The UK government has launched the first stage of a new points-based system for migrants from outside the EU. It will initially only apply to highly skilled workers already in the country who want to extend their stay. But by the end of 2008, every graduate with good English, on £40,000 or the local equivalent, will potentially have enough points to seek work in the UK. Skilled workers in shortage occupations will also be able to enter provided they have a job offer. But low skilled workers from outside the EU will be barred from entering for the foreseeable future, as the government believes it can fill all manual work vacancies from within the EU. Biggest change Migrants from EU countries - with the exception of Romania and Bulgaria - face no restrictions on working in the UK. The government says the points-based system is the biggest change in UK immigration policy "in a generation" and will attract migrants with the right skills to boost Britain's economy while easing pressure on local public services. But the Conservatives say the changes are "over-hyped" and will not make a significant difference to the numbers entering the country. They have called for an annual limit on immigration. Tier One, which is being launched first, will replace the existing highly-skilled migrant programme, which is also based around points. It is designed to attract entrepreneurs with significant sums to invest in British business as well as highly qualified people who the government believe will boost the economy. All applicants will have to pass an English test - unless they have £1m or more to invest. Labour gaps Skills and earning potential will also be taken into account - although much will depend on the country in which applicants live. For example, someone applying for entry from a poor country, such as Nigeria or Afghanistan, will have to prove annual earnings of at least £4,000, while somebody applying from a wealthier country will have to have a previous salary of £40,000 or more. Tier two, which will be launched later this year, will focus on filling gaps in the labour market - an independent committee will advise ministers on how many points to award to certain skills to reflect economic conditions. Businesses who want to bring in skilled workers will need licences. Tier Two will also cover temporary workers and young people allowed to come in for a short time. Students will be covered from next year. Skills crisis Immigration minister Liam Byrne said the changes, which he says are based on Australia's immigration system, offer enough flexibility to respond to changing economic conditions. "If and when we need to raise the points score that a migrant needs to come to Britain we can do that and do it instantly, rather than setting an arbitrary number," he told BBC Radio 4's Today programme. He rejected Conservative calls for an annual cap on immigration, which he warned could create "chronic skills crises". Mr Byrne has also said the new system will ease pressure on services and community tensions in parts of the UK experiencing high levels of immigration, even though many of the new arrivals are from Eastern European countries not covered by the points-based system. He told Today: "If you look around the country, in some communities like my own constituency in Birmingham I think the pace of change over the last ten years has been too fast. "But when you look at the national picture actually overall migration has absolutely been good for our economy." Over hyping Asked repeatedly if he thought there were too many immigrants in Britain, he said "it can't be reduced to such simplicities". Mr Byrne has also introduced new fines for those found to be employing illegal immigrants as part of a move towards more managed migration. But shadow immigration minister Damian Green said the government was "over hyping" the change and a "sensible" policy would include a cap on the number of migrants who can come to the UK. He said: "We've seen real strains in some areas on housing, on police, on hospitals and on school places and the new system makes no attempt to address that at all. "You still don't know whether you're getting the right number of people that the social services, the public services, can absorb." He said the government had got its figures "hopelessly wrong" when calculating how many new EU citizens would come to Britain in 2004, when it said just 13,000 migrants would arrive annually. Mr Green said it was important to control "what you can control" - economic migration from outside the EU - through annual targets. Source: BBC