Non-EU Citizens: Income Threshold

Keir Starmer Excerpts

Monday 7th March 2016 Westminster Hall

[Tommy Sheppard (Edinburgh East) (SNP)]

I am delighted to speak in this debate, but like my hon. Friend the Member for Glasgow North (Patrick Grady), I wish the attendance was rather better. I do not want to score any political points, but I do think that a fairly nasty and pernicious little proposal is being put forward and it is incumbent on us all to encourage our colleagues to take this a little more seriously and show more interest in it.

[Keir Starmer (Holborn and St Pancras) (Lab)]

Will the hon. Gentleman give way?

[Tommy Sheppard]

I will of course. Perhaps a meeting is going on that I do not know about.

[Keir Starmer]

I let that comment go the first time, but hon. Members will see on the screen that in the main Chamber at the moment there is a debate on a Home Office Bill, in which very many of my colleagues are down to speak. It is unfortunate that there is a clash, but it is not fair to read into that a lack of interest in this debate. I do not know whether the hon. Member for Edinburgh East (Tommy Sheppard) has seen the screen and realised that that Bill is now being debated in the main Chamber.

[Tommy Sheppard]

I thank the hon. and learned Gentleman for his point. As I said, I am genuinely not trying to score a political point. I am simply saying that we need to encourage colleagues to take more interest in this debate, this subject and this proposal in particular.

Since my election to the House, I have discovered that this is a place rich in irony, and I have been overloaded with it today. I have come to this debate from Portcullis House, where I was at an exhibition of scientists, engineers and technologists, who are trying to show Parliament pioneering work in which they are involved. I met three young people working at Edinburgh University on doctorates. One was from England, one from Italy and one from the United States of America. I am fairly confident that if this little proposal goes through, we will have to say to Laura Underwood, who is pioneering clean water technology at the University of Edinburgh, that if she is successful in discovering something new in that technology, she will not be welcome to stay in this country and realise that and get a job to develop it unless she is earning more than £35,000 a year, which in a first-time job, when someone has just graduated, is pretty near impossible. If some people in the House get their way and we manage to pull out of and turn our backs on the European Union, down the line we would have to say something similar to Enrico Anderlini, who is working on developing new forms of wave technology—that he would not be welcome here as an Italian unless he was earning £35,000 a year, which for a young 20-something is pretty hard to do. It is very ironic indeed that I should come from that gathering to discuss a policy that seems to be set up to put a major hurdle in front of such people.

I am here today because more than 1,000 of my constituents have signed this petition and because many people have written to me, giving examples of what the proposal will mean for them as individuals. I think—I welcome some of the comments so far—that we need to change the whole way in which we debate immigration in this country and we need to start in this Chamber by setting the pace and setting an example of how that should be done. Immigration is undeniably a good thing for our economy; it is a good thing for our communities, and it is a good thing for humanity and the individuals who are involved in that process. If we had not had immigration or migration over the centuries, this world would be a much more miserable and unliveable place than it is today, so I would be glad if we could at least try to couch the debate in positive terms.

I note the statistic that has been thrown up in the debate that net migration—this is seen as a horrible thing—was about one third of a million people last year. I thought to myself on the train down this morning, “Well, how much is that really?” It is about one in every 200 people in the United Kingdom, so in a town of, say, 20,000 people, it would mean that 100 people have come over the last year to live in that place. I cannot square that statistic with the thoughts in some people’s minds about our being overrun by alien hordes or alien cultures and the country’s being swamped by migrants. That is clearly ludicrous, so we could at least get a sense of perspective.

I understand that in some communities, among some of our citizens, there is deep apprehension about migration. I understand in particular that many of the people who are living at the margins of society and who feel themselves to have very little are susceptible to the argument that says, “You can’t afford to be generous to people from elsewhere in the world. You need to be hard-faced about this and turn your backs on these people.” I do not agree with that approach, but I can understand why some people will develop it. It concerns me that we have politicians who want to manipulate that prejudice and who, rather than confronting with evidence the assumptions on which it is based, pander to it and try to use it for political capital. That is all of us going to hell in a handcart if we do not pull back from that general direction.

Although I can understand that type of feeling when it comes to whether we should take tens of thousands of refugees fleeing warzones in the third world, I cannot for one minute understand that when it comes to the question of tier 2 visas. Tier 2 visas, let us remind ourselves, are given to people who are coming to work here in a job that has already been advertised locally and that no one living in the area wants to take, so how that can be described as anything other than a positive benefit and contribution to our economy and our community, I do not know.

I want to question—the Minister will perhaps answer this—the rationale, the logic, behind saying that people have to earn a certain amount of money, a certain salary, to be able to come here, but a different amount of money, a different salary, to be able to stay here. That seems ludicrous; and the £35,000 a year figure is arbitrary. I need to hear the justification for it, because it certainly does not work in my constituency—in my city. It takes no account whatever of regional variations within the United Kingdom in employment and in salaries. Whereas there might be places in the middle of London where £35,000 is regarded as some sort of miserly salary, I can tell hon. Members that it is regarded as a very good salary indeed in my constituency. If we set that as the limit, all that will do is further imbalance the UK economy towards London and the south-east and those areas that are already sucking the lifeblood out of it, so I would caution people when thinking about trying to manipulate migration to this country so that it favours London and the south-east rather than the rest of the country.

The proposal also demonstrates no recognition of different industries. A constituent wrote to me and said, “This seems to indicate that the Secretary of State has a value system behind this—that they view some jobs as more important than others and that if someone is working in banking or finance and earning a good salary, they are regarded as inherently more valuable and someone we would want more than someone who is working in a lower-paid job in our public services or in the arts and creative industries.”

I want to make the point in particular about the arts and creative industries. This issue is particularly relevant to a city such as Edinburgh, a metropolitan, bustling city with people from all over the world, doing all sorts of exciting things and fuelling our great festivals. Many people in this Chamber will have attended those festivals and enjoyed them. That is partly because it is a welcoming place to come and we do not say to people, “To practise the arts here, you have to be in a job earning £35,000 a year, or you can’t do it.” As soon as we begin to do that, not only will that culture begin to ebb away and things will get that much duller, less creative and less exciting as a result, but other cities, in other countries, will directly benefit from that because people will go elsewhere.

Of all the petitions that I have ever seen come to this House, this one is the most eminently reasonable. If we read what the petitioners want, we see that they are not saying, “Oh, throw out the Government’s immigration policy.” They are not even saying, “Overturn and throw out the concept of having to reach a salary threshold before people can get indefinite leave to remain.” They are saying, “Press the pause button. Take a look at this again, and wait to get some evidence in particular about whether a different limit should apply to different industries.” I cannot for the life of me see anything more reasonable than that, and I think that not only should we consider it, as we do in these debates in Westminster Hall; I hope that the Minister will say that the Government will consider it to the extent that they will think again and go away and amend this policy.

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[Keir Starmer (Holborn and St Pancras) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. Like others, I welcome the debate and the valuable contributions made by hon. Members. Clearly, there is public concern about this policy, which has not been debated in the House. It was introduced by statutory instrument, albeit followed by a consultation. I, too, pay tribute to the Stop35k campaign that has helped to raise awareness and highlighted a number of consequences that could stem from the Government’s policy.

This afternoon, we have heard about the concerns from businesses and employers who recognise the potential economic consequences of the policy, as well as from teachers, nurses and trade unions who are rightly concerned about the impact it could have on key public services. Labour supports an immigration system that has control and fairness at its heart, but we also recognise that, as businesses across the country have told me, there are very serious skills shortages in our economy that we increasingly rely on skilled migrants to fill. We would like the need for skilled migration to be reduced, but the policy’s focus should be to upskill local workforces to reduce the long-term need for skilled migration. That is the best way to reduce immigration in the long term.

[Carol Monaghan]

To upskill the local population we need workers in key areas who will now be excluded, such as in teaching science, technology, engineering and maths and in lectureship positions. It will be almost impossible to upskill people who are living here without immigration for those key positions.

[Keir Starmer]

I accept the thrust of the hon. Lady’s point, and I will point out why the current policy is neither sensible nor sustainable, but the upskilling of the local workforce is much needed in the long term. Wherever I go across the country, I see a yawning gap between the skills that are needed in our businesses and our industry and the skills that are available locally, which points to a much wider issue than the narrow issue, framed in immigration terms, that we are addressing today. Labour’s position is that we should focus on upskilling the local workforce rather than relying on such a policy.

We recognise the concerns of the public, businesses, universities and, frankly, pretty well everyone else about the Government’s current approach to immigration. I remind Members that the Government’s net migration cap, which has already been mentioned—in fact, the primary aim of the Government’s immigration policy—is now in tatters. The latest figures show net migration at 323,000, which is more than three times the Prime Minister’s “no ifs, no buts” target. That is embarrassing for him but, more importantly, it is eroding public trust and is resulting in perverse consequences—this policy would be one of those perverse consequences—that are affecting British businesses and the British economy.

As we have heard today, the cap is leading the Government to clamp down even on those areas of migration that they acknowledge are likely to boost gross domestic product, fill skills gaps and support public services, which is a perverse consequence of the policy. The groups affected by the policy are those in work who have an approved visa sponsor and who have contributed to the UK economy and society over a number of years. Analysis of the group of individuals who currently would not meet the £35,000 threshold, the group most affected by the policy, shows that their mean income is £27,300. On any estimate, they are net contributors to the UK economy. They are the very people we should be welcoming to the UK, and they are filling skills gaps on which businesses and public services rely.

The Migration Advisory Committee’s assessment estimates that the threshold

“will reduce the numbers qualifying by around 16% per annum”.

That is the overall number, but the threshold will have a disproportionate impact on certain groups. The committee estimates that, as has already been mentioned, 48% of migrant nurses will be affected. Some 37% of migrant primary school teachers, 35% of migrant IT and software professionals and 9% of migrant secondary school teachers will also be excluded by the policy. The Department for Education made a critical submission to the Migration Advisory Committee’s call for evidence on the policy in 2011, warning that:

“If migrant teachers are required to leave the country after five years, this will present risks to the quality of teaching and incur further public expenditure on the training and recruitment of new teachers.”

That is the perverse impact.

Regional issues have also been mentioned, and I will stay with teaching. In London, there is a fair chance of a teacher reaching the £35,000 threshold in five years, but that is much less likely outside London, but the contribution and quality of input could be precisely the same in both cases. Obviously, like others, Labour welcomes the fact that nursing is currently on the shortage occupation list. Will the Government confirm that that will remain the case? We need to know, and it is a real concern for the national health service and the nursing professions. Nothing has been said to provide reassurance to the teaching profession, which will be affected in the way I have set out.

We recognise that there are strong arguments for addressing skills gaps in our economy, but the Government have failed to do so, and much more needs to be done. That is why we believe that the Government should urgently focus on improving skills training and vocational education to address those skills gaps, but businesses and unions have made it clear that an arbitrary limit that cuts off skilled migrant workers is a form of economic vandalism. I remind Members of the Government’s impact assessment, which states that the impact will be a loss to the UK economy, on the figures I have seen, of £288 million over 10 years—that is the adverse impact on business. I checked with the Library, which confirmed that that is the Government’s most up-to-date estimate. The independent Migration Advisory Committee also warned in 2012:

“As skilled migrant workers are expected to have a positive dynamic impact on growth over the long-run, we would expect reductions in skilled Tier 2 migrants to have a negative dynamic impact on per capita growth.”

Does the Minister accept those figures and the Government’s own figure that the policy will cost the economy £288 million over 10 years?

[Patrick Grady]

The hon. and learned Gentleman has perhaps explained why many of his colleagues are not on the Back Benches today. Perhaps some of his figures explain why not very many Government Back Benchers are here to defend this ridiculous policy.

[Keir Starmer]

I am grateful for that intervention because my point is on the adverse impact on business, and I will go on to address the minimal effect of the policy even in the Government’s own terms. We have the Government’s figure, which I have checked with the Library, and I am told that there is no more up-to-date estimate other than that the policy will cost the economy £288 million over 10 years. The Government’s justification for the policy, and therefore, in effect, for the damage that it will cause the economy, is that it will make

“a modest contribution to the Government’s target of reducing net migration to sustainable levels.”

So it is the old net migration target that is producing the perverse impacts. Drilling into that target, I remind Members that the Government’s impact assessment estimates that the introduction of the threshold will reduce overall net migration by between nought and 4,000 a year. We have the prospect of damage to the economy in the realm of £288 million over 10 years, with an estimated reduction in net migration that could be nothing or, at most, 4,000 a year in the best-case scenario. On current figures, that would simply reduce net migration from 323,000 to 319,000. Again, I have checked the figure of between nought and 4,000 for the estimated overall impact per year with the Library. Does the Minister accept that figure?

The Government are asking the House to agree a policy that will cost the country millions of pounds a year, deprive businesses and services of key workers and force people who are making an economic and social contribution to the UK to leave the country. If that is not a good example of unintended consequences flowing from an immigration policy designed to create headlines rather than address the country’s immigration needs, I cannot think of many better. Would it not be better to drop this misguided policy and ring-fence some of the money saved to help boost skills and vocational training for local workers?

Labour supports a compassionate and controlled immigration policy. We also believe that there is scope to consider how the link between temporary work and indefinite leave to remain works. We will continue to push the necessity of long-term focus on skills and training, but we will not support policies that harm the economy, deprive public services of key workers and have next to no impact on net migration. Unless the Government can provide updated, materially different estimates for the policy, we cannot support it.

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[Richard Harrington]

I answer that by restating that the consensus is that this country has a significant skill shortage, and that it is easier—this is a question of fact, whatever values one adds to it—to get people with skills from abroad rather than train staff oneself.

[Keir Starmer]

How does the policy, under which an employer could simply sponsor in another person earning under £35,000 to fill the job that has just been vacated by the person leaving, help the skill shortage in this country?

[Richard Harrington]

If employers want long-term employees, they will have to concentrate on training them here. In the short term, the hon. and learned Gentleman is absolutely right.

The Government consulted on reforming the rules for settlement in 2011, as we do not believe that there should be an automatic link between coming to the UK to work temporarily and staying permanently. That is common in most countries: there is a difference between temporary work and permanent settlement rights.

The minimum earnings threshold was set following advice from the Migration Advisory Committee. The main purpose of the tier 2 category is to support the UK economy, not to provide migrants with a route to settlement. While the MAC considered a number of alternative criteria, such as age or qualifications, it advised—this is where some hon. Members would have disagreed with it—that the strongest indicator of economic value is salary, and those migrants earning more than a given amount are more likely to make the biggest contributions to the UK economy in future. There may be exceptions to that, but fundamentally I believe that in the majority of situations, that is the case.

Tier 2 is reserved for those filling graduate-level jobs; that is what it is for. The figure of £35,000 a year was not invented by politicians from nowhere; it was worked out professionally by the MAC to be equivalent to the median UK pay in skilled jobs that qualified for tier 2 at the time of the MAC’s consultation in 2011. Hon. Members should be aware that the most recent research that the MAC has carried out means that the equivalent figure today would be £39,000.

The MAC has also identified evidence of a wage premium for migrant workers with specialist skills that are in short supply. On average, tier 2 migrants—that is, general migrants—earn an extra £3,000 per annum compared with UK workers with similar characteristics.

However, the Government recognise that salary is not always the strongest measure of the importance of a job, a point made very strongly by many Scottish National party Members who have spoken today. I thank all the SNP Members who are here for coming to this debate, because without them there would be comparatively few Members here. The hon. and learned Member for Holborn and St Pancras (Keir Starmer) made the point that this debate unfortunately coincides with a Second Reading debate on the Policing and Crime Bill, but I still thank the SNP Members for coming to this debate.

Within tier 2, there are exemptions for migrants working in a PhD-level occupation, for example, university researchers, and for those working in recognised shortage occupations. The hon. Member for Edinburgh East (Tommy Sheppard) gave the example of a university researcher in the field of clean water technology and said that she would have to leave her job. As I say, there are exemptions for PhD-level occupations—

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[Richard Harrington]

I would like briefly to respond to the points about the notice period. The view was expressed that it was unfair that people who had come here to work believing that it would lead to settlement had no idea about the changes that were going through. The Government made it clear that new rules would apply to migrants who entered tier 2 from 6 April 2011, and employers have had time to prepare for the possibility that their workers might not meet the required salary threshold for remaining in the UK. Workers who cannot meet the threshold may extend their stay in tier 2 for up to six years and may, during that period, apply to switch into any other immigration route for which they are eligible. It is not on or off, black or white; there is a transitional period.

I know that hon. Members recognise the importance of sustainable immigration. We must ensure that the UK economy can thrive while also reducing pressures on schools, hospitals, accommodation, transport and social services. We believe that the minimum earnings threshold for settlement under tier 2 ensures that the tier 2 route plays its part in the Government’s overall strategy to control net migration and that settlement is reserved for those who provide the greatest economic benefit to the UK.

[Keir Starmer]

I do not think that the Minister has touched on the impact on net migration. I am reading from the impact assessment, signed off by the right hon. Member for Ashford (Damian Green):

“We estimate that these restrictions on settlement will lead to some reductions in net migration of between 0 and 4,000 per year”.

Does the Minister accept that the policy could have no impact on net migration? That must be inferred from the impact assessment.

[Richard Harrington]

As the hon. and learned Gentleman would expect, I do not accept that. That impact assessment was from the previous Immigration Minister, my right hon. Friend the Member for Ashford (Damian Green). I would like hon. Members to look at the policy in two years’ time and see its effects.

In part based on my many years’ experience as an employer—I am proud to have had many employees from all sorts of backgrounds—I think that the policy will make a significant difference to the number of skilled UK residents being employed here while, at the same time, because of the significant exemptions regarding qualifications and shortages, allowing reasonable numbers of skilled and qualified people to come here. I do not agree with the shadow Minister’s view and I think that, in time, the policy will be seen to be sensible, reasonable and measured.