Brexit and the Labour Market (Economic Affairs Committee Report)

Baroness Smith of Newnham Excerpts

Thursday 8th February 2018 Lords Chamber

[Baroness Smith of Newnham (LD)]

My Lords, like other noble Lords, I thank the noble Lords, Lord Forsyth and Lord Hollick, for the report. I had intended to say that on many of the issues we appear to have considerable agreement. Then the noble Lord, Lord Reid, spoke and brought in a range of issues on which we may not have quite so much agreement. The Liberal Democrats have not yet changed our minds on identity cards. We have not discussed that issue within the party for several weeks but I do not imagine that there will be any change in our position on that any time soon.

I was intrigued by the fact that when the Labour Party was in power the noble Lord, Lord Reid, had come up with an idea for controlling immigration and had been accused of seeking to adopt a Soviet-style system. I wonder whether the noble Lord, Lord Green, has ever been accused of adopting a Soviet-style approach given that his views may be somewhat similar.

The report contains some key lessons with which I think your Lordships all agree: namely, the fact that the data are not fit for purpose, it is very difficult to know who is actually in this country, we do not know who is working, or whether people are using their national insurance numbers or have claimed a number and perhaps gone back to their home country. That is an issue on which there is clearly some agreement. The Liberal Democrat Benches can certainly agree with two issues in the report: namely, taking students out of the statistics for the purposes of public policy, and getting rid of arbitrary targets.

In opening the debate, the noble Lord, Lord Forsyth, pointed out that the Brexit vote already seems a long time ago. I declare my interest as an employee of the University of Cambridge. Like other Members of your Lordships’ House, I have always found that Brexit has basically been a job creation scheme for academics, lawyers, perhaps for trade negotiators, and certainly for Members of your Lordships’ House and members of committees in your Lordships’ House and in the other place. They seem to have produced so many reports on Brexit since June 2016, that one begins to wonder where all the evidence and the expertise was to be found before the referendum, and whether some of that work could not have been done before June 2016 rather than now.

I also have a brief secondary declaration in that in the past I have been the beneficiary of the right of free movement of people. In the 1990s I had a scholarship to be in Germany and I went back and forth; I was quite homesick, so I visited the United Kingdom on many occasions. I flew in and out of the country, and nobody asked me what I was doing or whether I was a student or working. It appears that the border agency of the 1990s was no better or worse than the situation we have now. If the Government can come forward with ways to improve the data, that would be enormously welcome.

We have already heard that there is a change in the number of EU citizens resident in the United Kingdom. The net numbers are already falling. As the noble Lord, Lord Turnbull, pointed out, perhaps we should be careful what we wish for. The impact on the labour force is significant and the vote to leave the European Union has created uncertainty in the minds of EU citizens resident in the United Kingdom, some of whom have already taken the decision to leave, others of whom may decide to leave, and many of whom are saying, “We are still not sure that the United Kingdom really wants us”. The interim agreement made in December 2017 does not give the certainty that EU migrants need to ensure that they will remain in the United Kingdom. Therefore we are already seeing a loss of EU migrants. Is that really what we want? Not necessarily.

The report recommends that the Government provide,

“a suitable implementation period during which businesses retain access to the European labour market”.

That would clearly appear to give certainty to businesses, and it has been welcomed across the House. However, what does an implementation period mean? In particular, the noble Lord, Lord Forsyth, and other noble Lords suggested that the implementation period might be for “several years”. So far, we have heard about an implementation period which Theresa May suggested would last two years, and which the EU 27 suggest would be 21 months. If an implementation period as regards access to the European labour market needs to be for several years, can the Minister explain to us how the Government might come forward with a policy on that? Will that be part of the proposed immigration White Paper and the immigration Bill, which we are likely to see later this year, or do the Government object to the idea that an implementation period of multiple years for access to the labour market is desirable?

[Lord Forsyth of Drumlean]

I suspect that I may be responsible for the confusion here by having used the word “implementation”. I was talking about the implementation of an immigration policy which took account of the needs of specific businesses, which is quite different from the transitional implementation period that is currently under discussion.

[Baroness Smith of Newnham]

I thank the noble Lord for that clarification. That raises two questions. What do the Government propose to bring in? If the implementation period for a new immigration policy was about access to the European labour market, there is still the question of what the Government propose to do. If the committee’s proposals are taken on board, is there a suggestion of having an interim period in which there are more liberal policies for EEA nationals than for third-country nationals? That might be welcome, but are the Government thinking about that? Also, are the Government willing to think about a wider range of implementation periods and transitional periods then we have heard so far? The use of the words “implementation” or “transition” suggests that the Government have a process and an idea of where they are going. So far, there is not a great deal of clarity on where the United Kingdom will be beyond 29 March 2019. The noble Lord, Lord Lea, would like us still to be in the single market, in which case many of these questions do not arise. However, assuming that the Prime Minister does not take on board the Chancellor’s idea that the United Kingdom should remain linked as closely as possible to the single market, what sort of immigration policy do the Government propose? To what extent are they willing to open up to the idea of having a policy that is based on the needs of the labour market, not on arbitrary targets? With the possible exception of the noble Lord, Lord Green, we are united in saying that arbitrary targets are not necessary or desirable. Therefore, to what extent will the Home Office be flexible?

We on these Benches very much welcome the amendment moved by the noble Lord, Lord Forsyth, in Committee, which has therefore been brought forward in this report, on the situation of students and the idea that they should not be included in short-term immigration statistics for public policy. I know that the Minister will say, as her noble friend Lady Vere said on Monday in answer to comments on a Statement, that students have to be included in the numbers because that is what happens in the OECD. But for public policy purposes, other countries, including the United States, do not consider students in the migration statistics. The noble Lord, Lord Hannay, pointed that out again on Monday and got the stock answer from the noble Baroness, Lady Vere, and the same answer is in the Government’s response to the Economic Affairs Committee’s report. Can the Minister please think about giving us an answer today that goes beyond the stock answer and which recognises that students are important and benefit the UK economy? In addition, the standard answer we get is not correct. We keep being told that there is no cap on student numbers, but if there is a commitment to a figure of net migration, and all of a sudden we say, “We want another 100,000 students this year”, does that mean that there are 100,000 workers who cannot come?