Brexit and the Labour Market (Economic Affairs Committee Report)

Lord Darling of Roulanish Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Darling of Roulanish (Lab)]

My Lords, I will not follow the noble Lord, Lord Horam, too far down the road of immigration. I too believe that immigration needs to be controlled, but we also need to look at the benefits that can come from it. To put it another way, if he is concerned about quality of life, as we all are, he should take a good look at a country like Japan which does not have much in the way of immigration and is now facing the serious problem of an ageing population without the workforce to support it. These things can cut in a number of ways.

I should draw the attention of the House to my entry in the Register of Lords’ Interests, in particular that I am a director of Morgan Stanley New York, which is of some relevance to this debate. I do not want to dwell too much on the wholly inadequate nature of the statistics with which we are faced because they were dealt with in detail by the noble Lords, Lord Forsyth and Lord Turnbull. Suffice it to say that if the Government have as their central policy on immigration the reduction of net migration but they do not know the figures on which it is based, then the policy does not add up to very much. We all know that the policy has not been met, and if George Osborne is right, no one in all the Cabinets that he served in prior to moving on to other things believed that it was realistic either. What was obvious from the evidence we heard is that we simply do not know with any degree of accuracy the number of people coming in or going out. That is extraordinary, given that most of us who travel in and out of the country are well used to producing our passports. Someone, usually an airline, knows when you left, and the Immigration Service certainly knows when you come back. It cannot be beyond the wit of this country to try to marry the two up in order to get an accurate picture of who has gone and who is coming back. That is particularly important if we really do want to measure what the net migration figure is.

I want to concentrate on the section of our report that calls on the Government to consult with business and to develop a strategy for what the labour market needs of this country will be post Brexit. That simply has not yet been done and the clock is ticking away quickly. What was obvious to us, as it is to anyone who looks at this subject, is that a number of people, particularly from the European Union, work in this country, contribute and pay their taxes. However, it is not only those with degree-level skills in higher-paid jobs that we should be concerned about because at the present time an awful lot of jobs requiring lower levels of skills are being done by EU nationals. Indeed, the evidence we had is that many of those people would simply not qualify under the non-EU scheme that this country currently operates if they were to apply to come to work here. For example, looking at skill levels, the figures we got show that some 32% of EU nationals are working in lower to middle skills and 24% are working in jobs that would be described as low skilled.

When the Government develop their strategy they have to ask themselves: what does industry need across the piece? If we end up in a situation where after March next year many of these workers cannot come here or they choose to go back—an awful lot of them do go back for perfectly understandable reasons—and are not replaced, many of our industries could find themselves very exposed. It is not just agriculture, manufacturing and the academic world; all these areas depend to a substantial extent on having an adequate supply of labour from not just this country, but the EU. Dare I say it, having people come from different countries with different backgrounds and skills sometimes enriches the workforce. It adds quite a lot to it because we learn from each other.

That is why our recommendation that the Government should consult with business to ask what the skills requirements are is paramount. We simply cannot introduce the system that currently applies to non-EU nationals, where there are skill-level requirements and quotas, for two reasons. Partly, I do not think the Home Office could cope with it. It has struggled under successive Governments and over many years to try to operate schemes like this. All of us who have had experience of dealing with them will know that you sometimes get some extraordinary decisions that are very difficult to understand.

The second thing is that I find quite extraordinary the idea, particularly coming from a Conservative Government, that the state knows how many people we require, what level of skills are required and that it can adjudicate as and when business requirements change. Maybe I am being too new Labour here, but I do not think that that is the job of the state and I do not think it can do that. If that really is what is being proposed—I certainly read in the newspaper today, and I presume it is not fake news, that one of the things that was discussed by the Cabinet sub-committee yesterday was simply to transpose the non-EU regime and make it universal for people coming into this country—I can see all sorts of difficulties. Our economy is growing, but, as we all know, it could be growing an awful lot faster. My belief is that it if we removed the threat of Brexit it would grow significantly faster. This is the last time at which we should be introducing uncertainty for manufacturers, farmers or whatever field as to who they will likely be able to employ in future.

This part of our report is one that the Government need to pay heed to given the cross-party nature of the Economic Affairs Committee and the different views on Brexit in that committee. The Government should draw from that the strong feeling that there needs to be a policy that is coherent and meets the skill requirements of people in this country.

I will say two things in conclusion. First, I want to see as many people in this country as possible employed in whatever their chosen field is. The Economic Affairs Committee is currently engaged in a study of the adequacy of our higher education, further education and apprenticeships. Without pre-empting our findings, it is blindingly obvious to us so far that we have a long way to go, particularly for those people with lower and intermediate skills to get into the labour market. The idea that they can simply step into the gap that will be left by departing EU workers is fanciful.

Secondly, we must remember that this cuts both ways. There are about 1 million UK citizens in the rest of Europe, many of whom are working there. It would be very unfortunate if we got into a situation where we said that only people in Britain can work in Britain and only the French can work in France. That is simply unacceptable on so many different levels.

I hope that the Government will pay heed to that. I hope that they will recognise the need for us to improve the way we gather statistics, especially when immigration is such a contentious and sometimes poisonous issue in our politics. We need to have a basis on the facts, which are there to be found if we only have the will to do so. I hope that the Government will take this report seriously and add some clarity to a policy that at present looks anything but clear.