Non-EU Citizens: Income Threshold

Patrick Grady Excerpts

Monday 7th March 2016 Westminster Hall

[Patrick Grady (Glasgow North) (SNP)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I think this is the first time that I have spoken in a Westminster Hall debate under the Petitions Committee system. I tried to squeeze into the debate on the Women Against State Pension Inequality petition, but I arrived about two minutes too late to get a seat, so I ended up sitting in what I believe is grandly called the “Press Gallery”—that little bench over at the side of the room—much to the chagrin of some members of the press. However, the fact that the Petitions Committee allows such debates to be triggered is a welcome development in this Parliament.

I note from the information provided by the Committee that 551 of my constituents have signed this petition—the 32nd highest number in the country—out of the 102,748 people who had signed the petition when I checked earlier this afternoon. I noticed that some of the constituencies with the highest number of signatories were held by Labour Members, so it is rather disappointing to see the paucity of Back Benchers from what is supposed to be the official Opposition party at such an important debate.

In opening the debate, the hon. Member for Sutton and Cheam (Paul Scully) noted that there had been a variety of immigration-based petitions, some of them pro-immigration and some less keen on various aspects of immigration. That demonstrates a disconnect across the country on the issues. There is certainly not any consensus behind the Government’s position, which seems to me to be driven by ideology and an obsession with the net migration target. It does not reflect any kind of consensus among the population at large, and certainly not among political parties or the different regions and nations of the United Kingdom.

We in the Scottish National party recognise that effective immigration controls are important, but the £35,000 threshold that we are discussing is just another poorly thought out, unfair immigration policy from the Government. I want briefly to look at the principles behind the policy and the complexity of it, and I will raise a couple of specific concerns and the need for a fairer approach.

As I said, it is pretty clear to SNP Members that the UK Government’s immigration policy comes from a certain kind of ideology and a determination to pander to some of the more unpleasant elements of the support for the Conservative party and some other parties. The 100,000 net migration target does not seem to be based on any needs analysis of what might be good for this society’s economy. Rather, it is a nice round number that sounds quite big, and the Government hope that it will placate certain Back Benchers and UK Independence party voters. Incidentally, and interestingly, UKIP voters seem to be concentrated in constituencies that do not have much immigration or many asylum seekers.

The effect of the target has been a whole series of unintended consequences and ever more tortuous mechanisms to try to reach the target, focusing on smaller and smaller sub-groups of immigrants. That is having a disproportionate impact on the economy, society, communities and, most importantly, the lives of individuals.

Despite all that, there have been reports that net migration is beginning to fall, even if, at 323,000, it is much higher than the Government’s arbitrary target. Such an arbitrary target is almost impossible to reach, because so many factors that affect it are outwith the Government’s control. For a start, they cannot change the number of UK citizens who, rightly and legitimately, might want to leave the United Kingdom to live and work in other parts of the world, whether in the European Union, as my hon. Friend the Member for West Dunbartonshire (Martin Docherty-Hughes) said, or in other parts of the world. Nowhere in UK policy does there seem to be any consideration of how other countries might react to people from this part of the world who want to leave to work overseas.

That brings me to some of the failings of the proposal. A disappointing lack of parliamentary scrutiny has preceded its introduction, as is true of many aspects of immigration reform. This debate should be the beginning of a scrutiny process rather than, as is more likely, the end, after which the reforms will be introduced. As far as I am aware, there has never been a vote in the House on the matter, nor is there likely to be one.

Our approach is at odds with that of many other countries that are trying to attract and retain expertise and skilled workers. In 2011, the Institute for Public Policy Research said in response to the original proposal:

“It is significant that no other major country is moving in this direction. Indeed, countries whose skilled migration policies are widely praised, such as Canada or New Zealand, are taking precisely the opposite approach: they may be fairly selective about who is allowed to enter, but they assume that those who do enter will settle, and have integration policies designed to make that work.”

[Martin Docherty-Hughes]

Does my hon. Friend recognise that one reason why Canada and other nations are going in the opposite direction is the ageing population in the northern hemisphere and the limitations on the ability to deal with it?

[Patrick Grady]

Absolutely. An ageing population and a declining birth rate have disproportionately affected Scotland and various regions of the United Kingdom. That goes back to my point about immigration policy being designed to placate voters and political parties in parts of the country that do not have such a situation.

Bodies in a number of sectors have expressed a wide range of concerns about the policy. The Government have responded to some extent to the concerns expressed by the Royal College of Nursing and others about the impact on the health service, but my understanding is that the proposal to put nursing into a skills shortage category will be temporary, with no guarantees about what might happen in future.

We have heard about the impact on other sectors that rely on special skills but do not necessarily pay above the £35,000 threshold. My background is in the international development charitable sector. People come to that sector with a whole range of skills and experiences, but £35,000 is a pretty high salary in such a field.

We have heard quite a bit about the catering industry. I was reminded of a video that was doing the rounds on social media at the weekend: the famous Rowan Atkinson sketch from the 1980s in which he speaks as a Conservative politician saying, “Well, you know, we welcome these people from different parts of the world, and they brought us exotic cuisine such as curry, but now that we’ve learnt the recipe, there is no real need for any more of them.” That was supposed to be satire, yet here we are hearing exactly that sort of sentiment expressed by today’s Tory Government.

I have just come from the all-party group on music’s live music briefing. Our creative sectors benefit hugely from people being able to come into the country to share their expertise, drawing on our rich cultural heritage and bringing their own. Again, £35,000 is a significant salary in those sectors, especially in the early years of work. My hon. Friend the Member for East Renfrewshire (Kirsten Oswald) made a point about churn in such sectors. As a result of the policy, people might come for five or six years and then have to leave, only to try to come back 12 or 18 months down the line.

[Paul Scully]

Does the hon. Gentleman agree that whether it is in the catering industry, the music industry or any other industry, the Government’s default position on lower-paid jobs should be to train our own people first, and then to attract the skills we need beyond that?

[Patrick Grady]

Yes, but those things need not be contradictory. People can come here with specific skills, and learn, develop and share their skills in different ways. The system will allow people to be here for five or six years precisely to develop professional skills and, hopefully, work their way up the ladder, but if they do not meet the arbitrary threshold they will face having to leave the country, forcing potential employers to start again, ultimately with more cost. The Government’s paper on the issue, signed on 14 March 2012 by the Minister who was responsible at the time, states that there will be a reduction

“in economic output—estimated at £181m to £575m over 10 years”.

Even the Government’s own estimate is that the policy will have a negative impact on the economy, but clearly they believe it is a price worth paying to hit their arbitrary target.

The impact on the economy, society and culture as a whole is important, but so is the impact on individuals. I suspect that all of us—certainly all SNP Members—have had constituents in similar circumstances. If they are not directly affected by the income threshold, they are certainly victims of other pernicious aspects of the UK Government’s immigration policy.

The first time I was drawn to ask a question in Prime Minister’s questions—in fact, the only time—I raised the case of my constituent Steve Forman. I do not expect the Minister to have the details in front of him, but Dr Forman is a highly skilled musician, percussionist and teacher at the Royal Conservatoire of Scotland. He did not meet a particular income threshold, so he was being forced out of the country. He was not costing the taxpayer a penny. He was earning an income on which he was paying tax. He has access to a private income from his considerable years of work and experience around the world. He was a musician for David Bowie, among many of his contributions, yet the Home Office saw fit to try to deport him. That is what is costing the taxpayer money. A fortune is being spent on appeals, tribunals and further legal processes. My constituent could have been allowed to stay in the country. He is still here, but with a massive question mark over his appeal, which seems to be snarled up. I do not expect an immediate response from the Minister, but a letter telling us where we are with his case would be much appreciated. That is but one of the many examples that come to our surgeries daily.

Immigration is essential to the strength of our economy and greatly adds to the social and cultural fabric of the country. This proposal is, sadly, one more aspect of an ideologically driven Tory policy that is all about pulling up the drawbridge irrespective of the needs of the economy and society across the United Kingdom. When I raised the case of my constituent at Prime Minister’s questions, I said that if the UK Government did not want to introduce an immigration policy suitable to Scotland’s needs, they could devolve immigration powers to Scotland and let us develop a policy that would work in Scotland’s interests.

Our vision is of a fair and sensible system of managed migration, with a measured strategy to make the most of the huge benefits that immigration can bring to the UK and Scotland. That stands in stark contrast with the Conservative approach. I have no doubt that we on the SNP Benches will continue to stand up for that, whether in Westminster Hall or during discussion of legislation on the Floor of the House.

--- Later in debate ---

[Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)]

It is a pleasure to serve under your chairship, Ms Vaz. I, too, welcome the debate and am genuinely pleased to see the degree of engagement on this issue that use of the petitions facility has generated, not just in terms of numbers, although they are at first glance pretty remarkable, but in terms of the quality of submissions made possible through Parliament’s Facebook account. I also welcome the contribution of the campaign group Stop35k in engaging with those affected and making their voices heard.

We have heard some excellent speeches this afternoon, and I am pleased to see so many of my hon. Friends present. A lot of good points have been made. As my hon. Friends the Members for Glasgow North (Patrick Grady) and for Edinburgh East (Tommy Sheppard) pointed out, it is important to focus on the specific issue we are debating. It is not yet—thankfully—about raising the threshold for people who are coming here. People are being allowed to come here and take up jobs at a certain salary level that no resident could be recruited to do, but when those people put down roots, a huge extra salary hurdle is put in their way before they are able to gain settlement.

There are so many strong arguments in support of the petition and they broadly fall into two categories. The first is that the introduction of the new £35,000 salary requirement will cause a hell of a lot of pain. As some of my hon. Friends have argued, the second is the question of why we would want to inflict that pain. What is it all for? The answer seems to be that it is not for very much at all. I will take those two sides of the coin in turn.

The threshold will cause pain and, most importantly, distress and upheaval for so many people who have made their homes and built their careers in the UK over several years. My hon. Friend the Member for Glasgow North mentioned a powerful constituency case. Indeed, so many individuals will have their lives, plans and dreams turned upside down by the new provisions. Parliament’s Facebook page and case studies provided by Stop35k have allowed those individuals to explain their personal experiences. I will add another two or three examples that I spotted when looking at Parliament’s Facebook page this afternoon.

A typical example is Shannon, who has been here for more than seven years and who, but for the changes, would be eligible for indefinite leave to remain in a year. She studied at Imperial College London and has worked ever since on a tier 2 visa, doing very good work for a charity based in central London that communicates original science and development news and analysis aimed at helping the global south. She says,

“I don’t have anything anywhere else. I hope you can help skilled people like us stay in our homes and continue contributing making the UK as unique as it is.”

Megan has three university degrees and works in the international development sector, in which, as my hon. Friend the Member for Glasgow North mentioned, very few jobs pay more than £35,000. She supports herself comfortably and presents no burden whatever to the UK system, but the rule means that she could be forced to leave. She argues:

“This £35k threshold determines the worth of an individual based solely on income rather than contribution to society, which is not just inhumane—it’s shortsighted. The UK will lose essential staff like nurses, teachers, and care workers, and for what?... I sincerely hope that Parliament will think better of this foolish, knee-jerk policy.”

Those case studies point out that people put down roots over time so the UK becomes home, and they illustrate the excellent contribution that those people make to our economy and society. Some might argue that people should have known that this was coming, but it is clear that many just simply did not know. One contributor to the Facebook page was pretty typical in saying:

“When I immigrated to the UK almost five years ago, there was no £35,000 rule…So the ‘deal’ I signed up for has been RADICALLY changed, but only after I uprooted my family and committed to this country…It’s iniquitous, in my opinion, to entice an immigrant with one set of rules, and then rip the rug out from under them like this.”

That point was also eloquently made by my hon. Friend the Member for Edinburgh East.

Even if people were aware of the rule changes that were provisionally announced in 2011, they cannot refrain from getting on with life and they cannot make a conscious choice to not put down roots, make friends, or build up a home and private life here. Nor can we stop folk having the ambition of meeting the £35,000 threshold by the end of their visas.

First and foremost, the Scottish National party condemns the impact that the provision will have on the individuals who are directly affected. Beyond that, we need to consider the impact it will have on the businesses and public services that employ those people. We are talking about teachers, classical musicians, IT workers, software engineers, professional ballet dancers, chefs and cooks, carers, media workers, biomedical and technological researchers, and many people with jobs in science and research, including in the NHS. We are talking about start-ups, employees of which will often earn less than £35,000 but will make a significant contribution to innovation and economic growth.

We are still concerned about nurses, as my hon. Friend the Member for Glasgow North West (Carol Monaghan) pointed out, despite the Government’s temporary sticking plaster of using the shortage occupation list. Prior to that move, 3,365 nurses working in the UK potentially would have had to leave the country, with a recruitment cost implication of £20 million for the NHS. The Royal College of Nursing pointed out that there was a steep percentage rise in non-EU admissions to the Nursing and Midwifery Council register in 2015. If nursing is removed from the shortage occupation list again, the figures for future years are potentially even more worrying, particularly if overseas recruitment continues to rise as a result of a shortage of home-grown nurses and a crackdown on agency nurse spending. A stopgap answer for the NHS is not sufficient, but at least it has a stopgap measure—the other industries mentioned cannot rely on any such measure.

As several of my hon. Friends have argued, a one-size-fits-all policy is being used where, yet again, it is entirely inappropriate. As my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) said, one size is being designed to fit all industries and jobs. The Government are also trying to make one size fit all nations and regions—a point made well by my hon. Friend the Member for Edinburgh East. One size simply does not fit all.

My hon. Friend the Member for Glasgow North highlighted the UK Government’s estimate of the damage to the UK economy of several hundred million pounds. Of course, the Migration Advisory Committee estimated that the cost to the UK economy would, in fact, be not far short of £800 million. The word “bonkers” springs to mind.

There will be personal pain, pain for business and public services, and economic pain, and for what? It is hard to find an up-to-date assessment of the numbers of people who will be affected but we are talking about comparatively small numbers in the grand scheme of things, particularly after various exceptions and exemptions are considered. Even the Government’s defence and response to the petition appears half-hearted, saying that the move

“is intended to make a modest contribution to the Government’s target of reducing net migration to sustainable levels.”

If the so-called gain is accepted, even by the Government, to be a modest one, why on earth inflict so much pain?

[Patrick Grady]

Is not the point that it is not really a modest measure, but a desperate one? The Government are so hidebound by this arbitrary target they have no chance of meeting that they will stop at nothing, even if it is at a cost to the economy and to people’s personal lives.

[Stuart C. McDonald]

I absolutely agree. One word that could be used is “tokenism”. Someone described the measure to me as “immigration theatre”; it is all in pretend pursuit of the so-called target that my hon. Friends the Members for Glasgow North and for Edinburgh East ripped to pieces. No one believes that the target is a genuine one. I think the Government recognise, to some extent, the ridiculousness of the move—hence the creation of an exemption for those whose job has been on the shortage occupation list at any time in the six years prior to a settlement application. There is an exemption for migrants who work in a PhD-level occupation, and for those who have a tier 2 minister of religion visa or a tier 2 intra-company transfer visa. With so many large exemptions and exceptions, should not the rule that we are creating those exceptions for be considered absolutely absurd?

As my hon. Friend the Member for East Renfrewshire (Kirsten Oswald) rightly asked, what assessment has been done of the displacement effect of the change? Will not the lives of thousands of non-EU citizens be disrupted, only for so many of them to be replaced with fresh migrant employees? If so, what on earth is the point?

The Home Office’s 2012 impact assessment states:

“The goal is a smarter, more selective, more responsive system that commands public confidence and serves the UK’s economic interests.”

In fact, all the signs are that the measure will have a negative economic impact and will undermine, yet further, any confidence that the public has in what the UK Government are doing on immigration.

I know that the policy was inherited by the Minister for Immigration and I know that his hon. Friend, the Under-Secretary of State for Refugees, who is responding for the Government today, has had nothing to do with it either. I wish that they would ditch it not only as singularly unhelpful, but as harmful and hurtful for all concerned.

--- Later in debate ---

[Keir Starmer]

I accept the thrust of the hon. Lady’s point, and I will point out why the current policy is neither sensible nor sustainable, but the upskilling of the local workforce is much needed in the long term. Wherever I go across the country, I see a yawning gap between the skills that are needed in our businesses and our industry and the skills that are available locally, which points to a much wider issue than the narrow issue, framed in immigration terms, that we are addressing today. Labour’s position is that we should focus on upskilling the local workforce rather than relying on such a policy.

We recognise the concerns of the public, businesses, universities and, frankly, pretty well everyone else about the Government’s current approach to immigration. I remind Members that the Government’s net migration cap, which has already been mentioned—in fact, the primary aim of the Government’s immigration policy—is now in tatters. The latest figures show net migration at 323,000, which is more than three times the Prime Minister’s “no ifs, no buts” target. That is embarrassing for him but, more importantly, it is eroding public trust and is resulting in perverse consequences—this policy would be one of those perverse consequences—that are affecting British businesses and the British economy.

As we have heard today, the cap is leading the Government to clamp down even on those areas of migration that they acknowledge are likely to boost gross domestic product, fill skills gaps and support public services, which is a perverse consequence of the policy. The groups affected by the policy are those in work who have an approved visa sponsor and who have contributed to the UK economy and society over a number of years. Analysis of the group of individuals who currently would not meet the £35,000 threshold, the group most affected by the policy, shows that their mean income is £27,300. On any estimate, they are net contributors to the UK economy. They are the very people we should be welcoming to the UK, and they are filling skills gaps on which businesses and public services rely.

The Migration Advisory Committee’s assessment estimates that the threshold

“will reduce the numbers qualifying by around 16% per annum”.

That is the overall number, but the threshold will have a disproportionate impact on certain groups. The committee estimates that, as has already been mentioned, 48% of migrant nurses will be affected. Some 37% of migrant primary school teachers, 35% of migrant IT and software professionals and 9% of migrant secondary school teachers will also be excluded by the policy. The Department for Education made a critical submission to the Migration Advisory Committee’s call for evidence on the policy in 2011, warning that:

“If migrant teachers are required to leave the country after five years, this will present risks to the quality of teaching and incur further public expenditure on the training and recruitment of new teachers.”

That is the perverse impact.

Regional issues have also been mentioned, and I will stay with teaching. In London, there is a fair chance of a teacher reaching the £35,000 threshold in five years, but that is much less likely outside London, but the contribution and quality of input could be precisely the same in both cases. Obviously, like others, Labour welcomes the fact that nursing is currently on the shortage occupation list. Will the Government confirm that that will remain the case? We need to know, and it is a real concern for the national health service and the nursing professions. Nothing has been said to provide reassurance to the teaching profession, which will be affected in the way I have set out.

We recognise that there are strong arguments for addressing skills gaps in our economy, but the Government have failed to do so, and much more needs to be done. That is why we believe that the Government should urgently focus on improving skills training and vocational education to address those skills gaps, but businesses and unions have made it clear that an arbitrary limit that cuts off skilled migrant workers is a form of economic vandalism. I remind Members of the Government’s impact assessment, which states that the impact will be a loss to the UK economy, on the figures I have seen, of £288 million over 10 years—that is the adverse impact on business. I checked with the Library, which confirmed that that is the Government’s most up-to-date estimate. The independent Migration Advisory Committee also warned in 2012:

“As skilled migrant workers are expected to have a positive dynamic impact on growth over the long-run, we would expect reductions in skilled Tier 2 migrants to have a negative dynamic impact on per capita growth.”

Does the Minister accept those figures and the Government’s own figure that the policy will cost the economy £288 million over 10 years?

[Patrick Grady]

The hon. and learned Gentleman has perhaps explained why many of his colleagues are not on the Back Benches today. Perhaps some of his figures explain why not very many Government Back Benchers are here to defend this ridiculous policy.

[Keir Starmer]

I am grateful for that intervention because my point is on the adverse impact on business, and I will go on to address the minimal effect of the policy even in the Government’s own terms. We have the Government’s figure, which I have checked with the Library, and I am told that there is no more up-to-date estimate other than that the policy will cost the economy £288 million over 10 years. The Government’s justification for the policy, and therefore, in effect, for the damage that it will cause the economy, is that it will make

“a modest contribution to the Government’s target of reducing net migration to sustainable levels.”

So it is the old net migration target that is producing the perverse impacts. Drilling into that target, I remind Members that the Government’s impact assessment estimates that the introduction of the threshold will reduce overall net migration by between nought and 4,000 a year. We have the prospect of damage to the economy in the realm of £288 million over 10 years, with an estimated reduction in net migration that could be nothing or, at most, 4,000 a year in the best-case scenario. On current figures, that would simply reduce net migration from 323,000 to 319,000. Again, I have checked the figure of between nought and 4,000 for the estimated overall impact per year with the Library. Does the Minister accept that figure?

The Government are asking the House to agree a policy that will cost the country millions of pounds a year, deprive businesses and services of key workers and force people who are making an economic and social contribution to the UK to leave the country. If that is not a good example of unintended consequences flowing from an immigration policy designed to create headlines rather than address the country’s immigration needs, I cannot think of many better. Would it not be better to drop this misguided policy and ring-fence some of the money saved to help boost skills and vocational training for local workers?

Labour supports a compassionate and controlled immigration policy. We also believe that there is scope to consider how the link between temporary work and indefinite leave to remain works. We will continue to push the necessity of long-term focus on skills and training, but we will not support policies that harm the economy, deprive public services of key workers and have next to no impact on net migration. Unless the Government can provide updated, materially different estimates for the policy, we cannot support it.

--- Later in debate ---

[Richard Harrington]

I do not think anyone could dispute that we would certainly have greater flexibility if we were not in the EU, but many of us would argue that the benefits of being in the EU are so significant that that would be a small point. For the record, that includes me; I totally agree with that view.

It should also be placed on record that numbers of those using tier 2, the skilled work route, have increased by 35% since 2010. Even if we were not experiencing high levels of migration from the EU, I argue that we would still need to reform the rules leading to such large population flows into the UK. I have dealt as much as I can in this debate with the EU issue. I have certainly given the Government’s view, which—luckily for me —coincides with my personal view on these matters.

In the past, it has been too easy for some employers to choose to bring in workers from overseas rather than invest in training for our existing workforce. On average, employers in the UK underinvest in training compared with those in other countries, with a marked decline over the past 20 years. In an increasingly global economy, it is not surprising that many skilled workers come to the UK for a short time to fill a temporary skills gap, or perhaps to experience work in another country, but—this is an important point—reducing migration is not just about reducing the numbers coming here. It is also about being more selective in who we allow to settle permanently. In 2015, some 44%, or nearly half, of all migrants granted settlement in the UK—

[Patrick Grady]

How does the Minister answer the point that other countries with skill shortages are actively encouraging people to come? Moreover, what kind of message does he think this policy sends to other countries to which UK citizens might want to travel or emigrate?

[Richard Harrington]

I answer that by restating that the consensus is that this country has a significant skill shortage, and that it is easier—this is a question of fact, whatever values one adds to it—to get people with skills from abroad rather than train staff oneself.