Examination of Witnesses (Questions 190
- 199)
TUESDAY 13 NOVEMBER 2007
Mr Brendan Barber, Mr Owen Tudor, Mr Richard Exell,
Mr Jack Dromey and Mr Omer Ahmed
Q190 Chairman:
Good afternoon and welcome to our inquiry; we are most grateful
to you for seeking to help us with this inquiry. The first thing
I have to do, though you are old hands and I do not really have
to say it, is to remind you and our Committee that it is desirable
that we speak up and speak relatively slowly, so we get a reasonably
accurate record of what everybody has to say. You know we are
going to ask you a number of questions, but is there anything
you want to say at the beginning or do you want to go straight
into the questions?
Mr Barber: Happy to go straight into questions.
We welcome the inquiry. It is an issue on which there is a lot
of ill-informed comment, so we welcome the light that hopefully
your inquiry will shine onto this important issue.
Q191 Chairman:
We are going to try to do just that.
Mr Dromey: We hope, as I am sure will be the
case, that you will be able to inform an intelligent debate, not
the increasingly hysterical debate that is taking place on this
issue of vital concern.
Q192 Chairman:
We do not wish to be hysterical in any way. Our report will be
entirely evidence-based, so your contribution will be very valuable
to us. May I start the questioning then? Why have you supported
free access to the British labour market for workers from the
A8 countries? Bulgarians and Romanians were denied free and open
access to the UK labour market when they joined the EU this year.
Should this policy be reversed soon and, if so, why?
Mr Barber: A number of reasons. First, we attach
high importance to the principle of freedom of movement of labour
within the European Union. It is one of the founding principles
and it should not be set aside lightly. We take a view of principle,
but in terms of the overall judgment about the contribution that
migration has made to the British economy, it has contributed
in a positive way so we have a second reason for supporting full
access for citizens from Romania and Bulgaria. A third point is
a concern that, as they have the right of access to the country,
if they are denied the right to work, then that is only creating
a risk of them being pushed into the informal economy or a self-employed
status, potentially a bogus self-employed status, which would
be of no benefit to them, would put them at risk of exploitation
by unscrupulous employers with potentially wider risks to the
economy as a whole. For all of those three reasons, we think Romanian
and Bulgarian citizens should have been given full access to our
economy and I hope that the Government will reconsider the position
with the restrictions which are currently in place.
Mr Dromey: Brendan is right on the issue of
principle. Within the European Union you have freedom of movement
of capital, goods, the rich, the self-employed, but on this occasion
not of workers. Secondly, it is unworkable. I can just give a
very practical example of what happens in the real world. One
particular employer, who mercifully has had his contract terminated,
provided cleaning on the London Underground. To get around the
current law as it stands, he brought over 200 Bulgarians, employed
them, but said "You are self-employed". He treated those
workers shamefully, the contract was terminated and I welcome
that, but it is a bad example of what Brendan has been describing
about the current arrangements being open to abuse. The third
and final point is that it is unsustainable. Ultimately this will
have to change under European Union law.
Q193 Lord Vallance of Tummel:
A number of employers have told us that migrants often have a
superior work ethic compared with British workers who are sometimes
described as "unwilling to do the work". How concerned
are you about immigration adversely impacting on the employment
prospects and indeed conditions for British workers, especially
the low paid or those who are unemployed and looking for a job?
Mr Barber: There are solid grounds for believing
that migrant workers will indeed have a good work ethic. If they
have travelled from their home country to look to prosper here
in Britain, they will approach that, I am sure, with a real commitment
to making a success of that move. It would be entirely wrong to
seek to draw a contrast and suggest that British workers somehow
fall short, set against that. We can look across all sorts of
areas of employment where you have extremely dedicated, successful,
skilled, committed British workers and there are no grounds for
drawing an unfavourable comparison with the work ethic of migrants
who have come to our country. In terms of concerns about the impact
on employment and pay, you will have seen from our written evidence
that overall, while there are areas of the labour market where
there are concerns, the contribution has been positive to the
economy in terms of both employment and indeed ultimately in terms
of living standards also. That is the answer to your questions
about the implications for employment and the pay.
Mr Dromey: May I just add to that? By definition,
to cross continents to seek employment means you are highly motivated.
Our experience is that when some employers say what they have
said to you, actually what that disguises is that unfortunately
all too many employers take advantage of the vulnerability of
the newly arrived in our society. It is not just a question therefore
of them being highly motivated: it is also the workers concerned
are often vulnerable and prey therefore to bad employers. It is
absolutely wrong to pose migration against the importance of getting
those not in work in Britain into work. The economy is expanding,
the population is ageing, we need both migration—of course
there is a legitimate debate about how you manage that—and
we also need the kind of initiative, and I welcome this, that
the Government took back in the summer, the local employment partnerships,
the notion of working together with 30 household-name employers
to target 250,000 workers here in Britain without work and get
them back into work.
Q194 Lord Layard:
I want to ask about training and apprenticeships. We all agree
that British employers do far too little of it and provide too
few opportunities for high quality apprenticeships. Do you think
it is possible that if employers did not have the access which
they have to skilled migrant labour, we could get them to do more
for the domestic workforce? Obviously, there are other things
we could do to make them do more for the domestic workforce, but
do you think, just as an objective matter of fact, that they would
have done more if there were less access to migrant labour?
Mr Barber: We have not had a lot of evidence
of that reported to us by our unions, but we do suspect that there
are some grounds for concern on this issue. If you just take,
for example, the Olympic project, a huge project of tremendous
importance to the economy overall and particularly East London
where much of the Olympics are to be housed and the events to
take place, that massive construction project could be entirely
undertaken by migrant labour, if one simply left the key contractors
to make these decisions for themselves. If that were to be the
case, rather than there to be positive investment in the skills
and training of others in the communities of East London who may
wish to take advantage of the opportunities that the project is
going to open up, if it passed the East London economy by, that
would be a disaster. There is a real concern here and the Olympic
issue illustrates it quite graphically.
Mr Dromey: May I just follow that specifically
on the Olympics? We very much welcome that the Olympics are coming
to Britain; the Olympic project is a classic example of why you
must not pose migration against the importance of getting those
not in work in Britain into work. To build the Olympics, we will
need Polish bricklayers, but this is also a tremendous opportunity
for Government to use the power of public procurement to target
those young white kids out of work in Barking and those young
second generation Bangladeshi kids in Tower Hamlets, with a view
to offering them apprenticeships, so that a legacy of 2012 becomes
a project of which we are all proud but a new generation of Barking
and Bangladeshi bricklayers.
Q195 Lord Paul:
Professor Bob Rowthorn told us last month "The argument is
an unimpeachable one—that to defend the [wages of] locals
you basically have to restrict entry by others". How would
you like to respond to that?
Mr Barber: We are not persuaded by Professor
Rowthorn's argument and the evidence suggests that the whole economy
has benefited from the contribution and that overall workers benefit
from rather higher wages as a result of immigration. We do not
deny, particularly perhaps at the bottom end of the labour market,
that there can be concerns that it has a depressing effect on
the prospects for wages. We do think that there is a matter of
concern. We rather thought that the Government's evidence on this
point came across as just a little bit complacent about the dangers.
I would say also that the way Professor Rowthorn put the point
has a rather beguiling simplicity, but I fear that a few generations
ago one could have heard commentators making the same point about
the entry of women on a bigger scale into the labour market and
the world of work, that that would have a depressing effect on
the prospects of the wages of men and so on. For the same reason
that I do not think that would have been a valid or an accurate
observation 20 or 30 years ago, I do not think it is a valid observation
now about the impact of migration.
Mr Dromey: Nothing is new. I remember sitting
down in Southall to go through the District Committee minutes
of the 1928 District Committee of the AEF, as it was then called,
the old engineering union. There was a big influx into West London
of Welsh workers and they were going into the burgeoning industrial
estates of Perivale, Southall, and further afield Park Royal,
and the minutes recorded this exchange about the impact on the
rate for the job of this influx of Welsh workers. At the end of
this minute it recorded the decision of the Southall District
Committee to launch a campaign to keep the Welsh out of Middlesex.
I am pleased to say that was one of the most spectacularly unsuccessful
campaigns that the trade union movement ever waged, because within
a generation every second teacher in West London was called Dai.
Nothing is new. The same was said when my father came over from
County Cork, the same was said about the West Indians, the same
was said in relation to the impact of women coming into the world
of work. Two final related points. The first is that the reality
is that we are an expanding economy and an ageing population;
we need labour. Who is going to do the work? Take, for example,
what the National Farmers' Union says, and rightly so, about the
importance of migrant labour in terms of the rural and agricultural
economy, "Who is going to do the work?". I am not sure
what Bob is saying, and he would not say this for one moment,
but short of a Pol Pot solution, which is that you drive people
out of the cities into the countryside, who is going to do the
work? The issue therefore is that you need the labour, and on
what terms does that happen? What is utterly crucial is that you
have equal treatment of migrant workers and those who have been
doing it for generations.
Q196 Lord Paul:
I agree with you. I have been listening to this debate for almost
55 years since the first time I came to this country in 1949.
When do you think this debate will end and we can move on?
Mr Dromey: If the politicians give leadership,
hopefully that debate will come to an end. At the moment, that
is not happening.
Q197 Chairman:
May I just ask a supplementary that I perhaps should have asked
earlier? You said two things and I wonder whether you could just
expand a bit. You said that you would be concerned if you thought
that the workers on the Olympic buildings all came from different
parts of Europe and most of us would share that view. You also
said that you would be concerned if you thought that, at the lower
end of the market, there was any serious evidence of low-paid,
unskilled workers in this country suffering as a result of migrant
labour. What role would you expect the Government to have in either
of those situations if you saw it arising?
Mr Barber: In terms of the Olympic project,
those responsible for the delivery of the Olympics, the Olympic
Delivery Agency and LOCOG, the London Organising Committee, they
both have a clear responsibility to look to ensure that the legacy
of the Games is a positive legacy in East London, which includes
some of the most deprived boroughs in the country. To ensure that
that is the case, there need to be very active training strategies
to ensure that there are opportunities for members of those communities,
at the right time, to be able to access the training to give them
the necessary skills, to take advantage of the opportunities that
the Games are going to provide, not just in the construction phase
but in the delivery of the Games themselves as 2012 gets closer,
all the associated activities. Those boroughs neighbouring the
Olympic sites ought to be able to look back on the Games as a
success in providing a legacy that has really contributed to economic
regeneration. That should be a part of the legacy. The Government
need to be clear that that is a part of the mission and they are,
to be fair, and the bodies responsible, the ODA and LOCOG, need
to take that challenge up seriously and take the necessary action
with the local authorities, with the training providers and so
on to make sure that those opportunities are provided.
Q198 Lord Skidelsky:
May I cite another professor, maybe adding to ill-informed comment
on this topic? In his written evidence to us, Professor David
Blanchflower argued that empirical evidence shows that wage growth
has been repressed in both Ireland and the United Kingdom since
A8 accession and he rather strikingly says that immigration has
therefore helped the Monetary Policy Committee to hit its inflation
target. What that means in plain language is that real wages would
have been higher on average had there been no new immigration,
that is immigration from the A8 countries. Do you think that is
a reasonable assessment of the evidence?
Mr Exell: There are two factors to take into
account here. One is the lagged impact of migration on wages so
that it takes time for the wages of skilled workers, who tend
to benefit most from the effects of immigration, to be fully boosted
by immigration; especially for the people who started coming here
in 2004, that will not really have started happening to anything
like the full extent yet. The second point that we would make
is that there is going to be an impact which is not just lagged,
a negative impact down at the bottom end of the scale. This is
why the theme in our written submission was very much that overall
the country is better off, however, there are people who risk
losing out, especially in terms of wages, as a result of migration.
Therefore, the first call for spending of the benefits that we
get to society from migration should be on helping them. If migrant
workers are coming over here and part of the effect of them coming
here is to depress wages in low-skilled jobs, one of the things
that we want to be doing is to raise the skill levels of the people
who would otherwise have been doing that work. That is definitely
a role that we see for Government.
Mr Dromey: May I add a practical example? There
is no question of it; in some areas, for example food processing,
there is a growing problem with the emergence of a two-tier labour
market with more and more agency workers employed, overwhelmingly
migrant, and fewer and fewer directly employed, workers here for
generations, with the agency workers on inferior conditions of
employment and those here for generations directly employed on
better conditions of employment. That does have an impact on wages.
It creates division and it damages social cohesion. You then ask,
"What do you do about it?" and the solution that we
have argued, and absolutely rightly so, is that it is wrong that
when two people work alongside one another, one an agency worker
and one directly employed, doing the same work in the food-processing
company, one gets paid £2 an hour less than the other. It
is then for Government to act on equal treatment of agency workers
and the directly employed. Do we duck the reality that we have
to confront in the world of work, that there are problems, in
particular at the lower end of the labour market? Not for one
moment, but we need the labour. The question is: on what terms
are they here in Britain?
Q199 Lord Skidelsky:
Mr Exell's argument is explicitly a long-run argument.
Mr Exell: Oh, yes. The realities in the short
term are very different and that is part of the problem of course,
that the picture, especially for the A8 migrants, looks different
at the moment from what it is going to look like when we are looking
back from say 2015.
Mr Ahmed: Central to this particular question
is to ensure that the minimum wage is secured and that the minimum
wage does not effectively become a maximum wage. The key to arresting
the low pay of indigenous workers is to ensure that the minimum
wage is maintained in real terms and ideally increased to a living
wage. Much has been agreed with cleaners in the House of Commons
and also workers in the Olympics. It is absolutely crucial and
all the evidence suggests that the real key to ending exploitation,
ending the difficulties, the potential difficulties that indigenous
workers face, is to secure the minimum wage.
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