Examination of Witnesses (Questions 96
- 99)
TUESDAY 16 OCTOBER 2007
Ms Susan Anderson, Mr Neil Carberry and Mr William
Simpson
Q96 Chairman:
Good afternoon. I think the faces I see are somewhat familiar.
We are pleased to see you here again and most grateful to you
for coming along to help us. I wonder if you could introduce your
colleagues
Ms Anderson: Just to remind you, I am Susan
Anderson. I deal with employment, education and skills issues
at the CBI. I will allow my colleagues to introduce themselves.
Mr Carberry: I am Neil Carberry. I work for
Susan. I am head of pensions and employment policy at the CBI.
I am also the CBI's representative on the Migration Impact Forum
which has recently been set up.
Mr Simpson: I am William Simpson. I am a senior
economist at the CBI and have been for the last three years.
Q97 Chairman:
Thank you very much indeed. Your written evidence suggests that
immigration is helping firms to address skills shortages in the
short term but that in the longer term the sustainable business
solution is to strengthen the skills profile of the domestic workforce.
Does not the availability of migrant labour reduce the employer's
incentive to invest in training of British workers? In other words,
it seems to me that there is a danger that there will always be
a short term and there will not be a long term.
Ms Anderson: We can understand that concern.
I think it might be a reasonable working assumption but the evidence
is that it has not happened in practice. Although we cannot be
complacent, employment continues to remain strong, unemployment
has not risen and employer spend on training has not declined.
If we look at employer spend on training, it has risen over the
last six years or so from about £23.5 billion to £33
billion for the UK as a whole, so employer spend on training is
holding up very well. In the absence of migrant workers, we may
have seen fewer workers on incapacity benefit. I think we now
have about 2.5 million workers on incapacity benefit. About one
million of those would say they would like to work. We have also
seen a slight increase in the number of 16-17 year olds who are
not in education and training (the so-called "NEET"
group). That is now around 126,000. It has been rising. It was
6% in 1994 and the last figures that we have real evidence for
was around 9.5% in 2005. It is undoubtedly the case that there
has been some impact on the unemployed, getting those more-difficult-to-place
unemployed into jobs (for example, ex-offenders or those with
health problems, particularly mental health problems), but there
is no evidence that it has led employers to reduce their spending
on training of the existing workforce.
Q98 Lord Vallance of Tummel:
What is the role of immigration in addressing staff shortages
in occupations which require relatively low skills? Are we likely
to see a continuing increase in the share of low-paid jobs held
by migrant workers? Specifically, what are your views on the Government's
decision to phase out low-skilled migration programmes for migrant
workers outside the European Union?
Ms Anderson: My colleague Neil will deal with
the migrant workers low-skilled schemes. For us, we are seeing
some interesting trends. If you look at exhibit 1 in our evidence,
we are seeing both the demand for unskilled and skilled staff
from our members, so that it is not true to say when we are looking
at the new EU states, the A8 states, that companies are only looking
for unskilled staff. There has been a significant rise in the
number looking for unskilled but we are also seeing rises in skilled,
not only from the A8 countries but also from the old EU states.
I think there is a demand that is particularly strong in sectors
such as retail, hospitality and in parts of construction, where
we are seeing still quite a strong demand for unskilled but I
do not think we should ignore the fact that we are also looking
for skilled staff as well.
Mr Carberry: A lot of the extra EU low-skilled
migration programmes date from before the 2004 enlargement—the
sector-based scheme and so forth. It is not strictly the case
that the Government will phase those out. Tier 3, of course, exists
within the new points-based system; it is just not being used
yet. We have supported that decision because, of course, we have
placed controls on workers coming in from Bulgaria and Romania,
and on the basis of the principle of free movement we support
the Government's decision that the first place to look for these
workers should be within the European Union, including Bulgaria
and Romania in due course, and then, on the basis of an assessment
of demand in the economy at the due time, the Migration Advisory
Committee will be able to advise the opening up of tier 3 if it
is necessary.
Q99 Lord Vallance of Tummel:
I do not quite have an understanding of the answer to the longer-term
question, whether you believe these are trends that are going
to continue in the long term or not.
Ms Anderson: I think we would anticipate that
while the economy is still in very good shape and is continuing
to grow, we would see a demand for migrant workers from low- and
indeed high-skilled workers continue. But quite whether we will
see quite the steep rise that we have seen in the last few years
is a matter of some uncertainty.
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