Controversial proposals by the UK government’s advisory committee on immigration issues if adopted, could hit UK productivity and its ambitions of being a global leader in the digital space, as well as threatening the country’s current status as the hub for Indian companies in Europe, Nasscom has warned.

Earlier this month, the Migration Advisory Committee, which advises the UK government on its immigration policy, published the report, advising major changes to the system for Tier-2 visas, used by companies to employ non-EU workers in the UK, including India’s software and services industry.

The report proposes an annual levy of £1,000 per employee that would go towards up-skilling the local workforce and raising the minimum salary from £20,800 to £30,000, and as high as £41,500 for third party contractors. In a pointed dig at the Indian IT companies, the report said that companies employing Indian IT workers, on third party contracts made “rather modest efforts to up-skill UK workers” and argued that Indian IT workers now accounted for a far larger proportion of the intra-company transfer (ICT) route, than was ever intended. Gagan Sabharwal, Director-Global Trade Development, Nasscom, spoke to Business Line about the implications of the report.

What is your overall action to the content and tone of the report?

We believe the current system is working fine. In our evidence to MAC we outlined clearly that we appreciate the political compulsion and the promise the government has made [to reduce net migration], and we submitted data that demonstrated that there is very minimal contribution to the net migration figures by our set of companies. Most are on short-term permits that only allow 12 months stay.

What will the impact of the proposals be, if introduced?

We are concerned that the UK businesses’ ability to access the world’s best talent pool would be made significantly costlier through various measures they have proposed.

We don’t believe the UK will reduce migration or significantly increase the pool of locally available skills with these measures.

The impact will be felt over time by the UK economy, which is currently accessing foreign talent. In the short term, it would be impossible for them to pass it on to customers but in the mid- or long- term this cost will have to be born by UK PLC, hitting productivity and adaptation to the digital world.

What is your reaction to their concerns about the lack of up-skilling?

This is a global phenomenon — we face a similar challenge in India, and with skills changing so dynamically its almost impossible for any education establishment to adapt to the global environment. We do appreciate there is more to be done, whether in India or the UK and we are happy to work with UK policy makers and show practices.

However, collecting taxes from the usage of foreign workers, will give you a kitty of money but whether it contributes to up-skilling remains to be seen. Up-skilling is not about bricks and mortar — it’s a very complex process. There is no textbook solution.

What steps are you taking in response to the report?

We are reaching out to all stakeholders in the UK system to communicate the same point: the UK remains the hub of European activity for most Indian companies and the status that London enjoys is something the UK should be proud of.

These measures would severely dent that status of being the hub of European activities for most Indian companies. It is ironic that at a moment when the entire European landscape is trying to make it easier for workers in intra company transfers to come and work in Europe, Britain is going in the opposite direction.

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