The Professional Contractors Group (PCG) called on the Government to take action to prevent the abuse of the 'Fast Track Visa' scheme where companies are sacking UK workers and replacing them with overseas labour.
The PCG, the trade association for more than 14,000 small businesses, mainly in the IT and engineering sectors, is preparing a dossier of examples of such abuse to present to Government which show that large companies are using the scheme to replace UK IT workers with overseas workers under the guise of the skill-shortage legislation - even though the skills are plentiful in the UK.
The so-called Fast Track Visa scheme is intended to operate at several levels to meet a 'known' skills gap within the UK or to transfer essential workers from overseas offices. However, the PCG has collected evidence that this system is being abused by some companies who are importing cheap labour to cut their own costs and replace similarly-qualified UK workers who are then made redundant or have contracts terminated.
Jane Akshar, Chairman of the Professional Contractor Group, said: "This scheme is being used as a skills replacement, not to meet a skill shortage. That cannot be what this Government wants.
"At the moment, the IT sector is in the doldrums - many qualified IT workers are unemployed or out of contract. But the Government's skill-shortage list allows companies to import these skills at exceptionally low rates and in many cases, the workers are not eligible to pay any tax in the UK, while UK workers are already qualified for these roles.
"The problem is that the Government's justification for this scheme is out-of-date. Some of its evidence for skill shortages is based on research dating back more than two years when there was high-demand in the IT sector and the dot.com companies were booming - that is no longer the case. But some large companies are using this to their own advantage.
"Anyone who is close to the IT world knows that this sector is in recession - up to one in three contractors are out of contract at the moment; IT rates are being slashed; almost weekly there are reports of IT workers losing their jobs; and recruitment agencies are consistently reporting a huge down-turn in the sector. These are not the signs of an industry with a 'skill shortage'.
"Also, we are aware that the scheme to allow companies to transfer workers between countries is being abused. We have heard of cases were 'sham' companies have been established just to provide a base for 'transfer'.
"We asked PCG members to give us specific examples of where the Fast Track Visa scheme is being abused - and the results have shocked us. We are preparing the first tranche of responses in our dossier to the Government's Work Permits (UK) with whom we have already been working closely. We want to continue to work with them to crack down on this abuse; and help to create a scheme which achieves its objectives of meeting a skills gap not create a system which fast tracks UK workers to the unemployment queues.
"It cannot be right that a Government scheme should facilitate the sacking of UK workers and replacing them with cheaper imported labour - when there is no skill shortage in this area. We want to work with the Government to plug these loopholes, and we believe, that these companies who are abusing the scheme should now be 'on notice' that we will be naming and shaming them in our dossier to Government."
The PCG has been working closely with the Work Permits (UK) and is on the Skills Sector Panel to help to identify areas where there is a genuine IT need and prevent abuses of the system. The PCG set up an on-line reporting system for its members and others in the IT field to identify examples where the system is being abused. The first tranche of these abuses are now being handed to Government.
Examples (anonymised for this press notice, though handed over with full details) which will be given to the Government include:
Referring to major UK company: "My group leader's words, at the time were: 'I was instructed to replace you with an Indian - they are cheaper'. This company runs an agency that specialises in bringing in low cost contract staff from India. Many hundreds of UK jobs and contracts have been lost here through the rush to bring in Indian workers. There is no skills shortage - just a reluctance to pay a fair rate for the job."
Referring to major international company based in UK :" A total of eight individual were placed through this scheme. They were employed on systems written in a language (computer) that none of them had any knowledge of when they arrived to take up the posts. For nearly all this time, they worked alongside UK nationals, part of whose brief was to train the foreign agency staff in the computer language….Now those UK-based staff have left or (like myself) have been laid off as the posts are now being filled with Indian nationals."
Referring to a major financial institution: "Officially the company announced that they are to cut IT contract staff considerably. In fact what is happening is that UK staff, both on contract and permanent employees, are being removed and replaced with people exclusively from the Indian sub-continent. This policy has been set up by senior management."
Referring to a financial institution: "This organisation makes extensive use of the 'fast track visa' type of worker. There are many small UK businesses, such as my own, which could be supplying suitable services."
The PCG survey is on line here:
Its provides a mechanism to allow people to report (in confidence) on organisations breaking the rules. PCG will forward the information to the Government's Work Permit (UK) department. Specifically the PCG and Work Permit (UK) are interest in details about:
· Any organisation not paying external staff (ie those on work permits) the appropriate market rate;
· Any organisation that has recruited from abroad when the skill is freely available within the UK;
· Any organisation that has replaced contract staff or other workers with FTV workers.
Notes to Editors:
1. The Professional Contractors Group was formed in May 1999 to lobby
against the Government's IR35 proposals. It is a non-party political group
and its patrons are cross-bench peer, Lord Weatherill, former Speaker of the
House of Commons; and industry guru Sir John Harvey-Jones. Since its
formation it has evolved into the representative body for independent
contractors from many disciplines including IT and engineering on many
issues affecting the knowledge-based sector. It is the fastest growing trade
association in the country and now has more than 14,000 members.
2. The PCG's aim is to work for proper recognition of independent
contractors as a genuine and valuable sector of the economy, generating
wealth and employment, providing industry with a flexible workforce. The
Internet has been the primary resource for the Group, providing fast,
3. For further information about the PCG: http://www.pcgroup.org.uk
For further information or interview requests contact:
Susie Hughes, Press Officer for the PCG
0207 462 7955/07703 486276
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