Moved by Lord Green of Deddington
26: Clause 4, page 3, line 8, at end insert—“(5A) Any regulations made under subsection (1) which make provision to permit EEA and Swiss nationals to enter the United Kingdom for the purpose of taking up employment must include a specified limit on the total number of such persons to be granted permission for that purpose each calendar year.”Member’s explanatory statementThis amendment would oblige the Secretary of State to place an annual limit on the number of EEA and Swiss nationals that may be granted permission to enter the UK to take up employment when making regulations under Clause 4 (1).
My Lords, Amendment 26 is tabled in my name and those of the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Hodgson of Astley Abbotts, who regrets that he cannot be present to speak to it.
This amendment is absolutely central to our future immigration regime. It calls for an annual limit on work permits that would be granted to EU, EEA and Swiss nationals. Like other amendments, it is confined to these nationals for technical reasons; that is, what the Bill purports to deal with. However, in practice, any such limits applied to EU workers would have to be extended in some form to the rest of the world. The amendment is central because, in the absence of a cap on work permits, the numbers granted could run very rapidly out of control
This is for three reasons. First, a very large number of UK jobs will be open to new or increased international competition. We estimate that the number is of the order of 7 million. Secondly, the number of potential applicants is huge. We made a careful estimate but one confined just to the 15 main countries outside the EU which have been producing work permit applications in the past. That produced—wait for it—nearly 600 million people who would qualify for a work permit, provided that they have the required level of English, although that level has not yet been specified. From the EU, a further 50 million or 60 million people would also technically meet the requirements. Of course, they are obviously not all going to come, but the point is that a large number of people are in the age group with the qualifications that are required. Thirdly, there would be a great incentive for employers to go for cheap, competent, non-unionised workers, as indeed we saw when east European workers were allowed to come to Britain with no transition period.
It is astonishing that the Government should continue on a path devised long before Covid-19 came over the horizon and to do so just as millions of our fellow citizens are facing the prospect of unemployment. I remind your Lordships that net migration was back at record levels when we went into lockdown. The Government say that the present cap on numbers will be “suspended”, but it could well take time to restore the cap, especially as they would face heavy pressure from business. Surely it would be much better to start with a cap and adjust it in the light of circumstances.
Finally, I note a most interesting and courageous speech by the noble Lord, Lord Adonis, at Second Reading. He said that he does not believe that the proposed system will provide any control. He described it as a
“staging post in a very unstable situation with regard to immigration in the future.”—[
He is absolutely right and, as I say, he is also courageous. To put it in a nutshell, the Government are heading for a car crash on immigration, and they would be wise to act soon to avoid it. I beg to move.
My Lords, I rise to support Amendment 26 in the name of the noble Lord, Lord Green of Deddington, as well as in my name and that of my noble friend Lord Hodgson of Astley Abbotts. It is an honour to be associated with—and indeed, sandwiched in the Marshalled List between—two such experts in the field of immigration and demography. Their untiring, perceptive and long-term thinking was reflected in their startling contributions at Second Reading and which, as has been said, were echoed by the noble Lord, Lord Adonis.
This amendment calls for a limit on the total number of EU, EEA and Swiss migrants coming into the UK for employment in each calendar year. I believe that we should go further and apply a cap to all such immigration from all countries, perhaps with specific separate guest worker schemes for agriculture and health workers. There is clearly a serious risk, as the noble Lord, Lord Green, has just explained, of the numbers getting very large indeed if we do not control immigration more directly, and of course if we do not enforce the laws properly.
Effectively leaving the numbers of migrants to the whim and interests of employers, as now proposed, is unnecessarily risky. It would also make it impossible to plan properly for the additional houses, schools and health and transport facilities we would need. The new lower salary thresholds designed to help employers, combined with the apparent attraction of the UK as a place to live and work—as evidenced, sadly, in the channel every day—would result in ever greater numbers of arrivals, especially from third countries outside the EEA.
We need as many jobs as possible for those already in the UK, particularly with the chill winter we must expect following Covid-19, and a greater incentive for employers to train in the skills we need. We are a small island; we need to be careful about the numbers and nature of the people we welcome here. Otherwise we will feel the consequences, including at the ballot box. We have to get this right.
This is rather awkward for me, because I have great respect for the noble Lord, Lord Green, and the noble Baroness, Lady Neville-Rolfe, both of whom I regard as friends. The noble Lord was a close colleague and a brilliant ambassador, and the noble Baroness was a highly successful public servant before she became a highly successful businesswoman. However, I find myself in total disagreement with what they are recommending.
I find the amendment unattractive for a number of reasons. I will stick to the economic and business reasons, except to say that in political terms this is definitely a little England amendment. If you go north of the border and look at Scotland, where the population is declining and only immigration makes it possible to hope to maintain present levels, the political arguments are completely different. I did not hear from either the noble Lord, Lord Green, or the noble Baroness, Lady Neville-Rolfe, any recognition that the points being made were specific to the economy of England.
I see three obvious effects of the imposition of an annual quota. First, it would be the Government, not the market, who would pick the number. I would have thought that the free-market instincts of the noble Baroness would bridle at the idea that the gentleman in Whitehall—or perhaps his algorithm—knows best. Moreover, it would not be the Business Department, alert to the concerns of business, that would set the number, but the Home Office, which is not famous for having its finger on the pulse of the economy.
The second effect would be to produce a short-term surge at the start of every year. I am looking at this from the point of view of international businesses with operations based here; they would need to bring in their essential workers quickly before the door clanged shut for the year. The surge would then be followed by a freeze, preventing them bringing in new staff to match new requirements. I spent some time on the board of a great Anglo-Dutch company, dual-based here and in the Netherlands. Amendment 26 would have been hugely damaging to the flexibility essential for our efficiency.
Hence the third effect: the long-term discouragement to our friends in Milan, Munich or Madrid to put or keep parts of their business in our country. It would be a further deterrent to their putting or keeping their operations here, on top of the complications of our being outside the single market—just what we do not need. I hope that the noble Lord and the noble Baroness will, on reflection, decide not to press an amendment that is politically damaging in the context of the union and economically hugely damaging in the context of international business.
My Lords, I welcome the proposal of an annual cap on the number of people allowed to settle in this country, initially from the EEA but eventually applying to all countries, I hope. It is strange that such a cap has not been included in previous plans to limit immigration.
Successive political leaders from Tony Blair onwards have promised what they describe as an Australian-style points-based system for controlling immigration, but what they have planned has not been an Australian-style system. For most of this century, and indeed earlier, Australia has had a system with an overall cap on the number of visas issued, while allocating those visas on the basis of the points awarded to would-be immigrants. Australia is a vast, underpopulated country that, after the threat of Japanese invasion, decided it needed to increase its population to ensure its security, but even it does not allow everyone who happens to qualify for a certain number of points to settle there with no cap on the numbers.
We are a small, crowded island. It beggars belief that we should introduce a system that would potentially allow almost unlimited numbers of people to come and work and settle here. The number of people coming here from outside the European Union is clearly out of control already. In the last financial year, nearly 90,000 new national insurance numbers were issued to people from India alone—just one country. That is nearly double the number in the previous year and three times the number in the years before that. Of course, it was matched by similar numbers from the rest of Asia combined, not to mention those coming from other continents.
So far as I know, no one knows why this sudden surge has occurred, what jobs these people are working in or where they live, but if we had an annual cap, at the very least such surges would be smoothed out over a number of years, during which we could establish what the driving force was, and, if we decided it was reasonable to continue to allow that number of people to come, to prepare—as the noble Baroness, Lady Neville- Rolfe, said—for the numbers of houses and schools, et cetera, that we would have to build.
Whatever our personal views about the desirability of allowing large numbers of people to settle here, there can be no doubt that the overwhelming majority of the British people would like to see strict limits put on those numbers. This is not a democratic House and your Lordships have made it clear in this debate that they have remarkably little sympathy for the democratic sentiments that the people constantly express. But this country is a democracy, and our laws should reflect the broad wishes of the British people. This amendment would go some way to achieving that.
My Lords, this is not a workable notion. I am not the world’s expert on the non-EU migration system. It is a world I am having to learn about, having known far more about EU free movement in the past. As I understand it, most aspects of non-EU migration to date—which is going to be changed by the points-based system—have, I think, been affected by caps within individual tiers. I am sure I will be corrected if I am wrong. That has not, from some people’s point of view, been a great success. After all, for at least the last few years, annual non-EEA migration has been considerably higher than EU or EEA migration. I understand the aims of the authors of this amendment, but I am not sure how or why it would be expected to reduce numbers.
The amendment also offers us a very bureaucratic system rather than, as the Government intend, one that would respond in a flexible, streamlined fashion to the need for skills in our economy. After all, if you are an employer with a crucial post that cannot be filled—perhaps the geophysicist I mentioned earlier—it seems somewhat ridiculous that you would fail to recruit an expert that you could not find at home because you were the first one after the cap had been imposed.
It is not as if it is a free-for-all. As I understand it, the sponsor employer has to sponsor the call welcoming bids from would-be immigrants and has to pay the immigration surcharge and so on. It is not as if the numbers are not overseen by the system and by a number of individual needs and choices that are driven by the needs of the economy and the employer.
An overall cap would be unworkable and unhelpful to the economy and to employers. Indeed, as the noble Lord, Lord Kerr, pointed out, there are areas of the United Kingdom—he mentioned Scotland—that have a need for a greater population. There is one thing worse than having an expanding population, and that is having a declining one, as Germany is finding out and Japan has found out. There will come a time, with declining birth rates in this country, when we will be wishing that we had more immigrants. Indeed, that partly motivated Chancellor Merkel in 2015.
All things considered, I cannot offer from these Benches support for this amendment. I acknowledge the sincerity with which it is proposed, but I honestly do not think it is wise or workable.
My Lords, I hope the Government’s response to this amendment, and indeed to the next two, might reveal something about their intentions and objectives as far as the new points-based immigration system is concerned.
I feel there is a lack of consistency on behalf of the Government about how crowded or otherwise they believe this country actually is. When it comes to the planning White Paper, and the opposition there appears to be to it from within the ranks of the Government party, one of the responses you get is that it is only a very small percentage of this country that is being built on. Yet when it comes to an immigration system, one senses that the Government base it on the fact that this country is too crowded. There appears to be a contrast, depending on whether they are talking about the planning White Paper or the immigration system, in what their view is on how crowded or otherwise this country actually is at present.
I hope that when the Government reply we shall find out a bit more about their statement that their points-based immigration system will reduce migration. An answer on that might address some of the concerns raised by the noble Lord, Lord Green of Deddington. The Government have never told us the basis on which they reached that conclusion—in spite of the comments of my noble friend Lord Adonis, and the noble Lord, Lord Green of Deddington, at Second Reading, which suggested that the contrary would be the case.
Over the past decade we have heard policy statements about reducing migration to below 100,000, but those statements—I will not go into whether they were sensible or otherwise—were followed by a rise in net migration, including, and not least, from outside the EU, where freedom of movement does not apply.
I hope that when the Minister responds to this amendment we will get a very clear statement from the Government as to exactly why and how they happen to believe that their new points-based immigration system will lead to a reduction in migration—if that, rightly or wrongly, is their policy objective. Such a clear statement is badly needed, and could be given right now.
I thank the noble Lord, Lord Green of Deddington, and pay my respect to the deep expertise that he brings to this subject. The House benefits from it every time he speaks. As he said, his amendment would reintroduce an annual limit on the number of people that might be granted permission to enter the UK to take up skilled employment. The existing cap, which the Government are committed to suspending, is set at 20,700 and is administered monthly to those seeking entry clearance as skilled workers.
Currently, applications are held till the end of each allocation month. If applications exceed available places in any month, priority is given to occupations on the shortage occupation list and PhD level occupations. Thereafter, priority is broadly determined by salary, with higher-paying jobs getting first preference. On the face of it, this sounds like a sensible measure to control and limit migration to the UK, and is consistent with the aim of prioritising the brightest and best to come to the UK. However, it adds to the burden on business, as the noble Lord, Lord Kerr, pointed out, slows the process of recruiting a skilled migrant and creates uncertainty among employers. It also creates a situation in which a migrant might be perceived as of value one day and not the next, which is what inevitably happens when a cap binds.
We want the UK to be a great place to do business, and we want to reduce uncertainty for UK employers and businesses—which imposes costs and prevents forward planning—while ensuring that we do not put unnecessary obstacles in the path of those who want to operate and contribute, so that the UK’s economy continues to prosper. As noble Lords know, we also want to create a simple global immigration system that focuses on skills and talent and the contribution migrants can make to the UK, rather than on where they come from.
We should be imposing a cap only if we think it would genuinely offer extra protection to resident workers and can be implemented in a way that mitigates uncertainty for businesses and employers across the whole of the UK. The Government do not think that that is so. That view is based on the clear economic advice of the independent MAC, supported by evidence from a wide range of stakeholders.
To illustrate, I draw noble Lords’ attention to the MAC report of September 2018 on the impact of EEA migration in the UK. It said it does
“not believe that the welfare of existing residents is best served by a cap for two reasons. First, the cap, when it binds, constrains inflows of a group of migrants which the evidence suggests are the most economically beneficial … Second, the cap creates unpredictability when it binds as there can be sharp increases in the minimum salary threshold that skilled visa applications face.”
This is very similar to a point made by the noble Lord, Lord Kerr. The MAC went on:
“A cap may be viewed as important as part of a political strategy to provide an impression that the system is under control but it is important to recognise that it has an economic and social cost.”
The MAC’s findings in relation to the impact on the devolved nations are equally important, and both the noble Baroness, Lady Ludford, and the noble Lord, Lord Kerr, spoke about this. Given the Government’s commitment to introducing an immigration system that works for the whole of the UK. In its September report, the MAC highlights findings from various reports for Scotland, stating that, in practice, the cap
“prioritises those roles with the very highest salaries to the exclusion of other criteria—disadvantaging Scottish businesses in favour of those in London and the South East who offer the highest salaries.”
For Northern Ireland and Wales, the cap risks squeezing or crowding out Welsh and Northern Irish employers.
Finally, the MAC has said:
“We believe that if the Government wants to reduce migration numbers it would make more economic sense to do so by varying the other aspects of the scheme criteria e.g. salary thresholds and the level of the ISC.”
We agree, and this is why we are retaining the immigration skills charge and extending its application to employers of EEA and Swiss nationals.
The requirement to pay that charge, the proceeds of which contribute directly to the UK skills budget, helps to ensure that employers are unlikely to employ a migrant when there is someone suitable to under- take the role within the domestic labour workforce. We are also maintaining a firm requirement in the new points-based immigration system for migrants who are coming under the skilled worker route to be paid a salary that does not undercut domestic workers.
As outlined in the Government’s February policy statement, we have accepted the MAC’s recommendation on salary thresholds, as set out in its
The Government will carefully monitor the impact of the changes on the resident labour markets and key sectors. The new points-based system will allow us to make future adjustments to ensure that it is able to meet the needs of the UK economy. On the basis that we are maintaining robust protection for resident workers and providing certainty for UK businesses and employers, and because the key expert advisers—notwithstanding the noble Lord, Lord Green, of course—have said that we should not apply an annual cap on skilled workers, I hope that the noble Lord will withdraw his amendment at this point.
My Lords, I am grateful for the lucid and powerful support of the noble Baroness, Lady Neville-Rolfe. In addition, the noble Lord, Lord Lilley, dealt most effectively with the need for a cap. I am sorry to find myself in some disagreement with the noble Lord, Lord Kerr of Kinlochard. He is hugely respected in this House—rightly so—and including, if I may say so, by myself. That is not to say we agree on immigration.
The Minister explained very clearly how a cap would be administered. There is also something called the intra-company transfer, which would deal with large companies wanting to post senior staff.
On the issue of public opinion, 55% of the UK population want to see a reduction in immigration—that is about 30 million people—while 4% want to see an increase. The figures are similar for Scotland. I beg leave to withdraw the amendment.
Amendment 26 withdrawn.