83.In the year ending June 2017, an estimated 261,000 people migrated to the UK for work, comprising 46% of total immigration to the UK. Over the course of our inquiry, we have heard a wide variety of different views on the relationship between immigration and the economy. While business groups are adamant that the UK needs continued high levels of recruitment from abroad, there is considerable public concern that overall immigration levels are too high.
84.We received evidence from academics and economists about the overall benefits that immigration provided for economic growth and the public finances. We also heard from businesses and organisations about the need for recruitment from abroad, especially to secure top international talent, or to find employees in areas of skill shortages, or for jobs that local residents do not want to do. However we also heard concerns in the National Conversation about the impact of migration on the housing market and local public services, as well as real concern that immigration is being used to undermine local employment, wages, and terms and conditions. Despite this wide range of views, on the basis of the evidence we have heard and the work by British Future, we believe that it is possible to build more consensus on immigration and the economy, but there needs to be much stronger coordination between immigration and labour market policies.
85.The work of British Future suggests that the principle of contribution carries strong support, and the public are broadly in favour of people coming to the UK to contribute but are concerned about people coming to claim benefits. A study by University College London estimated that migrants coming to the UK since 2000 were 43% less likely to claim benefits or tax credits compared to the British-born workforce. The British Social Attitudes survey found that 37% think that EU citizens who are working and paying taxes in Britain should be able to access the same benefits as British citizens immediately or after one year, 24% think they should have access after three years and 30% after five years or more. Professor Ford told us:
[ … ] the public often regard the migration system, the citizenship system and the benefit system as like clubs that you pay in and contribute for a while and then you should be given the full rights and resources of the clubs.
86.The public need reassurance that the contributory principle is embedded in the immigration system to address concerns that some people might be attracted to the UK because of our system of welfare. As part of the Annual Migration Report which we have recommended, the Government should set out the details of the expected contributions and entitlements of new arrivals in the UK in the different immigration categories.
87.We note that there are a range of views on the potential trade-offs between immigration and global trade policy. We have not yet considered the options for a specific migration policy towards EEA citizens post-Brexit, but expect to do so when the Government publishes its forthcoming immigration White Paper.
88.Throughout our inquiry we heard of the importance of high-skilled workers, especially for internationally competitive roles, and the need to continue to attract top talent. However, the definitions of high- and low-skilled are not well understood. In the current rules for non-EEA migration such definitions are based on salary thresholds. As a result, however, there are many public sector jobs which the majority of people consider to be high skilled—including nursing and teaching—which do not pay a high enough wage to meet the threshold for a high-skilled visa. Dr Alan Renwick observed from his work on the Citizens’ Assembly that the public do not fully understand the categorisation of high- and low-skilled and that many people were surprised to find out that highly valued professions are defined in the immigration system as low-skilled.
89.The Government has stated that it wants the post-Brexit immigration system to “continue to attract the brightest and the best” to the UK but, as Professor Jonathan Portes has observed, “migration is not just a matter of the UK choosing migrants; migrants have to choose us.” Since the 2016 referendum, as the value of the pound has decreased and uncertainty has grown about future residency rules for new EU arrivals, immigration from the EU has declined. This is particularly evident in certain professions. The number of applications from EU nurses has fallen significantly over the last year. Statistics from the Nursing and Midwifery Council show 1,107 nurses from other EU countries joined the NMC’s register in the 12 months ending September 2017 compared to 10,178 in the preceding year; while the number of such nurses that left the UK rose by 67%.
90.We support the idea that the immigration system should treat different skills differently. There is also clear public support for the continued supply of high-skilled (not just highly-paid) workers to provide skills that are needed in the economy. Immigration rules should allow UK businesses and organisations easily to attract top talent in internationally competitive fields, and restrictions and controls should focus more on low-skilled migration.
91.In addition to key public sector roles, there are many other low-paid parts of the economy where there are skills shortages among the UK resident population. For example, Neil Carberry, Managing Director of People and Infrastructure at the CBI, has warned about shortages of skilled technicians in the manufacturing sector. At the same time, we heard concerns that easy recruitment from abroad is being used as an excuse not to invest in training at home. For example, London First stressed that “our economy benefits greatly from semi-skilled and low paid but experienced workers who augment the local workforce, particularly in industries such as construction and hospitality”. However, they warned against relying on migrant labour at the expense of improving the UK skills system and called for “a stronger pipeline of home-grown talent with the right employability and technical skills.” London First observe that 30% of construction workers in London are EU citizens yet the London Assembly found that London is the worst performing region for apprenticeships in the construction sector. British Future report that attendees at the citizens’ panels and stakeholder meetings raised the issue of skills and training for those living in the UK with both groups suggesting that not enough was being done to equip local school-leavers with the skills they need to find work and that, as a consequence, employers were more likely to turn abroad to fill vacancies. Lack of employer investment in training and over-reliance by business on migrant workers was a particularly strong theme of the discussions in North Tyneside.
92.We recommend that policy on immigration for work purposes be linked to strategies for improving investment in domestic skills and training with the target of reducing dependency on migrant labour. For skilled jobs where there are shortages or high levels of recruitment from abroad, there should be a joint plan on skills and migration set out in the Annual Migration Report. Government should draw up a three-year rolling plan with businesses, trade unions, training sectors, devolved governments and local councils which identifies the level of immigration needed to fill skills gaps in the short term, but only alongside a clear vision of and commitment to investment to increase domestic training and skills in sectors and regions where this is needed. For example, nurses are currently categorised as a ‘shortage occupation’ for the purposes of non-EU immigration policy. In the case of nursing, easier access to labour in the short-term should be accompanied by a plan to increase nurse training places and domestic recruitment over the next three years. In the cases of, for example, computing skills and construction, the awarding of work permits should be linked to sectoral agreements setting out commitments to training.
93.CIPD survey data of employers found that the most commonly mentioned reason for employing newly arrived EU citizens was an inadequate supply of UK-born labour, especially for low-skilled roles. The CIPD also found recognition amongst some employers that the strong labour supply from the EU had substituted efforts to recruit from a wider range of channels for UK workers such as ex-offenders, older workers and women returners.
94.Some low-paid, low-skilled sectors where it is hard to recruit, such as social care and the food industry, rely particularly heavily on immigration. The National Conversation found far greater concern about low skilled migration, however there was support for ‘low-skilled workers’ in key sectors such as health and social care and in those sectors in which the public do not typically wish to work, such as seasonal farm work.
95.Until their closure in December 2013 the Government operated seasonal immigration programmes for those employed in the agriculture and food production industries. The Migration Advisory Committee reported that most parties had gained from the Seasonal Agricultural Workers Scheme (SAWS). It found that it was well managed by the Home Office, growers got a supply of efficient labour, migrants received a good wage, British workers were not displaced and integration issues were limited as SAWS workers usually lived on the farm. The seasonal programmes were closed as it became clear that demand for workers could be met from the EU under freedom of movement, particularly once restrictions on the number of Bulgarian and Romanian migrants allowed to come to the UK were lifted on 1 January 2014.
96.The previous Committee heard from employers in the agriculture sector who said that they were unable to recruit sufficient low skilled UK workers—particularly for seasonal work moving from farm to farm. Sarah Boparan from HOPS Labour Solutions described a back-to-work scheme with a guaranteed job, accommodation and transport and a qualification at the end of it. She explained that she had managed to get 100 people on to the scheme, five of whom turned up of whom four left after five weeks. We heard that the problem was not limited to UK workers. Beverley Dixon, Group HR Director at G’s Group, said in January 2016, they had 750 EU applicants to their website for 900 jobs but in 2017 it had fallen to 350. The employers called for the reintroduction of a seasonal agricultural workers scheme and for it to be open to workers from both within and outside the EU.
97.The Government should consider a new Seasonal Agricultural Workers Scheme as there is already evidence that access to UK and EEA labour markets is insufficient to meet current demand. The objective of any such scheme would be to meet labour and skills shortages in the sector.
98.We also received evidence of concerns that some employers in low-skilled sectors of the economy exploit migrant workers, breaching minimum wage and employment legislation, thereby undercutting the rights and wages of UK labour. The TUC told us that employers taking advantage of the low level of employment regulation and enforcement of employment rules was a source of concern for many of their members. Jill Rutter noted that the National Conversation had identified particular concerns about wider undercutting of terms and conditions in certain areas such as Chesterfield, Northampton and parts of Scotland. In Chesterfield, where Sports Direct is based, they found that anxieties about job displacement and wage depression were “more strongly articulated than in almost all other places the National Conversation has visited”. Some panellists suggested that when Sports Direct set up its distribution centre there, it promised jobs to local people but the company then used an employment agency to recruit many of its staff directly from Poland.
99.For low skilled jobs where recruitment is heavily reliant on workers from abroad, the MAC should assess how far this is because of poor pay, terms and conditions, agency working or location, and therefore what kinds of new restrictions and controls are needed to prevent undercutting and exploitation.
100.Following concerns that exploitation and abuse in the labour market were not being sufficiently tackled, the Government extended the remit of the Gangmasters Licensing Authority (GLA), renamed it the Gangmasters and Labour Abuse Authority (GLAA), and provided an addition £2 million for its budget. On 30 April 2017, the provisions to give the GLAA’s Labour Abuse Prevention Officers (LAPOs) powers under the Police and Crime Evidence Act 1984 came into force. This means that LAPOs can use these powers to investigate labour market offences, including modern slavery across the economy. Labour market offences are offences under the following legislation: Employment Agencies Act 1973, the National Minimum Wage Act 1998, the Gangmasters (Licensing) Act 2004 and Parts 1 and 2 of the Modern Slavery Act 2015.
101.The Home Office has estimated that there are 13,000 victims of modern slavery in the UK a figure the Chief Executive of the GLAA viewed as “far too modest”. Since its powers were extended to all sectors of the economy, the GLAA has opened more than 200 new cases. Arrests have been made in sectors such as catering, cleaning, construction and textiles for human trafficking and gangmaster offences and non-payment of the minimum wage.
102.We welcome the provision of further powers and resources to the Gangmasters and Labour Abuse Authority (GLAA) (formerly the Gangmasters Licensing Authority). However, we recommend the Government considers further reforms to strengthen the GLAA and expand its remit, including considering an increase in regulated sectors where GLAA licences are required. We also recommend that enforcement of labour market standards is included in the Annual Migration Report, so that Parliament can consider the efficacy of the GLAA reforms and monitor its activities.
86 Written evidence submitted by the New Economics Foundation , Written evidence submitted by Professor Jonathan Portes 
87 Written evidence submitted by Zari Restaurant , ARM , London Chamber of Commerce and Industry , City of London Corporation , UK Interactive Entertainment , Cancer Research UK 
88 British Future and Hope not Hate, National Conversation on Immigration: An interim report to the Home Affairs Committee, January 2018
89 University College London, , 5 November 2014
90 NatCen Social Research, , 2014 Edition
91 Oral evidence taken on , HC (2017–19) 500, Q38
92 Financial Times, , 16 March 2017
93 Oral evidence taken on , HC (2017–19) 500, Q12; the basic metric the Government uses to categorise skill level for non-EEA migration is a salary threshold of £30,000, though occupations may be exempt from this criteria if they are included in the Shortage Occupation List.
94 www.gov.uk, , January 2017; The UK in a changing Europe, 10 April 2017
95 Daily Telegraph, 2 November 2017
96 Written evidence submitted by London First 
97 Financial Times, , 16 March 2017; London Assembly, , January 2017
98 British Future and Hope not Hate, National Conversation on Immigration: An interim report to the Home Affairs Committee, January 2018
99 Written evidence submitted by CIPD 
100 Written evidence submitted by CIPD 
101 The two schemes were the Seasonal Agricultural Workers Scheme and a Sector based scheme for food production
102 Migration Advisory Committee, , May 2013
103 Oral evidence taken on , HC (2016–17) 864, Q181
104 Oral evidence taken on , HC (2016–17) 864, Q176
105 Oral evidence taken on , HC (2016–17) 864, Qq 161-215
106 Written evidence submitted by the TUC 
107 Oral evidence taken on , HC (2017–19) 500, Q39
108 British Future and Hope not Hate, National Conversation on Immigration: An interim report to the Home Affairs Committee, January 2018
109 The Times, , 23 October 2017
12 January 2018