and in addition, its use is
increasing during the recession.

4. The Government, originally due to make their response known on the 18/08 alongside publication of the MAC’s report, instead released their
decision to tighten the ICT rules two weeks earlier, 07/08. They have gone further than the MAC’s suggestions and explicitly introduced a rule
preventing ICT’s from displacing UK settled workers. PCG has received numerous reports of this happening and hopes to pass evidence on to the UK Borders Agency.

--CONTACT--

For further information:

Michele Bayliss
Tel: 01273 475672
Mobile: 0777 937 2106

George Anastasi
PCG Policy Adviser
0845 125 9899
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

John Brazier, PCG Managing Director commented: