Examination of Witnesses (Questions 583
- 599)
TUESDAY 22 JANUARY 2008
Professor John Salt
Q583 Chairman:
Good afternoon. You are an old hand at these events so I do not
need to say, although I am always told to say to everybody, to
speak up and to speak very clearly so we get an accurate record
of what you have got to say. You are extremely welcome, and if
you were able to say who you are so that the television record
will get your name, and if you want to make an opening statement
or go straight into the questions, that is up to you.
Professor Salt: My name is John Salt, I am a
professor at UCL and I run the Migration Research Unit there and
have done for a number of years. I have worked on international
migration for a long time. I should add that I am a geographer
and not an economist and my forte, I suppose, is migration rather
than labour markets. This is the first time that I have appeared
at one of these sorts of meetings.
Q584 Chairman:
I hope it is as pleasurable an experience for you as it is for
us to have you with us, we are delighted you are here. If, therefore,
I am able to start off with the questions, the first one I would
ask you is how do Tiers 1 and 2 of the new points system differ
from the existing highly skilled migrant programme and the current
work permit schemes for skilled workers? How, if at all, do we
expect the new system to change the number of skill levels of
non-European Economic Area workers coming into the UK?
Professor Salt: Thank you very much. I suppose
the first thing I would say is that Tier 1, which is the old HSMP,
is something relatively new in the history of UK immigration where
people from abroad are allowed to vote themselves in for work
purposes. Interestingly enough, it is closely targeted—something
like a third of those who have come have been in the medical sector,
around a fifth in finance, so we are not talking about a particularly
broad spectrum of occupations coming in. There are a number of
ways in which I think the old and the new actually differ. As
far as what I call the new Tier 1 is concerned, which is the points-based
Tier 1, there are additional categories, which is an important
thing. Investors and entrepreneurs are now put in with the existing
HSMP system and, interestingly enough, post-study students. I
happen to think that these students are relatively important,
we have been looking at them and found that post-study students
are of growing significance because of globalisation of the economy
and diversity strategies in firms. What we have found is a growing
trend for companies to recruit international students, either
to send them home or to use them in the UK, and in some cases
in preference to domestic students. There is a targeting of international
students going on. Some firms are doing this quite actively and
have been for a few years, not very many, others are thinking
about it, and yet others have probably not got round to that sort
of stage. I think it ties in, interestingly, with the way in which
new Tier 1 is likely to work and it is something that has not
really been talked about or thought about very much at all. A
second point that I would make is that ICTs and shortage occupations
are now in new Tier 2 whereas they were old Tier 1 in the preceding
system. In new Tier 2 intra-company transfers (ICTs)—always
confused with information, communication and technology for those
of us who are not in the field—get enough points for entry
anyway; if you are an intra-company transferee you have enough
points, the only proviso is that you have worked for your company
for six months before coming in. Employees in effect, do not have
to demonstrate that they have got skills and experience to do
the job on offer in the way that they have had to do under the
old Tier 2. Also what is new is employer licensing and registration,
the rating of employers, which is something that has not happened
before, at least not officially, and sponsorship. Licensed sponsors
will make a bid at the beginning of the year for a certain number
of certificates for immigration of workers and, once they have
done that, once they have been approved as sponsors, they get
their certificates more or less as a matter of course. Also what
I suspect is new, or at least an extension of what exists now,
is a rather better compliance check, both pre-registration for
employers to go on the sponsorship list and also post-entry for
migrants. So there is a change in the composition of the tiers
and also the introduction of the sponsor list. The fourth point
I would make is that there is more emphasis in the new system
on the individual worker. What is new in Tier 2 is an attributes
test of qualifications and earnings and also a control test, things
like accumulation of language, funds, holding a certificate of
sponsorship, history of compliance and so on. Compared with old
Tier 1 and old Tier 2, in the new system there will be rather
less influence directly by employers on individual applications.
In the past employers often built up a relationship with Work
Permits UK and that, I think, on the whole has probably been positive
for both sides over the years; I can remember a time when it hardly
existed at all. In the old system the companies learned what was
acceptable and what was not, and to some extent they were trusted.
This was not true of all of them by any means and having seen
some of the management data in the past, a lot of blue chip companies
had quite a high rate of failure to obtain permits, but I think
that has been getting better. The final difference has been a
change in the locus of decision-making. In new Tier 1 and Tier
2, employers—particularly in Tier 2—are more remote
from the decision-making. We see, if we look at Australia (and
to a lesser extent Canada), there has been a repatriation of decision-making
back home into Adelaide and Tasmania, decisions that might formerly
have been made in the case of the UK and Europe down on The Strand.
What the UK is doing is in a sense expatriating decision-making,
as far as individual workers are concerned, to its embassies and
consulates overseas, and what that means is that there is going
to have to be a good IT system which will allow the whole lot
to be linked satisfactorily together. Those are the main differences.
Q585 Lord Layard:
What overall effect do you think the change will have on the number
of people coming into the country?
Professor Salt: I wish I knew that. I have been
asking myself, ever since I saw these questions in the middle
of last week, can the PBS tail wag the economic dog? I am not
sure that it can, but we certainly need to monitor closely what
employers are doing. We need more information from individual
employers on how they are operating their international labour
markets and how they are deploying their expertise. We have a
global economy and in talking to employers, one just before Christmas
I went to see in anticipation of a conference that I was about
to present at, and I asked "What is the key thing about moving
skills?" and she said, "It is as it is, this is how
the global economy works, this is how we have to work in the global
economy, this is how we have to manage our labour markets."
I got the clear impression that these global forces were rather
stronger than the ability of individual countries at least to
buck the trend—I think the tendency has to be to move with
it rather than otherwise. It depends too on public investment.
If we look at work permits in the UK over the last ten years,
public investment has been really quite crucial in the work permit
system. I calculated a few years ago that something like 45% of
work permits were, in essence, at the behest of government and
government spending in health and education. So it is the way
in which the dynamics of politics work as well as the dynamics
of the labour market which is important. It also depends upon
investment in training among the domestic population and, at the
end of the day, on what happens in different parts of the economy
because the work permit system tends to be focused so much on
a relatively limited number of sectors. I am thinking particularly
of IT, health and management, particularly corporate management:
up to 60% of work permits are in those three areas, so it really
does depend upon what happens in those sectors as much as, perhaps,
what happens in the economy as a whole.
Q586 Lord Lawson of Blaby:
May I ask first, very briefly, a statistical question which I
do not expect you to answer now, but it would be very helpful
if you could let us have the details. I am looking at Table 20
of that very interesting paper that you produced in which you
record foreign labour inflows by route of entry 2005, which shows
the numbers coming from the new Europe, the enlargement countries,
particularly Poland and others, a very high proportion of the
total. This is, in a sense, misleading because it does not include
family members and it does not include students, and you say there
is a very important increase in post-study students in the labour
market and it also does not include refugees, although the most
important category is family. However, if you include all those
who have the right to work here it would be interesting to know
what the proportions under these headings would be. If we could
have that information it would be very interesting, because I
suspect that the A8 countries and new Europe would be a much smaller
proportion because the family members appear to be from outside,
but I do not know, so it would be interesting to have this information.
The other question I would like to ask you is: you are an independent
academic, you are not beholden to anyone; you were devising an
immigration policy that would be of the greatest economic benefit
to this country, what would you propose?
Professor Salt: An immigration policy of greatest
economic benefit to the country, not social benefit or cultural
benefit?
Q587 Lord Lawson of Blaby:
If there are problems in integration, for example because of language
difficulties, to take one example, they are unlikely to be of
the greatest economic benefit either, so there is a considerable
overlap.
Professor Salt: I would start with a strategy
which emphasised orderliness, which is a system which is able
to cope with the unexpected, whether it is a large flow of asylum
seekers or indeed a large flow of people coming in unexpectedly
from the A8 countries. As far as labour is concerned, it would
be a system which was linked to the needs of the economy, with
the desirability of protecting the jobs of those who are already
here. It would have a third arm of family reunion and integration
and measures to make sure that the flows of people coming in did
not create waves, did not create separation and in which it was
seen that adaptability had to be two-way, the hosts to the immigrant
community and vice versa. The fourth element would be one which
protected human rights so that those people who were coming in
as asylum seekers had the right degree of protection and those
people who were already in here were properly protected and had
access to the services that they needed. That is the sort of overall
strategy which is probably required; it is one which brings together
the whole gamut of immigration factors and not just the economic
ones. That is orderliness, managed labour, integration and human
rights.
Q588 Lord Lawson of Blaby:
How do you think the Government's proposed points system meets
that objective you have defined, or would you change it in some
way?
Professor Salt: I do not think the points system
is designed to provide a comprehensive strategy; it is designed
for a particular reason. It is also a great experiment. No country
in the world has ever adopted a points system for temporary migration
on this scale. The only points systems that have worked have been
in the settlement countries, particularly Australia, Canada and
New Zealand. They have had a chequered career; at one point I
think the Canadians pretty well did away with their occupation
shortage list because they found that it was not flexible enough
to cope with the ups and downs of the labour market. I think the
Australians would probably say the same thing about flexibility
at the moment and I am sure you have heard evidence that by the
time they get the aeronautical engineers, for example, that they
need, the job has already been filled in some other way, so a
points-based system I think is really only a partial solution.
Q589 Lord Macdonald of Tradeston:
If I could follow up on that, I just wonder if you see much scope
in the new schemes for abuse and where they might be most vulnerable,
perhaps to being manipulated against the intention of the Government.
Professor Salt: This is where we come up against
the point that Professor Metcalf made about compliance and the
way in which compliance works. There are always going to be "abuses"
or at least both companies and migrants will seek to make the
system work as far as possible for them. The resident labour market
test, for example, is something that is supposed to happen; in
a sense it does happen but the key to whether or not it really
works as it should do is what goes on within the company. If you
have got applications coming in from somewhere else, how do you
treat them? If you advertise across the EEA and you get somebody
applying from Bulgaria because Bulgaria is part of the EEA market,
this has to be investigated. Do you really take steps to look
at the qualifications and characteristics of somebody from further
afield in the EEA when there is somebody that you know you already
want, maybe one of your own employees who is out in another country?
Therefore, the resident labour market test is able to be abused;
I am not suggesting that it is abused all the time but it has
been very difficult to apply in the past. In some countries where
they have got labour market tests I know that at times of relative
shortage the Government has said all right, we will just relax
it, we will not bother saying openly that we have relaxed the
labour market test but we will tell companies unofficially that
that has happened. I know that that was the case in the Netherlands
a few years ago because we were doing research there and we found
out that it went on.
Q590 Lord MacGregor of Pulham Market:
Do existing data allow us to compute the total stock of non-EEA
migrants employed on work permits in the UK? Do we know what proportion
of temporary work permit holders go on to acquire permanent resident
status in the UK?
Professor Salt: The first thing is that the
work permit system does not allow us to say what the stock of
work permit holders is. We do not know how long people stay, there
is no record of whether they leave, nor do we have information
on the immigration status of people who might be entitled to work
in the UK. As far as your question about proportion is concerned,
I did look at some figures and the only way I think we could do
it would be actually to use the live system in the Home Office,
which would be to look at those people who are applying for leave
to remain on the basis of four years employment within the work
permit system. The figures for 2005, were that 25,000 people were
given leave to remain on this basis; four years earlier we had
85,000 people coming in under work permits and first permissions,
so this gives us around 30% staying on. If you do the calculation
slightly differently and put that 25,000 over 115,000, which is
work permits, first permissions, changes of employment and extensions,
that takes the figure down to 20%. That is a rough and ready calculation
and until somebody does a more concrete calculation—these
things do go on in the Home Office from time to time—that
is probably the best that I can do.
Q591 Lord Turner of Ecchinswell:
Can I ask an immediate follow-up to that? You just said we do
not know the stock of people who are presently here on work permits.
Would that not be a fairly easy bit of data to gather and would
it not be a sensible piece of data to gather as part of just understanding
the problem, because all it would require from now on is that
once the sponsoring employer got a work permit they had to say,
over the years, whether that person was still here, had become
a permanent UK citizen or had gone back?
Professor Salt: That is right.
Q592 Lord Turner of Ecchinswell:
It does not sound a terribly difficult piece of data if we set
out in advance to gather it.
Professor Salt: You are probably correct. Looming
in the background is the absolute paucity of information that
we have on emigration—people leaving—as far as the
work permit system is concerned. Since they are part of the regulatory
system it could be the job of companies actually to inform when
somebody leaves. There is a problem with those people who come
in short term because you have somebody who might come in for
three months and then go away, come again and so on, multiple
entries and multiple departures, so it is not absolutely easy
but it could be done, at least with qualifications.
Q593 Lord Moonie:
I hear what you are saying about employers perhaps having to make
a return and I think, "why can this not be done automatically?"
These people are presumably allocated a National Insurance number,
they pay tax and so on. Why can that information not be collated
as part of what is after all a computerised system?
Professor Salt: At the moment there are two
different government departments involved, the Department of Work
and Pensions is giving national insurance numbers and—
Lord Moonie: You have answered my question.
Lord Lawson of Blaby: They need to be
introduced to each other.
Chairman: You may have made the point.
Lord Best.
Q594 Lord Best:
Do you think that the Government should set a quota on immigration,
and what has been the international experience with quotas? How
are they set and how effective are they in managing migration?
Professor Salt: Very often when I am asked questions
about this subject I always begin with "it depends"
and in this case it depends on what you mean by immigration; do
you mean all incomers, do you mean labour only and if so what
sort of labour? So you have to start breaking it down pretty well
straightaway. Then there is a simple question, what is a quota?
There are different sorts of quotas: Australia, New Zealand and
Canada, for example, have numbers fixed each year which they would
regard as planning levels and not quotas, and then they are only
for permanent settlers and not for temporary workers. US levels,
say H1B visas, are fixed by the 1990 Immigration Act, changed
from time to time, not quotas in an accepted sense. Quotas are
no use if they are arbitrarily fixed. The United States has come
up against this problem with its H1B visas as the current cap
on numbers, around about 65,000, tends to be reached after only
a few months. It is only sensible to have a quota if it is based
on sound labour market evidence and predictions of growth and
decline in markets for certain jobs or skills. So it has got to
be related to the dynamics of what is going on in the labour market,
and ultimately quotas are not easily responsive to change in labour
market conditions. They may be influenced by employers who shout
loudest and earliest, perhaps if they are wanting Bangladeshi
chefs for example, employers wanting low cost workers maybe to
push up the numbers available to them and quotas are likely to
discriminate perhaps against small firms that may have a critical
need for workers but lack experience of international recruitment.
There is an enormous number of definition issues as well as conceptual
ones as a matter of fact, followed by practical issues in defining
what is an appropriate level, how often you should change it and
so on.
Q595 Lord Macdonald of Tradeston:
What are the current rules for the dependants and family of non-EEA
nationals entering the UK and how do those UK rules compare to
those operating in comparable countries?
Professor Salt: I did start to look at this
and I must admit that by the time I got to all the different routes
of entry and the rules as far as spouses and fiancées and
siblings and what have you are concerned, it is really quite complex.
As far as those who are coming in to work under the work permit
system are concerned, the spouse can work but not children, the
children require work permits of their own. I know something about
what goes on in other countries and there is no hard and fast
rule; the situation varies depending upon the type of visa. For
example, those who are going permanently to Australia and Canada,
their spouses can enter the labour market as soon as they arrive
because they are landed immigrants. Temporary workers in Canada
have had a special spousal employment scheme designed to encourage
skilled migrants to go to Canada, but who might be put off because
their wives cannot work, so there is a special scheme for the
wives to work, designed to help attract people in. In Australia,
spouses of highly skilled people have immediate access to the
labour market and are exempt from a language requirement, which
is another condition that you can have. Some countries do not
allow the spouses of temporary workers to work and probably the
one that most commonly comes up and has come up in the past is
Switzerland where, particularly in Geneva, you have a lot of foreign
workers who are coming to Geneva and a lot of diplomats for one
reason or another with spouses who cannot work, so there is a
lot of voluntary work going on, I suspect, in those sorts of circumstances.
Q596 Lord Layard:
You have told us a lot about the rules governing relatives working.
What about the rules governing relatives coming into the country?
How do we compare with other countries as regards the rules for
letting in siblings, rules for letting in parents? We are somewhat
conscious of the rules letting in spouses because that is a matter
of public debate, but what about the others?
Professor Salt: I am not in a position to say
what the rules are for different routes of entry. When I started
to examine it I, realised that in the time available from being
forewarned of this question I could not provide the answer in
detail about the particular rules for family members. The rules
as far as spouses, fiancées are concerned have changed
quite dramatically over the last ten years, for example, with
the rescinding of the primary purpose rule, the introduction of
a probationary year so that you cannot have right of settlement
if you come in as a spouse until you have been here for a year
and established that it is a genuine marriage, and so on and so
forth.
Q597 Lord Layard:
Can you refer us to some source on all this?
Professor Salt: One of the sources is the footnotes
to the Home Office's command paper on migration statistics and
the immigration rules, which periodically change. There are regular
changes to the immigration rules which are on the Home Office
website.
Q598 Lord Turner of Ecchinswell:
Can I ask another question about things which are not in table
20? Table 20 is the foreign labour inflows by route of entry,
but presumably it is legal foreign labour inflows by route of
entry?
Professor Salt: Yes.
Q599 Lord Turner of Ecchinswell:
Do you think we know anything at all about the level of illegal
immigration, either as a flow or as a stock or is it simply something
that we do not know? Also, within that, would it be right to assume
that the vast majority of illegal immigration is low skilled,
or do we have significant numbers of higher skilled people who
might have applied for the work permit system but have chosen
not to and are simply working here at higher skills levels? First
of all, quantity, therefore: do we know anything about that and,
secondly, do we know anything about skill mix?
Professor Salt: As the often-publicised author
of the magic figure of half a million, I think I would like to
take this opportunity of saying that I have never ever produced
a calculation of the numbers of illegal migrants or people in
the country irregularly or however you want to define it. No country
in the world knows how many people there are who are living or
working illegally, with the probable exception of Australia where
they count everybody in and they count everybody out, and they
have information on everyone's status there, so if I get on to
the Australian High Commission and ask what is the size of the
illegal population in Australia, they can say as of 30 June 2007
there were an estimated 46,500 overstayers. They do that because
there is electronic control of everybody going in and out and
it is an island. In this country and pretty well every other country,
we just do not know. Illegal people do not want to be counted,
that is one problem, they are probably quite good at making sure
they are not in the census. We also have a problem of defining
what is illegal. A student is allowed to work for 20 hours; a
student who works for 21 hours a week becomes illegal. Somebody
working at below the rate for the job, perhaps brought in without
a satisfactory labour market test, might also be described as
illegal, and here I might just touch on the second part of your
question. If you have got somebody who is coming in, maybe an
IT worker, who is being paid less than the statutory rate, or
at least the package works out less because of the way it is put
together, which may happen—I am not suggesting it does happen
a lot but it may happen—then that person is illegal as well.
So, first of all, you have got the problem that these people do
not want to be in the counted list, then how do you define illegal
and finally there is no satisfactory method of counting the illegal
population anyway. The study we did for the Home Office went through
all of the possible methods that we could find and none of them
were terribly satisfactory. We also need the co-operation of outside
agencies, particularly employers but maybe also health workers
and other service providers (what the Dutch call "systems
agents") to say whether a person should not be here and is
entitled to a service or allowed to work, and even then you have
the problem of verifying documents, so employers have problems
there too. I do not think that we know how many there are, but
we can all make guesstimates. I think it is dangerous to make
guesstimates because once a figure is launched, like the 500,000
figure, it takes on a life of its own and it becomes at least
the baseline. I have said on another occasion, and maybe this
is going to come up a bit later, that one possible way of beginning
to know is how many people come out of the woodwork if you have
an amnesty, because you know that if 300,000 people put themselves
forward for legalisation, that is at least 300,000 people who
were illegal. That is a starting point, though, not an end point.
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