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TAX NEWS - may 2010

United Kingdom: The Conservative-Liberal Democrat Coalition - What next for U.K. immigration?

Summary

Following the announcement earlier this week that a coalition government is to be formed between the Conservatives and Liberal Democrats, there has been increasing speculation as to how this will impact the landscape of U.K. immigration. Immigration policy was one of the major differences between the Conservatives and Liberal Democrats during the election campaign. The coalition agreement dated 11 May says:

"We have agreed that there should be an annual limit on the number of non-EU economic migrants admitted into the U.K. to live and work. We will consider jointly the mechanism for implementing the limit". Initial indications from the newly appointed Home Secretary, Theresa May, suggest that, for the most part, Conservative policies will prevail. The Liberal Democrats' controversial policy to offer an amnesty to illegal immigrants who have been in the U.K. for more than a decade is not expected to be adopted.

Although specific detail is currently hard to find, the main areas of focus are set out below.


Conservative immigration policy: The four pillars of reform

The Conservative's pre-election manifesto focused on four main immigration policies:
- The introduction of an annual limit on the numbers of non-EU economic migrants. This limit would change each year;
- The introduction of a dedicated Border Police Force to crack down on illegal immigration and people trafficking;
- The introduction of important new rules to tighten up the student visa system;
- The promotion of integration into British society. It is proposed that there will be an English language test for anyone coming here from outside the EU to get married.


Limit on non-EU migrants

New Prime Minister, David Cameron, has said he wants to see net immigration into the U.K. slashed drastically from hundreds of thousands to tens of thousands, to levels seen in the 1990s. The Home Secretary has therefore confirmed that there will be a cap placed on the number of non-EU economic migrants entering the U.K. She has referred to the fact that this will involve a process of looking at the factors to be taken into account in imposing the cap and that it will "not just be pulling a figure out of thin air". Further details are yet to be released but there have been suggestions from some Conservative sources that the cap may be industry sector specific, rather than a general cap on all entrants.


Identity cards to be scrapped

Identity cards are also set to be scrapped under plans announced by the new Home Secretary. This is on the basis that the parties agree the scheme has led to a "substantial erosion" of civil liberties in recent years. It is unclear at this stage whether this applies to all ID cards, including ID cards for Foreign Nationals (introduced in 2008), but media reports currently suggest that all ID cards will be scrapped. The process of rescinding ID cards (and the accompanying National Identity Register) will be announced "in due course", although we understand that until Parliament passes legislation banning them, ID cards will remain valid and people can still apply for them.

At the moment, very limited official information has been released to indicate how the new government intends to implement changes to U.K. immigration or even what those changes might be. We expect further detail in the Queen's speech on 25 May and in the coming weeks. However, it is clear from the announcements made so far that Conservative policies have prevailed and news on the level, or means of calculation of any immigration cap, is eagerly awaited.
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