Non-EU Citizens: Income Threshold

Debate between Patrick Grady and Keir Starmer

Monday 7th March 2016 Westminster Hall

[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.