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

Robert Goodwill Excerpts

Committee stage & Committee Debate: 1st sitting: House of Commons
Tuesday 9th June 2020 Public Bill Committees

[Holly Lynch]

Q An open question to both of you: if you could change one thing about the Bill to make it work for your members, what would it be?

Richard Burge: It would be quite complex. It would be a move away from worrying about what people are paid to worrying about their skills. Skills are not necessarily measured by qualifications, so we welcome the reduction down to A-level standard. However, for instance, you could look at a small coffee shop, where you pay with your credit card. No accountant, bookkeeper or partner in an audit company is physically involved in your paying your money and it appearing in the annual accounts of that company, but you still need a barista to serve your coffee, so the question is: what matters now—is it skills and competence, or is it qualifications and what you happen to be paid? I would like to see that change.

Martin McTague: The biggest thing for us is the bureaucracy of this system. We estimate that a typical business with fewer than 50 employees will probably have to spend about £3,000 per employee to get through this tier 2 process. That is made up of a whole series of different costs. The biggest obstacles to recruiting somebody through this system are simply the cost and the time required to do it. Many businesses that traditionally recruit on the open market and have never gone anywhere near this kind of tier 2 system will find it very off-putting, and may just constrain their ambitions and avoid doing it completely.

[Mr Robert Goodwill (Scarborough and Whitby) (Con)]

Q When the Bill was being formulated and opinion was being sought, the UK jobs market was entirely different from the one we shall see from the summer onwards, with many skills in very short supply—particularly for things like engineering, or even for people working in care homes or picking fruit. Do you not think that we shall see a situation in which a lot more British workers come into the jobs market, and that some of the concerns expressed in the past about the bureaucratic hurdles that might need to be coped with will actually not be such a great problem, because we will have a lot of very well-qualified and well-skilled British people? Is it right that the costs that we have just heard of from the Federation of Small Businesses will be a real incentive for companies to employ British people who are now, sadly, in many cases being thrown back on to the jobs market, in a situation in which we do not have, in effect, full employment? I think the FSB should be the first to answer that.

Martin McTague: I can see that there will be more incentive to look for indigenous employees, but the reality is that a lot of the shake-out, or the potential shake-out, that we are hearing is likely to happen will be among the least-skilled people. Companies are going to enormous lengths to try to hang on to the rare skills that they have. If they have managed to recruit somebody from, say, the European Union, they are going to enormous lengths to try to get them to apply for settled status and to reassure them about the covid situation. I do not think that a new influx of unemployed people, many of whom will have poor skills, will solve a lot of the problems for these companies.

Richard Burge: From a London point of view, I think the jury is out, literally. I do not think we really know what to expect as we come out of covid-19. The critical thing for London, and probably for all metropolitan areas, is the mobility of people, and the willingness of people to be physically mobile to go and find new work, possibly earning less than they were earning before. However, it is also about emotional mobility, too. Are people emotionally prepared to go and do new work, taking completely new tangents in their lives and probably earning less? That will be a real challenge. I think there will be greater opportunities, but not necessarily in a career path that people might have been expecting.

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

Q May I go first to the London Chamber of Commerce and then to the FSB? You have both spoken eloquently about the new challenges and red tape that the system will impose upon businesses. Looking at the other side of the coin, is there also not an extent to which this process puts some red tape and expense on potential employees from the European Union? It risks making coming to the UK to work less attractive. For example, I am from Germany and I have a job offer in London or I have a job offer in Dublin. Going to Dublin does not involve any charge or bureaucracy; going to London involves a visa, a health surcharge, and so on and so forth. Is there a danger that we are going to make this country much less attractive for skilled workers to come to?

Richard Burge: I think it is inevitable that it is going to be more difficult for people from the European Union; that is the consequence of leaving the European Union and not having an immigration policy for people from there. It is no longer an internal market; it is now a normal external market.

I think what we need to do is to make the red tape manageable. I think part of that is umbrella licensing. Part of that will be border clearance that is rapid and smooth, so it needs to be digitised and there needs to be e-clearance, and that also means that it cannot get cluttered up with tourism. We hope that everyone from the European Union will be able to come without a visa and not get caught in that process. Part of this process is the mechanism, and I think that one of the big challenges for the Home Office is to ensure that, while there may be more bureaucracy, it tries to make that process as smooth and as digitised as possible, and that is going to be a big ask before 1 January.

Martin McTague: I am really sorry; I can barely hear the conversation. Is there anybody closer to the microphone who could just repeat the essence of that question for me?

--- Later in debate ---

[Kate Green]

Thank you.

[Mr Goodwill]

Q My question is for Richard Burge in particular and concerns international companies in London that might well have existing employees based in Japan, Singapore or the United States who wish to come to London to work as part of their company’s operation. There are also companies that might be based in the European Union whose employees have habitually come to work in London but, under the new regime, will be in the same category as those first workers. My question to Mr Burge is, under the new regime, how will that system function? Will it be an equivalent situation, something that companies can work with easily, or will there be problems for international workers coming to the UK within a company that might even be based in London, but certainly an international one?

Richard Burge: The answer is that I don’t really know. A lot of companies that are already established in places such as Japan will find it easier; for the ones that have operations elsewhere in Europe, this will be a new world. This also comes down to the Home Office being flexible and agile in terms of making sure that we assume positive intent on the part of companies—that they are not getting people into Britain secretly to do full-time work, but that they are in fact part of the transferable market within their company.

We need to address that. It will be complicated, but there are precedents in companies outside the EU, so I think we will use that as an example. It will be more difficult for smaller companies. Increasingly, we find that international companies in London are actually quite small; they are not huge operations. You can find yourself to be an international company in London by dint of the first order put on your website, whereas in the old days you would have spent 20 years developing a domestic market and then you would move internationally. Smaller companies might find themselves potentially hostage to this without realising it. So yes, complex.

[The Chair]

I remind hon. Members of the scope of the Bill, which is EEA nationals, EU nationals and Swiss nationals, not the rest of the globe.

[Mr Goodwill]

Q Thank you for that guidance, Mr Stringer. Of course, EU nationals will be in the same category as non-EU nationals were. Does the Bill provide the equivalence of the posted workers directive? Under EU regulation, under that directive, people can work in other EU member states. Will there be equivalence in this to cover that particular situation, where some workers—particularly people such as lorry drivers but other sectors too—may use that regulation to enable them to work?

Richard Burge: I don’t know. We will look at that and provide you with some written advice on it.

[Dame Diana Johnson (Kingston upon Hull North) (Lab)]

I wanted to ask a follow-up to the question of the shadow Minister, my hon. Friend the Member for Halifax, about the income threshold. In some answers, we have heard about the effect that that might have on particular sectors, such as the care sector. Will you both say more about the regional impact of the provisions of the Bill? Do you have particular concerns for the regions? I understand that Richard Burge is speaking for the London Chamber of Commerce, but I am interested in what other chambers of commerce around the country might be thinking.

Martin McTague: We have made it clear that we think—if I heard the question correctly—that the care sector is a special case and should have a separate visa arrangement, because it does not fit neatly into any of the categories that we might like to define under normal immigration rules. It is clear from the experience that we have had over the last few months that this sector is under massive pressure. Any major changes would be disastrous.

Richard Burge: I would agree to the extent that I think that the care sector is a special case, but we need to make sure that the definition of the care sector—in terms of immigration—runs alongside what I hope is emerging in the Department of Health, which is a much closer definition of what care is, bringing it in. Certainly, the Health Secretary has been trying to say that care is as important as the NHS, so I think that it needs much more careful definition.

In terms of the regional perspective, we are a country of many parts. For instance, on the lower wage threshold, I am deeply worried that, particularly in essential services—care being among them, but also things such as porterage in hospitals—in many parts of the country this is not a sufficiently low level of wage to enable us to get people in who technically have lower skills but are in high demand. There needs to be a more nuanced approach to this in order to respond to the different economic circumstances in different parts of the country. My colleagues in other chambers think that I am quite fortunate being in London, where this wage level will get us through most of our problems but will not get them through theirs.

--- Later in debate ---

[The Chair]

Order. No, sorry. Robert Goodwill, very briefly.

[Mr Goodwill]

Q Many of the concerns about being able to get skilled workers such as engineers were expressed before the current covid crisis. Do you think that, in the new situation that we will be in, there will be lots of British workers with these skills looking for work? Therefore, if it is slightly more difficult to get in an EU worker, it might actually benefit British workers looking for jobs in your sector.

Tim Thomas: I understand the point that you are making, but our issue is with the type of skills that we need. I mentioned green skills, and we also need digital skills. We need a range of skills that are not available in the UK labour market. We are training domestic UK workers for them, but in the meantime there is a skills mismatch between what employers need and what is available in the UK labour market. There may be some mitigation, but I would say that we are still going to need non-UK workers for the foreseeable future, until we develop those skills in the domestic labour market.

[The Chair]

Mr Thomas, thank you very much for the full evidence that you have given. It is valuable and I am sorry about the technical difficulties that we had in getting through to you.

Tim Thomas: Not at all. Thank you for your time.

--- Later in debate ---

[Holly Lynch]

Q I am very mindful that you are from the Migration Advisory Committee. Given what you have just said about analysing and reforming the shortage occupation list, do you also think that, having identified the gaps, there should be a role in informing domestic skills policy as well as migration policy?

Brian Bell: Absolutely. If we identify an occupation that we think is in shortage, I consider that essentially a failure. You might not think it is a failure if there has been a big increase in demand for that sector, so the sector suddenly sees a large increase in the demand for its product. In the short run, there might be a shortage in terms of getting the appropriate labour for that—that is fine and makes sense—but often the shortage occupation list identifies a failure of the British education system to provide the people who are needed. A classic example of that is nurses. Nurses have been on the shortage occupation list since I can remember ever hearing of it. Every time they are put on the list, we hear statements along the lines of, “Yes, we know that they are in shortage, and we have a plan to increase the number of nurses who go through training so that we deal with the shortage in the long run.” They are still on the shortage occupation list. We should be using the shortage occupation list to signal both to Government and to employers that there are training needs that need to be fulfilled.

[Mr Goodwill]

Q Professor Bell, you referred to the care sector, but another sector that I am sure regularly makes representations to the MAC is the agricultural sector. We often read stories about crops rotting in the fields if we cannot get enough people to work there. Indeed, the Government have a seasonal agricultural workers scheme for non-EU workers. Do you feel that the provisions in the Bill will accommodate the needs of agriculture, or will the sector continue to need special exemptions to allow that to happen?

Brian Bell: The seasonal agricultural workers scheme is probably the only sectoral scheme that the MAC has recommended as a good idea. That is because it is truly unique. I think the statistic is that 99% of seasonal workers in agriculture are not from the UK, which makes sense. As it is directly seasonal, the job does not fit with people who live in the UK and who want a year-round job to make a living. Most countries have some type of seasonal workers scheme, and I would be surprised if there was any argument for why we would get rid of that. It is in a pilot at the moment; as I understand it, the pilot is going well.

[Mr Goodwill]

Q So you think that the current scheme should be extended to include EU workers. Can they come under the provisions in the Bill?

Brian Bell: Actually, that is a good question. It would be a question for Government. If there is a seasonal workers scheme, and we have removed the special entitlement of European Union workers in terms of access, there is no reason why the seasonal workers scheme should not be open to people of any nationality, but that is a question for Government.

[Mr Goodwill]

Q Finally, do you carry out any analysis of the economic impact of workers who come here, put down their roots, bring up their children and pay their taxes and of workers who may well see their time in the UK as being short, who send a lot of the money back to their families, and whose children are in education in other countries? Do you carry out any analysis of the impact on the UK economy of that type of immigration?

Brian Bell: One thing that we have done, which is particularly important for public finances, is think about different types of immigrants, such as a migrant who comes to the UK and then makes their home here. We often highlight how migrants in general are positive for public finances. When we see them before they get permanent leave to remain, they are often not bringing their family or they are only just forming a family unit, so they are not using public resources but they are paying in taxes. Once they have permanent leave to remain and either become British citizens or stay here permanently, they begin to cost the Exchequer because they tend to start using schools and the health service. From a purely public finance perspective, you would like migrants who just come, pay their taxes, do not use any of the resources and then leave. We have done that kind of analysis. We have done less analysis in thinking about the broader questions on what the benefits are to British society more generally of having migrants who come to the UK and stay for a long time.

[Mr Goodwill]

Q Is it more likely that EU workers will come and stay? If they are deterred from doing so, we might have more workers from outside the EU, who might not stay so long.

Brian Bell: I certainly have not seen any evidence of that. It is a difficult one, because there has been a different rule up until this point in time. I have not seen any evidence that suggests European Union workers are more or less likely to stay on a long-term basis than non-EU workers. The data are not very good on that kind of thing, but it would be an interesting thing to look at.

[Stuart C. McDonald]

Q Professor Bell, may I take you back to what the Minister asked you about regional variations? It is important to be precise about exactly what the MAC recommended. The Minister suggested that the report recommended against regional variations, but you were very careful to say that your report addressed regional variations and salary thresholds. The MAC was not looking at the broader issue of regional visas or devolution of immigration control.

Brian Bell: That is correct. Immigration is a reserved matter, so we were asked to report just on that.