Neutral Citation Number: [2008] EWHC 664 (Admin)
Case No: CO/924/2007
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 8th April 2008

Before :

SIR GEORGE NEWMAN
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Between :

	The Queen on the application of
HSMP FORUM LIMITED	
Claimants	
	- and -		
	SECRETARY OF STATE FOR THE
HOME DEPARTMENT	
Defendant	
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(Transcript of the Handed Down Judgment of
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Michael Fordham QC and Margaret Phelan (instructed by Morgan Walker
Solicitors) for the Claimants
Robert Jay QC and Sam Grodzinski (instructed by the Treasury Solicitor)
for the Defendant

Hearing date: 5th March 2008

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Judgment
Sir George Newman : 
1.	In January 2002 the United Kingdom government introduced a new way of allowing individuals to migrate to the United Kingdom.  It represented a change in the policy of managing immigration.  Unlike a policy and legal control designed to meet the migration of those who unilaterally decide to come to the United Kingdom, this policy had the aim of encouraging people to come to the United Kingdom, if they could meet the criteria outlined under the scheme known as the Highly Skilled Migrant Programme (“HSMP”).  Guidance was issued to prospective applicants setting out the criteria which would have to be met and providing them with sufficient detail to self-assess the likelihood that they would score the sufficient number of points to qualify.  The mutuality of benefit which the scheme was designed to provide was expressed in these terms:
“This programme is a new way of allowing individuals to migrate to the United Kingdom.  It aims to provide an individual migration route for highly skilled persons who have the skills and experience required by the United Kingdom to compete in the global economy”.
2.	The “migration route” was designed to provide an avenue to settlement in the United Kingdom, comprising an application for an extension being made and thereafter, if granted, after a passage of time, an application being made for permission to stay on a permanent basis, namely by the grant of Indefinite Leave to Remain or settlement.  As one would expect, the family of the migrant would also be able to obtain permanent residence.  
3.	Prospective candidates were informed that the programme would be reviewed on a regular basis and that the qualifying criteria might be adjusted from time to time.  The government also confirmed that it retained the right to suspend or close the programme on an indefinite basis.  This reservation was clearly made in connection with future applications for permission.  Indeed, the guidance went on to state:
“Should this occur those already in the United Kingdom, as skilled migrants, will continue to benefit from the programme’s provisions.”
	This statement confirmed, at least in connection with closure or suspension, that the benefits conferred by the scheme and to be enjoyed by skilled migrants already in the United Kingdom were continuing in character.  The statement is consistent with the stated aims of the programme and its framework involving continuity, structured from the date of a migrant’s original admission, through stages of extension, leading to ultimate settlement.  
4.	In October 2003, April 2005 and April 2006 various revisions were made to the scheme.  As necessary I shall refer to them later.  But this application for judicial review arises out of changes to the HSMP which came into force on 7 November 2006 and, more particularly, the application of the changes to those already in the uk as skilled migrants.  It has been referred to as the “new scheme”.  The guidance in connection with the new scheme contained the following statement:
“The HSMP requirements may change in the future.  The immigration rules, which provide for entry into the UK under immigration categories including the HSMP, are also subject to change.  The criteria for HSMP extensions may also therefore be subject to change in the future.”
5.	Whereas the various revisions prior to November 2006 affected initial entry and left unchanged the criteria for the grant of an extension, the new scheme changed the criteria for extensions and settlement and made them applicable to new entrants as well as migrants already in the uk under the old scheme.  For this reason, it was no doubt felt necessary to make a reservation in connection with revisions to the criteria for extensions which had not been made before.  The Claimant, HSMP Forum Limited, is an incorporated body formed to represent the interests of a number of highly skilled migrants affected by the new scheme.  A declaration is sought in this Court that the relevant parts of the changes should not apply to the claimants on one or more of the following grounds:-
(1)	unfairness;
(2)	unreasonableness;
(3)	unlawfulness.
Within the allegation of unfairness there are two subheadings, namely legitimate expectation and abuse of power.  Within the allegation of unreasonableness the claimants also rely on (i) anxious scrutiny and (ii) failure to treat prior admissions differently.  Within the allegation of unlawfulness the claimants rely on (i) the principle of legality and (ii) the Race Relations Act 1976, section 71.  
Summary of the Original Scheme
6.	Under the criteria for entry an applicant had to satisfy a score (originally 75) by means of (i) qualifications; (ii) work experience; (iii) past earnings and (iv) achievement in a chosen field.  In due course another criterion was added, namely skilled partner.  
7.	There were also general requirements including (i) the ability to work in the United Kingdom and (ii) migrational intent, namely the willingness to undertake to make the United Kingdom the applicant’s main home.  
8.	Permission to enter was originally given for an initial year, later changed to two years.  Thereafter the migrant would be able to obtain an extension to remain for a further three years and, finally, permanent settlement by way of Indefinite Leave to Remain.  
9.	The guidance contained questions and answers which were designed to shed light and give greater detail in connection with the scheme itself.  For example, under the scheme when it was introduced in 2002, it was not essential that the applicant had a degree.  Work experience for at least 5 years in a graduate-level job would earn 15 points.  A further 10 points in addition could be obtained for two years’ working at a senior level or in a specialist position within a chosen field.  Under the heading “The Conditions/Restrictions” there was a question:
“Q.	What kind of work can I do?
A.	You can undertake any work, for example it could be as an employee, a contractor worker or on a self-employed basis.  However, you will be expected to work at a level appropriate to your skills and this will be important when you renew your application to stay in the United Kingdom under the scheme”.
It is not clear what importance was to be placed upon this for there is no reflection in the immigration rules of this expectation.  And in the same section the question “What will I need to do to qualify to stay after the first 12 months?” was answered in this way:
“A.	You will need to show that you are working in a job that is appropriate to your qualifications and experience and that you will continue to be able to do that kind of work.  For example if you entered on the basis of your experience in civil engineering you would be expected to be working in the area of engineering or make use of those skills.  You will also need to show that you and your family have not had to have any need to use public funds and have not been involved in any criminal activities.  Applications are made directly to the Home Office and details on how to do this will be provided when your initial application is approved.”
10.	The form of the revisions to the programme which were effective from 28th January 2003 is relevant.  The entry criteria expressed in 2003 were as follows:
“In addition to scoring at least 75 points in the above areas you will also need to demonstrate:
1.	Your ability to continue to work in your chosen field in the United Kingdom.
2.	That you have enough savings and/or potential income to be able to support yourself and your family.  You will not be allowed any use of UK public funds (for example income support) whilst in the United Kingdom with permission to stay under the programme.  
3.	That you are willing and able to make the United Kingdom your main home.  We will ask you to provide a written undertaking to that effect.  You will be expected to make the UK your country of habitual residence….”.
11.	As to an extension of stay in the United Kingdom, the guidance read as follows:
“…. On this you will need to declare that you and your family have not had access to public funds and have not received a prison sentence.  In addition you will be asked to provide evidence of your economic activity during your period of stay in the UK and evidence of your personal earnings during the period, if you are employed.  If you are self-employed you will need to supply evidence of the progress of the business …”.
12.	In connection with an extension application, the 2003 guidance stated as follows:
“You will be expected to have been economically active in the UK in employment, self-employment or a combination of the two for at least some of the time within the twelve month period before you apply for further leave to remain.  If you have been unable to put your business or employment plans into operation we will expect you to provide evidence (e.g. several completed job application forms or a business plan) that you have taken all reasonable steps to become economically active in the UK and what steps you are currently taking”.
It can be seen that, despite the hope and expectation and intent on both sides that the chosen field of employment would be taken up, it was accepted also that circumstances might prevent that occurring within the first 12 months and, so long as reasonable steps had been taken, that would not prevent an extension being granted. 
13.	The questions and answers were also directed at those who had successfully applied under HSMP, for example:
“Q.	I have already applied successfully under HSMP.  How does the revised HSMP affect me?
A.	Not at all.  It is important to note that once you have entered under the programme you are in a category that has an avenue to settlement.  Those who have already entered under HSMP will be allowed to stay and apply for settlement after four years’ qualifying residence regardless of revisions to HSMP.”
This question and answer followed upon a question and answer containing a reservation of a right to change the scheme.  
14.	From April 2003, the HSMP was enshrined in the Immigration Rules (see HC 583, rules 135 A-H).  The rules made clear that the entry criteria were appraised once and for all.  The general requirements needed to be satisfied on an ongoing or continuing basis.  Both an extension of leave and settlement required ongoing satisfaction of self-sufficiency and migrational intent.  But it is to be noted that to obtain settlement there were additional requirements in connection with the lawful economic activity.  Whereas for an extension of leave to remain to be granted the applicant needed to have taken “all reasonable steps to become lawfully economically active” (rule 135D(ii)), for the ultimate indefinite leave to remain the applicant needed to be at the time lawfully economically active (rule 135G(iv)).  
The New Scheme
15.	According to the witness statement of Susan Shaw of the Border and Immigration Agency of the Home Office, made for the purposes of this application for judicial review, the justification for the new policy embodied in the new scheme was derived from an analysis of data, carried out by the Border and Immigration Agency, which, it is said, showed that the existing system contained a number of weaknesses, in particular:
•	“The criteria were not the best indicators of economic success.  This meant the scheme was not always fully effective in its aim of attracting and selecting the most highly skilled migrants to the UK.
•	There was no robust test at the extension stage that assessed how migrants performed in the UK labour market resulting in some migrants being granted an extension to remain even if they were not contributing effectively to the UK economy.”
16.	In paragraph 12 of her statement Susan Shaw observes:
“There is no one definition of whether an applicant was performing highly skilled work.  However salary levels and job titles are significant indices in helping to assess whether someone is in highly skilled work.  When the data taken from the sample was analysed overall, many of the jobs being done by FLR applicants did not appear to be highly skilled and thus did not meet the objectives of the HSMP.”
	In the light of these conclusions it was decided to make a number of changes, including refocusing the initial points test on objective attributes, which it was believed would better predict labour market success and “introducing a points test at the extension stage”.  The statement continues:
“It was considered that the previous extension test, whereby it was simply enough for the applicant to have taken all reasonable steps to become lawfully economically active since his arrival in the UK, had not proved to be a sufficiently robust measure of whether the applicant had been making an economic contribution to the UK as a highly skilled migrant.”
17.	The “refocusing” of the initial points test and the “robust measure” of testing whether an applicant had been making an economic contribution as a highly skilled migrant was reflected in the following changes.  The entry criteria, the necessary score (now 75), can only be met by one’s qualifications and past earnings.  Reliance is no longer placed on work experience, unless that has been in the United Kingdom itself, or achievement in a chosen field or the skilled partner qualification.  There is also a new pre-condition, namely an English language requirement not linked to the ability to work.  No issue arises on that requirement in these proceedings.  These new entry criteria are those specified by the Secretary of State for the purpose of rule 135A of the Immigration Rules.  
18.	In relation to remaining and settling, the general requirements of self-sufficiency and migrational intent remain as before (see rule 135D(iv) and rule 135G(ii)).  The requirement of being “lawfully economically active” at the stage of settlement also remains (see rule 135G(iii)).  However, in place of the requirement for an extension being the taking of “all reasonable steps to become lawfully economically active”, the new scheme involves an updated reapplication of the new criteria applicable for entry.  Thus, in order to stay, an equivalent points score is needed based on qualifications and past earnings along with a mandatory English language requirement.  Applied to remaining and settling, past earnings mean a particular level of earnings achieved within the United Kingdom.  These new criteria required amendment to the Immigration Rules.  
Application to those Successfully Admitted Under HSMP
19.	Susan Shaw states in paragraph 15 of her statement:
“We carefully considered whether or not to apply the extension/FLR test only to those migrants who were new to the HSMP from December 2006.  We did not expect that everyone would be able to pass the new test...
16.	Recognising however that there would be a number of HSMP migrants who would face difficulties in meeting the new FLR test, but conscious of the overall policy aim of only granting work based Leave to Remain to those who were genuinely making a significant contribution to the economy, we introduced extensive transitional arrangements dealing with those in employment (making the process of switching into Work Permit employment easier), as well as addressing the position of self-employed people and independent contractors…”
20.	Then, importantly for the purposes of this case, in paragraph 17 she states:
“Ultimately, we were not persuaded of the need to restrict the FLR test to new applications.  Primarily, this was because we considered that the new FLR test, in combination with the transitional arrangements (in particular allowing an easy entry to the Work Permits scheme for those who did not qualify for HSMP FLR), meant that only a small percentage of people would actually have to leave the country, and that those who did would be very clearly those who were not making a contribution to the UK economy that had been expected of them when they were granted initial HSMP approval.  The only people who would have to leave would be those who did not meet the new HSMP points test, and those doing insufficiently skilled jobs to qualify for Work Permits or whose employers chose not to apply for work permits for them (a decision over which he had no control).  This view has been borne out by subsequent statistical evidence, as explained further below.
18.	Further, it would have taken at least 5 years for the rules change to achieve the intended policy outcome of ensuring that those passing an extension test were those making the greatest contribution to the UK economy.”
The Issues
21.	Whatever the impact of the changes, namely how many people are or are likely to be affected by them, there seem to me to be other considerations calling for attention and to which weight must be paid.  A Parliamentary Joint Committee on Human Rights conducted an inquiry into the changes in the Immigration Rules to which the new scheme gave rise (see HL paper 173, HC 993 published 9th August 2007).  In summary, the Committee found that the new rules were retrospective in effect and could not be justified as proportionate.  The Committee found the following:
“… individuals with leave to enter or remain under the HSMP have taken a number of important and long-term steps to establish their main home in the UK: they have left permanent jobs in their home countries, sold their homes, relocated their families (spouses and children) to be in the UK also, entered into financial commitments such as mortgages, transferred businesses, entered into long-term financial arrangements, made long-term economic and contractual plans, and the lives of their families have been transferred (for example, spouses have new jobs, children new schools).”
	This conclusion echoes the terms of a letter dated 16 November 2006 from the Immigration Law Practitioners Association to the Minister (see paragraph 24 below).
	The Committee went on to state:
“The immediate effect of the tightening of the requirements for extending leave is to make it likely that a considerable number of those highly skilled migrants who have moved to this country and made it their main home under the HSMP will not now be eligible for further leave when their current period of leave expires …”.
22.	But for a suggestion (see para 25 below) that migrants were not required to sever all connections with the country of origin, no argument has been advanced to the Court disputing the catalogue of circumstances likely to have surrounded a person’s decision to enter and make the uk his or her main home under the HSMP.  Further, Susan Shaw accepts that the tightening of the requirements will mean that highly skilled migrants will not qualify for an extension or settlement where, under the scheme prevailing at the time of their entry, they would have done so.  I accept the Committee’s finding on the likelihood of the occurrence of circumstances associated with a decision to join the scheme and it is the agreed legal consequence of the impact of change on admitted migrants which will have to be considered.  What then of the complaint of retrospectivity?
23.	The Committee were not persuaded by the Government’s arguments that the changes were not retrospective.  In a letter dated 30th March 2007 from Liam Byrne MP, Minister of State for Nationality, Citizenship and Immigration at the Home Office, (Appendix 2 to the report) Mr Byrne stated as follows:
“… there are a number of issues that I feel it is important to clarify.  Firstly, you mention that the Committee is concerned about the ‘retrospective application’ of the changes to HSMP.  These changes do not have retrospective application.  A migrant with initial leave will not have that grant of initial leave re-assessed.  The new extension test applies to all those who choose to take the test from the date it was introduced – there is no retrospective element in these changes.”
	The Committee dismissed the Government’s arguments on these grounds:
“….. changing the relevant criteria to be met by those who have already made their home in the UK on a clear understanding of the criteria that would be applied to them in the future is, in our view, indisputably retrospective in effect.”
24.	By a letter dated 16th November 2006 the Immigration Law Practitioners Association complained to the Minister in connection with the manner in which the changes had been introduced and the content of the changes.  The letter contained a summary of the nature of the commitments inherent in making a new country one’s main home, subsequently adopted by the Joint Committee in its report.  The letter recorded that there had been a lack of formal consultation or notice concerning the measures and that the measures being announced on 7th November 2006 came into effect on 8th November.  The letter raised an issue as to the content of a legitimate expectation that the highly skilled migrants were entitled to rely upon.  In his response, in a letter dated 24th November 2006, the Minister replied:
“We have made these changes in order to make sure that the people who succeed under the programme are those who will make the greatest contribution to the UK economy, to make the requirements clearer and more objective and to make sure that the programme is robust against abuse.”
25.	As to “tests at extension”, the letter stated:
“I do not accept that those who receive a grant of leave in a category have a legitimate expectation that the rules for further grants of leave within that category which existed at the time of their first grant of leave will apply to them for the rest of the time that they spend in the UK.  The rules must be capable of being changed from time to time so that the Government can carry out its policies – in this case, to ensure that those granted further leave to remain under HSMP will benefit the UK economy.  The power to make changes to the Immigration Rules, as laid out in the Immigration Act 1971, is not restricted to changing the rules for entry, or to changing the leave to remain rules only for those who obtained leave to enter when those were in force.  The only expectation which applicants should have is that the rules and policies which are in force when their application is decided will be correctly applied to them.
8. Indeed, it has never been guaranteed that applicants would qualify for further or indefinite leave to remain, so there has always been the risk of not qualifying for further leave.  We have merely tightened up the rules.  I also do not believe that this is incompatible with the requirements under HSMP to have made the UK your main home.  This does not require the severing of all connections with the country of origin and refers to the need to make the UK your main home during the course of your leave, which is necessary for highly skilled migrants.”
26.	I have to say that I find the Minister’s reasons unsatisfactory.  The Joint Committee had not so misunderstood the new scheme as to suggest that it required a migrant already in the uk under the old scheme to apply again for entry under the new scheme.  Nor had the Committee failed to appreciate that a migrant already here was obliged, if he wished to remain, to apply for an extension.  The point being made was that the old scheme constituted an integrated and entire programme and that it was not open to the government to alter the terms and conditions upon which the pre-arranged stages were to be implemented.
27.	It seems to me that the issue of retrospectivity is but a reflection of the real issue in the case, namely whether acceptance under the old scheme conferred fixed benefits upon a migrant for the duration of the scheme.  Obviously if the changes had brought about the withdrawal of an initial grant of entry the new scheme would have been retrospective in its effect.  The complaint which has been advanced is that a measure of retrospectivity has been introduced because the scheme involves not simply a once and for all entry, but a continuing framework providing future opportunities to remain and, ultimately, to attain settlement.  The Minister’s reference (see para 23 above) to “… those who choose to take the test” at an extension stage does not appear to me to be apt.  The choice and past commitment to apply to remain must, to a large extent, be seen as having been made upon entry on to the scheme.
28.	In my judgment, proper consideration to the claimants’ complaint requires due weight to be given to the character and purpose of the scheme.  I am satisfied that migrants were encouraged to enter the scheme, not simply because they would gain admission for one year, but because, in accordance with conditions and criteria which were set out and offered to them, they would obtain, if the conditions and criteria were met, an extension of leave to remain and ultimate settlement.  Obviously they were not “guaranteed” an extension or settlement because they had to meet the conditions and criteria which had been laid down.  But, equally, they were being told that if they met the conditions they would be entitled to remain.  I am wholly unimpressed by the attempt to interpret the scheme as a commitment only to the terms of entry and only those terms could not subsequently be altered.  The real question is whether, properly interpreted, the scheme conferred a commitment on the part of the government not to change the conditions in connection with the continuing implementation of the scheme.
29.	I am unimpressed by the weight the Minister attaches to the term “main home” (see para 25 above).  The avenue to settlement involved a staged process to having permanent leave to remain.  Clearly to have referred to the need to have a “permanent residence” within the United Kingdom before a grant of permanent leave to remain, would have been premature and inappropriate.  It is not clear to me what is meant by “severing all connections with” a country of origin.  I doubt whether such severance ever occurs, even after permanent settlement.  His view provides no answer to the circumstances of likely upheaval, financial investment and substantial change which had been laid out by the Joint Committee and the letter of 16 November 2006. 
Submissions
30.	It has been accepted that applicants under the former scheme would generally be granted leave to enter for 12 months and, after April 2006, for two years.  Someone applying for an extension of stay as a highly skilled migrant would, in summary, have had to show that he had “already taken during his period of leave all reasonable steps to become lawfully economically active in the UK in employment, self-employment or a combination of both.”  He also had to show that he met the criteria specified in rule 138 (initial entry criteria).  However, because of the words “at the time of issue of that document” in rule 135A(i), there was no obligation to show that at the time of applying for an extension, the applicant still met the original HSMP points-based criteria.  
31.	Subject to the usual exercise of discretion, an extension of stay as a highly skilled migrant would generally be granted for three years and if an applicant had a continuous period of at least four years’ leave to remain he would then, generally, be granted indefinite leave to remain.  
The Transitional Measures
32.	As we have seen, the Minister placed considerable reliance upon the transitional measures when responding to the Joint Committee.  Susan Shaw has made reference to them.  Counsel for the Secretary of State has relied upon them in this Court.  The most relevant aspect of the measures is that applicants who cannot satisfy the new HSMP criteria may be able to switch into Work Permit arrangements, the entry criteria for which have been relaxed.  The criteria which have been relaxed to enable HSMP migrants to move to Work Permit employment are:
(1) 	the resident market test (the requirement to advertise the post to prospective UK and European Economic Area nationals in advance of the application) will be waived, provided that the applicant has been in post for at least eight months, if the grant of leave was for 12 months or less or at least 12 months if their grant of leave was for more than 12 months.
(2)	employers are to have a period of grace, namely 42 days from the date of the letter telling the applicant that they did not pass the points test to apply for a Work Permit.  A self-employed person who does not pass the points test on an application for an extension could be granted leave under the transitional arrangements for self-employed people subject to conditions being satisfied.
33.	It has not been suggested that permission to remain in the United Kingdom to work under the Work Permit scheme compares favourably to an extension under HSMP.  An applicant under the Work Permit scheme depends upon his employer making an application for a Work Permit.  If granted it is in connection with that particular employment.  Should the particular employment cease for reasons outside the control of the applicant then a fresh Work Permit with a fresh employer would have to be sought.  That could arise at any time.  Those acting under the Work Permit scheme are vulnerable to exploitation in connection with the terms and conditions of their employment.  Whilst families can reside with the holder of the Work Permit, the status carries considerable uncertainty and potential for disruption to family life.  The path to settlement would from the time of the grant of the Work Permit be five years.  Until 1st April 2008 was not known, so far as a highly skilled migrant is concerned, whether any period of time here as a highly skilled migrant would count towards the five year qualification period.
34.	In my judgment, leave to remain pursuant to a Work Permit cannot be compared favourably with the individual migration route which is available for those under the HSMP.  
35.	Some might regard the creation of an opportunity to transfer to the Work Permit scheme as a measure of recognition on the part of the defendant that some option to removal should be provided in order to ameliorate the consequences for a highly skilled migrant who has failed the new test.  In part this may well have formed part of the reasoning, but the principal impact, which the creation of an option to transfer to the Work Permit scheme had on the decision-making process of the defendant, has been unequivocally stated to be that the defendant “considered that the new FLR test, in combination with the transitional arrangements … meant that only a small percentage of people would actually have to leave the country …” (see para 17 Susan Shaw).
36.	As a result, the question arises as to why it was thought necessary, if the failed highly skilled migrant was not going to be removed from the United Kingdom, to permit him or her to remain but under a significantly less advantageous scheme, which would probably interfere with their chances of taking the highly skilled employment they were originally intended to take up.  I can appreciate that without the option to transfer, the defendant’s contention that the percentage of highly skilled migrants who would have to leave the country would be small, would have been more difficult to maintain.  When pressed, Counsel for the Secretary of State submitted that it was desirable in the interests of maintaining the integrity of the new scheme that those who did not meet its criteria should be removed from it, but not necessarily from the country.  I am unable to see how the integrity of a new scheme is undermined by accepting the consequences of what was seen as an inadequate old scheme.
The Impact of the New Scheme
37.	Susan Shaw’s statement provides statistical evidence on the impact of the new scheme on applications for further leave to remain, sometimes referred to as “extension applications”.  Her statement shows that the refusal rate at the extension stage before November 2006 was 6%, taking into account withdrawn and rejected applications.  If rejected and withdrawn applications are taken into account the figure is adjusted to between 3% and 4%.  
38.	After November 2006 and between 5th December 2006 and 31st December 2007, 7,870 HSMP extension applications were made, 6,890 were granted and only 570 were refused.  Thus only 7% of the further leave to remain applications were refused.  
39.	However of the 570 who were refused in this period, 120 were granted leave to remain for a year (because they had been granted an incorrect period of initial leave) or given discretionary leave to remain (because they had been successful in their appeal on Article 8 ECHR grounds), which brings the percentage to 6%.  
40.	Further, it is said, of the 570 who were refused 260 would have failed under the previous HSMP test in any event on the basis that there was no evidence of any earnings whatsoever during the preceding 12 month period, so the differential is 4% of all further leave to remain applicants.  
41.	In addition, out of the 570, another 84 individuals had successfully used the transitional arrangements and 26 more applications under these arrangements are still under consideration.  
42.	The conclusion reached is that the numerical difference that the new further leave to remain test has made in terms of requiring pre-November 2006 HSMP migrants to leave the United Kingdom who would not otherwise have done so under the old FLR test is very small.  The defendant’s view is that this small number generally represents those individuals who were not making a significant contribution to the economy in the highly skilled work for which they entered in the first place.  
43.	But for the fact that the defendant placed significant weight on those factors in deciding not to restrict the new scheme to fresh applicants, this evidence would not have struck me as calling for particular attention given that it was accepted that highly skilled migrants who would have qualified under the old scheme, will fail the new test.  The statistical evidence does not provide an answer to the individual claims of unfairness on the part of those who, by reason of the changes, face uncertainty and may, for one reason or another, fail the new test and have to choose between remaining under a Work Permit or being removed.  Nor do I find the paucity of the number of people likely to be affected provides any answer to the degree of hardship likely to be caused in individual cases.  On another view it seems material to ask, if the new changes are likely to affect so few a number of people, what interest is there to be served by subjecting a limited number of people to considerable hardship which they would not otherwise have faced.  Individuals have made witness statements detailing the hardship they face.
The Race Equality Impact Assessment (the REIA)
44.	The Home Office were under a duty to carry out an REIA.  In the normal course such an assessment would be published before changes in the rules were announced.  On this occasion that was not the case.  On 6th June 2007 the Commission for Racial Equality wrote to the Director General of the Border and Immigration Agency commenting on the fact that the assessment had been “recently published in respect of the changes to the highly skilled migrants programme”.  The letter of 6th June also detailed various significant concerns on the part of the Commission in connection with the changes.  Since the assessment was drawn up before the rules changed in November 2006 it is material to focus on one or two parts of the understanding on the part of the Home Office as to the impact of the changes and the need for the changes.
45.	As to those seeking to extend existing leave, the assessment noted that a new economic test would be applied.  Since the current economic extension test required that applicants have “taken all reasonable steps to become lawfully economically active in the UK in employment, self-employment or a combination of both”, the new test would require them to satisfy a points test (as well as a mandatory language requirement).  It was accepted that this points test was similar to that which people had to meet when making first applications.  On the question of overall racial impact, the assessment observed that the scheme was not intended to bring about a large-scale reduction of successful applications (a reference to original applications) but the assessment went on to note:
“We do, however, expect a reduction in the number of successful applications for extensions of leave, because the new test is more arduous than the old one.  However, we hope to retain most people who are currently in the UK with leave to remain under the HSMP and who are employed, self-employed or working as independent contractors, but who will not pass the new test.  Those who do not succeed under these transitional arrangements (i.e. those who are unemployed or having been working for very short periods) are not people who will benefit the UK economy.”
	The assessment noted:
“Overall, the change will therefore work to the relative disadvantage of non EEA nationals and, conversely, to the relative advantage of EEA nationals, but the effect will not be great.”
46.	The letter dated 6th June 2007 from the Commission detailed criticisms in connection with the assessment which were, to a large part, directed to the scheme as it affected original applicants, but it did also include observations upon the particular position in the professional and managerial workplace for people of ethnic minorities.  As will be apparent from the changes already noted, salary levels had taken high priority in the changes.  Indeed, so far as extensions are concerned and settlement, levels of salary have overtaken job description as “highly skilled employment”.  The Commission were concerned that the assessment had failed to address the difference in salary between ethnic groups in the United Kingdom labour market.  This was a reference to the disadvantage highly skilled migrants have in obtaining employment in their appropriate field, at a level of remuneration which matches those not coming from an ethnic minority.  
The Law
47.	It is now necessary to examine whether the above facts and circumstances found any one or more of the legal challenges.  
Legitimate Expectation
48.	Although the point is obvious, it is necessary to emphasise that the defendant’s discretionary power to make changes to the scheme under which highly skilled migrants will be admitted to the uk is not under challenge.  It follows that none of the reasons for changing the scheme are under scrutiny.  It is sufficient to note that the original scheme was seen to have shortcomings and the new scheme was designed to overcome those shortcomings.  If, as is the asserted case, the original scheme was not always fully effective in selecting and attracting highly skilled migrants and the test applied at the extension stages resulted in migrants being granted an extension even though “they were not contributing effectively to the uk economy”, it was the fault of the scheme.  It was not the consequences of any material fault on the part of the migrants.  In this regard a material fault would be a failure to meet the criteria set by the scheme.
49.	The conflict to which this case gives rise requires the Court to establish a balance between the importance of preserving the defendant’s right to exercise her discretionary powers in the field of immigration control and the desirability of requiring her to adhere to the statements or practice announced in connection with the original HSMP.  Mr Fordham QC has drawn attention to the developments which have taken place in the law relating to legitimate expectation.  The Court of Appeal has warned against making separate compartments of law where, in truth, a single principle or interlocking principles are in play (see Nadarajah [2005] EWCA Civ 1363, para 49).  He submits that a number are in play:
	(1)	the existence of clear, express representations that the criteria for the grant of extensions would not be changed so as to preclude settlement being obtained in circumstances where it had been represented it would be available;
	(2)	the clear practice prior to November 2006 that revisions to the scheme were not to affect those already on the scheme;
	(3)	the conspicuous unfairness involved in encouraging migrants to sever links with their home country and to make the uk their main home, by issuing statements about their future entitlement to remain in the uk and thereafter subsequently withdrawing the applicability of the statements;
	(4)	the absence of any pressing public interest requiring that she should frustrate the expectation of highly skilled migrants who had met the criteria of the scheme which they had joined;
	(5)	the abuse of power involved in frustrating the migrants’ path to final settlement in the uk when the migrants had already embarked on the journey.
50.	Schiemann L.J. observed in R (Bibi) v Newham LBC [2002] 1 WLR 237 that the answer to the question, to what has the authority committed itself, can often be dispositive of a case.  Mr Jay QC submitted that the insurmountable difficulty facing the Claimant was that no clear and unequivocal representation had ever been made to the effect that the criteria to be applied to FLR extension applications would remain unchanged.  He adopted the analysis of the position contained in a judgment of the Asylum and Immigration Tribunal in AA & Others (Highly Skilled Migrant: legitimate expectation) Pakistan [2008] UKAIT 00003 at paras 87 to 95.  The Minister’s conclusion in his letter dated 24 November 2006 (see para 25 above) bears a striking resemblance to the conclusion in paragraph 95 of the AIT judgment:
“Their only legitimate expectation is that their applications will be judged on the basis of the rules and criteria under the HSMP in force at the relevant time, namely the date of any decision”. (para 95). 
51.	The Minister’s conclusion represents a likely outcome in cases where claimants rely upon existing general provisions of law as founding a legitimate expectation as to their future rights (see, for example, R (Ooi) v Secretary of State for the Home Department [2007] EWHC 3221 (Admin)).
52.	In my judgment the correct answer to the “dispositive” question requires a contextual analysis of the purpose and terms of the HSMP up to November 2006, not a textual analysis of its parts interpreted in isolation from the other parts of the scheme.  My analysis, which is to a large extent laid out in the preceding paragraphs of this judgment, is as follows:
(1)	The scheme represented a change in the policy of controlling immigration.
(2)	The policy was designed to target a particular group of migrants and to encourage them to come to the uk to assist the uk economy.  
(3)	The scheme was not composed of severable parts but of interlocking provisions.  Once a migrant had joined the scheme he was entitled to enjoy the benefits of the scheme according to its terms.  He was obliged to establish a migrational intent to make the uk his main home.
(4)	Participation in the scheme was designed to provide a path to settlement and once a migrant had embarked on the scheme it was intended that he should carry the expectation of attaining settlement.  That was the purpose of the scheme.
53.	It would not have been inconsistent with nor inimical to the scheme for it to have been expressly stated that admission to it gave no guarantee that the criteria at the extension stages would not change during a migrant’s participation in the scheme.  But I do not think the defendant can escape from the consequences of having failed to make that clear.  The stages leading to permanent settlement and security of status would have been of acute interest and significance to applicants.  They received considerable attention in the guidance.
54.	Had it been in the defendant’s contemplation that the criteria at the extension stages would need to change, even though a migrant had embarked on the scheme, it seems inconceivable that notice would not have been given of this possibility at the time notice was given to prospective applicants that the “criteria and documentation” would change.  The defendant’s original misconceived reliance upon the limited reservation as applying to changing the rules for extension and settlement, was abandoned between the summary grounds of defence and the hearing.  I agree with Mr Fordham that the express reservation, and the absence of any equivalent, contribute to the overall representation as to what was- and what was not – capable of being changed.
55.	But the guidance went further.  The January 2002 guidance stated that even if the programme was suspended:
“those already in the United Kingdom, as Skilled Migrants, will continue to benefit from the programme’s provisions”.
	The later guidance stated in answer to the question “What if the scheme changes?” and “I have already applied successfully under the HSMP.  How does the revised HSMP affect me?”
“A. 	Not at all.  It is important to note that once you have entered under the programme you are in a category that has an avenue to settlement.  Those who have already entered under the HSMP will be allowed to stay and apply for settlement after 4 years’ qualifying residence regardless of revisions to HSMP”.
56.	It can be said (indeed it was emphasised) that the revisions did not touch the extension and settlement criteria and that the statement cannot be read as applying to such revisions.  I am not so much influenced by the reference to “revisions” as I am by the “important … note” in general terms: “… once you have entered … you are in a category that has an avenue to settlement”.  This seems to me to accurately describe the character and intended manner of operation of the scheme.
57.	I find that the terms of the scheme, properly interpreted in context and read with the guidance and the rules, contain a clear representation, made by the defendant, that once a migrant had embarked on the scheme he would enjoy the benefits of the scheme according to the terms prevailing at the date he joined.
Overriding Public Interest
58.	Mr Jay QC submitted that:
(1)	there are cogent macro-political reasons for applying the new and more robust test to all HSMP migrants and not just those who have applied post November 2006;
(2)	between January 2002 and October 2006, 49,188 applications were granted;
(3)	the Court should not adjudicate on the economic interests of the uk;
(4)	account should be taken of the transitional arrangements.
59.	I am wholly unpersuaded that there are any significant macro-political reasons for including admitted HSMP migrants within the changes.  On the defendant’s own case:
(1)	the number of migrants likely to be removed is small; and
(2)	an appreciable number will be able to remain under the Work Permit scheme.
The macro-political aspect of the changes rests with the stated objective of introducing a more effective and robust scheme.  That is not to any degree undermined by a small percentage who are not making the contribution expected of them and when the level of contribution meets that originally set by the scheme.
60.	Since nearly 50,000 migrants have entered under the scheme and only a small percentage are clearly not making the financial contribution expected of them, the scheme, as originally introduced, was according to its own terms, seemingly, successful.  I do not regard the issue under consideration as touching important economic interests which are centred upon the policy aim of establishing a more effective scheme for future applicants.  Mr Jay submitted that “the transitional arrangements were specifically intended to ameliorate the effect of the change to the new rules, and so as to assist those genuinely contributing to the economy”.  The offer of a Work Permit seems hardly commensurate with what a migrant “genuinely contributing to the economy” should be placed under pressure to accept.
61.	I am unable to see a sufficient public interest which outweighs the unfairness, which I am satisfied the changes visit upon those already admitted under the programme.  In the circumstances, I am satisfied that the terms of the original scheme should be honoured and that there is no good reason why those already on the scheme shall not enjoy the benefits of it as originally offered to them.  Good administration and straightforward dealing with the public require it.  Not to restrain the impact of the changes would, in my judgment, give rise to conspicuous unfairness and an abuse of power.  Bad faith, rightly, has not been alleged, but I am concerned about the repeated refusal to consider the undeniable evidence of hardship and the extent of the special commitment required of those migrants which has been placed before the defendant from a number of quarters.  I am satisfied, following the three questions set out in Bibi, that the defendant proposes to act unlawfully and the Court should intervene.
The Race Relations Act 1971
62.	It is unnecessary to decide whether the defendant failed to comply with her duty under section 71, but it has been admitted that the REIA disclosed shortcomings.  I have to say that having regard to the number of migrants of ethnic minorities which it must have been contemplated would enter the programme and, as history tells, did, the value of the original scheme was that it could take account of the difficulties faced by such persons on the labour market, which cause them, despite reasonable efforts to obtain employment, to suffer periods of unemployment or employment in less highly skilled positions.  The robust character of the new scheme is less apt to accommodate these realities.  The Commission highlights the failure of the assessment to take account of “the ethnic penalty in the workplace”.
63.	The above point and the failure to carry out the assessment so as to have it available to inform the decision to include admitted migrants have contributed to my overall conclusions.  The paucity of due consideration given to the true character of the case, exemplified by the absence of any appraisal of the unfairness and hardship involved and a determination to treat these migrants as falling into the same category as any migrant who has chosen to come to the uk, have given rise to real concern on my part.  The absence of any wide-ranging policy issue being in play and the absence of any significant economic consequences to which adherence to the original scheme would give rise point to an irrational determination to hold to the decision to include admitted migrants within the new scheme.  Paragraph 17 of Susan Shaw’s statement simply cannot sustain the case advanced for the defendant.
64.	Since I am satisfied that the doctrine of legitimate expectation clearly founds a basis for the application of the concept of abuse of power, I do not propose to take up time in this judgment with the other limbs of the claimants’ case.  I am grateful to both Counsel for furnishing the Court with all the relevant authorities, which I have duly considered.  But since I have found the case to be clear, I have not seen the necessity for rehearsing the content of them.
65.	This application for judicial review succeeds.  I shall listen to Counsel on the appropriate form of relief.