Examination of Witness (Questions 360-379)
PROFESSOR DAVID
METCALF
17 MARCH 2009
Q360 Mr Streeter: Professor, you
mentioned the Shortage Occupation List earlier. Were there some
occupations that you recommended in your September report which
the Government did not actually put on the list in the end?
Professor Metcalf: No, they accepted
the whole list but they added back, as it were, social workers.
Q361 Mr Streeter: You have just been
talking about how robust your data is in terms of trying to spot
these skill shortages. You will be aware of course that in this
time of fierce recession people are losing their jobs by the month.
The monthly figures are rolling on all the time. I would just
like to ask you how up to date your list is on shortages? You
may go into the changes and so on but the picture is changing
all the time and people are very worried about this. Are you confident
that your picture is up to date and the Government is getting
the right information?
Professor Metcalf: That is a very
good and reasonable question. Let me deal with it in a couple
of ways. The data about the immigration is really quite good data;
it is getting better now that the ONS has recognised some of the
weaknesses of the previous passenger survey. The data on things
like the Labour Force Survey on which you get a lot of information
about people's characteristics and so on is very good data indeed
but it is not designed specifically to deal with immigration.
Data on earnings is very good. There is a real issue with this
data which is that oftentimes it is out of date. The earnings
survey, for example, only comes out once a year; it taken for
April and it comes out in October. Let me back-track a little
bit. When we are thinking about skills, we have three main indicators
there. When we are thinking about shortages, we use 12 indicators.
It is the case that we are attempting to keep these indicators
up to date but some of the data is not timely. That of course
is the reason why we take so much trouble consulting stakeholders
so that then we try to dovetail the data that we have from the
national data sources with the data that we get by our workplace
visits. In terms of how up to date the list can be, what we have
agreed essentially informally with Home Office and across Government
is that we will produce a new list every six months. It is a very
big job to do a complete analysis. We will not do the complete
analysis every six months; we will do that every two years but
we will update it every six months. Frankly, obviously we could
do things a little bit shorter than that but it takes quite a
long time to consult the stakeholders and to think through and
to make sure that we do respond to changes. I am pretty content—I
do not perhaps want to anticipate where you might go subsequently—that
not all of the shortages are actually of a cyclical nature; some
of the labour shortages are very different to that. So I would
not expect many of the occupations presently on the list immediately
to come off, even in a downturn.
Q362 Tom Brake: I was wondering whether
in the last six months you have picked any of the skill shortages
that are linked to the economic downturn paradoxically and, if
so, what are they?
Professor Metcalf: We are reporting
at the end of this month; in a sense, that is the first six-monthly
review. Some of that is material that the Government has specifically
asked us to do: social workers, social care, for example. Some
of it is occupations where we thought in our previous report,
the September one, that there is a bit of evidence of a labour
shortage there but actually we did not get any evidence. We have
gone back to the centres and asked about that. Some of it is occupations
which we have taken it upon ourselves to analyse—these are
particularly construction-related—because we think the labour
market has changed profoundly very quickly. I am not going to
anticipate, if you will forgive me, what we are going to conclude
at the end of March; that will be available very soon. We are
having a very close look—and I choose my words carefully—at
the construction-related occupations, particularly quantity surveyors
and construction managers, which were previously on the list,
in the light of up-to-date information on vacancies and on unemployment.
Let me go through this a little more, if I may. If you were to
think about, say, the medical profession, and some but not all
consultants are on the list presently, it takes a long time to
acquire the skills for that, so you would not expect them to come
off so quickly. If you think about some of those that are high
culture—the ballet dancers and so on—
Q363 Chairman: We will be coming
on to ballet dancers later.
Professor Metcalf: Not all of
the occupations on the list are cyclical, but we are having a
good look at those that are cyclical.
Q364 Margaret Moran: I can tell you
that in Luton in the construction-related industries at the levels
you are talking about there is certainly an issue about people
now being made redundant, and so we do not have a skills shortage.
That relates to my question and apologies if you have already
mentioned this. How frequently are you in touch with the job centres
to see what is really happening on the ground? The evidence again
in my area is that it is not so much a skills shortage we are
seeing any more but a glut of professionals that you would not
traditionally have thought of, such as IT managers and people
with those kinds of skills, who are now coming on to the market
as a result of the recession. Whereas you still have them listed
as being a skill shortage, they are now finding that the only
offer of work they are being given at a job centre is to become
a truck lift driver. There is a big mis-match here, surely?
Professor Metcalf: If I may say
so, it is not us that has the skills shortage. We have done the
report for September and we have done the review now to March.
You are absolutely right and we have had a good look at the construction
trades and we will report on that in a couple of weeks' time.
Q365 Margaret Moran: The point that
I am asking you is similar: six months sounds like a short period
but surely your staff should be looking at the job centre week
by week, given the speed with which things are changing in the
current economic circumstances?
Professor Metcalf: That will be
one approach and if there is a keenness to do it, we might be
able to do so. We have been doing other things, as it were. We
have been doing Romania and Bulgaria. Presently we have been doing
whether or not the Worker Registration Scheme should continue.
It is not as if we are not doing other things. Similarly, into
the future, we have a number of tasks over and above doing the
shortage list. I do agree with you that we have to keep the shortage
lists under very close review. I think that is what we have done
and we will be reporting in two weeks.
Q366 Mr Clappison: Migrants can also
come in not just by passing a shortage occupation test which gives
them automatic entrance—I think it gives them the necessary
50 points straight off—but they can also come in by passing
the resident labour market test and then acquiring the appropriate
number of points through age and earnings and so forth. The Government
has said very recently that it is going to ask you to look at
whether there is an economic case for restricting Tier 2 skilled
workers to shortage occupations only. Do you have a time scale
for when that is going to take place?
Professor Metcalf: Yes. This will
be by July.
Q367 Mr Clappison: And you will be
reporting back to Government then?
Professor Metcalf: Yes.
Q368 Mr Clappison: May I follow on
from what Margaret Moran was saying? Some of my constituents might
also find it curious. My constituency is very near London. We
now have nine job-seekers to every vacancy advertised at the local
job centre and many of the people who have been made redundant
recently are people who have been working in computer services,
administration, business and management services. Some of them
work in London and some at the Bradford and Bingley, which has
just closed its premises in my constituency. They might find it
curious if they look at the list of people who have been allowed
to come into this country as migrants under this system. We have
been supplied with some documents as a committee which show that
the two largest categories of work permits for the times we have
been given are for computer services, firstly, and, secondly,
for administration, business and management services, which are
just the sorts of things in which people in my constituency are
looking for jobs. Do you understand why my constituents might
find that curious?
Professor Metcalf: I do but this
is nothing to do with the Shortage Occupation List. If I may say,
what you have said is absolutely right. There are three different
routes through which you can come in under Tier 2 and get your
work permit, of which the Shortage Occupation List is one. In
the past, the number of people coming in through the Shortage
Occupation List was actually rather modest. It was probably of
the order of 10—15% of the total work permits issues. The
others were, as you rightly say, through the resident labour market
test and through the intra-company transfers. It is not in some
sense that the IT people are on the list; indeed they are not
on the list. I think, if I may say, that your point is very well
taken because in the review of Tier 2, which the Home Secretary
has asked the MAC to do, the issues that will come up there are
that, all right, we have the Shortage Occupation List, in some
sense why should there be other routes in: one, the resident labour
market test and one the intra-company transfers? The people to
whom you are alluding coming in to do IT jobs are disproportionately
coming in under the intra-company transfer route, and we will
be having a proper look at that in our review that we have been
asked to do on Tier 2.
Q369 Mr Clappison: The numbers on
that have increased very significantly in the last couple of years.
Professor Metcalf: Yes, they have.
Q370 Mr Clappison: You can understand
somebody who might think that it is a flawed system on account
of that.
Professor Metcalf: It does not
mean it is a flawed system but we will definitely have a proper
look at the different routes in. One of the issues on intra-company
transfers is this, and I am sure it is legitimate for people to
be brought in to do the IT projects under the intra-company transfer
but it is possible that the original intention for that was more
like Honda bringing people in from Japan to work at Swindon for
a bit, and so we will have a proper look at that route. Clearly,
to the extent if there were some real elements for example of
displacement or levels of undercutting, then we will report on
this.
Q371 Mr Clappison: Can I ask you
about one other aspect? The Chairman put what I thought was a
good point to you earlier about population size. What you have
told us about today so far has been, if I may say so, very well-founded
but is narrow and technical. Really you should be called the Labour
Market Shortages Committee. You are in fact called the Migration
Advisory Committee. Do you not think that that is a bit of a misnomer
because you have said to us you cannot look at population size.
We have a population which is predicted to go to 70 million, by
both the UN and the Government forecasts, but that is not something
which you can take account of, is it? Can you express an opinion
about it? Do you think that the population of the UK will rise
to 70 million, which is the forecast, and 60 million in the case
of England alone, which is a very significant increase in a short
time?
Professor Metcalf: With respect,
this is a matter for politicians; it is not a matter for me.
Q372 Chairman: It may be a matter
for politicians but Mr Clappison is asking you if you think that
the terms of reference for your committee should be extended or
that the name of your committee should be extended? We are not
asking you to make the decision, Professor.
Professor Metcalf: I am very content
with the terms of reference.
Q373 Chairman: Are you happy with
your name?
Professor Metcalf: Yes, and I
was just going to come to that. Originally, I think that you would
have been absolutely spot on that it should have been the Labour
Market Shortages Committee, but actually we gave been asked to
report on the issue of Romania and Bulgaria and the issue about
the Worker Registration Scheme and now the reviews of Tier 1 and
Tier 2 and dependants are less to do with labour shortages and
more to do with immigration. It seems to me that the title of
Migration Advisory Committee is correct.
Q374 Mr Clappison: We are told that
net migration running at the present level, and it may actually
well increase, will take the population, say of England, up from
just over 50 million to over 60 million by 2031 and that population
increase will be driven very largely by net migration. Can you
look at that and take into account the consequences of such a
significant population increase and the effect upon infrastructure
and housing needs and so forth?
Professor Metcalf: As I say, our
work plan is set by the Government and if we are asked to look
at it, we would. I have to say I am very sceptical about these
forecasts because all they do is take the present levels of net
immigration and project them forward 20 years.
Q375 Mr Clappison: They have been
going up recently. Since then, we understand that there are people
who are now coming back to this country from Europe when they
thought they were going to retire over there. They are returning
because of the collapse of the pound. It would well be that net
migration could increase since immigration is running at a very
high level and is continuing to do so?
Professor Metcalf: That is possible,
yes.
Q376 Margaret Moran: Can I take you
back to the intra-company transfer scheme, particularly again
relating to IT? I think when we were in Bangladesh we heard some
evidence from IT companies. I chair an IT committee here in Parliament.
What is very clear from large companies like IBM and Tata for
example is that they would actually prefer to recruit some of
the specialist niche IT skills that may be lacking from the UK.
Have you reviewed that? Do you ever give recommendations to the
Government of the sort that they were recommending, which is that
where there are very specific IT skills, there should be a more
strategic link with UK universities to fill those gaps rather
than them having to rely on shifting their people across from
India or elsewhere?
Professor Metcalf: We have tried
to do that in a way throughout our report, both in terms of the
issue of upskilling and the links now with the Commission for
Employment and Skills, our list being in a sense a guide for resources
allocation. On the specific point about IT, they are not on the
list because in fact when we discussed this with the Sector Skills
Council, they did not want to be on the shortage list because
basically they thought that many of the jobs could indeed be filled
from the UK. So the IT occupations are not on the shortage list.
The reason you are getting many people coming in is, as you rightly
point out—and Tata I think had 3,000 come in last year—that
they are coming in through the intra-company transfer route.
Q377 Gwyn Prosser: Professor Metcalf,
Mr Winnick and others have asked you about the possible mis-match
or disconnect between what someone described as your academic
studies and what is actually happening on the ground. Last November
when you published your list of shortage occupations, and I do
not have the full list in front of me, I recall that amongst a
list of a dozen occupations, and some of them are restated in
your brief and they look the natural sorts of subjects, is a shortage
of hovercraft pilots.
Professor Metcalf: Pilot officers.
Q378 Gwyn Prosser: I have been part
of that industry for some time before coming into this place.
I cannot think of a single hovercraft service in existence. What
is happening there?
Professor Metcalf: It is very
straightforward and we should have alluded to this in the report.
We use the standard occupation classifications and I am sorry
to be boring and technical but that is the way that the Office
of National Statistics classifies occupations. When they drew
up this classification some years ago, we no doubt had hovercraft
and the occupation is called " ship and hovercraft officers".
The main shortage when we did this list was of ships' officers.
I hear want you say about hovercraft.
Q379 Gwyn Prosser: Yes, there is
a shortage there.
Professor Metcalf: the occupation
still happens to be called "ship and hovercraft officers"
and we decided, possibly wrongly, to keep to the occupation title
as it appears in the national statistics. That is the reason.
As it happens, you put your finger on an occupation which may
very well have changed in the last little while, this one that
we are going to be reviewing by September to see whether or not
that should sill be on the list. The union, I think it is NUMAST—
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