Brexit and the Labour Market (Economic Affairs Committee Report)

Lord Liddle Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Liddle (Lab)]

My Lords, this has been a very interesting debate. I am not sure that I have that much to add to it, to be honest, but I regard it as a clarion call for improving the statistics in this area, so that we can have evidence-based policy-making when decisions are taken on immigration policy in the future. Given the way that the Government have been reluctant to disclose the evidence base for their policy-making in the rest of the area of Brexit, I should like assurance from the Minister, if possible, that the work that the Home Secretary has commissioned from the Migration Advisory Committee will be fully and publicly available as a basis for thinking about future migration policy.

Last night, I and some other noble Lords attended an interesting meeting that the Lord Speaker held with businesspeople on their concerns about Brexit. The noble Lord, Lord Forsyth, was there as well. The message that comes across all the time is, “You politicians are putting us in a position of impossible uncertainty—we need to know where we are going”. There has been a lot of controversy in the last weeks about the uncertainty over the degree of regulatory alignment we will have with the EU after Brexit. But there is a far bigger uncertainty for a lot of businesses, which is far more important to them, about what the Government’s immigration policy will be. Before too long, the Government really must face up to the clash between politics and the economic reality and needs of business, and give greater clarity about their long-term aims. Surely, we cannot remain committed in the long term to the idea of a target in the tens of thousands; it just makes no sense.

Like my noble friend Lord Livermore and my former noble friend, the noble Lord, Lord Balfe, I am a strong supporter of free movement. It is the right policy within the European Union and has been of great benefit to Britain. It is not just economic benefit; there is merit in diversity. I speak as chair of Lancaster University, and free movement enables many of our lecturers and researchers to come easily from the European Union. This is a tremendous plus in advancing knowledge and research. Free movement is a great benefit.

I also think that migration is one reason why our London schools have been so successful in improving their performance in the last decade and a half. We should therefore be willing to accept these things. I have three points on migration. I accept that there are serious problems of integration in certain parts of the country, as the noble Lord, Lord Horam, talked about, but in the main it is not a problem of EU migration but of non-EU migration. It is a serious problem for the country which has to be addressed. Secondly, the relationship between immigration and the leave vote in the referendum is complex. The fact is, most of the areas of the country that have seen the most immigration—I am sure the noble Lord, Lord Green, is aware of this—are areas such as London and parts of the south-east that voted to remain in the EU. I admit that there are some other parts of the country that have seen sudden increases in immigration, such as Lincolnshire, where there was a strong leave vote but, in my part of the world in Cumbria, where there was also a strong leave vote, there has been very little EU migration. I suggest that, although people gave immigration as a reason for voting leave, what was in fact in their minds were deeper frustrations about life today, particularly the way our labour market has functioned in the last two or three decades. Migration is a consequence of weaknesses in our labour market structures; it is not the cause.

If I have a criticism of the report that the committee prepared, it is that I do not think it looked sufficiently at these structural questions in the labour market. I have, from the 1980s onwards, always supported the flexible labour market. I spent my youth working on questions of incomes policy and industrial democracy and trying to make us into a Nordic-model economy but, after 1979, it appeared that the only way that we could run ourselves was with a more flexible labour market. The Labour Government are owed credit for what they did to strengthen protections in the labour market through the Social Chapter and national minimum wage.

We have benefited from a flexible labour market, but we now ought to be thinking about what further changes we need to make in labour market structures. Certainly, the problem with skills results from deep problems in the British education system. You have to look at the whole system, not just ask, “How do we tackle the problem of the lack of construction skills?” We need to look seriously at maths teaching in secondary schools and at early years opportunities in areas of high deprivation. As I have said in this Chamber before, we need to consider seriously the gross regional imbalances in our economy, which result in the paradox that people cannot move to well-paid jobs, or to jobs in general, and the only labour that is available in London and the south-east is immigrant labour. We also need to look at whether we need to strengthen the balance of power in the labour market, and whether that should shift. That issue is of pressing concern but that is for another day. All those issues are important. If they were addressed and reforms were introduced, people’s worries about immigration would lessen.

I welcome this debate and hope that it is a clarion call to the Government to establish a clearer policy based on clearer evidence. I hope we will think much more about the structural issues in the labour market that need addressing, rather than attacking free movement as the source of all the problems.