House of Lords - Economic Affairs

Select Committee on Economic Affairs First Report

CHAPTER 7: IMMIGRATION POLICY

Objectives and limitations of UK immigration policy

186. We now come explicitly to the question of public policy—the Government's present policies and our own proposed approach. As a background to this issue, we first summarise some of the conclusions we have already reached, against which policy has to be measured:

The scale of net immigration in recent years has been unprecedented in our history. Net immigration has added 1.5 million to our population over the last ten years. Two-thirds of these have come from the continents of Asia and Africa.[71]
If net immigration continues at its present rate, as the Government Actuary's Department assume in their principal population projection, the total population in 2031 will be 6 million higher than if there were balanced migration (with emigration equal to immigration), and by 2081 it will be almost 21 million higher.
It is likely there will continue to be significant positive net migration from EU countries. As discussed below, we have no control over this, but it needs to be taken into account when considering what policies to adopt towards non-EU immigration, over which we do have control.
Significant gross immigration of highly skilled non-EU nationals may well be desirable. There may also be important dynamic gains from the exchange and movement of people. A different issue is how much overall net immigration is desirable. Our general conclusion is that the economic benefits of positive net immigration are small or insignificant. So the policy judgment has to be based on other criteria, including diversity and social cohesion and the advantages or disadvantages of a growing population. In this context it should be noted that, even if there were no net immigration, there would still be substantial gross immigration; the immigrant share of the population would still grow steadily and most employers of immigrants could employ at least the same number of immigrants as at present.
Thus we believe that in formulating its policy towards the entry of non-EU nationals, the Government should explicitly take into account the likely impact on the future size and composition of the UK population. The Government should review the implications of its projection that overall net immigration in future years will be around 190,000 people—an annual amount equal to the population of Milton Keynes. The Government should have an explicit and reasoned indicative target range for net immigration, and adjust its immigration policies in line with that broad objective.

187. Clearly, there are numerous potential objectives of immigration policy, such as: honouring human rights obligations; maximising economic benefits and minimising distributional costs for the resident population; minimising fiscal costs; and maintaining social cohesion and national security. Immigration policy objectives may also take account of the interests of immigrants and their countries of origin (for instance, minimisation of brain drain and promotion of economic development in immigrants' countries of origin).

188. In our view, the primary economic consideration of UK immigration policy must be to benefit the resident population in the UK, although we recognise that there are important practical constraints on the capacity of the UK to control immigration: EU membership, human rights considerations and illegal immigration.

189. First, the UK, as a member of the EU, cannot currently influence the number or selection of EEA nationals—including A8 workers and A2 workers (Romanians and Bulgarians)—coming to the UK. The UK can and does, however, regulate the new EU nationals' access to legal employment in the UK.[72] A8 workers can freely take up employment in the UK but, unless exemptions apply, they must register in the Worker Registration Scheme. In 2004, the Government said the scheme would "be in place for an initial period of five years".[73] In contrast, the employment of Romanians and Bulgarians (who joined the EU in January 2007) continues to be restricted through the work permit system. This restriction must be lifted by 2014 at the latest.

190. Second, although the UK can, in theory, regulate the immigration of all those from outside the EEA, policy toward asylum seekers/refugees and family/dependants of British citizens and other permanent residents in the UK is largely determined by human rights considerations.[74][75] These include the rights to freedom from persecution and to family reunion. In 2006, the number of asylum applications in the UK was 28,320 (including dependants).[76] About 85% of applications were made in-country, that is by people who had already entered the UK, rather than at port. According to the Home Office, in 2006, 59,810 persons were given "leave to remain" (also known as grant of settlement) as a family member or dependant of a permanent UK resident, including 42,725 partners, 9,290 children, 1,470 parents and grandparents and 6,325 persons classified as "other" (see Appendix 10).

191. The consideration of these rights is beyond our remit although we note that, whilst the rights of asylum seekers may be considered inalienable, those of family members and dependants could be modified if the Government chose to do so.[77]

192. The current constraints on the capacity of the UK to regulate immigration have major implications for UK immigration policy. EEA nationals, and non-EEA nationals who come to the UK as asylum seekers/refugees or as family members/dependants of British citizens or other permanent residents, currently constitute about half of all immigration of foreign nationals in the UK.[78] In other words, under current policies in respect of family members and dependants, only half of all foreign persons currently migrating to the UK are "managed migrants" in the sense that their admission to the UK is regulated, though clearly the number of managed migrants in turn affects the number of family members who follow.

193. Managed migrants include non-EEA nationals entering as students (309,000 in 2006), work-related migrants (about 167,000)[79], and their dependants[80]. In 2006 there were 17,000 dependants of students and 48,500 dependants of work permit holders (see Table 1, Appendix 11). To regulate the entry of these categories of immigrant, a balanced approach is required, under which rights considerations are important but not necessarily decisive.

194. Moreover, rather than serving only the exclusive interest of employers, policy should reflect a balancing of the interests of resident workers, employers and other groups among UK residents. The assessment of the scale and composition of immigration that most benefits UK residents must be based on research and evidence on the economic and other impacts of immigrants.

195. A more general limitation on the application of immigration policy stems from the inability of nation states to exercise complete control over the immigration (entry) and employment of non-nationals. Many, perhaps the majority, of the UK's illegally resident immigrants have legally come to the UK as visitors and overstayed their visas. Although the extent to which high income countries can control immigration in practice is disputed, it is unrealistic to expect that it is possible to eliminate all illegality in entry and employment of immigrants in the UK. "Unintended consequences" are a common theme in discussion of immigration policies around the world. There are many examples of migration policy failures and few (or, some would argue, no) "best practices" in immigration control.

Key issues in the current reform of the UK's immigration policies

196. In early 2008, the Government began to phase in a new partially "points-based" system for managing the migration of non-EEA nationals to the UK.[81] The immigration of family/dependants and asylum seekers/refugees will remain outside the new system. Students are included. The planned new system will have five Tiers:

Tier 1: Highly skilled migrants (launched in the first quarter of 2008)

Tier 2: Skilled migrant workers (to be launched in the third quarter of 2008)

Tier 3: Low-skilled workers (currently no programmes planned)

Tier 4: Students (early 2009)

Tier 5: Youth mobility and temporary workers (third quarter of 2008)

197. The current and the new immigration systems are described in Appendices 11 and 12, respectively. This section focuses on key policy issues in the reform of the UK immigration system.

POINTS-BASED SYSTEM

Tier 1

198. The Migration Policy Institute has said that calling the new set-up a "points-based system" is a "misnomer" and has described it as "a hybrid, five-tiered economic migration selection system (p 479). Tier 1 is the only part of the new system that resembles the basic structures of the points systems in Australia and Canada. We endorse the use of a points-based system for regulating the immigration of highly skilled migrants from outside the EEA. However, there are significant problems that Tier 1 will need to address, including finding an effective way of checking and certifying the skills and educational qualifications of applicants, as well as assessing their previous earnings outside the UK. Furthermore, as the Canadian experience has shown, it cannot simply be assumed that highly skilled migrants will be able to find jobs in the UK that correspond to their skills. In Canada, a significant share of skilled migrants admitted under the points system cannot access high-skilled jobs, mainly because employers discount work experience abroad and place more emphasis on work experience in Canada.[82]

Tier 2

199. Plans for Tier 2 suggest that it will essentially remain a work permit system that is not too dissimilar from current policies for skilled migrants. However, there are some important changes, in particular the requirement for an English language test and the establishment of the Migration Advisory Committee (MAC) that will now recommend the list of shortage occupations. Tier 2 provides for four different routes to getting a work permit: (i) shortage occupation; (ii) intra-company transfer; (iii) minimum salary threshold; and (iv) labour market test plus criteria relating to the applicant's qualifications and prospective earnings in the UK (see Appendix 12). For Tier 2 to constitute a rational immigration programme that benefits the UK, the Government needs to ensure that these different routes are consistent with each other and effectively implemented. The Government has said that it will begin to enforce more strictly the labour market test—where employers have to show they tried to recruit within the EEA but were unable to do so. But it has not explained how this will be achieved. The effectiveness of the current and future labour market test is questionable. A failing labour market test adversely affects employment opportunities of resident skilled workers.

200. The Government has not explained how it will decide on the minimum earnings threshold under entry route (iii) within Tier 2. It is also not clear how this entry route relates to other routes including the list of shortage occupations drawn up by the MAC. There is a clear danger of inconsistencies and overlap between the various routes of entry within Tier 2. It is also unclear how Tier 2 relates to Tier 1 or which tier the Government considers more desirable and how potential overlaps and conflicts between the various components of the overall points-based system will be avoided.

201. In drawing up the list of shortage occupations, the MAC should ensure that employers have made serious efforts to recruit British or other EEA nationals, and seriously considered other alternatives for filling vacancies, before claiming that there is a shortage. There is a substantial pool of skilled labour within the EEA. The MAC must carefully scrutinise employers' claims about staff shortages and ensure that the employment and training opportunities of British and other EEA workers are not adversely affected by granting employers fast and easy access to non-EEA migrants through the shortage occupation list.

202. Tiers 1 and 2 contain some new and potentially effective elements of immigration policy. However, it is not clear whether the new system will in fact constitute the radical overhaul of the UK's immigration system suggested by the Government. Furthermore, some of the plans are still very vague (especially for Tier 2) and it is unclear how they will work in practice. Importantly, it is currently unknown how Tiers 1 and 2 will affect the number of non-EEA migrants coming to the UK. The new system may lead to an increase or a decline in numbers. Given these unknowns, the Government needs to monitor carefully how Tiers 1 and 2 will work in practice.

203. The public needs to be informed about the effectiveness and consequences of the new immigration system. To achieve this, the Government should publish periodic Immigration Reports that include the latest data on non-EEA immigrants entering the UK under the various Tiers of the new system and on immigrants entering as family members/dependants or as asylum seekers/refugees. Such a report could follow the model of the Accession Monitoring reports for A8 workers which the Government publishes quarterly.

Tier 3

204. We endorse the Government's view that all low-skilled vacancies should be met from within the EEA.

TEMPORARY OR PERMANENT?

205. A key issue is which channels of immigration should lead to settlement and citizenship and which ones should be strictly temporary. Many countries operate temporary routes for low-skilled migrants and permanent routes for skilled and highly skilled migrants. Highly skilled migrants will not come to the UK if they are not offered adequate rights.

206. There is considerable international debate about the desirability and feasibility of temporary immigration programmes (also commonly referred to as "guest worker programmes"). The principal objections are: (i) guest worker programmes do not work as there is no effective mechanism that can ensure that immigrants go home after their work permits expire ("there is nothing more permanent than temporary migrants"); and (ii) it is unethical to restrict immigrants' length of stay unless they stay for very short period of time only (such as seasonal workers). Many people argue that the longer immigrants stay in a country, the stronger their claims for permanent residence and citizenship. But all this is contested and subject to a lively international debate.

207. The Government should give further consideration to which channels of immigration should lead to settlement and which ones, if practicable, should be strictly temporary.

71 See Table 2 Back

72 Long before EU enlargement on 1 May 2004, the EU-15 and the 10 accession countries agreed on a 'transitional system' that would allow the old member states to continue to restrict employment of accession state workers. The restrictions can be in place for a maximum period of seven years after enlargement. See European Commission (2002) Free Movement for Persons-A Practical Guide for an Enlarged European Union, downloadable at http://europa.eu.int/comm/enlargement/negtioations/chapters/chap2/. Back

73 Home Office Press Release, Regulations laid for Worker Registration Scheme for new EU members, March 25, 2004 Back

74 The UK is a signatory to the 1951 United Nations Convention Relating to the Status of Refugees which lays down basic minimum standards for the treatment of refugees and includes the principle of non-refoulement, i.e. that "no Contracting state shall expel or return ("refouler") a refugee, against his or her will, in any manner whatsoever, to a territory where he or she fears persecution" (see http://www.unhcr.org/protect/PROTECTION/3b66c2aa10.pdf). Following the Human Rights Act 1998, the UK must also adhere to the European Convention on Human Rights (see http://conventions.coe.int/Treaty/en/Treaties/Html/005.htm#FN1) "which prevents us sending someone to a country where there is a real risk they will be exposed to torture, or inhuman or degrading treatment or punishment" (Home Office website on asylum in the UK). Back

75 Evidence provided by the Home Office explains that UK immigration rules currently provide for the following family members of British citizens or settled persons to enter or remain in the UK: fiancés, proposed civil partners, spouses, civil partners, unmarried partners, same sex partners, children, parents, grandparents and other dependent relatives. To qualify for entry and legal residence in the UK, an individual needs to demonstrate that they meet the requirements of current Immigration Rules (as described in Appendix 10). Back

76 Excluding dependants there were 23,610 applications for asylum. Of these applications 6,225 (26.4%) resulted in grants of asylum (9.8%), humanitarian protection/discretionary leave (8.9%) or in allowed appeals (7.7%), according to the Home Office Statistical Bulletin 14/07, August 2007, Asylum Statistics United Kingdom 2006. However, a proportion of the applications made for asylum in 2006 were still awaiting the outcome of an initial decision or an appeal when the Home Office figures were published. Back