Immigration and Social Security Co-ordination (EU Withdrawal) Bill

Written evidence submitted by Global Future (ISSB17)

1. About Global Future

Global Future is an independent think-tank, making the case for immigration and an open and vibrant Britain that looks out to the world and succeeds in it.

We have previously conducted research on the impact of ending free movement on public services, particularly social care and the NHS. We welcome the opportunity to submit evidence on this bill and the government’s plans for ending free movement of EU nationals.

2. Executive summary

Ending free movement would mark a dramatic shift for UK immigration policy and the British economy. Global Future is deeply concerned by the prospect of passing an immigration bill which leaves the entire shape and direction of post-Brexit immigration policy to be determined by the executive without full parliamentary scrutiny.

This is particularly true in light of the only statement of the government’s intentions for post-Brexit policy, the December White Paper, which contains proposals that are vague in many areas and concretely damaging in others.

The White Paper makes no proposals in areas where change is widely supported and clearly needed, including on family migration rules, asylum seekers’ work rights and immigration detention.

The central proposal to make EU migrants apply for skilled worker visas would cost employers £1.14bn in red tape over the first five years of the policy. A substantial proportion of this would be money churned from other parts of the government to the Home Office.

The skilled worker rules would lead to substantial net emigration of EU workers in the first five years of the policy, with severe effects on the ability of employers to maintain an adequate workforce. The White Paper proposals would exacerbate an already developing crisis in social care, potentially leading to 115,000 fewer care workers by 2026.

The temporary work visa proposed in the White Paper would struggle to attract migrants and be a poor fit for employers’ needs, whilst making those who did use it much less likely to integrate.

The bill does not contain any of the primary legislation needed to reduce the risk of large-scale, Windrush-style errors in the administration of the settled status scheme.

Global Future believes that the White Paper’s proposals lack crucial details, would come at significant cost to the UK and have not been adequately consulted on. A bill ending free movement should not be passed in advance of clearer and more satisfactory proposals for what will replace it.

3. Structure of the submission

Our evidence falls into two parts. The first (section 3) expresses our concerns about the immediate content and structure of the bill. Due to the nature of the proposed legislation, as will be explained below, this discussion is necessarily brief. The second part (sections 4-9) highlights the findings of Global Future research on the proposals contained in the government’s white paper on immigration, which accompanies the bill and was rightly the focus of parliamentary attention at second reading.

4. Executive powers in the bill

The bill in its present form has minimal substantive content beyond ending free movement rights for EU nationals. The entire shape of post-Brexit immigration policy is left to be determined by regulation with minimal parliamentary scrutiny.

Global Future has deep concerns about this model for making immigration policy. While some degree of executive flexibility is required for the ongoing management of a migration system, it is not appropriate for the Secretary of State to have total control over the design of new rules which will apply for the first time to EU citizens.

The government’s current plans for immigration policy are outlined in its White Paper of December 2018, but this document is vague in crucial areas and concretely damaging in others. A 12-month consultation with business and other stakeholders is ongoing, but we are concerned that this consultation is largely unstructured and will not, if the bill is passed in its current form, require any formal response from the government.

In these circumstances, Global Future’s view is that it is not appropriate to give a blank cheque to ministers to determine the direction of UK immigration policy.

5. The Immigration White Paper

The remainder of our evidence concerns the potential impact of the policies outlined in the government’s White Paper last year. We recommend to the committee our recent report, Closing the Door: The true cost of the Immigration White Paper , which examines these issues in greater detail.

Global Future’s overall position is that the White Paper outlines a policy in flat contradiction with the government’s own view of the evidence. The White Paper’s annexes detail the government’s projection that ending free movement will lower GDP by up to 0.9% and increase the budget deficit by as much as £4 billion by 2025, with damage only likely to compound over time. These figures are not referred to in the main body of the White Paper. It is concerning that the government is proposing to implement such a costly policy at all, let alone without explanation of what benefits it feels justify those costs and, due to the structure of the current bill, minimal parliamentary scrutiny of the policy details.

There are a number of areas in which changes to the existing immigration system have been widely discussed and have garnered cross-party support. None of the following areas saw any proposed change in the White Paper:

Reform of hostile (‘compliant’) environment policies, notably Right to Rent, beyond the temporary pause in data-sharing announced last year

Introduction of a time limit for immigration detention

Lifting the ban on asylum seekers working during the often lengthy processing of their claims

Commitments to extend refugee resettlement after the end of the Cameron government’s Vulnerable Persons Resettlement Scheme for Syrians

Changes to family migration rules to ease strict salary requirements preventing UK citizens living with their partners and children

All of these issues are ones the government should have addressed and which would be worthy subjects for amendments to the bill, to the extent permitted by its narrow scope.

The White Paper also makes a large number of commitments without detail in areas such as improving processing times, simplifying the sponsorship process and improving the accuracy of data-sharing activities. Ending free movement will be an unambiguous move towards a more complex immigration system and will create significant new burdens on the Home Office. In this context we are concerned that general commitments like these to improve the administration of the system are window-dressing that will ultimately be neglected. We would seek much greater clarity and consultation from the government and strong parliamentary oversight to ensure that they are actually delivered.

Global Future’s research has examined five areas of the White Paper in more detail, and our findings in these areas are discussed in the subsequent sections.

6. Administrative burdens on employers

Ending free movement through this bill and replacing it with a system like that envisaged in the White Paper would create enormous new administrative costs for employers seeking to hire migrant workers.

We have estimated the cost of the government’s proposals by applying the fees, charges and compliance costs associated with visa applications to the future number of EU migrants under projections published in the White Paper. These estimates are thus closely tied to the government’s own analysis of likely immigration flows. We do not model any changes in fees except where the government has explicitly committed to them, though in reality fees have usually seen annual increases above the inflation rate.

Our estimate is that the White Paper’s policy would create £1.14 billion in new costs to employers over the first five years of the new system. This overall cost includes charges payable to the Home Office, including sponsorship fees, visa application fees, the Immigration Skills Charge and Immigration Health Surcharge, as well as red tape costs of managing the application process and complying with Home Office bureaucratic requirements.

The figure encompasses employers in the public sector as well as private businesses. The employment profile of EU citizens in the UK suggests that just under 30% of the overall cost would be borne by the public sector, a total of £337 million over five years. This is a cost imposed by one part of government on another and the bulk of the figure is a pure churn of resources between different departments.

We have also produced an estimate of potential costs to the NHS if, as the government’s NHS Long Term Plan calls for, international recruitment is increased over its current levels in order to address staff shortages. These estimates are significantly more uncertain given that it is currently unclear how the NHS plans will interact with the government’s tightening of immigration rules. If the "step change" called for by the Long Term Plan is implemented, we estimate that NHS employers could face new costs of up to £589 million over five years to comply with the immigration bureaucracy. This does not include any costs for recruitment of international GPs.

Full details of these estimates can be found in our February report .

7. Impacts of a £30,000 salary threshold

The White Paper proposes to extend the salary threshold for non-EU work migrants, set at £30,000, to apply to future EU migration. The precise level of the salary threshold is the subject of an ongoing consultation, but our view is that it has long been clear that the £30,000 threshold is unworkable. This part of the government’s plans was rightly a subject of significant discussion at second reading.

Very limited analysis of EU immigration flows under the proposed system was published alongside the White Paper. By taking the figures that were published and information from the White Paper’s technical documentation, Global Future has been able to produce a more detailed breakdown of the impact of the £30,000 salary threshold.

The government’s plans are so restrictive that they would lead to substantial net emigration of EU citizens in the first five years of the new policy. Under the continuation of free movement, the White Paper’s modelling suggests net migration of EU workers from 2021 to 2025 of 190,000. The government’s policy would lead to net migration of -68,000 in the same period.

All categories of occupation would see fewer EU workers than under free movement - the change would not lead to better recruitment of the high-skilled, high-wage migrants the government says it wants to attract.

Some intermediate and lower-skilled occupations would see significant contraction in their EU workforce. This is likely to affect several industries where the majority of recent employment growth has come from European migration, meaning that businesses in these sectors could find it extremely difficult to maintain a functional workforce.

Contribution of EU migration to the workforce, 2021-2025

Under free movement

Under proposed policy

Managers, Directors and Senior Officials

12,043

4,042

Professional Occupations

28,567

13,806

Associate Professional and Technical Occupations

20,262

1,812

Administrative and Secretarial Occupations

13,116

-8,729

Skilled Trades Occupations

23,001

-10,306

Caring, Leisure and Other Service Occupations

15,366

-11,172

Sales and Customer Service Occupations

9,554

-6,711

Process, Plant and Machine Operatives

24,086

-18,006

Elementary Occupations

44,206

-33,228

Global Future’s view, in line with the findings of the Migration Advisory Committee and the White Paper’s own economic appraisal, is that the smaller workforce overall will worsen the UK’s economic prospects. In particular industries where the effects are concentrated, the disruption will be even more dramatic.

We would particularly highlight social care, where an acute staffing crisis is already developing. Social care providers have become increasingly reliant on EU workers in recent years, as the British workforce expands only slowly and non-EU workers have been locked out of the sector by immigration restrictions. Our previous research has found that subjecting EU workers to these same criteria could lead to 115,000 fewer social care staff by 2026 than under the continuation of free movement.

Ending free movement would pose a serious risk to the provision of adequate care. The sector urgently needs migration policy that will not adversely affect vital service provision. The White Paper notes the vulnerability of social care to the new skilled worker proposals, but does not propose any steps to mitigate these consequences. Our view is that there is little sign the government, if given carte blanche by the bill, will give sufficient consideration to this risk.

It is also important to note that the £30,000 salary threshold is not necessary to ensure that migrants make a positive contribution to the public finances. Parts of the White Paper seem to imply that this is the case. In fact a young single migrant needs to earn only a little over £10,000 a year to make a net fiscal contribution. The figure varies for different types of household, but even in a family with two parents and two children - where public service use is much higher - the adults need only earn about £22,500 each to make a net fiscal contribution.

More detail on the impact of ending free movement on social care can be found in our August report . A full discussion of the £30,000 threshold, its impacts and its misguided rationale can be found in Part Two of our February report .

8. Design of a temporary workers visa

To mitigate some of the effects of the high threshold, the White Paper proposes the creation of a temporary work scheme for lower-wage migrants. There are three areas of concern around this proposal.

First, the twelve month time limit would make these visas a poor fit for the needs of employers. Allowing for orientation and even minimal on-the-job training, plus the fact that many migrants will plan to leave somewhat early to avoid any risk of overstaying, means that the effective maximum employment period is about eleven months - or even as low as nine in sectors like social care, where more training is needed. This makes it difficult for employers to make plans for staff progression, and will mean higher recurring recruitment costs. Large construction projects, for example, might have to integrate multiple waves of migrant employees into the workforce over the course of two to three years. This kind of forced turnover is likely to be highly disruptive to business activity.

Second, the scheme as currently proposed is so restrictive that it may struggle to attract the workers the UK needs, given that EU citizens will still enjoy full free movement rights in 26 other states. Banning temporary workers from switching to another type of visa, even if they meet all its requirements, would make the visa unappealing to those hoping to use it as a step on the ladder towards higher-skilled work or higher education. The design of the twelve month ‘cooling off’ period would effectively rule out the kind of circular migration which workers in highly cyclical industries, like construction, may want to engage in. The White Paper proposes visa fees - without any discussion of the appropriate level to make the system viable - and the possibility of numerical caps, which could make the scheme chaotic and difficult to navigate, as was seen when Tier 2 caps were repeatedly hit in 2018.

Third, the temporary worker proposals would discourage integration and, as a result, damage social cohesion. Currently, more than 80% of EU migrants stay in the country for three years or more. An enforced 12-month time limit would greatly increase churn in communities. Strictly time-limited immigration status would make it difficult for migrants to access regular rental housing and financial services, given the new requirements for immigration status checks in these areas, increasing the likelihood of segregation. The limit would also remove any incentive for migrants to integrate, either in their communities or workplaces, since they are barred from settling or building a life in the country.

It is the ending of free movement, implemented through this bill, that pushes the government to propose this dangerous idea. Global Future’s view is that this scheme would exacerbate exactly the issues that those concerned about low-skilled migration express concern about, by all but ensuring that migrant workers will not integrate and that their employment will be precarious and transient.

9. The settled status scheme

There are significant doubts about the ability of the Home Office to deliver the settled status scheme with the required level of speed and fairness.

In the second trial phase, the Home Office made decisions on settled status applications at a rate of 363 per day. If it is to deal with the expected number of applications by June 2021, that rate would have to increase to almost 4,500 per day. When fully open the scheme will no doubt have a larger staff and financial base, but there is great reason for caution about whether the Home Office can increase the pace of decision-making more than twelve-fold without compromising the quality of decisions.

Our view is that the EU Settlement Scheme is already recreating the conditions that led to the Windrush scandal and that changing the immigration status of millions of people at a stroke is an extremely high-risk step. The risks associated with a no-deal exit are even more serious, due to the suddenness of the changes that will be introduced and the large number of people newly affected by compliant environment measures such as Right to Rent.

Mitigating these risks requires primary legislation - for example, to temporarily exempt EU nationals from employer and landlord checks in the case of no-deal and guarantee appeal rights for settled status applicants. The current bill abolishes free movement rights without making any of these provisions, significantly raising the likelihood of problems arising rapidly after the date of Brexit.

Adopting a declarative approach to settlement rights for EU citizens currently resident would lower the risks, but it would not eliminate them. Commonwealth citizens were given declarative legal status by the 1971 Immigration Act, but status without documentation is of limited value in the modern context of extensive in-country immigration checks. Many Windrush migrants were not protected from destitution by their legal status because of inadequate documentation.

This bill would immediately subject EU citizens to immigration checks by employers, landlords and banks long before many would register for documents and even, in the case of no deal, before it is logistically possible for them to obtain proof of status.

Global Future’s position is that ending free movement before ensuring that currently-resident EU citizens have both legal status and proof of that status is not sensible and risks creating serious problems for those residents.

Our full analysis of the Settlement Scheme and the multiple points at which problems are likely to arise, even for those who are granted settled status, can be found in Part Four of our February report .

10. International students

By ending free movement, this bill would immediately require students from EU countries to apply for visas under the existing Tier 4 system. Based on the current number of students in UK universities, this would amount to a £79.8 million annual barrier to universities attracting these students. It is very likely that this would lead to decreases in the number of EU students coming to the UK, particularly in combination with non-immigration measures relating to fees and student finance.

The White Paper setting out the government’s planned new system proposes minimal change to current policy. This is in spite of the fact that the UK higher education sector has started to become a less attractive destination for students, relative to competitors such as Canada and Australia, and that this trend will be exacerbated by the end of EU free movement.

Higher education stakeholders have consistently called for the introduction of a post-study work visa for graduates from UK universities. This would be consistent with other aspects of the existing work migration policy, such as the lower salary threshold for international students applying for Tier 2 visas, and would bring policy in line with other Anglosphere countries competing with the UK to attract students.

A full analysis of the benefits brought to the UK by international students, and the effects of ending free movement without countervailing measures to boost universities’ global competitiveness, can be found in Part Five of our February report .

11. Conclusion

Our research on the government’s White Paper proposals for the post-Brexit immigration system has led us to formulate eight recommendations.

The details of these can be seen in our February report examining the White Paper. They include exempting the NHS from visa fees, lowering the £30,000 salary threshold, exempting shortage jobs from any threshold and redesigning any temporary work scheme.

These are proposals which can be implemented within the framework of the government’s desire to end free movement.

At present, the only guide to the government’s intentions for post-Brexit migration policy are White Paper proposals which lack crucial details, would come at significant cost to the UK and have not been adequately consulted on.

In these circumstances, our position is that a bill to end free movement at the current time is premature. The bill should not be passed until the government has a clearer, more detailed vision for what will replace free movement, and parliament and stakeholders are able to adequately scrutinise it.

February 2019

 

Prepared 18th February 2019