Immigration and Social Security Co-ordination (EU Withdrawal) Bill (Second sitting)

Nicholas Dakin Excerpts

Committee Debate: 2nd sitting: House of Commons
Tuesday 12th February 2019 Public Bill Committees

[Jack Brereton]

Q In terms of productivity, do you think that immigration has any bearing on the levels of productivity in this country?

Matthew Fell: In the UK, there are quite clearly issues around needing to raise productivity. I do not think there is any evidence—I think the Migration Advisory Committee confirmed this too—that that is explained in any way by current approaches to immigration and levels of immigration in the country.

[Nic Dakin (Scunthorpe) (Lab)]

Q We heard the argument this morning from the Migration Advisory Committee, which was supported to some extent by Migration Watch UK, that the threshold approach would encourage employers to push up wages and that would solve the problem. What is your response to that argument, which was consistently played back to us this morning?

Matthew Fell: I am not sure I agree with that. I will paint you a picture of the current situation in a number of sectors. If you take the construction industry, with two thirds of migrant workers, the median salary is currently under £30,000. If you look at the logistics sector, with about 10% or 20% of HGV drivers, or at the warehousing sector, with about a quarter of all fork-lift truck drivers, the wages for EU workers are quite significantly lower than that. I do not think that just changing a threshold level as a way of driving up wages is a helpful thing to happen in the economy.

[Nic Dakin]

Q That was very much the argument that we were being given—that if you have a higher threshold, employers will be obliged to pay more for those scarce skills.

Matthew Fell: We have a better set of ideas for how you have the right checks and controls in place. If your concern is around whether that is doing any potential damage to local labour markets and local people, first, I do not think the facts bear that out, but even if that was a concern, our suggestions are that there are examples around the world, including relatively close to home in other EEA states, of something akin to a local labour market test where you have to give an initial preference in a simple and quick way. If they were the sort of concerns that you were driving at, there are better ways of doing that than a crude, flat salary threshold.

My other thought on salary thresholds is that, even if they are part of the overall mix of a system design, I venture that, rather than just picking a pure number today that is fixed over time, it would be much better to look at the median salary in the country today or to pick something like the 25th percentile of a particular skill area or something like that, so it adjusts over time and adapts to how the economy evolves. That would feel like a slightly more sophisticated way of going about it than just picking a crude number.

[Nic Dakin]

Q What do you think about the argument that salary thresholds are a decent proxy for skill?

Matthew Fell: If the intention is to use a salary threshold, I think it is part of the answer, but I would not say it is the only thing you should look at. If it goes hand in glove with some other metrics, it is potentially part of a solution as a system design, but I would not have it as the sole arbiter.

[Nic Dakin]

Q What other matrix would you suggest?

Matthew Fell: As I have just said, we think there is something quite interesting to look at in a simple and quick local labour market test.

[Nic Dakin]

Q That is to do with shortages rather than skills, is it not?

Matthew Fell: Yes, but you would have a look at that, then skill levels alongside salary. Salary as a proxy in its own right is not helpful.

[Nic Dakin]

Q One of the arguments Migration Watch came up with was the idea, for a middle-area skill, to have a sliding scale: a three-year visa and then a sliding scale where the salary levels are going up. Is that the sort of thing that would be attractive to you?

Matthew Fell: I have not looked at the specific proposal. I am very happy to go away and have a look at exactly how that would work. The one thing that that would have in its favour is the point I made about time to adapt. Within reason, if you have time to adapt, you can say “Okay, how do I configure around a particular system?”, if that has a combination of certainty to it and a length of time to adapt. As principles, those are helpful things to have.

[Nic Dakin]

Q Finally, what are your members’ biggest worries at the moment in relation to this?

Matthew Fell: The single biggest area is time to adapt. It is not knowing exactly what new system they propose to jump into. They are completely crystal clear that free movement is coming to an end. The fear is whether a new system will be ready in time, with the promised reforms, streamlining and improvements. Will that be ready in time?

The vast majority of businesses in this country do not use the non-EU visa system at the moment. It is something in the order of only 30,000 firms in the country that currently use it and that tells me that it is a really quite restrictive, complex and burdensome system. If we are not ready with a new system that is ready to go from day one, without that clarity and without the time to transition into it, that, I think, is probably the biggest concern of all.

[Tracey Crouch]

Q You have spoken of the need to streamline and simplify the future immigration system. Following the question put by the Minister to the previous witnesses, did you manage to respond to the Law Commission’s consultation?

Matthew Fell: Here are a couple of examples around the sorts of streamlining we have in mind for the non-EU system right now. One of the requirements is around asking sponsor employers to provide evidence of their employers’ liability insurance. Nothing wrong with that per se, but you have to have a hard copy of that and today, most of those are issued digitally, so it is a headache. Another example of a day-to-day burden is that you are required to notify a change in salary for any individual. On those sorts of issues, for example, the check is required to make sure you clear the minimum salary threshold requirement, but there is still a requirement even if you raise an individual’s salary. You still have to notify. Again, when we are talking about simplifying and streamlining a system on a non-EU basis, those sorts of administrative headaches are the things that firms find unnecessarily complex.

--- Later in debate ---

[Caroline Nokes]

The complaints mechanism, because this Bill is specifically about turning off free movement and the role that immigration policy has to play. Do you think the Home Office is best placed to do that?

Caroline Robinson: You are right that possibly the Home Office is not best placed to do that. It holds a twin role with BEIS hosting the director of labour market enforcement, so it has some engagement in labour market enforcement and oversight. You are right, there could be a BEIS role.

[Nic Dakin]

Q Are you saying it is more about enforcement than regulation? Are there flaws in the regulation that you are concerned about, or is it really about capacity around enforcement? We can have all the regulations in the world, but if the enforcement is not there, it doesn’t help.

Meri Åhlberg: It is difficult to say, for instance, about the 12-month programme because there has not been a lot of information about it. We do not know which countries are lower risk; we do not have a lot of information about those programmes. There are definitely aspects of temporary migration programmes that put workers at risk. Anything that restricts workers’ and migrants’ rights is going to include some level of risk.

I feel as if the Brexit conversation and the immigration conversation has been focused very much on whether we should have more or less migration, rather than on how we make sure that we are providing decent and good work for everyone. Part of that discussion is around regulation. They are so intricately tied to each other that it is hard to separate them.

[Nic Dakin]

Q Are there good practices—you pointed to one or two things—in a seasonal workers’ scheme that you would have confidence in if it were replicated in the UK?

Meri Åhlberg: I mentioned the scheme in Sweden for migrant berry pickers. They have extended a collective bargaining agreement. There is a trade union. They have collectively bargained with employers to decide what the labour conditions should be. The trade unions are allowed to access labour sites and inspect them and make sure that the terms in those collective agreements are being upheld. When an employer in Sweden employs a migrant worker from Thailand, they have to share the contract with the trade union to make sure that it fulfils those terms and they have to provide a baseline salary, which is approximately £1,100. Importantly, the recruitment agencies in Thailand have to have a presence in Sweden, so that they are under the jurisdiction of Sweden. If they are charging recruitment fees, they can be held accountable in Sweden for doing that. That is one example where there have been successes in dealing with the exploitation of workers.

[Nic Dakin]

Q The involvement of the trade union sounds very important in that.

Meri Åhlberg: I would say so, yes.

[Afzal Khan]

Thank you Chair. Let me say, first of all, that throughout this day your chairmanship has been excellent. We have got through a lot of evidence. My final question—