Migration Policy and the Economy

Debate between Mark Harper and Charlie Elphicke

Wednesday 29th November 2017 Westminster Hall

[Mr Mark Harper (Forest of Dean) (Con)]

I beg to move,

That this House has considered the effect of the Government’s migration policy on the economy.

It is a pleasure to serve under your chairmanship, Mr Hosie, and to see the Minister in her place. We had a crossing of paths in Gloucestershire when she stood as our police and crime commissioner candidate in 2012. She was not successful on that occasion, but Gloucestershire’s loss is very much the House’s and the Home Office’s gain. It is also a pleasure to see the hon. Member for Manchester, Gorton (Afzal Khan) here to speak for the Opposition. I will be happy to take interventions from hon. Members and listen to their contributions.

To summarise what I plan to say, my proposition is that migration can be good for Britain if it makes all of us richer, not just the people who have come here to work. It can benefit the public finances and help with the budget deficit, but only if the people coming have sufficient skills and earn a sufficiently high salary. After we have left the European Union, we should treat people who come to Britain from the European Union in the same way as people from elsewhere in the world. Anything else would be indefensible. The system should be based on people’s skills and what they can contribute to the country, not where they are from. That will also make a tremendous difference to our efforts to strike trade deals around the world. That is the nub of my argument; I will now set it out in more detail.

I will talk primarily about migrants who come here to work or to look for work; I will not cover people who come here seeking refugee status, for family reunion or as students, although I will touch briefly on students towards the close of my remarks. I want to be clear that migrants who come to Britain with the right skills are to be welcomed: they come here, they do valuable jobs and they can benefit our economy as well as themselves. However, we should also consider our primary responsibility to the people who elect us to this place and ensure that our migration system benefits not only the people who come here, but the people who are here already.

When we debate the performance of the economy, the measure that we most commonly look at is the growth of GDP—the size of the economy—which has been positive since the Conservatives came to power soon after the economic crash, but we should also look closely at GDP per head, which is the size of the economy adjusted for the fact that there are more people in Britain. Perhaps that is something the Minister can pass on to colleagues in the Treasury. Of course not all population growth is to do with migration, but according to the Migration Observatory, just over half the population increase between 1992 and 2015 was due to migration. That is quite a significant amount. The rest was to do with things such as the ageing population. GDP growth per head in the time that we have been in office is about 0.75% per year lower than GDP growth, and over a considerable period that makes a significant difference to how well off we are. We need to ensure that the people coming here contribute to the extent that they are not just making themselves better off, but increasing GDP per head. It is important to make British citizens better off as well.

I want to flag up how migration relates to the conversation we are having about productivity performance, which has been somewhat disappointing since the financial crash. The Chancellor spent a fair bit of time on that in last week’s Budget, which we voted on last night. I do not want to overstate my case, because the academic research shows that there is no single cause of what some of the academic literature calls the “productivity puzzle”. A lot of bright, smart people—far brighter and smarter than me—are not entirely certain what is at the root of it, but I posit that at least one aspect of productivity is to do with migration.

If we say to businesses that there is effectively an unlimited supply of all different sorts of labour that can come from the European Union and that can be hired relatively cheaply, it does not make much sense for those employers to invest significant capital sums in their business for the latest technology and labour-saving innovations that could help their existing workforce to become and stay more productive. If we were to say to employees that after an appropriate adjustment period that unlimited supply of labour from across the European Union will no longer be available, employers would look at investing capital into their businesses and at different and smarter ways to do things that would improve the productivity of their existing workforce. That would make Britain more competitive and deliver the only sustainable way to drive up wages in the public and private sectors: increasing productivity.

[Charlie Elphicke (Dover) (Ind)]

Will my right hon. Friend give way?

[James Cartlidge (South Suffolk) (Con)]

Will my right hon. Friend give way?

[Mr Harper]

I give way first to my hon. Friend the Member for Dover (Charlie Elphicke).

[Charlie Elphicke]

My right hon. Friend is making a powerful argument. Is not the nub of his case that importing cheap labour from overseas disincentivises businesses from investing not just in kit, but in improving the skills of their employees and our workforce?

[Mr Harper]

My hon. Friend makes a good point. This is a big issue in his constituency of Dover, one of the gateway parts of our country.

It is perfectly right for us to look at what people can pay; we have rules in Britain about paying the national living wage. However, research done by the Bank of England in its staff working paper, “The impact of immigration on occupational wages: evidence from Britain”, concludes that although there is not an impact at the higher end of the skills spectrum,

“in the semi/unskilled services sector…a 10 percentage point rise in the proportion of immigrants is associated with a 2 percent reduction in pay.”

I do not want to overstate it, but there is certainly some evidence that at the bottom end of the labour market, there is an impact on pay. It is also a question of the availability of labour and saying to employers that they need to think about smarter ways of working, not just assume that they can access an unlimited supply of labour.

--- Later in debate ---

[Mr Harper]

That may be true, but if the hon. Lady will allow me, I will say more later about what business thinks and about the opportunities that will arise if we make the change I propose. Then, if she does not think I have covered her point, of course she should feel free to intervene.

[Charlie Elphicke]

My right hon. Friend is being generous in giving way. Will he address ensuring that we can end free movement when we leave the European Union and get the right balance with work permits?

[Mr Harper]

Yes, I will come to that.

It is worth saying that Britain’s unemployment rate of 4.3% is relatively low, compared with 7.5% in the EU as a whole and 8.9% in the euro area. Some countries in Europe have unemployment rates of more than 20%. Our record is very positive, and businesses have created 3 million new jobs since this Government have been in power. I am always careful to say that businesses have created the jobs, because it does not happen automatically. Although we can help to create the conditions, it is businessmen and businesswomen who actually take the risks and start the businesses. In this country there are still 1.4 million unemployed people, as well as a number of people not in the labour market, to whom we should give opportunities. I think that addresses my hon. Friend’s point.

When we leave the EU in March 2019, we will leave the single market and the customs union, and freedom of movement will end. The Government were absolutely right to make a generous offer to EU nationals already in Britain who came here before we triggered article 50. We were not able to make that offer unilaterally, because we had to ensure that we protected the 1 million British citizens elsewhere in the EU, since the British Government’s first responsibility is to defend the interests of British citizens, wherever they may be in the world. In the Chamber today, we will debate an Opposition day motion from the Scottish National party that we should unilaterally make an offer to EU nationals, casting aside the essential interests of British citizens elsewhere in the world.

Finance Bill

Debate between Mark Harper and Charlie Elphicke

Committee: 1st sitting: House of Commons
Wednesday 11th October 2017 Commons Chamber

[Mr Harper]

I have not got any idea. I was not Chief Whip between 2010 and 2014. Individual taxpayer matters are for Her Majesty’s Revenue and Customs, and Ministers do not get involved in individual taxpayer decisions. As the Financial Secretary to the Treasury and several other hon. Members have pointed out, we have reduced the scope for businesses to avoid and evade paying taxes. We have closed that gap and are collecting more revenue that we can spend on our important public services, which I want to turn to.

The hon. Member for Bootle mentioned multinationals. He will know that there is nothing we can do unilaterally to collect money from multinationals that operate in different countries. That has to be part of an international process. He will know that David Cameron’s Conservative Government led that process and set up the initiatives. It is not very exciting, Mrs Winterton, but we are part of what I think is called the base erosion and profit-shifting programme. I am a non-practising chartered accountant, and I am afraid that we talk about such exciting things over coffee, but it is important because it relates to a set of international rules for treating where companies earn income consistently so that we tax them where they are genuinely doing their economic work. This Government cannot do that unilaterally; we have to co-operate. This Government have been leading and shaping that work across the world, not following others or trying to avoid it. Not only do we not have anything to be ashamed of, we have a lot to be proud of, which is shown in the revenue that we have been collecting.

Moving on to the substance of clause 5 and the amendments, I want to return to the point I made when intervening on the hon. Member for Bootle. There is nothing in the proposals that should alarm anybody—particularly those on lower incomes—who is playing by the rules. That issue came up when there were votes on the Ways and Means motions, and the Minister made the Government’s intentions clear and they are not what the hon. Gentleman suggested. Anybody worrying about their job at Bombardier, BAE Systems, about which we heard yesterday, or any other company should know that the Government have not proposed to alter the £30,000 tax-free limit at all. If the Government were to bring forward such a proposal, it would be governed by a statutory instrument under the affirmative procedure, meaning that the matter would come to the House and that Ministers would have to make the case at the Dispatch Box and persuade the House to back a change. There is no such proposal. The hon. Gentleman knows that it is not true and in saying that it is he is scaremongering and worrying people when they have no reason to be worried. He should be ashamed of himself.

As the Minister set out on Second Reading, clause 5 is necessary because the rules are unclear and complex and there is some abuse. Some 85% of termination payments are below the £30,000 threshold and will not be affected, but we must make sure that people do not abuse rules that are there for a good reason: to ensure that employees who lose their jobs are properly compensated and have some money to help them as they look for another job. There is no proposal to change that; this is about dealing with abuse.

On amendment 4 and “injured feelings”, there is a clear reason why it is foolish. Were it agreed to, it would introduce a large loophole into the process that would absolutely be abused. If someone wanted to offer some tax-free payments on loss of office, the payment could be labelled as “injured feelings”, rather than as something in the contract, and they could avoid paying tax and national insurance on it. The Minister should be congratulated on thinking things through and ensuring that people cannot dream up loopholes. Dealing with tax evasion is not just about acting after it has happened; it is about smartly drafting legislation so that loopholes are not left open in the first place.

[Charlie Elphicke (Dover) (Con)]

My right hon. Friend is making an incredibly powerful argument. I was just considering his remarks on tax avoidance, loopholes and, indeed, Thames Water, which was mentioned by the hon. Member for Hornsey and Wood Green (Catherine West), and it is important to remember that industrial-scale tax avoidance arose under the previous Labour Government, who did nothing at all to stop this egregious practice. This Government have been passionate, trenchant and active in righting that wrong.

[Mr Harper]

My hon. Friend is right. We hear a lot from the Opposition about clamping down on evasion and aggressive tax avoidance, and I give them credit for talking about it a lot. Unfortunately, they did not do anything about it when they were in government. The Minister and this Government talk about it a little bit, but we spend most of our time dealing with it and collecting the money, which is the right balance.

Finance Bill

Debate between Mark Harper and Charlie Elphicke

Tuesday 12th September 2017 Commons Chamber

[Charlie Elphicke]

I think that my right hon. Friend is being too generous to the Scottish nationalists. They are not simply nationalists; they are incompetent. They were warned on the question of VAT and the police before they took those reforms though, and they went ahead regardless. It is their fault and their mess, and as usual they are trying to blame everyone else for it.

[Mr Harper]

I am grateful to my hon. Friend for that intervention. By the way, Madam Deputy Speaker, I did not think that it would be out of order for me to make some brief remarks about something other than the Finance Bill, given that the Opposition Front-Bench spokesperson spent 10 minutes talking about yesterday and the hon. Member for Aberdeen North spent quite some time doing the same.

Let me move on to finance and the essential capability of the Bill, which is, of course, to raise revenue. My right hon. Friend the Member for Wokingham (John Redwood) talked about that, and of course the central point is about balancing the public finances. I shall not talk about that at length because I was fortunate enough to secure a Westminster Hall debate on the subject which, much like today’s, was well attended, with more than 20 Conservative colleagues and only one Opposition Back Bencher, the hon. Member for Islwyn (Chris Evans). To be fair to him, he spoke extremely well, but he was the only Opposition Back-Bench Member to speak in that debate, which demonstrated that when it comes to balancing the public finances, Opposition MPs are very good at spending money, but not so good at thinking of ways of balancing the books and ensuring that we have sound public finances. That is important because the sound public finances that the Bill helps to put in place will ensure that the country continues to grow and that we can continue to deliver pay rises for people across the country.

European Union (Notification of Withdrawal) Bill

Debate between Mark Harper and Charlie Elphicke

3rd reading: House of Commons & Committee: 3rd sitting: House of Commons & Report stage: House of Commons
Wednesday 8th February 2017 Commons Chamber

[Charlie Elphicke]

I thank the hon. Lady for making a very important point. The common travel area must be maintained. We have a strong history of that between Northern Ireland and the Republic of Ireland, and the Prime Minister has set it out as a key priority for her. [Interruption.] The hon. Lady’s intervention brings me neatly to the next issue: the customs union. [Interruption.] I am answering the hon. Lady’s question.

[Mr Harper]

Will my hon. Friend give way on that?

[Charlie Elphicke]

I give way.

[Mr Harper]

There are sedentary interventions asking my hon. Friend how we might do that. Let me give a constructive suggestion. Because of the common travel area and the rights of Irish citizens in the United Kingdom, which are also reciprocal, it seems to me that there is no need to have checks on people movements across the border, and from the conversations we had earlier about the fact that most customs checks can be done electronically, it seems to me that we can perfectly well maintain a soft border and the prosperity of both parts of the island of Ireland when we leave the EU.

[Charlie Elphicke]

I thank my right hon. Friend for that intervention.

I want briefly in the last minute available to me—

Border Force

Debate between Mark Harper and Charlie Elphicke

Wednesday 4th September 2013 Commons Chamber

[Mr Harper]

I agree with my hon. Friend. I have looked at some of the plans for the London Gateway, which is an excellent development; it is a really important port. I sense that London Gateway and Felixstowe will be competing with each other as to which is the largest port in the United Kingdom. We work closely with the port operator, and we will properly resource the checks at the port. He can have confidence that we will do that.

[Charlie Elphicke (Dover) (Con)]

My constituents, many of whom work at the controls in Dover and Calais, think that the Government have had real success in stopping illegal entry into this country, after years when people could basically just wander in. However, my constituents do have concerns about smuggling and trafficking, so will the Minister seek to prioritise lorry checking at Dover and investment in smashing international supply chains for traffickers and smugglers?

[Mr Harper]

I am grateful for my hon. Friend’s comments. Again, I had the pleasure of visiting the port in his constituency and talking to officers, who raised some of the points that he has just raised with me about getting that balance right across Border Force between checking people and checking goods. We keep that under review, looking at the intelligence about the threats to the United Kingdom. We deal with that on a daily basis, and I hope that I can give him that reassurance.