Accession (Immigration and Worker Authorisation) (Amendment) Regulations 2011

Lord Hunt of Kings Heath Excerpts

Wednesday 14th December 2011 Grand Committee

[The Minister of State, Home Office (Lord Henley)]

My Lords, I beg to move that these Regulations be now considered by the Grand Committee.

This is a slightly different subject and I shall set it out in a degree of detail. The Government announced on 23 November that transitional restrictions currently applied in respect of Bulgarian and Romanian nationals’ access to the labour market will be extended to the end of 2013. These regulations achieve that by extending the transitional period during which the current regulations apply until the end of 2013. The amending regulations make no other changes to the current regulations.

The context of the Government’s decision is that the terms of the treaty governing the accession of Bulgaria and Romania to the European Union provide for the existing member states, if they choose, to regulate access to their labour markets by nationals from the Republic of Bulgaria or Romania. This is a permitted derogation from the EU’s free movement rules. Such restrictions may be applied for up to a maximum of seven years, but may only be maintained beyond five years where there is, to use the words in the treaty,

“serious disturbance of the labour market, or the threat thereof”.

As noble Lords will know, the Government are committed to reducing net migration to the United Kingdom. It is of course the case that after 2013, Bulgarian and Romanian nationals will be free to enter the United Kingdom for the purpose of work in the same way as any other EU nationals. The free movement of workers within the EU is a fundamental element of the internal market and it is one that brings benefits to the United Kingdom, not least as an exporter of workers to other member states.

On the other hand, the United Kingdom experienced a very significant influx of workers from the new member states that joined the EU in May 2004. It has been sensible, both in the light of that experience and the changed economic circumstances, to take a more gradualist approach to subsequent accessions. The Government are clear that they will apply transitional restrictions to nationals of countries joining the EU in the future. Similarly, for as long as it remains legally possible and proportionate for the United Kingdom to apply transitional restrictions on Bulgarian and Romanian workers, and there is a compelling labour market case for doing so, it will be prudent for those restrictions to be maintained.

The United Kingdom has applied restrictions on Bulgarian and Romanian nationals’ access to the labour market since those countries joined the EU on 1 January 2007. Whereas nationals of those countries joining the EU in May 2004 were simply required to register their employment under the worker registration scheme, Bulgarian and Romanian nationals have been subject to more substantive restrictions on permission to take employment in the United Kingdom. Their effect is to preserve the level of access to the United Kingdom’s labour market which Bulgarian and Romanian nationals enjoyed when they joined the EU. The standstill clause in the treaty means that we cannot impose controls that are more restrictive than those that were in place on 31 December 2006.

Under the current regulations, Bulgarian and Romanian nationals are required to obtain authorisation from the UK Border Agency before they take employment in the United Kingdom. This will normally require the employer to apply for a work permit in respect of the job in question and such a permit will normally only be issued in respect of skilled employment and where resident labour is unavailable to fill the vacancy. Bulgarian and Romanian workers are also able to obtain authorisation to take lower-skilled employment in the agricultural and food processing sectors under the quota-limited seasonal agricultural workers scheme and sectors based scheme. As the terms of the derogation require, the requirement to obtain work authorisation ceases once a Bulgarian or Romanian worker has completed 12 months’ authorised employment in the United Kingdom. The regulations also provide for the most highly skilled to be granted free access to the labour market from the outset.

The effect of the current restrictions is that a Bulgarian or Romanian national who intends to take employment in the United Kingdom will have a right to reside as a worker only if they are working in accordance with these restrictions. However, the restrictions do not and cannot interfere with the ability of a Bulgarian or Romanian national to exercise a right to reside in the UK on some other basis; for example, as a student or for the purpose of engaging in business. What they do ensure is that labour migration from Bulgaria and Romania reflects the UK’s economic needs by restricting employment authorisations to skilled work or employment in sectors where there are well established shortages of labour. Furthermore, the numbers given permission to work under these arrangements have not increased since the date of accession. Excluding participants in the seasonal agricultural workers scheme, the number of Bulgarian and Romanian nationals issued with accession worker cards in 2010 was 2,616, compared with 2,776 in 2008 and 2,097 in 2007.

As I have noted, the United Kingdom can only maintain its existing restrictions in circumstances of serious labour market disturbance. The Government have been concerned to ensure that the question of whether there is a labour market case for extending the restrictions is examined fully. The Minister for Immigration and Citizenship therefore asked the independent Migration Advisory Committee to consider whether there is a serious disturbance to the United Kingdom’s labour market and whether maintaining the restrictions would assist in addressing that disturbance. The committee’s findings, which it published on 4 November, were clear. On the question of whether the labour market is seriously disturbed, it examined the performance of the labour market against a number of indicators and concluded that it was performing poorly relative to the period prior to the last recession. On that basis, it is in a state of serious disturbance. It went on to conclude that an increase in the inflow of Bulgarian and Romanian nationals could have negative impacts on the labour market, particularly if it coincided with a change in the composition of that inflow, and that lifting the current restrictions would increase that risk. On the composition of the inflow, a particular risk would be that lifting the restrictions might increase the number of Bulgarian and Romanian nationals entering lower skilled occupations where migrants are more likely to substitute for, rather than complement, the resident labour force.

The committee acknowledged that the extent to which maintaining restrictions would assist in addressing such disturbance is subject to considerable uncertainty and it would not be sensible to attempt to put a numerical range around the likely inflow if restrictions were lifted. The Government would be equally cautious of attempting to do so. Nevertheless, the conclusion to be drawn from the committee’s findings is that a decision to maintain the restrictions would be both justifiable under the derogation in the treaty on accession and a proportionate response to current labour market disturbance. Accordingly, the Government have decided that the restrictions should be maintained.

I should add that Germany and the Netherlands have recently announced that they will maintain their restrictions. Spain has recently reimposed restrictions and will maintain them until at least the end of 2012. This is significant and not just because it means that the United Kingdom is not out of step with key EU partners on this issue. As the Migration Advisory Committee pointed out in its response, the risk of greater inflows would be highest if the United Kingdom lifted its transitional measures but other member states maintained theirs. The Government’s decision has avoided that outcome.

The Government believe that extending the current restriction to the end of 2013 is proportionate and the right response to current labour market conditions. I therefore commend the measure to the House.

[Lord Hunt of Kings Heath]

My Lords, I am sure that the Grand Committee is grateful to the noble Lord for his extensive introduction to these regulations. I was particularly interested in the advice that he read out from the Migration Advisory Committee. He will be aware that when the extension was agreed beyond January 2009, the committee reported in a similar vein at that time and said the impact of lifting the restrictions would be small but that the risks to the labour market were mainly on the downside. That led it to recommend a cautious approach. I assume that the committee is continuing that advice on the basis of that same philosophy.

I take the point the noble Lord made that it is difficult to attach facts and figures to this measure but does he accept the committee’s assessment of its impact? I would be interested to know whether he can put any figure at all on the likely impact of extending the measure by a further two years. He will know that the Merits Committee rather took the Government to task as regards the laying of the regulations and made the point that they have had rather a long time to consider the extension but, by leaving it to the last moment, it will have to be put in place. In a sense we are legitimising that through the current process. The Merits Committee would have preferred the policy to have been agreed somewhat earlier, which would have allowed the regulations to be laid before Parliament in draft and be subject to approval by resolution of each House. Will the noble Lord comment on that? What is his response to the Merits Committee?

[Baroness Hamwee]

My Lords, on the point about the timing of the measure, is the Minister satisfied that individuals and employers will not experience any practical problems as a result of that? I cannot quite get my head round what practical steps need to be taken. Is it the case that an application has to be made for a new accession work authorisation document and that there may be individuals—this goes to the question of the noble Lord, Lord Hunt, about numbers—who might have expected that they could continue to work for the same employer in this country beyond the end of this year but will, in effect, be given a matter of a very few working days to apply for the authorisation? Perhaps it is not as few days as from now until the end of December as the regulations were made—oh no, the regulations come into force on 30 December. I am getting very confused about the dates. I suppose that the warning was there for the employers but the regulations will not be made until the day before they need to be in formal terms, but there may be practical implications for individuals caught up with this. I hope that I have made myself at least moderately clear. The Minister is nodding, so I am glad about that.

In applying the tests, which the Minister has told the Grand Committee are about both the labour market and skills, will there be any changes from those that have been applied? My other question was about other EU member states. The Minister told us what some states are doing, so are we to understand that, in effect, the other member states are all maintaining their own status quo apart from Spain, which is reimposing restrictions, so that there is no other change across the European Union? The point has already been made that this cannot be looked at in isolation.