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EU Enlargement: Free Movement of Workers

4.14 p.m.

Baroness Scotland of Asthal: My Lords, with the leave of the House, I shall now repeat a Statement made in another place by my right honourable friend the Home Secretary. The Statement is as follows:

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    scheme to replace work permits for accession nationals. This will place an obligation on all accession nationals to register where and for whom they are working. Their right to work in the UK will depend on their being issued with a registration certificate.

    "It will be incumbent on the employer to check that the employee has registered. This will provide a platform for a national ID scheme under which, in time, all non-UK nationals will be required to register. This will help us accurately to determine how many new workers are in Britain, in which sectors and types of employment. It will also assist with enforcement and inspection and will enable us to react immediately if, against all the odds, there are destabilising effects on the labour market.

    "It is important to emphasise that the Government retain full discretion to remove all or part of the concessions at any time. We will not hesitate to do so if necessary. We will in any case be tightening controls and dealing with those who evade their responsibility by the employment of clandestine workers. I know that all decent employers will want to join with us in co-operating and in rooting out those who exploit.

    "We will be putting before Parliament a set of affirmative regulations which will allow access to the labour market while ensuring our benefits system is not open to abuse.

    "This is a coherent and sensible package of measures, which builds on the principles and policies laid out by the Government over the past three years.

    "We believe that proper, legal, managed migration is good for Britain and fair to genuine workers from the accession countries. Whether they are plumbers or paediatricians they are welcome if they come here openly to work and contribute. At the same time it is clearly not right that people should be able to come here, fail to get a job, and enjoy access to the full range of public services and social security benefits.

    "Therefore, this is the second element of the package we are announcing today. Those wrongly believing that they can move here in order to claim benefits without working should be in no doubt that they cannot. They cannot draw down on benefits without contributing themselves to the rights and entitlements which should go hand in hand with the responsibilities and duties.

    "For two years, and possibly longer, we will require accession nationals to be able to support themselves. If they are unable to do so, they will lose any right of residence and will have to return to their own country.

    "My right honourable friend the Secretary of State for Work and Pensions will bring forward regulations to prevent access to benefits for those not working. My right honourable friend the Paymaster General will bring forward regulations to

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    prevent them from claiming child benefit. We will also restrict access to other benefits such as social housing.

    "This package reinforces the balanced approach to migration that I have spoken about, within a clear set of rules.

    "I reiterate: we welcome people, as we have throughout the centuries, to come to our country to work, to contribute and to be part of our society. We reject those, from wherever they come, who exploit our generosity.

    "This approach takes account of the simple reality that under the treaty of accession, no EU member state has the right to interfere with freedom of movement. The issue therefore, is on what basis people come to our country.

    "By taking these measures we will ensure that those arriving in Britain are able to work for their living, openly and honestly, not drawn into the sub-economy. Those who wish to find a job will be free to do so. Those who come for short periods of time will have the means to do so.

    "In this way we avoid expensive bureaucracy and at the same time protect ourselves from clandestine work and the exploitation of the sub-economy. This is the right approach for Britain in the 21st century: fair on ourselves; fair to our new partners; and tough on those who would abuse the system. I commend this solution to the House."

My Lords, that concludes the Statement.

4.24 p.m.

Baroness Anelay of St Johns: My Lords, as this is the first occasion on which I have faced the Minister across the Dispatch Box since a recent television programme on Channel 4, perhaps I may offer her my warm congratulations on being elected by Channel 4 and the Hansard Society as Peer of the Year.

I turn to the Statement. I thank the Minister for repeating the Statement made by her right honourable friend in another place a short while ago. Earlier today the Minister was fastidious in not giving any teasing snippets of information to my noble friend Lord Howell of Guildford in answer to his Question on related issues which might properly have been answered without encroaching on the Statement. I make no criticism; the Minister was most careful, and properly so, in the Answer she gave. However, her right honourable friend the Prime Minister was not quite so fastidious, in that he pre-empted some of the core information in the Statement by answers that he gave earlier today in a BBC radio phone-in programme. That, of course, just whetted our appetite.

The enlargement of the European Union is, indeed, not a concept that suddenly emerged over the past six weeks. As the noble Baroness said, it has been on the agenda for years. Britain's strategy for the free movement of labour, which impacts on British jobs and our public services, should have been clear, consistent and planned in advance. The Government have failed to address that imperative until recently.

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Today we learnt that the Government have finally agreed to adopt a policy of registration for work for migrants from the new accession countries. I give a general welcome to that announcement. However, as always we shall have to look very closely at the orders that come before the House, especially those that restrict benefits and social housing to ensure that the Government's policy does not have unintended consequences, especially for those migrants who have families living here with them.

I have always recognised that there are serious labour shortages in some sectors of the UK economy and that when they are filled by legal migrant workers there is a benefit to the economy from tax and national insurance that they pay, apart from the part they also play, quite rightly, in society in general.

The Minister used alliterative examples of plumbers and paediatricians. In practice, it is the agriculture and hospitality sectors that probably benefit most from migrant employees. However, I have some questions for the Minister about how the measures she has announced will be implemented.

The Statement refers consistently to new countries. Are all accession countries thereby covered within these measures, including both Malta and Cyprus, which I had thought would be exempt?

What about those from the new accession countries who are already working here legally on work permits? Does the time they have spent here count towards the qualifying period before they can claim benefits or do they start from point zero when they register under the new system?

Referring briefly again to registration, I note that the Statement says that it will be incumbent on the employer to check that the employee has registered. The Minister is right to point out that employers will be very keen to co-operate with the Government to ensure that the system is properly managed. What will be the penalty for an employer who fails to carry out that proper check? What will a proper check be defined as? What consultation has there been over the past week or so with the CBI on these matters? It will ensure that its members are disciplined properly but the CBI has great expertise which could have been fed into the Government in determining which systems can properly carry out such measures.

I am puzzled by the vagueness of the Government's policy, even at this stage, after the flurry of ministerial discussions last week. We are told in the Statement that for two years and possibly longer the Government will require accession nationals to be able to support themselves and not be eligible for social security benefits, child benefit and social housing. Why have the Government not yet determined the length of that period? What will influence their decision when they do let us know how long it will be?

The Prime Minister said this morning on the radio—and I quote the BBC quoting him:

    "If they can't support themselves, they will be put out of the country".

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What is the legal basis for that compulsory expulsion? Who will pay for their expulsion—central or local government or the previous employer? Since the migrant is presumably destitute, one wonders how he or she might be expected to pay for it.

Finally, I notice that the Government bring ID cards into the equation. They say that the information given to employers will provide a platform for a national ID cards scheme. For my last two questions I ask the final and very obvious ones: how; and, when?

4.30 p.m.

Lord Wallace of Saltaire: My Lords, I suppose I should declare an interest as someone who was employed as a part-time university teacher in the Czech Republic and Hungary between 1993 and 1996. I am happy to say that they did not impose an ID card on me or any of the other things that are proposed for the other way around.

We on these Benches give a half welcome to this Statement. It is a useful defence of legal migration, but it slides down towards accepting tabloid press campaigns against the Roma and others. We would like to have seen some reference in a Statement of this kind to the contribution which Poles, Czechs and Slovaks have made to Britain over the past three generations. Those of us who have spent a lot of our time in the north of England know very well that those who were forced to come here after the War—being caught on the wrong side—had often fought for us in the Second World War and their grandchildren continue to make a major contribution to the British economy.

It worries us that the press campaign against the Roma has produced such a response from the Government; and, as I suggested during Question Time earlier this afternoon, it continues to puzzle us that the Government are so robust in standing up to the BBC but so remarkably unrobust in their response to the Daily Mail, the Sun and others. I have noted the number of occasions in the past few weeks that the Daily Mail has picked out asylum seekers and others as being sources of social turmoil in Britain. That seems to be the kind of press campaign to which any Labour Government should be standing up, and I regret that the Prime Minister has failed to do so.

Do the Government have evidence on the scale of benefit abuse and benefit tourism, or is this an imagined problem—a small problem that has been blown up by the press into a large issue when the issue really is not there? Certainly, we may regret that many other European Union states have retreated from the principles of freedom of labour. We welcome the Government's reiteration that they are in favour of freedom of movement within the EU and the enlarged EU and that as these states join the EU, which we welcome, they should be entitled to freedom of movement as rapidly as possible.

I would love to ask the Government how they assess the net movement. We know very well of the large number of Poles, Czechs, Hungarians and others who come into Britain every year, work for short periods

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and go home again. That is not gross movement, it is net movement. Since we do not have very clear exit controls of people moving across the Channel, I am not clear how the Government will collect the figures.

However, what is new in the Statement is the workers registration scheme—a national identity card scheme for all non-UK nationals. Have the Government consulted about that? Will it apply to company directors, people working in banks or to university teachers? There are French, German and Greek nationals in my department at the London School of Economics where I teach. Will they need to have ID cards? Is this seen as the beginning of an extension of an ID card system to all people in employment in Britain? That seems to be the most significant part of the Statement; and it is that which we need to know most about.

4.34 p.m.

Baroness Scotland of Asthal: My Lords, I very warmly thank the noble Baroness, Lady Anelay, for her kind words. I should like to remind the House that two other noble Baronesses were nominated—the noble Baroness being one and the noble Baroness, Lady Williams, the other. I certainly celebrated that this House for the first time nominated three women on merit and not gender. So I very much congratulate the noble Baroness on being among that band.

Perhaps I may now turn to the questions asked by the noble Baroness. I thank her for the warmth of her welcome in relation to the Statement. The issue of genuine workers being able to take advantage of work here is very important. In the few weeks before we broke for the break, it was clear just how bad some of the consequences can be where illegal workers are exploited in a quite improper way.

I can reassure the noble Baroness that Malta and Cyprus are not included in the list. They have been exempt. None of the 15 EU members states is imposing restrictions on free movement of workers from Malta and Cyprus. That is because of their wealth—they are the two richest members of the 10 accession states, with approximately 70 to 75 per cent of the EU GDP average—their small size, and their historical links with some existing EU member states. Malta and Cyprus are both Commonwealth members, as the noble Baroness knows.

The United Kingdom, by opening up its labour market to registered workers from the A8—unlike other EU member states—is ensuring that those who come here to work will do so legally rather than illegally, paying taxes and national insurance rather than working in the black economy. That is a matter about which I know the noble Baroness has spoken in the past and it is something that we are absolutely determined to eradicate. We also expect reciprocal rights for British workers to work in the new member states.

The noble Baroness mentioned the shortages and the availability of workers in the agricultural and hospitality sectors. That is why our approach is to

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allow workers from the EU accession countries to work in any sector they choose. We have consulted very widely. The noble Baroness may know that both the CBI and the TUC are very much in favour and support the decision to open the UK labour market. The British Chamber of Commerce did so also. They made it clear to us that they would not support an arrangement which would either put on a quota or would mean that people would have to apply before they arrived here. We listened very carefully to that advice. We were very grateful that both the CBI and the TUC gave their whole-hearted support.

The noble Baroness asked about the two years or longer mentioned in the Statement. She will know that the arrangements as a result of the accession treaty mean that in the first two years we will be able to make regulations under the national law. Those could be extended for another three years to make it five years and/or could be extended further—if there were specific specialised causes of concern—into the seven-year period. It is those two years to which we refer in that part of the system.

Those people who come here legitimately and work well will be in a position to take the benefits that accrue to them. That will be made clear. I absolutely understand that the noble Baroness will want to look very carefully at the regulations to make sure that they accord with what is right and proper.

On the issue of identity cards, the noble Baroness and the House will recall that the Government have made clear our approach in relation to the introduction of ID cards. This will be incremental and is part of the work that we have already indicated that we wish to see.

Perhaps I may turn now to the questions raised by the noble Lord, Lord Wallace of Saltaire. I take great pleasure in agreeing with him about the real contribution that has been made by migrant workers in the past but particularly the Poles, the Czechs and those who have come over the years from the eastern European bloc. The noble Lord will remember that we were at the forefront in welcoming enlargement as being of a positive benefit.

I also take pleasure in confirming many of the points that were alluded to at Question Time earlier this afternoon. Britain has benefited hugely from migration. UK employment is at a record high. It is up by 1.7 million since the spring of 1997; the UK ILO unemployment is down by 0.6 million since the spring of 1997; our long-term unemployment is down by more than three-quarters since April 1997; and we have the lowest ILO unemployment rate among the G7 countries. It is one of the lowest ILO unemployment rates in the EU, being almost half that of France and Germany. Approximately 15 per cent of the UK trend economic growth depends on migration. Migrants make up 8 per cent of the population but generate 10 per cent of our total wealth. Migrants are substantial net contributors to the Exchequer. Studies show that, in 1999–2000, they paid 2.5 billion more in taxes than they consumed in benefits and services. We are in no doubt that they are a positive benefit. The noble Lords opposite should be in no doubt that the children of migrants are of benefit because their

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leader is one such person. If we look around this House—I do not include myself as I was born British—we know that we have all benefited from the richness that comes from migration to this country.

I would like to reassure the noble Lord that the difficulty that we have experienced concerning this matter is not a change. We have had to be absolutely practical in the way in which we deal with it. For the first time our system could potentially be abused: benefits could become a draw. We have no legitimate way of identifying benefit abuse in the past, and we are simply making sure that that will not occur in the future. We are using the registration system as a means of identifying how many people come here, where they go to and what the migration flows are. There is no indication that that will cause a difficulty.

Earlier this afternoon, the noble Lord said that similar stories and concerns about accession have been bandied about. He was right. We do not believe that this will be a problem; we have taken the course that was necessary in order to make sure that we do not experience the adverse consequences that others have feared. I hope that the noble Lord will be reassured. We take delight in promoting the benefits that we have seen. The Government are unable to dictate what the tabloid press prints in response to what they say. If only it were otherwise. That is the position that we are in.

This is a rational and appropriate response to the problems that we now face, and I hope the noble Lord will feel that he is able to be wholly congratulatory now instead of only partially so.

4.43 pm

Lord Clinton-Davis: My Lords, what discussions have taken place with the Refugee Council and like organisations? What proposals do the Government have? If a persuasive case is advanced by any of them, will the Government consider what they have to say positively? Will they make appropriate changes to the proposals that she has outlined today, if necessary?

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