Brexit and the Labour Market (Economic Affairs Committee Report)

Lord Green of Deddington Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Green of Deddington (CB)]

My Lords, I declare an interest as chairman of Migration Watch, a post that I have occupied on a voluntary basis for nearly 17 years. Indeed, it was in that capacity that I give evidence to the committee when it was preparing its report.

The noble Lord, Lord Forsyth, in his magisterial survey, stressed the weakness of the immigration statistics, as did a number of noble Lords. He is right that the statistics now are simply not accurate enough to bear the kind of analysis needed for an economically driven system, and I accept that. At the broader level, it is worth bearing in mind that they tie in with the annual population survey and with the census, except for a period in the 2000s when they failed to count east Europeans. It says that it has now dealt with that. What that means is that the overall net migration figure, which has averaged 250,000 in the last 10 years, and is still at that level, is roughly right. That in turn leads to the increasing population and the consequences that the noble Lord, Lord Horam, so eloquently described, and which the public in general are very concerned about, whether noble Lords like it or not.

I shall start with a word about the economics of migration, then the future framework for EU migration and finally, the immigration target, which many noble Lords have mentioned. The House will recall that this committee’s landmark report of 2008 opened with the statement that,

“we have found no evidence for the argument, made by the Government, business and many others, that net immigration … generates significant economic benefits for the existing UK population”.

The immigration lobby has tried to ignore the central finding ever since. Yet surely it is at the heart of any policy on immigration and the labour market. Has new evidence emerged in the last nearly 10 years on this? What did the committee find? Apparently it did not find such evidence. The report includes, buried in paragraph 111, only a watered-down version of the earlier report. It says that,

“large-scale immigration, whilst increasing GDP, did not have the same effect on GDP per person”.

That sounds like an endorsement, and it is about right.

I suggest to noble Lords that it is absolutely wrong to say that immigration is good for the economy. It is not. It is not in dispute that highly skilled immigration is indeed good for our economy but there is certainly no evidence whatever for the UK—I stress the UK—that very high levels of migration into lower skilled or lower paid work over the past decade have enhanced either productivity or GDP. If anyone has that evidence, I would be most interested to see it. Meanwhile, in 2015, a report from the Bank of England concluded that large-scale inflows of cheap foreign labour may have put downward pressure on the pay of some low-paid UK workers. More recently, last month, Michael Saunders, a member of the Monetary Policy Committee made a very similar point.

The key to economic prosperity is not mass immigration but improved productivity. Indeed, UK productivity has barely grown since the recession, despite the overall number of immigrant workers increasing by more than 2 million and the migrant share of the workforce nearly doubling. That is not necessarily cause and effect, but I note that my noble friend Lord Burns touched on that point earlier. Better pay and the upskilling of UK workers are the keys to improving business models. Reducing immigration will add an important incentive for employers to take action in this regard. Certainly, their performance in the past decade has been frankly abysmal.

I turn now to the question of the future framework for EU migration. We can now expect an interim period of two years so that employers will have three years in which to make the necessary changes. Now that the status of EU citizens is almost settled, the Government should come forward soon with an outline of the immigration system that they propose for EU citizens so that business can make the necessary plans. The Home Secretary indicated, I think at the weekend, that unfortunately they do not plan to do this until the late autumn. That is bad news all round.

For our part, as Migration Watch, we have put forward proposals for such a system that would continue to allow businesses to recruit the best and the brightest from Europe, but which would also lead to a significant reduction in net migration from the EU. What we need is a work permit system that will sharply cut back the 80% of EU workers who are not in the highly skilled categories—that is, who would qualify if they were non-EU for a work permit. That is quite a high level, but if we cut those out, we could reduce net migration from Europe by something of the order of 100,000 a year from the record level. It may be necessary for a period to have work permits available for those with intermediate skills, such as construction workers. The noble Lord, Lord Shipley, was eloquent on that point, but they need to be time-limited. We believe that there should be an increasing annual charge on employers to encourage them to train local replacements. If there is not a financial spur, they will not do it. We have seen that for the last 10 years.

We should also encourage social and cultural links between young people. We should expand the youth mobility scheme to include young EU citizens, and allow them to stay for up to two years, but with no extensions and no access to public funds. Meanwhile, tourism has been touched on. Of course, ease of travel should be maintained for tourists, family visitors, business visitors and students who, in total, amount to 35 million passengers a year.

I will conclude with a word or two about the immigration target, which many noble Lords have mentioned. The committee’s report concludes that sustainable levels of immigration, as many have mentioned, are,

“unlikely to be best achieved by the strict use of an annual numerical target for net migration”.

Clearly those words were very carefully considered, and in some respects it is hard to challenge them. In fact, there has been no such strict use of a target, except possibly for tier 2 visas, but, in general, there has not been a strict target because the complexities involved in the different routes simply do not permit it. That is part of their own argument. But the benefit of an overall target is that it provides a focus for many strands of government policy that contribute to net migration, and provides a yardstick, of course, for the public to judge the Government’s performance. That, of course, is rather uncomfortable, if you are not meeting the target, but it is not a reason for abandoning it, particularly not when it is a major issue for a very considerable portion of the population, whether they vote for that side or this side.

If we drift into acceptance of the current level of immigration, we will, as the noble Lord, Lord Horam, said, grow by 10 million in the next 25 years, with serious consequences for our infrastructure and public services. For those who have ears to hear, public opinion is very clear—indeed, it was a major factor and arguably a decisive one in the outcome of the referendum that brought us to this point. Brexit now gives us the opportunity to put in place an immigration system that encourages the training of British workers, provides for the genuine needs of employers and, crucially, commands the support of the public.

[Lord Balfe (Con)]

My Lords, I draw attention to my entries in the register. I thank my noble friend Lord Forsyth for introducing the report. This reminds me of 50 years ago when we debated import controls—a subject that was well past its sell-by date when it was being debated, quite ferociously by, among others, a person who holds a senior position in the Labour Party today. When I read a lot of this report, I just think, “Sorry, the world has moved on”. We are in Europe; we are not in a siege economy. If the noble Lord, Lord Green, had been in charge when my father came to Britain, he probably would not have been allowed in. I certainly managed to complete my education without a single O-level, so I certainly would not have been allowed in. I wonder whether the Minister would have been allowed in, since she comes from the same country that my family came from. I like to think that she would, because she makes a great contribution to the public polity of this House—but I wonder.

[Lord Green of Deddington]

Is the noble Lord aware that there has been a common travel area with Ireland since 1920? You are entirely welcome to come from Ireland—there has never been a problem.

[Lord Balfe]

I am pleased that the noble Lord said that, because in his speech he talked about the European Union. Ireland is going to remain in the European Union, so maybe the noble Lord is indicating that there is going to be a back door, and that those who speak Ireland’s second language—namely, Polish—will be able to come into the United Kingdom in a very easy way by walking across the border. But let us wait and see.

I was struck—it has been mentioned already—by the state of the data, which are not in any shape to make any policy at all. They are,

“wholly inadequate for policy making and measuring the success or otherwise of the policies adopted”.

So we need to start off with some decent data. I would imagine that—if we work hard—we are looking at an annual net migration of 133,000 from the EU out of 250,000 overall. So roughly half of the problem that we are facing—if we define it as a problem, which actually I do not—is not covered by these proposals anyway. If we want to get the figures correct, I suggest that using national insurance and income tax data is probably the best way forward, because it is after all collected very rigorously, in that people—most people, anyway—pay their taxes.

To look slightly outside this report, since Brexit was decided I have travelled quite extensively and, wherever I go, whether it be Australia, Canada, the United States or Turkey, the common cry I get is, “If you want a trade agreement, we want an easier visa regime”. That was said to me by the Minister in Australia, by a very senior Canadian politician, by a number of people in the United States when I was there and by senior government officials in Turkey. They say, “If you want a trade agreement, we want a simpler visa regime”. I can tell noble Lords that the visa regime for people from outside the EU to get into the United Kingdom is absolutely horrendous, and certainly not fit for purpose.

On another point, the report rightly says that,

“24 per cent of EU nationals working in the UK are engaged in work considered to be ‘low-skilled’”.

But the 24% who are doing that work are not necessarily low-skilled. I know quite a few people who work in the city of Cambridge, where I live, and go to the same church as I go to who are doing low-skilled jobs, but they are certainly not low-skilled. Many of them are here to improve their English language skills to go back, or to make some money to go back—and, despite all our legislation, it is quite easy to work 60 hours a week in Cambridge in some of the lower-skilled jobs and to make money. So let us not confuse low-skilled jobs with low-skilled labour.

Of course, it normally falls to this side of the House to mention the demands of the TUC and the labour movement. The TUC evidence quotes from the government White Paper, which states:

“As we convert the body of EU law into our domestic legislation, we will ensure the continued protection of workers’ rights”.


That is a quote from the government White Paper, which we are all pleased to see. But I have two questions for the Minister. I shall quote from the TUC, which says:

“We take this to mean that all regulations (including employment related provisions) introduced under the 1972 European Communities Act shall continue to take effect”.


Will the Minister confirm that that is her understanding of that statement in the White Paper?

Secondly, the TUC says:

“In order to protect workers’ existing rights to equal pay, it will also be important to transpose Article 157 of the Treaty for the European Union which guarantees equal pay for work of equal value. It will also be important to ensure that valuable progress made through judgements of the European Court of Justice are retained as part of UK law”.


I hope that the Minister will also confirm that that is her understanding of matters.

There are a number of things that need looking at. The TUC rightly looks to the establishment of modern wages councils. It is not the first time in this House that I have raised the problem of domestic and care workers. You can talk about all the productivity improvements you like but you cannot change an elderly person’s bathing regime by applying productivity. There are more people getting old; there is more need for care in the community—and one of the great neglected areas is protection for carers. The people who are standing at the bus stop at 7.30 in the morning and going from client to client, often unpaid for the journey, are among the least protected workers in this country, and they need looking after.

I pay tribute to the TUC for the Unionlearn programme, which of course could not survive without support from this Government, and it is a great credit to this Government that they have continued to support that programme, which indulges in training, literacy skills and other skills, particularly for migrant workers. They help them to become part of our society, which is extremely valuable and has to carry on.

Finally, we need to make sure that the national minimum wage and the Gangmasters and Labour Abuse Authority continues to be well funded. If we are going to have a migration policy, we have to protect the people who are most likely to be exploited.

I will close with one other point. It would be a shame to ask just my own Front Bench, so I also ask the spokesman for the Labour Party for an observation. The Institute of Employment Rights—situated, very appropriately, in Jack Jones House in Liverpool—points out that one advantage of leaving the EU is that the collective bargaining rights that have been undermined by recent cases in the EFTA Court and ECJ could be restored. Indeed, the last Labour manifesto promised to restore these, pointing out that this could be done when we leave the European Union. Will the noble Lord who will shortly speak for the Labour Party confirm that this remains a policy of the Labour Party? It is important that people who are looking for new collective bargaining rights know that the Labour Party is behind this particular policy—otherwise it would be a great shame.

I will conclude with this remark. I do not see why, when 60 or 70 years ago people came from Gateshead to London for a job, they should not now come from Gdansk to London for a job. I see the future of Europe in a way that is not in conformity with the Brexit referendum. We are all in it together and we have to build a European community, a European entity—and it will boil down to us all working together. I would, frankly, keep free movement, I would simplify the visa regime and I would look for ways forward that did not rely on what often seems—for me, personally, although I am not accusing anyone of anything—to verge on the xenophobic.