Moved by Lord Green of Deddington
28: Clause 4, page 3, line 8, at end insert— “(5A) Where regulations made under subsection (1) make provision for the minimum salary requirement for new entrants to be lower than the equivalent salary requirement for other migrants, the regulations may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.(5B) For the purposes of subsection (5A), “new entrant” means an EEA or Swiss migrant who meets one of the following criteria—(a) the migrant is switching from the Student or Graduate to the Skilled Worker route;(b) the migrant is under the age of 26 on the date of their application; or(c) the migrant is working towards a recognised professional qualification or moving directly into a postdoctoral position.”Member’s explanatory statementThis amendment would require parliamentary approval of regulations which would make provision for the recruitment of new entrants to the labour market at pay rates below the general salary requirement under the new Points Based System.
My Lords, Amendment 28 is in my name and that of the noble Lord, Lord Hodgson of Astley Abbotts, who cannot be here. This is the third in a trio of amendments designed to draw the Committee’s attention to some rather key aspects of the points-based system, which is on its way but not yet in full detail.
The purpose of the amendment is to tackle what I submit is a totally absurd situation. Your Lordships will be aware that the new points-based system will reduce the required level of education from degree level to A-level. It will also reduce the general salary requirement from £30,000 to £25,000 a year. As I have already described in the context of Amendment 26, these changes will produce literally millions of potential candidates.
However, it gets worse. There is also to be a special scheme for what are described as “new entrants”—that is, those aged over 18 but under 26 when they first arrive in the UK. For such workers, the salary requirement will be only £20,480 a year—little more than the national living wage but still attractive to many in poorer countries, including even in some EU member states. What is more, this route will lead to settlement and eventual access to our full welfare state. There is surely bound to be a substantial take-up.
Ironically, this comes at the very time that the Government are launching their Kickstart programme—a £2 billion scheme announced last week that they claim will create thousands of new jobs for young people. The programme is being launched in September. In January, we will open our labour market to these new entrants. As a result, our young people, who have had enough difficulties to face already, will face unlimited competition from foreign workers with A-levels who might have years of work experience and who are prepared to work for not much more than the national living wage. Roughly 1.5 million British workers will be directly affected—those aged between 18 and 25 who do not have a qualification higher than A-level. So, first, there is the Kickstart in September and then, I regret to say, the kick in the teeth in January.
I also regret to say that this has all the makings of a policy shambles. The Government would be well advised to back off, and back off soon, for it is our own young workers who will pay the price. I beg to move.
My Lords, the noble Lords, Lord Hodgson and Lord Lilley, have withdrawn, so I now call the noble Baroness, Lady Neville-Rolfe.
My Lords, I rise to speak to this amendment with which I have much sympathy, especially now that I have heard from the noble Lord, Lord Green of Deddington. A salary of £20,480 seems quite low. It is surprising that we are offering a new entrant route, because I believe that allows employers to pay one-third less than the headline rate. I am far from clear whether this plan will apply to both EEA and third-country migrants, thus the importance of the response to my Amendment 32, which was debated earlier. I am sure my noble friend the Minister will be able to clarify matters when she responds.
I am sure it is completely right to require parliamentary approval of such a scheme as Amendment 28 proposes, but I worry that Parliament is in fact going too far in permitting such a scheme under the powers in the Bill. If the new immigration arrangements post Brexit lead to a serious shortage of labour, then of course the Government can return to Parliament for more powers. I fear that we are bringing in too many changes at once and risk losing control of our borders and disadvantaging young people and the unemployed in this country. This new entrant route is one change that I think should be deferred for now.
My Lords, I am not really clear how this is meant to work. Is there any intention on the part of the Government to allow the so-called new entrants to enjoy a lower minimum salary requirement than other migrants? It is clear that there is something that I have not fully understood on this. I assume that the authors of the amendment fear, anticipate or foresee such a development, but it may be that, as I admitted earlier, my knowledge of the points-based migration system is insufficient to allow me to fully grasp to what mischief this amendment is addressed. I am surprised it is assumed that this situation could arise.
That is rather a lame comment, so I look forward even more than usual to hearing the Minister’s explanation of why this amendment is—as I assume she is about to say—unnecessary or does not pass muster. It seems to me that it too possibly falls foul of the problem of being bureaucratic and inflexible. I think I should stop there and listen to the Minister’s expert explanation.
I think I am in a very similar position to the noble Baroness, Lady Ludford, in wanting to hear the Government’s reply.
I notice that the Government have been told that we are heading for a policy shambles, and I notice that the Minister has been told by those behind her that we are making too many changes. Obviously this is something that inevitably happens when we have a Bill with no proper scrutiny of what the Government can do.
Having made that comment, I will listen with interest to what the Minister has to say and to whether she agrees that we are heading for a policy shambles and with the other concerns that have been raised by the noble Lord, Lord Green of Deddington.
I again thank the noble Lord, Lord Green, and all noble Lords who spoke on these amendments. For the benefit of the noble Baroness, Lady Ludford, the noble Lord, Lord Rosser, and others, I will circulate the current rules for new entrants—rather than send everyone to sleep with the old rules and the new rules—so that they can compare and contrast.
The amendment seeks to put in place separate parliamentary approval for regulations allowing EEA and Swiss citizen new entrants to the labour market to be paid less than other skilled workers. Minimum salary requirements are a key part of our new skilled worker route. They serve three main purposes: first, as an indicator that a job for which a UK employer wishes to recruit a migrant worker is indeed a skilled job; secondly, to ensure that a migrant worker is paid a fair wage; and thirdly, to prevent employers using migrant workers as a source of cheap labour, undercutting wages for resident workers. The noble Lord is absolutely right that we must have confidence in setting the salary requirements for skilled workers at the right level, balancing the need to control immigration effectively and ensure that the UK’s economy continues to prosper, and not setting them so low that they do not achieve these objectives.
As I said ahead of outlining proposals for the UK’s points-based immigration system, the Government sought independent economic advice from the MAC. In its January 2020 report, A Points-Based System and Salary Thresholds for Immigration—which I am sure everyone has read—the MAC addressed the need for a range of salary thresholds and made recommendations for new entrants. The Government have accepted the recommendations in that report. Our salary requirements for skilled workers are based on national earnings data for UK workers. The MAC identified that new entrants—defined essentially as those at the start of their careers—typically earn around 30% less than experienced workers. Setting lower salary requirements for new entrants reflects this reality and means we avoid setting the requirements at an artificially high level. Reduced rates for new entrants have been part of the immigration system since 2013. While we intend to continue the new entrant salary rate, in future the new rules will set a more consistent 30% reduction across all occupations. As the MAC identified, the differences in the current system are very large for some occupations. New entrant quantity surveyors, for example, may be paid 69% less than more experienced migrant workers in the same profession.
The noble Lord is also right there should be parliamentary scrutiny of these requirements, but there is already a long-established procedure for this. The Government are required to set out their immigration policy in the Immigration Rules. This includes salary requirements, which can determine whether an immigration application succeeds or fails. Changes to the rules must be laid before Parliament under the procedure set out in Section 3(2) of the Immigration Act 1971. Either House may disapprove the changes by negative resolution within 40 days of them being laid and the Secretary of State may make any changes that appear to her required in the circumstances. Any such changes will be laid before Parliament within a further 40 days.
I do not think that it is necessary or proportionate to introduce a separate procedure for salary requirements for new entrants. As I have said, lower salary requirements for new entrants are not new. Skilled workers in the existing immigration system are subject to minimum salary requirements and the current Immigration Rules already provide for lower salaries for new entrants. Furthermore, there seems no particular reason for the procedure for new entrant salaries to be different from the procedure for the general salary requirements, or indeed any other requirements for skilled workers, such as the need for a sponsoring employer, a job at the appropriate skill level and the ability to speak English to an accepted standard. The nature of our points-based system is that all these requirements are closely interlinked.
Additionally, our salary requirements, including those for new entrants, are based on UK earnings data. We intend to update them regularly in line with the latest available data, ensuring that migrant workers’ pay keeps pace with that of resident workers. The procedure set out in Section 3 of the Immigration Act 1971 enables us to do so quickly and responsively, while maintaining an essential element of parliamentary scrutiny. Bringing forward draft regulations under an affirmative procedure would lessen this responsiveness.
We may also wish to amend the criteria used to identify new entrants in future. By way of example, we will be removing the option relating to university milk round recruitment to reflect the removal of the resident labour market test. We have also agreed the MAC’s recommendation to include options relating to those working towards professional qualifications or moving into post-doctoral positions. Similar changes may be needed from time to time, which this amendment would make more difficult by placing the new entrant criteria in the Bill.
As outlined in the February policy statement, the Government are committed to continuing to refine the system in the light of experience and will consider adding further flexibility. Specific parliamentary arrangements that risk splitting up interconnecting policies should not prevent this.
For the reasons I have set out, including that we will continue to lay before Parliament the full details of requirements—including those for new entrants—I hope that the noble Lord will be happy to withdraw his amendment.
My Lords, that was a short but interesting debate—interesting because very few people in the Committee had much idea of what is proposed. The Minister loyally read out what she had been advised to say, but there are just one or two little points. One is that this was based firmly on MAC advice. As I have mentioned, the MAC is a very competent bunch of people, but they are all economists. There seems to be no political common sense engaged in examining its recommendations. What is more, they were made in January, before the Covid crisis struck us, and so was the February policy statement to which the Minister referred. All these things were cooked up before we faced the very serious crisis that we now face. I therefore hope that the Government will be light on their feet and not wait for this to run out of control before they take some action to lower what is bound to be a highly attractive route, which will be, without question, to the detriment of our own young people, who will not have the work experience of a 24 year-old from overseas. With that, I beg leave to withdraw the amendment.
Amendment 28 withdrawn.
Amendment 29 not moved.