Examination of Witnesses (Questions 140
- 157)
TUESDAY 23 OCTOBER 2007
Mr Peter Kendall, Mr Richard George, Mr Tom Hadley
and Mr Stephen Ratcliffe
Q140 Lord Vallance of Tummel:
The issue about relative earnings and employment conditions as
between self-employed and those who are employees?
Mr Ratcliffe: Obviously, those who are self-employed
are getting higher gross pay, probably about 10% higher. It is
probably worth saying that the industry has a working rule agreement,
an agreement which we operate and negotiate with the three principal
construction trade unions, UNITE and UCATT being the two main
ones. It is a three-year agreement which covers pay, conditions,
how much health and safety equipment we will pay for, holiday
pay and this sort of thing. Certainly within Britain and north
of the M62, people tend to follow this working rule agreement
almost to the letter. The further south you come, it is more of
a free market, but certainly given the skill shortages at the
moment we are seeing people pay more than the working rule agreement
rate rather than less. Where I concede that there is a problem
is in this grey economy, where I can envisage people coming in
as self-employed, maybe from Romania or wherever, who are working
for very small companies and who may well be vulnerable. If someone
is working on a typical construction site in London, they will
be treated as indigenous workers would be treated and they will
be seen to be treated that way.
Q141 Lord Turner of Ecchinswell:
I would like to ask a question of Mr Hadley from the point of
view of recruitment and employment overall, but I am very happy
if the others want to come in for the particular sectors, because
what I am trying to understand is whether the dynamics of what
is going on are different by sector. So the first question is
a point of information, where are you most active by sector, but
also where do you think are the highest proportions of migrants?
Is it in construction, is it in catering, is it in social care
or is it in agriculture? Then the follow-on question is, wherever
it is, is the same thing going on or is there a difference? What
I mean by that is, it is possible to imagine in the agricultural
sector that the SAW Scheme has relatively little impact on the
local labour market because if these people did not come and pick
the fruit here, the fruit that we produce here would be produced
somewhere else and, as it were, the produce would move rather
than the labourers move. It is just two different ways of moving
things around. But that is not true in construction. If you are
going to build a house here, you are going to build a house here;
you do not import a built house from Poland. So if we did not
have that flow of people coming into construction, what would
happen? Would the price of their wages go up and we still get
them, or would the houses just not be built, in the same way that
we are arguing the fruit would not be gathered, and does that
vary between construction, catering, social care and agriculture?
Would the adjustment be different in different sectors?
Mr Hadley: Perhaps I could start with the first
question, which was where are our members most active, and it
is clearly where there is a shortage almost of candidates for
particular jobs. It is in markets like construction—a big
one is drivers, for example, that is where there have been proactive
campaigns in other countries to recruit people and bring them
over because there is a particular need. Social care is a big
area of activity where it is genuinely very hard to get enough
people to come forward for the particular positions. We mentioned
hotel and catering, which is an on-going need, but things like
driving and social care are some of the ones where there would
almost be proactive international recruitment campaigns rather
than just trying to recruit people who happen to be in the country.
So that is some of the areas that are the most active. IT is an
interesting one because although there are a lot of people coming
out of university with IT skills the feedback from recruitment
professionals in that sector is that people have not got the right
skills and that is where we can perhaps do more as an industry
to highlight to people the specific skills that employers are
looking for and that people are not having at the moment. That
is where we are most active. The second part of the question alludes
to almost the displacement and are migrant workers just a form
of cheap labour? We take that point head-on: the feedback from
our members is no and before countries became members of the EU
there was an on-going massive demand and for us it has been a
real boon in terms of having a candidate flow coming in. So it
is not really seen as a form of cheap labour.
Q142 Lord Turner of Ecchinswell:
Let me just ask a question of you. Suppose you have a restaurant
and you have a demand for waitresses. If you could not supply
that with migrant workers, then would they just have to pay more
or are you saying the job would not exist at all and the restaurant
would not exist at all? Would the waiting still occur at a higher
price or would it just not exist?
Mr Hadley: It would vary. Let me be clear, for
our members the more pay you can get for the person you are sending
through, the better; so, often the issue is how much is an employer
willing to pay for a particular job. The feedback from our members
is that people are not discriminating or imposing. But you are
right: if there was not that influx, then people would have to
look very carefully at the pay rates they are offering. Social
care is a good example, even within the NHS where you know there
have been very tightly regulated pay levels for agency workers
now. Sometimes in a very specific niche area where there is a
skills need you have to look beyond what has been agreed and there
is that kind of flexibility that we do need to build into it.
I would say, therefore, that you would have to increase pay rates
to some extent to recruit people if you could not do it, but whether
a small business could afford to do that is another question.
Mr Kendall: Can I make one comment about Lord
Turner's comment about whether we would have the production in
the UK at all? What I am really worried about is all the on-going
processing as well, the add-on industries. If the SAW Scheme is
wound up as projected at the moment—I give an example of
Wilkins which is the producer of the Tiptree jams and products
from Essex.
Q143 Chairman:
My old constituency.
Mr Kendall: They have many people employed throughout
the year who process the vegetables and the fruit that have been
gathered during the critical growing season, and that would be
something that I think we would lose if we lost the SAW Scheme.
In defence of the SAW Scheme as well, I think it has less impact
on the overall economy as regards housing, education and health
et cetera, because it is a temporary issue; and when I think of
some of the challenges we face as a global society now, producing
that agricultural product here in the UK and having access to
that labour temporarily, is a critical part of our industry.
Mr Ratcliffe: Could I just make a point on the
construction side? Certainly, wage rates are going up. We have
a working rule agreement as I mentioned before and looking at
settlements since 2000 they have been consistently higher than
RPI, so there is an adjustment there to try and attract more people
into the industry. Just to pick you up on your point about importing
the house from Europe; that is quite feasible but it is a question
of economics as to whether it is cheaper. Certainly in Catterick
they are doing some military accommodation up there and all the
bathrooms are simply transported in, having been made in a factory.
So certainly one of the responses to skills shortages will be
more off-site prefabrication; it is an idea which is catching
on quite nicely in the industry.
Q144 Lord Turner of Ecchinswell:
That might be quite good for the productivity of the economy.
Mr Ratcliffe: Indeed.
Lord Layard: I would like your reaction
to a different theory about this and that is that rather than
these are shortage areas these are areas to which the migrants
are suited, and I come to that from thinking about where do British
students work? They do not work in the shortage areas, they work
in areas which they are suited to. It is very easy for them just
to walk into a restaurant and become a waiter and so on, so I
think this notion that these people are plugging particular shortages
is not right. It is ordinary supply and demand at work and the
characteristics of the supply are determining to a large extent
where the people are going.
Q145 Chairman:
We are here to get your answers so let us have your reaction to
that.
Mr Hadley: For recruiters they do not really
mind where people are coming from as long as they can fill a particular
need, but I would say that there are some sectors where we do
think there is a genuine shortage and people are willing to come
to the UK to fill them. Social care is a good example, social
care and domiciliary care. We just cannot get enough people on
our books to fill the need and part of it is that the pay is actually
quite low and is a factor possibly. But there is a level of skill
that you need, it is not something that a student would just go
into for the summer, you do need a level of skill and people are
coming up with those skills. Our concern is that as the standard
of living goes up across Europe will people still be prepared
to work for what is relatively low pay in what I believe is actually
quite a highly skilled sector, social care, which is a whole other
debate. I take your point but I think there are particular sectors
where there is a skill match that is happening.
Mr Ratcliffe: From a construction point of view,
you want to take the people who are competent and have got good
health and safety awareness. I mean, we would be rather alarmed
at taking a student onto a site if he had not had proper health
and safety training. There is a card called the construction skills
certification of skills card, the CSCS card, which everybody has
to have as a passport to get onto certainly a major site, and
that is increasingly percolating throughout the industry. All
the experience we have from people coming in from Poland and elsewhere,
despite some of the language difficulties, is that these people
are very skilled, very competent, and site induction procedures
are now done in Polish and in 12 other languages—we have
a DVD. We would therefore be rather worried about having young
students simply coming along.
Lord Layard: It was just an illustration;
that explains that particular phenomenon.
Q146 Chairman:
Do either of you want to say something?
Mr Kendall: Other than the fact that we have
seen a massive increase in the use of poly-tunnels and increased
production of vegetables and fruits under those sorts of conditions,
which I think has extended the growing season and has done a fantastic
job of avoiding imports and providing nutritious, healthy diet
aspects. Although we do draw a number of UK students, there are
not enough. The SAW Scheme has been around for a long time and
even Lord Rooker, as part of the Concordia Scheme, tells how when
he was a student he worked picking raspberries up in Scotland.
So it has been using domestic students as well as migrant students.
But as we expand domestic production in certain areas we want
to have that flexibility to pull in students from outside the
EU.
Q147 Lord Kingsdown:
Let me start off by giving some evidence, by saying that I live
in the North Kent fruit belt and I have watched this fruit-picking
going on through the summer. It is extremely interesting how there
is never a shortage when they are wanted, but whether they are
immigrant students or locals is very hard to say. It varies from
day to day, but the people turn up for the work and I will tell
you why they do: if you are a good cherry-picker, you can earn
£60 a day and, for a Polish student, that is serious money.
Somehow, as I see it, the system works. But it is not for me to
hold forth about the system; it is for me to ask a question about
it, if I may, and this is probably one for the REC. Do employers
use agencies mostly for workers in general or for migrant workers
in particular? Do they specify what they want? Do some employers
express a preference for certain nationalities of workers and
if so why?
Mr Hadley: I will take the second one first,
if I may, because we have had isolated cases of agencies who might
put an advert just in Polish. Our employer clients are saying
that they will ask colleagues—"the last blokes you
sent me were great, we would like more"—and of course
we say that you cannot do that. So there is the odd demand for
that. Our view at the REC and among quite a lot of our members
is that it is not about Polish workers. One thing that any migrant
workers do bring is they are people who have made the effort to
come. It is a big deal to come and live in a different country,
to leave your family and come. They are more likely to be the
people in some way who have got an attitude which is can-do—"I
am going to go for it"—and I think if you look at the
States, it is the same. The feedback from our sister federation
in the US is that migrant workers by definition have a relatively
positive attitude to work. We were talking about skills a moment
ago. I would almost say that sometimes in the UK you almost feel
there is an attitude gap rather than a skills gap. That might
be a bit sensitive at the moment but there is a feeling that people
will turn up on the assignment on time—which if you are
an agency is a killer. If you put somebody out on an assignment
and they do not turn up, that is a nightmare for you, you will
not get paid as an agency. People are not actually demanding but
people are recognising that migrant workers in the UK have brought
something to the party and a lot of it is not just the skills,
it is a relatively positive attitude to work which certainly our
members have welcomed and the employers that they serve have certainly
welcomed. So that is something that we have certainly found. Can
you just remind me of the first part of your question?
Q148 Lord Kingsdown:
The first part of it was about employers who use agencies—do
they specifically ask for migrant workers or workers in general?
Mr Hadley: No, they would not do that, they
would ask for workers in general. What is interesting though is
that in some sectors where there is a real shortage—and
I use the example of welders, one of our members was tasked with
finding 100 welders, it might even have been more. How do you
do that? You try to do it in the UK but you could not, so I know
they were looking at a proactive recruitment campaign across Europe,
going to jobs fairs and going down that road. The employer wanted
100 welders and it was how you sourced them, but there are no
agencies that would just specialise in that although increasingly
a number of agencies will have links with agencies in other countries.
Sometimes they will set up overseas, so you get things working
in that respect, but you do not get a specific demand in our experience
for workers from one place.
Mr Kendall: Could I just make a brief reference
to Lord Kingsdown's comment that the system works? The problem
for us in the NFU is that the system is changing and from having
a system where the SAW Scheme allowed migrant workers from outside
the EU, from next year it will be 100% having to be sourced from
Bulgaria and Romania; and, as we see the Polish economy changing
and the dynamics changing, we are finding it a great challenge
to only source the migrant labour from within two countries and
not having the access to these seasonal agricultural workers from
outside the EU. So although the system works and it has been a
great success for all the points I have championed—the SAW
Scheme has delivered exactly as you have identified in the past—we
believe that there is a growing dynamism with some of these agricultural
incentives and we want to have access to migrant labour from outside
the EU and not just be tied to Bulgaria and Romania from next
year onwards.
Q149 Lord Lamont of Lerwick:
This is a question to be addressed in general to all of you and
I apologise that I may have to leave before all of you have answered,
but we really want the answer for the record rather than to me.
Do the characteristics, qualifications and motivations of the
A8 workers differ from those of other migrants and British workers
and what is your assessment of the expected duration of A8 workers
staying in the UK?
Mr Ratcliffe: Speaking for construction, the
anecdotal evidence coming from our members is that there is a
very strong work ethic amongst migrant workers. They have a good
standard of education and a strong motivation to work and to earn
good pay. Indeed, I would say that the qualifications of migrants
that have been coming across from Eastern Europe is comparable
with, if not better than, some of the indigenous workers. In terms
of duration of stay, I simply do not have any evidence of duration.
Again, anecdotally, we would quite often find that people are
coming for a year or so and then some of them are going back,
but we simply do not have any information.
Mr Hadley: In terms of the qualifications, I
think the big challenge or the big development we are seeing is
people coming in who are not making the most of the qualifications
that they do have. They are working in relatively low-skilled
jobs and we are now starting to see a dynamic happening, and that
is perhaps one of the benefits that we are seeing. People are
certainly accessing the labour market through temporary work,
for example, doing relatively low-skilled jobs, they are starting
to develop their language skills and they are now being placed
into jobs which are much more in tune with their qualifications.
Again, it is to the advantage of an agency to be able to do that
because you obviously get more commission, but it is something
that we are seeing as a benefit. As we have heard, there are some
very good qualifications and in terms of duration of stay again
there is no actual data but we do see a very high churn rate in
terms of people registering with agencies which indicates that
people are looking for different jobs and are progressing, but
also going back. That is one thing that perhaps the figures mask,
that a lot of people do come over for three months assignments,
six months assignments, earn a bit of money, get a feel for it
and go back. The issue with the registration scheme is that it
perhaps masks how many people are coming over and then leaving.
But certainly the feedback from our members is that there is a
fairly big churn and people are on your agency's books and then
leaving.
Mr Kendall: From the farming point of view,
I would say that the A8 countries are increasingly being seen
the same way as British workers are. However, we are finding them
moving on to other jobs and they are looking to see the potential
for other work within the UK, whereas when I refer back to the
SAW Scheme—and I have touched on it a lot—those people
come for a finite period of time and tend to be pretty motivated
by earning a lot of money, as we have heard already, in a short
period of time.
Chairman: Lord Lamont got his question
in and got his answers as well.
Lord Lamont of Lerwick: Like an American
congressman, I must go now.
Q150 Chairman:
UCATT has said in its evidence that migrants, including those
provided by recruitment agencies and businesses, are sometimes
paid less and employed under worse employment conditions than
British workers. Would you accept that or do you have a comment
on that?
Mr Hadley: We would not accept that actually,
because it would be discrimination for an agency to pay less just
because of their nationality. We have to recognise that the way
agencies work is they will hustle to get the most money that they
can for their workers. It is to their advantage to do so, so pay
rates do vary. But certainly, if you are comparing agency worker
with agency worker, that is not the case and, as I say, it has
certainly not been seen as a form of cheap labour. It is a way
of getting good workers who would earn fair pay, so that I would
not accept. I think what UCATT are perhaps referring to is potentially
our agency workers are paid less than a permanent employee in
the company that they are going to, possibly, and our line on
that would be that agency work is different from permanent work.
I mean, I would be upset if an agency worker came and sat next
to me and was earning the same pay as me, when I have been at
that company for five years plus. So there are sometimes differences
in pay rates between agency workers and permanent employees, and
that is partly to do with the fact that it is a very different
working model. That is something that we can be quite bullish
about. Let us not forget that one of the benefits of agency work
is the fluidity it gives and it works both ways; an agency worker
does move very quickly between agencies and I mentioned there
is a high churn. Just look at the number of agencies around now.
You can go to another agency and try and get a better pay rate,
try and progress within the labour market, and that is one benefit
of our flexible labour market, as we see it. So, yes, now and
again you can earn less pay than a permanent employee in the place
of work that you go to, but there are lots of opportunities for
progression and for accessing the labour market. We do have statistics
we can send you afterwards in terms of the number of temporary
assignments which is a good way in for migrant workers, and a
number of those assignments will lead to permanent employment
subsequently and that is one thing we have to value in the UK
rather than denigrate. It is the way we can provide access into
the labour market through temporary work. Anybody who has worked
overseas, such as I have in France, for example, knows how hard
it is in other countries to get into the labour market, and I
think that is one of the big bonuses for us of quite a vibrant
and dynamic labour market.
Q151 Chairman:
Does anybody else want to add anything to that?
Mr Kendall: Just that with agriculture we do
have the Agricultural Wages Board still, and that sets the rates
for our industry, so although there is quite a bit of piece work,
being paid for what you produce by being a good fruit picker,
we do have minimum rates set and they apply across agriculture.
Mr Ratcliffe: I might just say that UCATT have
made these claims to us as well and I am still waiting to actually
see the hard evidence. Indeed, I was at a meeting there yesterday
talking about vulnerable workers and certainly when we see the
evidence we will look at it, but I suspect we will not get any.
Q152 Chairman:
Tom has justified it happening on occasions.
Mr Hadley: What I should clarify is that there
can be pay differences. There are examples of migrant workers
being exploited, paid below the minimum wage, having unlawful
deductions, and that is absolutely not on. We are working with
the Vulnerable Workers Forum to address that and in fact we welcome
the fact that they have doubled the inspectorates to address those
sorts of issues. The regulations must be properly enforced. We
welcome all of that and any cases of worker exploitation—which
can happen. A lot of migrant workers do come here and can be quite
vulnerable if they do not speak the language, if they have been
given bad information. If they have paid a bond to an agency in
their own country, for example, there can be a level of vulnerability
there which needs to be taken on board, so we would actually agree
with the unions on those kind of claims and where there is exploitation
we need to address that and we are starting to move down that
road, I believe.
Mr Ratcliffe: I would just like to make the
point that in construction the definition of a vulnerable worker
may not necessarily be a migrant but quite a high proportion of
our workforce do not read very well and they are vulnerable, so
it is an issue that the industry is very much alive to.
Q153 Chairman:
Do you get a significant movement from casual workers to getting
permanent jobs?
Mr Hadley: Yes.
Q154 Chairman:
That happens, does it?
Mr Hadley: Yes, we have some data from our research
unit that we can send you on that.
Q155 Lord Sheldon:
It is said that many migrants do low-skilled jobs. If there were
higher wages, would there be more locals to do these jobs?
Mr Hadley: If there were higher wages? Possibly.
If it suddenly became a 60 grand job to do social care, then a
lot of us might look at it—absolutely. There is an argument
that people obviously would be attracted if there was more money
in certain jobs. Where there is pressure is actually in a lot
of the public sector jobs. I keep going back to the social care
example because it is a concern for us in terms of how low the
pay rates are and they are not increasing with inflation. So,
inevitably, there is a fairly high proportion of migrant workers
now filling those jobs and my view is that unless we look at sectors
like that, even migrant workers, certainly within the EU, are
not going to be willing to get into those professions for the
level of pay. I do not want to get into a political debate on
public expenditure but there is a concern, especially if we look
at the value that we are getting from it, that if we keep pay
rates too low, there is a repercussion in terms of recruitment
difficulties but also in terms of the quality of the people you
are recruiting to do very important frontline jobs in the public
sector. That is a concern that we have across a number of different
sectors.
Q156 Lord Layard:
Could I ask about the new points-based system? How is that going
to affect recruitment in the various sectors which the three of
you represent and will the focus on attracting skilled workers
produce a shortage of migrant labour for the low-skilled jobs?
Are you in general worried about the Government's expectation
that all the demand for low-skilled migrants will come from the
EU? You have already answered that for agriculture but, in particular,
how do you see the points-based system affecting your sectors?
Mr Ratcliffe: In construction I have talked
a lot about the craft workforce and this new scheme is more likely
to be affecting more managerial jobs like project managers and
the like where we recruit quite extensively from Australia, South
Africa and the like. So we are looking for high skills and all
the indications are that the points system will give us what we
want. So we do not really have any worries about it at all.
Mr Hadley: We welcome in some ways the clarity.
We welcome the fact that it is a system that does give an opportunity
for regular review and that is one thing we need to bear in mind
when we are looking at a labour market; it is being able to match
the migration policy with where the needs are and those needs
may vary. We do have some concerns, I must say, on the points-based
system for what I might call the mid-level skills, and again I
go back to social care being a good example, where there is a
fair amount of recruitment from outside of the EU, people who
come over with good language skills. Social care is a lot about
communication and it is actually very, very important, and under
the current proposals a lot of our members would no longer be
able to place people coming from certain countries. In the hotel
and catering industry, some of our members in that field will
say people like chefs du partis, a fairly skilled area within
the hotel and catering trade, they would no longer be able to
recruit, and I think it is a leap of faith to say that is not
a problem, that we will be able to recruit within an enlarged
Europe. We do have some real concerns that it will hurt the labour
market in some of those almost mid-range skilled areas.
Mr Kendall: In the farming community we are
very concerned about the introduction of the points scheme because
it assumes that we are going to find enough low-skilled labour
within the EU, which, as I have pointed out already, is a grave
concern of mine and it is why we are so keen to support the SAW
Scheme going forward because we do not see this confidence in
there being a priority on skilled labour and just assume we can
access all the low-skilled workers we need from the EU.
Q157 Lord Paul:
What is your confidence level in the new Migration Advisory Committee's
ability to identify accurately labour and skills shortages and
then to determine whether the gap should be filled by migrant
workers? Can this be done timely?
Mr Kendall: My concern ties in with the previous
point about the points system as well really. As the gentleman
on my left said, we can review these things regularly, but I am
worried that Wilkins Limited, for example, goes to harvest without
access to its harvest labour and so it stops producing and we
lose that to another country. The problem about this proposal
is that it is unproven so far and we need to know going forward
that we can plan our businesses and not find in two years time
that someone says, "actually that did not work and we are
now producing the fruit in some other part of the world".
So I am concerned about it. I know there is a strong recommendation
for it to go on but I go back to my previous point of really wanting
to see the old SAW Scheme perpetuated, so we make sure that we
have the proper labour required to see a growing industry.
Mr Hadley: We are fairly welcoming of the concept.
But it is almost not the what, it is the how, is it not? And whenever
you are talking about issues like this, it is the quality of the
data you are going to be accessing, the feedback you are going
to get from people really on the ground and right there in the
labour market that is going to be absolutely essential. So we
do have some concerns over how it will deliver, but perhaps just
a point to make is how global the management talent is. We had
our global recruitment conference not so long ago and the number
one challenge, not just for our federation but for federations
all across the world, is lack of suitable candidates. The Australian
federation, the US federation, across Europe and Ireland, everybody
is saying the same thing and it is interesting because in the
same way as a few years ago we talked about needing to promote
Britain as a place to come and do business, to come and work,
we almost need to promote Britain as a place to come and live
and work. I think there is that feeling that we do see from our
sister federations across the world. So it does need to deliver
and it does need to be something that is reviewed very regularly.
Mr Ratcliffe: In construction one of the advantages
of still having a statutory training board is they do considerable
work identifying and forecasting future skills, which is both
in depth from a geographical point of view and also from a skills
point of view, so there is readily available material there which
is constantly updated and available to map out what the skills
needs are in the next five years. So it is something that I would
hope they would make full use of.
Chairman: Thank you very much, it has
been very helpful to us and, if I may say, can I thank you for
the succinct answers that you have given to quite a lot of questions.
With three of you answering most of them, we got through a lot
of ground very quickly and we are very appreciative of that. Thank
you very much indeed.
|
