The fantastic BBC website team have produced this useful Q&A on the new immigration cap
How does the British immigration system currently work?
There are different ways to come to live or settle permanently in the UK.
Putting it very simply, migrants fall into five categories: economic migrants, students, temporary workers or visitors, refugees and asylum seekers, or people arriving for family reasons such as marriage.
Family reunion is the easiest part of the system to understand. If you are the partner of a British citizen or someone living permanently in the UK, you can ask to join them. The principles behind the refugee system are relatively simple too. If you believe you need protection because you are being persecuted, you apply for asylum. Government's main focus at the moment is the complicated business of economic migration.
So how does economic migration work?
The British system differentiates between most people who live in Europe and migrants from the rest of the world. If a migrant is a citizen of one of the European Union's member states (or one of the other counties in the European Economic Area), then they are free to compete for jobs in the UK.
This is because the UK is part of the European free trade area under which goods, services and labour can be freely traded across borders. The rules mean that British workers can equally seek work and settle across the rest of the EU.
And what about if you come from elsewhere?
If you come from anywhere else, including Commonwealth nations, a migrant has to apply under one of the "tiers" that make up the Points Based System (PBS).
This is a popular system among leading industrialised nations which allows border agencies to let in people the economy genuinely needs by awarding them points for their skills. Those with the most skills get the most points - and find it easier to get in.
So what are the tiers?
The most prized migrants in the global economy are, logically, the highly skilled. This would include business leaders with top qualifications and experience, doctors, experts in their professional fields and so on.
MIGRATION TO UK 2008
TOTAL: 590,000
UK citizens: 85,000
EU nationals: 198,000
Rest of the world: 307,000
Net inflow: 163,000
Source: ONS Long-term migration statistics (opens ONS page)
Under the Labour government, many of these "Tier 1" migrants could apply to enter the UK without a guaranteed job because experts say they are likely to generate wealth and expand the economy.
Tier 2 of the system covers skilled workers who must be sponsored. An employee advertises a post for a month - and if they believe they can't fill it from the British labour force, they can ask the Home Office for permission to bring in a foreign worker to fill the gap.
Tier 3 covers low skilled workers from outside the EEA - but that part of the system has never been introduced because the government says the vacancies should be filled by UK and European workers.
The fourth tier of the system covers students. The final tier covers temporary workers or visitors - such as young people working in bars or agriculture as they fund gap year travels. It also covers some very specific categories outside of the main economy, such as elite sportsmen and women, performing artists and religious leaders.
Will this system be scrapped?
No. But the new coalition government has pledged to tighten it up because it's the most obvious lever it has to push down levels of migration. It will introduce a cap on migration from April 2011. In the meantime, it is introducing temporary caps on some parts of Tier 1 and Tier 2 workers.
The number of general Tier 1 highly skilled migrants will be capped at the current level of about 5,400 applicants and the points required for entry will also be raised.
Investors and entrepreneurs putting cash into the British economy will not be blocked. The government is also cutting by 1,300 the number of skilled workers who gain entry through Tier 2 - but it won't block companies from moving their own staff in and out of the country, a relatively significant part of economic migration of skilled workers.
What does a cut of 1,300 workers look like in the context of all migration?
The Office for National Statistics says that 505,000 non-British people came to live in the UK for more than a year in 2008.
In the first three months of 2010, the UK Border Agency issued 6,685 Tier 1 visas and 16,915 Tier 2 visas as part of the 406,455 approvals it made to all visitors and economic migrants.
Other figures show some 214,345 were allowed to settle permanently in the UK in the year to March 2010. Just under half of these settlements were granted to people who had come for work and put down roots. The 1,300 temporary cut in skilled worker visas equals about 1.5% of these work-related settlements.
What will the cap be set at?
The government is asking business for its views on what the cap should be and how it should work. Once a cap is in place, it proposes putting all the skilled migrants into a first-come-first-served system - meaning that companies will need to act fast to get the people they want.
For the highly skilled migrants, it suggests placing them all in a pool. Employers could then periodically dip into that pool to fish out the top worker they want.
What effect will a cap have?
The short answer is that we don't know. If the cap were set very high it would have no effect at all. The key question that nobody can answer is how employers will react if it's set very tightly.
Let's take one example - the ongoing demand for home and social care workers. The government has been telling the care industry to do more to train up British workers so that it becomes less reliant on foreign care workers labour from around the world.
But, if a cap is put in place, will employers invest in training British workers - which some warn will lead to higher prices for the services - or will they bring in more workers from cheaper parts of the European Union?
And if they bring in more EU workers, something ministers cannot stop, will the government be able to meet a pledge to reduce levels of net migration back to "tens of thousands, not hundreds of thousands"?
Ministers say they're not promising the Earth - but they pledging better control and certainty. They refer to the experience of New Zealand which operates a points and limits system very efficiently. Its labour market is smaller than the population of London - and it's also not part of a trading block comparable to the EU, which accounts for a third of all migration into the UK.
But long-term EU migration patterns are difficult to predict. Many EU economies applied temporary bars on workers from central and Eastern Europe. That bar will be lifted. Home Secretary Theresa May says she will be "very surprised" if that doesn't lead to changes in where workers from countries like Poland head. Source BBC.co.uk
See also:
Home Office confirm UK migration limit
If you need any immigration advice or help with Sponsorship or Work Permits, Visa or an
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