Memorandum by Professor Richard Pearson
INTRODUCTION
1. I welcome this inquiry which is very
timely given the recent rapid growth of inward migration following
enlargement of the EU and the increased issuance of work permits.
It is important at the outset to recognise that conclusions drawn
reflect the fact this growth in migration has taken place in a
context of a strong economy. Also that the overall level of migration
is not "managed", rather it largely reflects the rights
of other EU and related nationals to come to the UK to work, and
the differential work opportunities and wages within the EU. "Managed
migrants", ie those coming with work permits and visas have
accounted for less than one in four of all migrants. In setting
policy recommendations for the future, consideration should also
be given to the longer term appropriateness of the policy, when
economic conditions may be different, and in particular if there
should be a weaker economy, or even one in recession.
2. This response draws on my extensive research
and international policy work relating to employment, skills and
migration for the corporate sector, government departments and
agencies, the EC and the OECD. Roles include that of Director
of the Institute for Employment Studies (IES), Research
Director, Employability Forum, and Visiting Professor at
the University of Sussex's Centre for Migration Research
(CMR). This is a personal submission and does not represent a
response from my affiliated organisations.
3. This submission focuses on selected issues
and questions. Supplementary material is referenced at the end
of this paper.
THE NUMBERS
(Q1)
4. At the outset, it is important to recognise
the scale and diversity of the "immigrant population"
and the wide ranging contribution they make to the UK economy.
Incoming migrants have totalled over 600,000 in recent years,
while the numbers coming from the core EU countries are unknown.
They include high profile chief executives of organisations such
as those at British Airways (an Irishman, and previously an Australian),
GlaxoSmithKline (a Frenchman), the London Business School (an
American), the Office of National Statistics (previously a New
Zealander), the Royal College of Nursing (recently an American).
They are a key means of meeting the UK's skill needs in the public
and other service sectors. For example, foreign born nurses, mainly
non EU, accounted for nearly half of the new nurses and nearly
one in four dentists in recent years, while 35% of all London
workers are migrants, as are 60% of those working in London hotels
and restaurants. Many highly qualified migrants from the accession
countries are often to be found working in low skilled UK jobs.
The migrant population also includes refugees; some of whom are
traumatised when they arrive, some speak no English, some have
no concept of the working in a developed economy; and many did
not choose to migrate to the UK. Many of the latter groups experience
high levels of unemployment or underemployment relative to their
potential.
5. In terms of current policy it is important
to recognise that "managed" migrants ie those entering
the UK via the work permits or related routes such as working
holiday makers, are only a small part, perhaps one in four, of
the overall inflow which is made up predominantly of those from
the EU who have the right to live and work in the UK.
6. The statistics collected by ONS and DWP
provide an overview of the main trends and sectors, but there
is little reliable evidence as the wider contribution and impact
of migrants on the economy and society. In particular, there is
little evidence about the scale and impact of illegal and trafficked
migrants, as well as groups such as students working outside the
remit of their visas, ie illegally. It has been estimated that
they total over 500,000. There is also only very limited evidence
as to the nature of the flows of UK nationals leaving the UK,
and of non UK nationals returning "home" or moving to
another country who are believed to have totalled over 300,000
per annum in recent years.
THE IMPACT
ON EMPLOYER
BEHAVIOUR (Q3)
7. Employers recruit migrants for a number
of reasons. In many cases recruiters are unaware at the outset
that potential recruits are migrants who are treated as individuals
in the wider pool of applicants. In other cases migrants are targeted
in the UK as a response to an employer's inability to recruit
indigenous workers at prevailing rates of pay and working conditions.
Increasingly employers have been targeting recruits in their "home
country", the most publicised examples being that of nurses,
while bus companies and taxi firms are also recruiting, and offering
basic training in the accession countries, where there has been
a long tradition of gang masters recruiting seasonal workers form
abroad. In some cases the explicit aim is to "exploit"
legal and illegal migrants by paying low wages and providing poor
working conditions.
8. The availability of a wider pool of recruits
will reduce the incentive for employers to train staff, introduce
new technology and innovate in the work place, maintaining a "low
skills equilibrium" business delivering low value added goods
and services. They may also reduce the incentive to reallocate
work outside of the crowded south east of the country. Migrants
may of course, also aid the introduction of new working practices
and innovation, although evidence around the balance of these
issues will, by its nature, be hard to discern. The wider pool
of recruits may also limit career prospects for more junior indigenous
staff, and reduce the incentive for others to train for and enter
such occupations. The latter has been a problem in the NHS when,
until limitations were introduced, the employment of overseas
nationals in training roles limited the career development of
junior UK doctors, potentially reducing the long attractiveness
of a medical career to UK nationals.
THE IMPACT
ON MARGINALISED
WORKERS (Q4)
9. It is important to recognise that the
rapid increase in migration in recent years has taken place in
the context of strong economic growth. While migrants have clearly
helped alleviate often long standing skill shortages, they have
also filled many low skilled jobs, often at very low wages. These
migrants are likely to be displacing, and reducing the incentive
on employers to recruit and train low skilled, indigenous workers.
The UK has large numbers of the low skilled who may, as a consequence,
become, or be more likely to remain, increasingly marginalised
from the labour market, adding to the demands on the welfare system.
This is evidenced by the fact that despite the continuing growth
of the economy, and the government's Welfare to Work policies
which are seeking to move more people from unemployment and other
benefits in to work, unemployment rose steadily between 2004 and
the end of 2006, including, of particular concern, amongst young
people. At the same time the overall employment rate of those
of working age fell. It is not clear how much of this rise in
unemployment is attributable to the steep increase in inward migration,
most notably the A8 migrants between 2004 and 2006, however there
must be some correlation, even if the precise level is hard to
disaggregate. Research by the DWP suggests that this has not been
the case but there are severe methodological limitations when
trying to draw such conclusions around hypothetical situations.
THE NEED
FOR A
WORKFORCE STRATEGY
(Q13, 14)
10. Establishing a managed migration policy
requires a judgement to be made about future needs. However, forecasting
longer term skill needs is not possible for many reasons, even
for one or two years ahead with any certainty (let alone shortfalls),
not least because of normal levels of economic uncertainty. Most
critically forecasts will have to factor in the likely extent
and impact of not just immigration from the EU, emigration, and
migration within the UK, but also other regular labour market
adjustments such as changes to wage levels, investment in training,
occupational change, and productivity. This is particularly the
case given the many major national skills initiatives that are
taking place whose aim is to alleviate the very shortages that
migration might otherwise resolve. This highlights the absence
of a wider work force strategy for the UK, which is needed not
just for the purposes of migration management, but also to inform
national, local, sectoral and employer skill and work force strategies,
careers advisers etc. At best forecasts can focus on wide margins
for very broad occupational groupings occupational groupings such
as `engineering professionals' which includes a wide range of
non largely interchangeable occupations, and will be unlikely
to drill down to the specific types of vacancy such as that of
digital engineers.
11. The government then has to translate
these "shortage occupations" in to points, and set numbers
able to enter in any one period. Given that entrants to Tiers
1 and 2 will have the potential for longer term settlement, consideration
will have to be given to longer term needs and commitments well
beyond the time horizon of any realistic forecasts, as settlement
will impact on population growth and then on to education, health,
housing and other aspects of the infrastructure for decades to
come. In seeking lessons from Australia and Canada, where a similar,
but broad brush approach is followed, it is important to recognise
that these have been countries seeking to boost their overall
populations.
THE IMPACT
ON EDUCATION
AND TRAINING
(Q12,15)
12. Recent migration has clearly had a major
impact in boosting the demand for English language training (ESOL),
the supply of which has not kept up with demand. While there is
an understandable wish to avoid providing a free service for "ESOL
tourists" ie encouraging foreign national to come to the
UK to receive subsidised English language training, refugees are
one group who are suffering as a result, a position accentuated
by of the recent changes in policy. While the Home Office seeks
to support the integration of refugees in to employment and society,
refugees inability to easily and quickly access ESOL training
is delaying their integration in to employment and wider society.
This is adding to welfare problems and costs, and reducing the
contribution of refugees to the economy, who experience disproportionately
high levels of unemployment and underemployment.
28 September 2007
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