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Brexit: UK-EU Movement of People (EUC Report)

Lord Green of Deddington Excerpts

Monday 17th July 2017

(7 years, 4 months ago)

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Lord Bilimoria (CB)

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My Lords, as recorded in this excellent report, on 17 January, the Prime Minister said in her Lancaster House speech:

“The message from the public before and during the referendum campaign was clear: Brexit must mean control of the number of people who come to Britain from Europe”.

In order to achieve this, the Government have undertaken to put an end to the free movement of persons, one of the four freedoms underpinning the single market. I congratulate the noble Baroness, Lady Prashar, and her committee on producing a report on this crucial area. It examines the Government’s pledge and what it might mean in practice. It states clearly and right up front that if Article 50 were to conclude with a hard Brexit, it would be a real problem. For its part, the UK could place EU immigrants on the same footing as non-EU immigrants; that is one option. At the other end of the spectrum, there could be new reciprocal and preferential arrangements for UK-EU migration falling short of free movement as it exists today, but coming close to it in some way.

The Government seem to want to put an end to free movement based on the Brexiteer mantra of, “Take back control and vote leave”. This is a big element of taking back control—the restoration of national control. However, we can see from the report that the reality is that three-quarters of EU migrants come to the UK either to work or to look for work. The unanimous view, whether it be that of the private sector or the public sector, is that these migrants are valued and want to work. We are talking about a work permit system. Employers have warned that this would disproportionately affect the ability of some employers to sponsor EU workers and could result in labour shortages. Moreover, the composition of UK migration to the EU is completely different from that of EU migration to this country. People who go to Europe from here are either retired or nearing retirement. They are over the age of 50. A reciprocal deal would not really be reciprocal because we are not comparing apples with apples, which is another challenge.

The Government have set out their direction of travel and they keep talking about “skilled” and “non-skilled” workers. This is a key aspect: where is the evidence for all this? The report highlights a major problem. What are we basing these statistics on? I challenge the Minister on this. I feel like a lone voice in the wilderness because time after time I have been asking like a stuck record both in Parliament and outside why the Government do not reintroduce physical, visible exit checks at our borders. I travel extensively around the world, including to European countries. Everywhere I go, whether it be South Africa, India, the United States or Switzerland—I have just come back from the Netherlands—my passport is checked when I go in and it is checked when I leave. If we scan passports both in and out of the country, we know who has come in, we know who has left, and therefore we know who is here and who should not be here. It is very simple, so why do the Government not do it? I tell them that it is negligent on their part. From the security point of view, given the dangerous world we live in, it is negligent. The Government’s primary responsibility is the security of their citizens, but they are letting those citizens down by not doing this, let alone not being on top of immigration. I am sorry, but e-borders are a nonsense because they are not visible or physical. Passports need to be physically scanned. That is my challenge to the Government. I have said it time and again and I will keep saying it until something happens.

EU immigration as a proportion of all immigration into the UK in 2016 was estimated at 44%. The Government want to reduce net migration to the tens of thousands. We know that the figure has been around 300,000 and that it is now about 275,000. In the year ending June 2016, some 49% of all EU immigration was made up of people from the old EU 15 member states, and by that month 72% of the EU nationals moving to the UK reported doing so in order to work. In contrast, the reason given by most non-EU nationals coming to the UK is to study, but we continue to include international students in our net migration figures. Once more, like a stuck record, I will ask the Government again: why do they not remove international students from the net migration figures? This is damaging our reputation. I am the chancellor of the University of Birmingham, a Russell Group university, one of the finest in this country and among the top 100 in the world, and I chaired the advisory board of the Cambridge Judge Business School. These institutions and everyone else are unanimous in asking, “Please take international students out of the net migration figures”. They can be counted as immigrants when we submit figures to the UN; that is fine, but take them out of these net figures. Our competitor countries, such as the United States of America, Canada and Australia, all do so.

Here we are with our international student intake either flat or declining while the number of international students from countries such as India is rising at a rate of 8% a year. The United States has seen an increase of 25% in the number of Indian international students while the number coming here has halved over the past five years. Wow, we are doing really well in this global race. International students bring £25 billion to the economy of this country. As the president of the UK Council for International Student Affairs—which represents the 450,000 international students in this country, of whom 130,000 come from the European Union—has said, they are a very valuable source of export income and they enrich the experience of our domestic students as well as the collaborations that are built up with foreign academics, many of whom are from the EU.

This is a point I have made time and again. We are worried about losing university research funding from the European Union, but we are more worried about losing our collaborations. When two universities collaborate anywhere in the world, the weighted impact of their research is three times higher than when they work on their own. Why do the Government not understand all this?

When we talk about weaknesses in the migration statistics, let us look at the International Passenger Survey. It is a joke. I have seen it. I have seen Jo Johnson, the Universities Minister, who I accompanied on a visit to India when the Prime Minister was there in November, being stopped and asked the International Passenger Survey. We started laughing.

The net migration figures exclude short-term migration flows, such as seasonal agricultural workers. I stumbled across a programme on Radio 4 in which the interviewer interviewed Romanian workers in east England, where there are lots of seasonal agricultural workers. They were very happy. The interviewer asked, “Have you ever had any British workers work alongside you?”. They replied, “Oh yeah, I think I remember one”. Then they interviewed the owner of the farm. They asked, “Are you happy with these workers?”, to which the owner replied, “They are excellent. They work really hard”. One of the Romanians said, “I am saving up money for my house in Romania”. The interviewer asked the owner of the farm, “Have you ever had any local, British workers working here?”, to which the owner replied, “Oh yes, we did hire one. He lasted one day”. The interviewer asked, “Which way did you vote in the European union referendum?”. The owner replied, “I voted to leave”. The interviewer asked, “Why?”—you could hear him muffling his laughter. The owner replied, “For sovereignty. Take back control and vote leave”. It is brilliant.

On Article 50, we will be negotiating with 27 countries to conclude this agreement. As predicted, the other 27 countries have said that when we are negotiating we cannot say, “We will have this movement of people with Spain and this movement of people with Romania”. We will have to have the same movement of people rule with the whole of the European Union. The emergency brake that the report has spoken about is a practical method that can be used. A work permit model would put it on the same footing as we have for non-EU citizens at the moment.

This point was brought up in the speech on construction: what would we do without these people? We keep talking about low-skilled and high-skilled people. Whatever skill you look at, we have 4.5% unemployment. That is the lowest level of unemployment in living memory. We have the highest level of employment in living memory. We will have a labour shortage without access to this free movement of labour from the EU. The CBI has concurred that the impact on wages would not be dramatic. The TUC has said that immigration was not the reason for low pay in specific sectors. The NFU does not expect,

“increased wages to result from a fall in EU immigration”.

On the low levels of unemployment, we have concluded that we will just hire British workers. What is stopping our employers from doing that right now? The Institute of Directors has said:

“The best way to control immigration and reduce employers’ reliance on recruitment from overseas is to increase the supply of British workers with the skills that those employers need”.

I ask the Minister: why is that not happening? We have had the option. We have the apprenticeship schemes. We are trying to skill up our local workers, but we still need these 3 million people from abroad. That is the reality. The British Chambers of Commerce has said that we,

“need to make sure that we can access the labour required … it is going to be very difficult to do that purely through UK workers”.

There is another point: if an EU person comes here and has not found work after three months we already have the ability under the rules to ask them to leave. Other European countries do that. We have an in-built system. Will the Minister confirm that that is the case?

This is the irony of what I call the wretched referendum: the report says that the UK and the EU,

“find themselves negotiating a Free Trade Agreement in reverse—starting from … full integration”,

and moving backwards. Normally with a free trade agreement you try to do it the other way round. We have skill shortages. In my business, Cobra Beer, we supply 98.6% of curry restaurants in this country. They cannot get the chefs they need. Why? It is because of our Immigration Rules. I have mentioned international students. Then there is the public sector. The argument made during the referendum was that EU nationals here are a burden on the state. The noble Lord, Lord Green, actually conceded that their impact is neutral. They are not a burden; the EU workers over here contribute six times more, in the statistics I have seen, than they take out. Their young do not use the NHS and they work in the public sector, whether it is the care sector or the health service—in every area they work in the public sector. Quite frankly, areas of the public sector would collapse without their contribution. Will the Minister confirm that we have already seen a 96% drop in applications for nurses from the EU? How will we make up this shortage?

I shall conclude by talking about the reality of the backdrop. Her Excellency Madame Sylvie Bermann estimates that there are 300,000 French people living in the UK. This figure could be higher. Approximately half of those people are highly qualified. Again, this is completely contradictory of the noble Lord, Lord Green, who said that these are primarily unskilled workers: these are highly skilled workers. Her Excellency said that the French community in the UK was “worried” and had lots of questions about the consequences and the great uncertainty. She reported a rise in xenophobic behaviour, which is really worrying.

The EU population represents 6% of the UK population, but 7% of the labour force. They are more likely to work than the native population, according to the Recruitment & Employment Confederation—81% compared with 75%. Relative to their share of the UK workforce, EU nationals are overrepresented in a number of sectors: 11% of manufacturing; wholesale and retail trade, hotels and restaurants 9%; transport 9%—I could go on. They are making a huge contribution. The creative industries respect and appreciate their collaboration.

I now come to the crux of it: public support for continued EU freedom of movement in exchange for access to the single market. A survey from just now—14 July—finds that Britons favour a deal that resembles Norway’s relationship with the EU. That very clearly involves the free movement of people. Cambridge University was a part of that survey. Here is the news: on free trade deals, the high commissioner of India has very clearly said that India has welcomed and wants to do a free trade deal, but it has to include talking about movement of people and students. India has nine bilateral free trade agreements in the whole world. The United States—the biggest economy in the world—has 20 bilateral free trade agreements around the world. Guy Verhofstadt has said:

“Improve the Brexit offer to EU citizens, or we’ll veto the deal”.

The EU has said very clearly that it is very disappointed with the proposition put by the British Prime Minister. Guy Verhofstadt and Michel Barnier are not going to accept the deal that is put forward and Guy Verhofstadt has said that it,

“seems that Britain wants to become the new champion of red tape”.

British public opinion has moved now. This is no longer a question of a soft or a hard Brexit. The country does not want a hard Brexit. When it comes to a soft Brexit, the reality is the public have seen very clearly that the Brexit emperor has no clothes. Quite frankly, there will be no Brexit.

Lord Green of Deddington

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Before the noble Lord sits down, could he tell the House whether he agrees that we can continue with net migration of a quarter of a million indefinitely? If not, what would he do about it?

Lord Bilimoria

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For a start, I challenge the net migration figures. We do not know what the accurate figures are. That is a challenge for the Government. The reality is that we have 4.5% unemployment. We need people from the EU and outside of the EU, whether they are academics or in any sector, private and public, otherwise this economy would not be where it is today—the sixth largest economy in the world.

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Lord Wallace of Saltaire (LD)

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My Lords, for me, the high point of this debate was when the noble Lord, Lord Cormack, remarked that picking strawberries is skilled work. I have spent most of the past three Sundays picking soft fruit, including gooseberries. I have scars all over my lower forearms to demonstrate this. To be told that this is skilled work was very pleasing. I shall go back and tell my wife, who merely did the jam, ice cream-making and other such things, that my work was at least as skilled as hers.

This excellent report emphasises that, fundamentally, movement of people is seen as an issue of sovereignty, on which the whole debate around the EU referendum was extremely confused. As the noble Lord, Lord Spicer, reminds us, the leave campaign was in favour of free trade for companies, for investment and in goods but in no circumstances for people. We are one of the most open economies in the world for foreign investment, so we welcome foreign companies but not foreigners—unless they are really rich, at which point, under the tier 1 investor visas, permanent residence can be bought. Under such visas, a rising number of Chinese and Russians whose wealth came from not entirely clear places were allowed in. Several of us have been involved in trying to change the rules on that and I am happy that the Government have now tightened them.

Given that we are a country which is remarkably open to foreign investment and is therefore dominated by multinational companies, talented young British people who want to rise to the top of those companies need to be able to work abroad and to be able to travel without the complications of getting visas to work in foreign markets. If multinational companies based in Britain, be they European, Japanese, Chinese or whatever, say to themselves: “Well, actually, promoting a Brit and making them work in Frankfurt for this year and Athens the next would be an awful nuisance because of the time it will take them to get visas”, they will promote French people, Germans and others instead. Another part of what has been wrong with our entire debate about leaving the European Union as far as immigration is concerned is that we have not thought about it as a properly two-way relationship.

Robert Goodwill has been quoted as saying to the committee that the UK Government do control their borders, at least in principle, but we have heard in this debate that, in practice, they do not manage that very well. I was struck some months ago when we had a question in this House about how many offshore patrol boats we had around the extensive maritime borders of the United Kingdom, to which the answer was a quarter of those that the Dutch have for their short coastline. I asked the Library to check this morning. I gather that we have fewer offshore patrol boats for our borders than any other EU member state except Belgium. That suggests that we are not really thinking about enforcing the rules. Many of your Lordships will have seen the NAO comment that there are more than 60 small ports within Britain which a member of any public authority, coastguard or police force does not visit for more than 12 months. Again, our borders are entirely open because we have had Governments so concerned with shrinking the state that they have given up on the idea that one must enforce control of our borders and existing immigration controls.

A lot of other noble Lords talked about the problems of statistics. The noble and right reverend Lord, Lord Eames, remarked that when you do not have the facts, perception becomes reality. I am very concerned by what I see as misperception in the white working-class estates of west Yorkshire and elsewhere which voted heavily for leave. There they believe that foreigners from Romania or elsewhere are taking their social housing and their jobs. There is very little evidence of this. An excellent article in the Financial Times on Portsmouth some months ago pointed out the widespread perception that most social housing there was now occupied by immigrants from the EU. Actually, the total number of people from the EU living in social housing in Portsmouth was three. That level of misinformation and lack of information is a tremendous problem for us all.

I will spend a little more time on the question raised in chapter 4: the pull factor of immigration from the European Union and the extent to which British employers prefer to recruit directly from eastern Europe rather than to train their own or recruit directly from here. I spent some time travelling around Yorkshire over the last four of five years asking small and large employers why they recruit directly from eastern Europe rather than look for people here. The answers are, first, that you cannot get trained people and, secondly, that the sort of people you get from Bradford, Wakefield or wherever it may be are often much less motivated, they tend not to turn up on time and go sick more often. Therefore the employers prefer Slovaks, Poles and the like.

That raises some large questions—whether or not we leave the European Union, or whatever we do about freedom of movement—about the structural weaknesses of our education and training system, in particular how it affects what one must call our underclass. That is, those whose grandparents worked in the mills, factories and mines and whose parents often managed to get only occasional work. These people go to underfunded schools—we had an interesting discussion earlier this afternoon about school funding—without decent careers services and they do not find a way into jobs. It is not that they do not want to find places. I work occasionally with a social housing association in Bradford which now runs its own apprenticeship scheme for training and retaining its own plumbers, electricians, bricklayers, plasterers and the like. It took in 10 people last year. It had 400 applications. A lot of young people in Bradford want training and cannot get it. Around Yorkshire I ask what is happening. They say, “Well, the big building employers do not want to take on apprentices because they are not sure they will want to take them through and retain them for four or five years. It is easier for them to recruit people from Latvia, Lithuania or Poland”. That is a huge problem, one that we must all address. It is not part of what the leave campaign told us about.

What about the Government? Nurses and teachers have been mentioned already, with the Government reducing the level of training for nurses when we need rather more of them. I have seen rather too much of the inside of some hospitals in the last year for various reasons. The Portuguese nurses who looked after me in St Thomas’s were superb. When I went into St George’s outpatients for some post-cardiac physio, the first thing that the Polish physio in charge of our course said to me was, “Do you still want us here or do you want us to go home?”. Of course, that was just after the referendum. The answer is that we need them here. They provide a very good service to our economy. We are not training enough nurses of our own, so they are even more important.

Clare Foges in today’s Times talks about the unfortunate bias of the current debate on immigration: the suggestion that somehow voting leave could solve our immigration problems and that European immigration is the key to that. The spectre of 80 million Turks swarming into Britain successfully blurred the issue between immigration from Europe and from the rest of the world. I must say to the noble Lord, Lord Green, that Migration Watch nurtured that popular perception, in alliance with the Daily Mail and others. Yet the Migration Watch website, which I looked at this morning, says:

“In the last decade only around one third of net migration came from the European Union—the rest originated from countries outside the EU”.

The overall population of the EU is falling. The surge of Polish, Romanian, Lithuanian and Latvian migration, which accounts for about half our current stock of EU residents, is finite. There are not that many more to come. Young Poles and Latvians are not having many children. The prospect of Brexit and the falling pound are already leading to a beginning of a return. The long-term immigration challenge we face, alongside other European countries, is from the rest of the world, where population is rising, climate change is making life more difficult and nasty regimes or violent conflict combine to push people north to struggle, if they can, across Turkey or the Mediterranean. For example, the population of Africa doubled in the last 25 years and will double again in the next 25 years. Where are those extra billion people likely to try to go? They will try to get out of their countries into a safer world. That is the immigration issue we should talk about.

So we are struggling with a distorted image. There is also a distorted image popular in the Daily Mail and elsewhere that all our European immigrants are Poles and Romanians living on benefits or taking low-paid jobs from the unskilled British. The Migration Watch figures show that 400,000 of the 3.3 million EU citizens from other countries living in the UK are Irish nationals. They will not go, even if we leave the European Union. It also shows that the third largest group in the UK are 300,000 German citizens, with 200,000 each from Italy and France. Overall, half of the EU arrivals in 2015-16 came from the 14 wealthy states of western Europe, not from Romania, Bulgaria and elsewhere.

The noble Lord, Lord Green, tells me that the reason Migration Watch statistics for Germans in Britain are 150,000 higher than the ONS statistics is that Migration Watch counts children as immigrants where one parent is born outside Britain. That puts me in mind that I am about to become the grandfather of an immigrant because my son’s American wife, currently living with him in Edinburgh where he teaches at the university—

Lord Green of Deddington

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I think the noble Lord misunderstood what I said outside. I will correct that later with him—it is not of interest to the House generally.

Lord Wallace of Saltaire

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I was merely about to say that if that were the case, our current Queen would be the first non-immigrant monarch since Queen Anne. Under that criteria, Prince Charles would also be an immigrant since his father was born in Greece. Again, one must be careful how we handle immigration statistics on one thing or another.

To conclude, we need a broader debate about the whole question of immigration. We live in a world in which we hope that our young people will travel, and study and work abroad. Some of them will marry people from other countries and, we hope, bring them back to live here. That is the nature of the world in which we live and we do not want to make that too much more difficult. We recognise that we also live in a world in which the global population is rising and there are many insecure countries from which people want to flee. That poses huge questions for us which are nothing to do with whether or not we stay in the European Union.

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