Immigration

Baroness Valentine Excerpts

Thursday 21st October 2010 Lords Chamber

Moved By

[Baroness Valentine]

To call attention to the economic and cultural impacts of immigration in the United Kingdom; and to move for papers.

[Baroness Valentine]

My Lords, before opening this debate I would like to declare that I am chief executive of London First, a not-for-profit business membership organisation.

It is a great pleasure to introduce this debate today; I thank my noble friend Lady D’Souza for allocating me the time. I look forward to the contributions of noble Lords from all sides of the House; there is much expertise and experience to draw on. In particular I would like to pay tribute to the excellent report prepared by the Economic Affairs Committee back in 2008 which sought to deal with many facets of this complicated subject. The committee concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result.

There have been significant recent developments in government policy on immigration. A decision has been made to introduce a permanent cap in April of next year, and in order to avoid an influx ahead of this date a temporary cap was implemented in July. The aim of this cap is to accelerate the reduction of immigration into the UK, a trend that had begun under the points-based system introduced by the previous Government.

Her Majesty's new coalition Government are right to be concerned about migration. Politicians reflect the views of the voters, and immigration was undoubtedly an election-time door-step issue. As recession has hit, people are understandably concerned that immigrants may be taking their jobs or creating an unwelcome burden on public services. In some respects, both concerns are valid: foreign waiters are prepared to live and work in more challenging conditions than their British counterparts, while the cost of education provision to immigrants and their dependants was recently estimated at £13 billion.

The other side of the argument is equally politically and economically obvious: the Government are reliant on economic growth as a pathway out of recession. As the public sector shrinks, so the private sector is expected to take up the slack. That private sector growth is partly reliant on the attraction of world-class talent to work in the UK.

One of the UK's strengths is the global reach of its service sector economy. It is the second highest exporter of professional services worldwide. London, which is particularly successful in this sector, contributes more in tax than it receives in public spending by some £15 billion or more a year. One seventh of London's businesses are foreign-owned. Many of the world's largest companies have invested in substantial bases here. These are global organisations; they compete with the best worldwide. They must be able to recruit the best people and move people and teams from A to B as and when required. If they are not allowed to, then the A or B in which they eventually base themselves will not be Aberdeen or Birmingham but Amsterdam or even Beijing. I am more concerned about highly talented international business people and academics leaving the UK than I am about limiting their entry.

I was struck by a lecture given by Sir Howard Davies, where he argued that an economy such as London's—a varied and global centre of excellence—ebbed and flowed according to the combination and concentration of talent. Rather than a fixed number of ever present companies in certain sectors, London's economy is a fluid agglomeration of the world's brightest and best. The UK must build upon its considerable

“combination and concentration of talent”,

not cap it.

Beyond the political and economic arguments there is a question of what kind of Britain we want—of what we value about the country in which we live. I know what my answer is. I value the academics who make our universities among the best in the world; the students whom we educate and send back to their countries with vital ties and connections to our country; the 13 scientists working at the Medical Research Council’s laboratory of molecular biology who have received Nobel prizes, only five of whom are British. I value the Russian ballet dancers, the European fine artists, the American sports stars, the Caribbean reggae artists and even the Australian soap stars, all of whom add vibrancy to our society.

Let me offer some names and achievements: Rudolf Nureyev at Covent Garden; Anish Kapoor at the Royal Academy of Arts; our Olympic aquatic centre designed by Iraqi-born architect Zaha Hadid; the structure of DNA, discovered at Cambridge University by James D Watson, who came here from Chicago. I understand, however, that Karl Marx had his application turned down.

What should inform an effective policy response to the Government’s twin ambitions of managing migration and growing the economy? Let me explore the different types of migration in more detail. First, illegal immigration is undoubtedly an issue, on which I would urge the Government to focus with urgency. Secondly, there are the asylum seekers, of whom those with legitimate cases should be given appropriate protection. Indeed, we should pay tribute to waves of migrants, such as Huguenots in the 17th century or the east African Asians in my lifetime, who have enhanced our culture and our economy. Thirdly, there is a difference between EU and non-EU immigration. The Government have no direct power to limit EU migration. Finally, there are the categories identified by the UK Border Agency. Tiers 1 and 2 migrants are defined as highly skilled and skilled respectively, tier 3 migrants are low skilled and tier 4 are students.

Taking tier 4 first, I understand that students from within and outside the EU accounted for roughly 230,000 migrants in 2009—40 per cent of the total. We should value students for their subsidy, in effect, of our world-class learning institutions and for their contribution towards forging links between the UK and fast-growing developing world economies. Cambridge University trains the world’s leading mathematicians and South Tyneside College trains the world’s leading marine navigators. However, poor monitoring of this category has allowed for bogus colleges and bogus students, so I encourage the Government to take firm steps to address this issue.

On tier 3 migrants, while entry for low-skilled workers from outside the EU has been closed since the points-based system was introduced, low-skilled migrants from inside the EU enter this country freely. These people are the greatest threat to British workers and the most likely net users of public services. The solution certainly lies in making work pay, so I welcome the Government’s focus on the relationship between welfare benefits and employment. However, once in the job market, if British workers are to compete with their continental European counterparts, they must be at least comparably skilled to do so. There is no quick fix on this front. Apprenticeships, job-related training and a concerted focus on employability in our education system are the only solutions. This takes time and effort on the part of both the Government and employers.

Finally, let me focus on tiers 1 and 2—highly skilled and skilled—non-EU migrants. This is the group that we drive away at our peril, and the group most likely to make UK residents better off with their presence, as the Economic Affairs Committee recommended. There were 55,000 such migrants last year, making up less than 10 per cent of the 567,000 total. This was a decline from 66,000 in 2008, following the introduction of the points-based system. These individuals are almost exclusively net contributors to UK plc, contributing directly to the Exchequer through tax and national insurance, and indirectly, through their employers or the businesses that they set up, the extra UK jobs created as a result and their spending power. Their interaction with public services and the benefits system is low.

The most striking statistic about those in tiers 1 and 2 is that they are net emigrants from the UK. When those 66,000 non-EU migrants entered the UK to work in 2008, 74,000 left. In other words, what we have in this country is a brain-drain of top talent. The UK is already exporting the talent on which the Government are reliant for private sector growth. In a global market, UK residents are increasingly looking overseas for top employment opportunities, which is an issue that, I am afraid, we cannot address directly, short of shackling people to their desks or confiscating their passports.

Let me comment further on the categorisation within tier 2. Tier 2 sanctions entry of skilled workers who fill skills gaps. First, I suggest that experience and business culture should count alongside a narrow definition of skills. Let me give some examples. A global engineering company may need Japanese speakers with knowledge and experience of infrastructure projects in Asia—knowledge and experience that a British engineer just will not have. A Moroccan bank may want to get a toe-hold in Britain and to bring in a Moroccan chief executive to set it up. Someone who has worked on the multinational acquisition of an energy company by a water company may be helpful to a comparable deal being facilitated in the UK.

Secondly, we should seize skills opportunities as well as simply meeting gaps. Think about the concentration of expertise in a place such as Silicon Valley. It is the most successful centre for IT entrepreneurship in the world and has achieved that by attracting talent worldwide. Sequoia, the venture capital company that backed Google, Cisco and Oracle, has said that it likes backing first-generation immigrants because of their hunger and drive. Motivated, talented people brought together with capital in a culture of enterprise provide a potent recipe for success. In my view, this is how we need to think about London and the UK—a centre for ideas, talent and experience drawn from around the world which, given the fuel of additional motivated talent, can create further economic added value and promote growth.

To sum up, as is perhaps apparent from what I have said so far, I am not persuaded that the Government will achieve either their political or their economic objectives by implementing a tier 1 and tier 2 cap on non-EU migrants. However, I understand the bind that the Government are in. What we are trying to achieve is to grow the economy while tackling voters’ migration worries. Therefore, my plea to the Home Secretary and officials in the Home Office is that they work with business and, jointly, think a little out of the box. To misuse a phrase, they should find a third way.

Let me throw some ideas into the mix. Perhaps it is worth lifting the bar a little for tier 2 entry and say to companies, “Yes, you can employ non-EU immigrants, but only if you really need them and if they really are the best”. Perhaps employers could be asked to demonstrate the net positive impact on UK residents as a result of recruiting employees from non-EU countries. Perhaps employers could pay a deposit on each worker that they bring in, refundable only when that amount has been repaid in income tax and national insurance. Perhaps employers could sponsor an apprentice for every migrant that they recruit.

If the Government say to business, “We want the best businesses here in the UK and we are prepared to work with you to make that happen”, I am inclined to believe that, complex though the issue is, with our multi-talented public and private sectors, a solution can be found. I eagerly await all that follows. I beg to move.

--- Later in debate ---

[Baroness Valentine]

My Lords, I thank everyone for their fascinating and multifaceted contributions to today’s debate and I hope that the Government will take account of the weight of opinion expressed. I thank the Minister specifically for his constructive reply on this thorny issue and I look forward to a continuing and constructive dialogue. It is critical to get this right.

I point the Home Office, again, towards the report of the Economic Affairs Committee of this House, which concluded that any immigration policy should have at its core the principle that existing UK residents should be better off as a result. I am afraid that capping tier 1 and tier 2 immigration will do the opposite. I encourage the Government to make clear that the policy that they are pursuing is in line with the outcomes that they seek.

Finally, I remind your Lordships that chicken tikka masala is Britain’s favourite dish. I beg leave to withdraw the Motion.

Motion withdrawn.