Immigration was not high on the political agenda at the millennium. Indeed, after the 9/11 terrorist attacks on the World Trade Center in 2001, the new immigration and work permit rules that emerged in the UK were seen by many businesses and their advisers as a spirited attempt to get our corner of the world economy moving again after a significant shock to political and commercial confidence.

In 2003, immigration lawyers who focused on obtaining work and study permits were able to describe a system that had been simplified and professionalised, and which came complete with accessible case workers and managers at Sheffield-based agency Work Permits UK, who had good sector and industry knowledge.

But then, in 2004, work permit and visa issues forced the resignations of immigration minister Beverley Hughes, on 17 June, and home secretary David Blunkett, on 15 December. With these two separate incidents, visas and work permits became a highly political subject, as these departures gave the impression that, like asylum, this area of immigration might also be out of control.

Policy has remained in a state of flux ever since, culminating in the introduction of a points-based system by the last government, and attempts by the current coalition government to introduce migration caps for non-EU citizens, and to alter the criteria for ‘settlement’ and study.

A resigning issueThe irony is that it was not failings inherent in the post-millennium immigration system that created a political storm around work permits, but ­­­unusual ministerial interventions.

Beverley Hughes resigned after she falsely insisted that suspect visa applications from Romania and Bulgaria had not been approved ahead of those countries joining the EU to avoid a large ‘spike’ in immigration from both countries when their citizens were allowed to come to the UK as members of an EU state. David Blunkett resigned after he made direct enquiries about the visa of his lover Kimberley Quinn’s nanny.

Neither minister would have had to resign had they left well alone and the impression of a system that was ‘out of control’ would have been limited to the more haphazard stewardship of the asylum route.

What followed, with Charles Clarke as home secretary, was a five-year plan that ushered in the points-based system (PBS) and the establishment of the Migration Advisory Committee (MAC) to decide which areas of the UK’s economy were suffering from a deficit of skilled workers. Although the UK has a new government, it is still the PBS that is being amended, and the MAC is still advising on skills shortages.

The PBS brought in five ‘tiers’, each representing a different route for workers or students and their partners. Tier 2 is the route for workers with a sponsoring employer and the idea behind it is that employers have direct responsibility for the immigration status of the employees they sponsor. Once the idea of ‘quotas’ on non-EU workers was introduced, each employer had a set number of work permits they could sponsor, which was mainly based on the number they had applied for in the past.

Losing in courtThese rules were always going to upset businesses that needed flexibility in their recruitment plans once the principle of quotas was introduced. But, with politicians unwilling to criticise changes to immigration policy, it has fallen to lawyers to challenge Home Office and UK Border Agency actions that have unfairly affected clients’ lives or businesses.

In doing so, immigration lawyers point out, they are also defending the UK economy. As Philip Trott, head of immigration at Bates Wells & Braithwaite, puts it: ‘The government approach is reactive, not proactive. They look at immigration and think "we have a PR disaster on our hands". They are not asking, "where would the need for the best results for the country take us, policy-wise?"’

In its lengthy submissions to Home Office and MAC consultations, the Law Society highlighted the impact on the City. Law Society chief executive Des Hudson explains: ‘To keep major transactions coming to London above rival business centres, international law firms need to know they can bring their key experts here, as and when required.’

He adds: ‘Firms use the example of capital markets work, where, to do key deals in London, you must, for instance, use lawyers who are members of a US bar.’

For lawyers and clients frustrated on principle by policy changes, the ways in which the Home Office has sought to bring in recent changes have given rise to successful challenges. In three cases last year, the Home Secretary lost on significant and substantial points.

In Pankina (Pankina v Secretary of State for the Home Department [2010] EWCA Civ 719; [2010] WLR (D) 158), a leave to remain case that centred on changes made by the home secretary to maintenance requirements, the Court of Appeal noted with some concern that UKBA’s external guidance could be changed at any time: ‘It means that a discrete element of the rules is placed beyond parliament’s scrutiny and left to the unfettered judgement of the rule-maker.’ In other words, the immigration rules could not lawfully incorporate provisions set out in another document that had not itself been laid before parliament and was able to be altered after the rule had been laid before parliament.

The Pankina judgment came in June. There followed, in July 2010, the case of English UK (R (on the application of English UK) v Secretary of State for the Home Department [2010] EWCA 1726 (Admin)), in which Mr Justice Foskett ruled that an annex to the immigration rules did not allow the home secretary to make substantive changes to the minimum level of an English language course: ‘Guidance cannot be used in the manner in which it was sought to be used’.

Another judicial reprimand, then, for the misuse of guidance in an apparent attempt to bypass the possibility of parliamentary scrutiny.

Then, several months later, came a judgment on the introduction of the interim immigration cap, centred on the highly skilled migrant route (Tier 1) and the sponsored application route (Tier 2). As Hudson notes: ‘For firms’ clients, the interim caps have been dreadful – seriously disrupting business plans without warning.’

A judgment given by the High Court on 17 December (JCWI) held that the home secretary had acted unlawfully in imposing an interim cap on out-of-country Tier 1 (General) applicants and on the number of certificates of sponsorship (COS) issued to licensed UK employers. Specifically, the secretary of state failed to lay the numerical limits for Tier 1 (General) and for Tier 2 (General) before parliament as required by the Immigration Act 1971. The quantums of the limits were held to be part of the rules themselves.

While each of these three cases has points specific to the individual appellants, they do seem to highlight a common theme. As Sophie Barrett-Brown, head of UK immigration at niche immigration firm Laura Devine and current chair of the Immigration Law Practitioners Association (ILPA), puts it: ‘As a broad point of principle, government is trying to enact policy through the back door.’

She adds: ‘These changes could have been laid before parliament; rather than do this and wait 21 days – giving an opportunity to have these prayed against – government just hurried these through. These are very, very substantive changes.’

Warnings ignoredThe Gazette spoke to several immigration lawyers who speculated that the government may have preferred to lose a court case than admit its attempts to change the rules would be illegal when applied to people whose applications for work permits, visas and settlement had been prepared or begun before such sudden changes. As Barrett-Brown puts it: ‘Everyone said at the time, you are exposing yourselves to a successful challenge.’

Nichola Carter, partner at Penningtons, who acted in English UK, is unequivocal: ‘The cases stand for themselves. The secretary of state was acting unlawfully.’ Those attending a meeting in August recall that lawyers warned Home Office officials that the use of ‘guidance’ to effect such changes would again be successfully challenged. The decision of officials to ignore such advice may yet land them in hot water – more of that below. But even as specific clients gain from these cases, concern switches to the general shift in public policy.

Permanent quotas will be brought in during April and immigration lawyers believe the government is unlikely to repeat its previous mistakes. As one immigration lawyer close to policymakers tells the Gazette: ‘This time they will do it by the book.’

With the option of successful legal challenges looking less likely, the focus of employers and their legal advisers has shifted to lobbying. Such is the political importance of immigration, that immigration lawyers predict a mixed result when policy is set. Points made on the Tier 2 route seemed to gain some traction. Along with the CBI, the Law Society is among the bodies that have influenced the criteria – pointing out in official submissions that law firms would be adversely affected by quotas and the proposed Tier 2 criteria.

There have been some positive results here. For law firms, confirms Hudson, there is an expectation that partners can often be brought in as ‘employees’. And signs are that the rules around the vital multinational companies’ tool of the inter-company transfer may also include vital compromises after the intervention of the CBI, the Law Society and other concerned groups.

But what has been done so far may not be enough for many employers and their advisers. Inter-company transfers can now last for only three years and the enhanced rights of settlement in the UK that this status confers have now been watered down. Trott puts the case for his own clients. ‘For example,’ he says, ‘we act for Nike. They have a business plan in the UK that needs transfers to last as long as they need them to last – that might be three years – or it might be five.’

Routes closedThe licence quotas set under Tier 2 are a significant worry for employers. The economy has had a rocky two years to say the least and, if an employer wishes to bring in employees under Tier 2, permission to do so will be based on its stated needs over the past seven months – or its needs may be ignored entirely if it has failed any number of criteria.

The point was demonstrated by the operation of the interim immigration cap in November and December last year. Before the JCWI case put a stop to interim caps, the cap was reached by 10 November and even earlier the following month, on 2 December.

Barrett-Brown notes: ‘They looked at business use in a seven-month period to decide on work permits – changing down or reducing to zero the allocation, affecting employers who had spent tens of thousands or hundreds of thousands on recruitment.’

Bates Wells & Braithwaite barrister Shahram Taghavi, who worked on several key cases last year, explains the difficulty: ‘When the permanent cap is in place, businesses will wait months for their people to reach the front of the queue. That is a serious problem for small businesses, who need someone urgently.’

In the current environment, which points could make progress, and which will struggle to gain traction? It seems likely there will be imperfect, though workable, compromises on Tier 2. For law firms, for example, this may mean bringing in partners as ‘employees’. But there could be little movement on Tier 4 – the route used by several types of student migrant. Carter, who acted in English UK, explains: ‘There is a huge fear that, because Tier 4 is the last major route left standing, it will bear the brunt of attempts to restrict numbers using PBS.’ She says there is ‘outrage in the education sector’.

That outrage is, Carter notes, all the greater because evidence used for changes in policy is so thin: ‘In English UK we asked the secretary of state for evidence of abuse by the institutions to be affected by the change. None was forthcoming. They try to make the statistics fit the policy. But there is no specific evidence being put forward.’

There is also a change in public policy priorities here. The emphasis for students has changed, Carter points out: ‘Historically, it was recognised that Tier 4’s benefits are cultural and economic – this was not just a route to give entry to the very brightest and best.’

This is not, she says, a recent phenomenon: ‘Some of these colleges have been running for 50 years. What’s proposed will cripple them.’

Battles to comeThe expectation is that the Home Office may now avoid using guidance to bring in the permanent immigration caps, opting to do things, in the words of several immigration lawyers, ‘by the book’.

Will that mean the end of a role for the courts here? On some counts the role of legal scrutiny has already been diminished. Barrett-Brown explains: ‘The issue of wrong decisions is interesting in PBS, because the approach is about box-ticking. Decisions can be technically right, yet perverse.’

She cites one common example: ‘Say you need a degree. You can prove you have the right degree, but if you prove it using a different certificate type to the one specified by the sponsor, your application will be rejected. The Home Office will only accept the type of certificate cited, even though proof relates to the same degree.’ Still, she thinks there may be room for further challenges: ‘Pankina concerned points on guidance specific to the case, but new guidance in all of the categories contains quite substantive criteria and [is] open to future challenges.’

Taghavi sees a broader problem in government policy, arguing that some immigration rules are subtly racist in their aim: ‘There is an intellectual dishonesty in policy here. The government seems to want to stop people of colour coming to this country. The fact that is not a rule they can set leads them to design a series of policies that could have the same effect but by referencing different criteria.’ He argues that criteria such as the age of a spouse deemed to be in an ‘unforced’ marriage are an attempt to bar immigrants from countries such as Pakistan and are arbitrary in their effect. He says such rules signal problems with policy in the future: ‘Whenever you try to justify a policy backwards there are legal problems.’

Carter speculates that the government’s apparent willingness to lose in the courts, rather than accept advice from lawyers involved in the consultation process, could have a dramatic and almost unprecedented outcome. ‘For a malfeasance in public office claim, there is a very high standard of proof, but people are starting to look at this,’ she says. ‘Because the Home Office wants to ignore the 1971 Immigration Act, damages claims could be there, especially for Tier 4.’

Carter comments on the nature of evidence she is gathering for colleges putting together a submission on the Tier 4 consultation: ‘It is almost a letter before action in tone and content.’

As for the government, where will the Home Office compromise outside of the demands of the courts? It seems clear it feels the need to have ‘face’ on immigration issues, even if there are points it needs to concede. Rules altering the link between residence and ‘settlement’ have been important here. As Trott says: ‘Delinking residence and settlement seems important – if they can say fewer people are settling, then that is a useful headline.’

In terms of the figures, the Conservatives said during last year’s general election campaign that they thought net migration should be in the tens of thousands. The implications are obvious. As a senior official at UKBA privately told one immigration lawyer: ‘Tens of thousands could go up to 99,999 and as long as we show no-one is settling we’ll get the right headlines.’Carter fears key concessions won for Tier 2 will mean Tier 4 sees very tight restrictions. Time perhaps, as happened in Tier 2 consultations, for clients to come out and make the case for the economic and cultural benefits immigration via this route brings to the UK.