The new points-based immigration system, due to be phased in from 2008, will reduce red tape for employers taking on immigrant workers, says law firm DWF.

However the firm warns it is also likely to restrict the supply of workers in sectors such as catering and cleaning that rely on cheap labour from overseas.

Under the new regime, individuals will be graded into five categories. They range from tier one, consisting of highly skilled people such as scientists and entrepreneurs, to tier five, which includes youths and temporary workers. Points will be awarded to reflect aptitude, experience, age and also the level of need in a given sector.

The new scheme will consolidate more than 80 existing routes of entry into the UK. A system of sponsorship by employers and educational institutions will be introduced to ensure compliance.

Ansar Ali, solicitor with DWF, said: “There is a common misconception that the government’s aim is to reduce the number of immigrants. This not the case. The system aims to attract the most talented workers into the UK, to tackle abuse and manage immigration more effectively.

“It does away with the two-stage process where an employer applies for a work permit which the employee then uses to apply for entry clearance. Instead, one application will be made from the country of origin.

“Given the decreased number of options, employers and applicants alike will be able to identify more easily the category that will be suitable for them. Employers will have a better idea as to whether or not a candidate will qualify for entry because they can do a reasonably accurate assessment.”

However Ali warned that the system could also have drawbacks: “One downside is that, with applications being dealt with abroad, there could be logistical problems, for example with employers sending documentation or providing legal support for the individuals concerned.

“Since the new system is designed to reduce low-skilled migration, sectors which rely on cheap non-EEA labour are likely to be affected. The risk is that this will serve only to exacerbate illegal migration and increase exploitation of workers in such sectors.”