Amendment 7

Immigration and Social Security Co-ordination (EU Withdrawal) Bill - Report (1st Day) – in the House of Lords at 6:45 pm on 30th September 2020.

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Lord Green of Deddington:

Moved by Lord Green of Deddington

7: Clause 4, page 3, line 8, at end insert—“( ) Regulations under subsection (1) must make provision for the Resident Labour Market Test (as set out in the Immigration Rules Appendix A: attributes) to apply to job offers where a job offer forms part of the application of EEA and Swiss nationals seeking to enter the United Kingdom for the purpose of taking up employment.”Member’s explanatory statementThis amendment would require that job offers made to EEA and Swiss nationals which form part of an application for that person to enter the United Kingdom should first be advertised in the domestic labour market in accordance with the Resident Labour Market Test.

Photo of Lord Green of Deddington Lord Green of Deddington Crossbench

My Lords, in Committee, the Minister quoted extensively from the Migration Advisory Committee. She said that the MAC had reported that it was “sceptical about how effective” the labour market test would be in giving settled workers the first opportunity to fill jobs—I think she just mentioned that again. She went on to quote the MAC saying,

“We think it likely that the bureaucratic costs of”— a labour market test—

“outweigh any economic benefit”.

Her third quote was that the MAC thought it

“important to have protection against employers using migrants to under-cut UK-born workers.”

It continued:

“The best protection is a robust approach to salary thresholds and the Immigration Skills Charge”. —[Official Report, 9/9/20; col. 844.]

Those are the technicalities.

I have checked those quotations. They came from the MAC final report on EEA migration in the UK, dated September 2018. This report specifically recommended that there should be no change in the £30,000 general salary threshold that was in effect at the time—yes, no change. So those quotations have clearly been stripped of their original context.

If the Government are now keen to invoke the MAC, they might wish to note the committee’s previous findings. In February 2012, it said that increasing exemptions from the labour market test would mean:

“Resident employees stand to lose out from increased labour market competition.”

Again, in 2015, it said that the labour market tests

“help protect the domestic workforce from being displaced or replaced by migrant workers”.

Whatever it said most recently and in whatever context, it has clearly consistently recognised the impact of a labour market test. In the light of those previous recommendations and the lack of any subsequent detailed work by either the MAC or the Home Office to consider the potential displacement impact, the complete abolition of the labour market test is of considerable concern.

The context in which these proposals are now being considered, of rising unemployment, which a number of noble Lords have mentioned, and increasing youth unemployment, surely requires the Home Office to commission some serious analysis before implementing what could be a drastic step.

Further, the MAC, and worse still the Government, completely ignore the fact that widespread concerns about the abolition of the test are not just about economics. Other noble Lords have mentioned the importance of fairness. These matters are about fairness and perceptions of fairness. That explains why, as I mentioned in Committee, 77% of the public believe that employers should prioritise the hiring of UK workers.

At this point, I should like to recall that this amendment was powerfully supported in Committee by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Lilley, both basing themselves on their experience of these matters at very senior levels of industry.

It is now obvious that the Government are struggling to justify a complete failure to give British workers an opportunity even to apply for jobs that are to be offered overseas. What this comes down to is whether the Government are going to cave in to the convenience of business or give British workers a fair chance. Which is it to be? Or have they already decided against British workers?

Finally, I notice that both the Labour and Liberal Democrat spokespersons avoided taking a view on this matter in Committee. They seemed to be unsighted. Perhaps they will take the opportunity of Report to clarify their positions. I beg to move.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Conservative

My Lords, I strongly support this amendment, to which I have added my name. Indeed, of the three proposed by the noble Lord, Lord Green, this is the one I have most hope of the Government accepting, in the context of the narrow EU-EEA focus of the Bill. I find it extraordinary that we should be thinking of dropping the long-standing requirement that jobs be advertised in the UK before overseas recruitment takes place. This will encourage employers, especially big employers, to recruit overseas without even trying the home market. We already have the benefit of the pool of 3.8 million or so EU citizens who have applied for the EU settlement scheme. Thanks to coronavirus, UK jobs are being lost everywhere, from the high street to our wonderful arts and entertainment industries.

In earlier discussions, defending the decision to dispense with the labour market test and the 28 days of domestic advertising it lays down, the Minister put a lot of emphasis on the salary thresholds and the immigration skills charge. I am not against the points-based system, as the noble Lord, Lord Paddick, seemed to suggest; however, with my experience of a number of industries, I think the thresholds look much too low, especially post-Covid. The skills charge has to be set against the recruitment fees that might have to be paid in the more demanding UK market. I appreciate, of course, that there will be scope to flex these numbers going forward—that seems to be what the Minister has been saying—however, I think this particular change is especially unwise.

While I do not rule out special arrangements for agriculture, mentioned earlier by my noble friend Lord Naseby, and for health workers—although the latter steals training and talent from countries that sometimes badly need it—we need our jobs to go to the home team wherever possible. We need a mechanism to encourage training, especially in the social care sector, which is crying out for suitable people, as my noble friend Lord Horam explained so eloquently in relation to Amendment 3. We are embarking on a skills revolution in the UK, and a jobs-first pledge, by advertising at home, should be part of our prospectus.

As I have said before, I am puzzled that trade unions such as USDAW, who I have worked so well with and who have done such a fine job in retail, are not strongly supporting the retention of some form of labour market test.

Photo of Lord Horam Lord Horam Conservative

This is about the resident labour market test and I find it quite astonishing, like my noble friends who have spoken to the amendment, that this should be removed at the point when we are entering a period of huge unemployment, as predicted by the Chancellor in his Statement only a few days ago. It is completely astonishing that that should be the case at the moment.

It is also amazing that the noble Lord, Lord Kennedy, has so far not supported such an amendment: it beggars belief, frankly, that the Labour Party spokesman is willing to give this up in such circumstances. I hate to attack—rather, argue—with the noble Lord but he did take me on in our last debate. I will not take long over this but he did ask, “Who is this think tank, Onward?” It is a perfectly reputable, charitable think tank. The point it was making, as am I, is that Australia has had a cap on immigration for years. We have imported half the Australian points-based system but are refusing to import the rest, which is the cap. They say in Australia, “no cap, no control”, and that is why they have a cap.

It is the same in Canada, where they have the same system and it is debated in Parliament. It is all perfectly transparent and its Parliament has a role. It is the same in New Zealand. The noble Lord, Lord Kennedy, also said that he was worried about the economy, but Australia and Canada have successful economies and caps on immigration; New Zealand has a successful economy. They are all rather more successful than we are, in many respects. I advise the noble Lord, as a true friend—we served together on the Electoral Commission and I really appreciate him as a stalwart Labour man—to think again about this and reposition his party. Believe you me, if the Labour Party does not reposition itself on immigration, I can tell him, it is in real trouble.

Photo of Lord Hodgson of Astley Abbotts Lord Hodgson of Astley Abbotts Chair, Secondary Legislation Scrutiny Committee, Chair, Secondary Legislation Scrutiny Committee

My Lords, I support this amendment, as the House would expect, but before I get there, the noble Lord, Lord Kennedy, threw down a challenge and I had better get to that first. I am pleased to be able to tell him that I paid for every single bit of that pamphlet. Every single envelope, stamp, and bit of printing was paid for by me and I am happy to share the receipts and information with him if he wishes. The only time that I used any of the facilities of the House was to distribute the pamphlet, a copy of which went to every Member of your Lordships’ House and every Member of the House of Commons.

I support the remarks of the noble Lord, Lord Green, and my noble friends Lady Neville-Rolfe and Lord Horam. I do not want to go over all that again now. In my remarks on Amendment 6, which we have just dealt with, I explained how employers have become addicted to cheap labour from overseas because it is in their commercial interests to do so. As a result, we have become thoughtless and careless about the employment opportunities for our settled population. We have young people locked into zero-hours contracts. We have members of minority communities locked into low-paid, low-prospect jobs. Increasingly, and really seriously because they are a larger part of our population, the over-50s find it hard to get jobs even as we raise the retirement age. A 2018 House of Commons report revealed that 1 million people over 50 would like to work or work more; 14% of 50 year-olds are out of work and 35% of 60 year-olds are out of work. Removing the resident labour market test opens them up to an even greater degree of unemployment risk.

As many noble Lords have said, as the impact of the pandemic makes itself felt, all these problems will get worse. How do we protect and look after our settled population in these circumstances, particularly since these same economic pressures will make employers ever keener to game the system and access cheaper labour from overseas? The first line of protection would have been a cap but we are not going to have it because my noble friend the Minister has told us so. This amendment is a second line of protection, as explained by the noble Lord, Lord Green of Deddington, since the resident labour market test prevents the grosser excesses of undercutting wages by recruiting from overseas.

I apologise to the House for not having been present in Committee, but I have read the debates and, following a point made by my noble friend Lord Horam, I was really astonished by a comment made by the noble Lord, Lord Rosser, at col. 843 of Hansard, about the trade unions. Why every union at the Trades Union Congress is not down here supporting this amendment as a way of helping and protecting the working man they seek to represent, absolutely astonishes me. Now, that is for the party opposite to sort out.

The strains that our society will face do not just come from the pandemic. They will come also from the impact of the fourth industrial revolution—from artificial intelligence and robotics, not often mentioned in our debate so far. In those circumstances, policies that will likely result in close to 1,200 people arriving on an average day cannot be sensible.

A key determinant of a person’s self-confidence and sense of self-worth is, undoubtedly, purposeful and secure work. Professor David Blanchflower said in his book Not Working, published last year:

“Unemployment hurts and it hurts a lot.”

The amendment, if the Government accepted it, would help reduce but, sadly, not eliminate that level of hurt, which is why I support it.

Photo of Lord Paddick Lord Paddick Liberal Democrat Lords Spokesperson (Home Affairs)

My Lords, I begin to wonder whether we should swap Benches at this stage. Again, the noble Lord, Lord Green of Deddington, longs for the old immigration regime that he has criticised so much. This time it is the resident labour market test or, as the former leader of the Labour Party, Gordon Brown, may have put it, “British jobs for British workers”.

The noble Baroness, Lady Neville-Rolfe, posited that UK employers were likely to recruit from overseas without even considering UK workers, and the noble Lord, Lord Hodgson of Astley Abbotts, said that UK employers were addicted to using imported, low-wage labour. I thought that under the points-based system there was a minimum salary of £25,600, which does not sound to me like undercutting UK labour.

Surely, British employers will look to avoid the immigration skills charge by hiring a UK resident in preference to a migrant, if they possibly can, and British employers will look to avoid having to pay a licence fee to be an authorised sponsor of migrant workers, if they possibly can. Migrants will be deterred from working in the UK, including in the National Health Service and social care, because they will have to pay the immigration health surcharge in addition to income tax, national insurance and VAT—effectively, having to pay twice for the National Health Service. Migrants will also be deterred from working in the UK because they will have to pay far more than the cost price of a visa, and because of the salary and skill levels they will have to attain to secure enough points to get a visa in the first place. From 1 January, all that will apply to all new migrants from the European Union as well as those from the rest of the world. Therefore, I do not think that the noble Lord’s amendment is necessary and we do not support it.

Photo of Lord Kennedy of Southwark Lord Kennedy of Southwark Opposition Whip (Lords), Shadow Spokesperson (Home Affairs), Shadow Spokesperson (Communities and Local Government), Shadow Spokesperson (Housing)

My Lords, Amendment 7, proposed by the noble Lord, Lord Green of Deddington, was discussed in Committee. I am all in favour of maximising opportunities for British workers to have employment and skilled employment. Good companies invest in their staff, and it makes good sense to do so. It is much more sensible, when possible, to recruit and train staff locally, for all the reasons given by the noble Lord, Lord Paddick, including the charges that employers incur when recruiting workers from abroad.

This amendment adds a test and a further layer of bureaucracy. For me, the case has not been made for why we should support it. Again, I find myself in agreement with the Minister and her position, as well as with the position of the MAC, which concluded that the likely bureaucratic cost would outweigh any economic benefit of bringing this test back in.

I should say that I have enormous respect for the noble Lord, Lord Horam. We are good friends; we served together for many years on the Electoral Commission. My only point about think tanks—and I am heavily involved in one—is that for some we are unclear about where their funding comes from. I am pleased that we now know that the noble Lord, Lord Hodgson, generously funded his own report. Sadly, of course, we do not know where the money of many of the think tanks that we refer to comes from. With all due respect, it is good of him to fund himself.

I do not think that the case has been made for this amendment in any sense, and I look forward to the Minister’s response. So far, I have heard nothing that could persuade me to support it.

Photo of Baroness Williams of Trafford Baroness Williams of Trafford The Minister of State, Home Department 7:15 pm, 30th September 2020

My Lords, I again thank the noble Lord, Lord Green of Deddington, for the return of this amendment, on which we had an interesting and mixed debate in Committee; it has been no different on Report.

As I outlined in our previous debate on this matter, this amendment would have the effect of reintroducing into regulations a resident labour market test for EEA and Swiss nationals and reversing a government decision to abolish this test under the UK’s new points-based immigration system. I have to say to noble Lords that the Government did not take this decision lightly or indeed in isolation. On the face of it, it sounds absolutely fair and sensible to require a job to be advertised in the UK for 28 days to establish whether there is anyone suitable in the domestic labour market before the job can be offered to an overseas migrant. However, we should be imposing a resident labour market test only if we think it would genuinely offer extra protection to resident workers and, in turn, support UK employers and organisations to access the skills and talents they need. The Government do not think that is the case. Not only does it add a burden on business and considerably slow down the process of recruiting a skilled migrant, without any guarantee of a vacancy being filled from the resident workforce, but it does so at a time when we are seeking to streamline and simplify the system and give UK employers and organisations the certainty they need.

My noble friend Lord Lilley—I am glad he is in the Chamber—rightly drew our attention in Committee to his experience of visiting Nissan, highlighting its enthusiasm and drive for training and retaining people in the UK. I am sure all noble Lords would agree that this is something to be celebrated and encouraged. Indeed, it fits with the Government’s clear assertion that immigration must be considered alongside investment in and development of the UK’s resident labour force.

However, I recognise the valid point made by the noble Baroness, Lady Ludford, who is not in the Chamber today, about the immigration system not being the way to enforce and encourage training of domestic workers. Where I would respectfully stray from her view is to say that while our immigration system should not be considered a silver bullet, it absolutely has its part to play in supporting businesses and ensuring that they invest in training to encourage staff retention. We must achieve a sensible balance.

That view and the decision to abolish the existing resident labour market test is not just a government opinion; it is based on the clear economic advice of the Migration Advisory Committee. The noble Lord, Lord Green, and others in this House are correct in saying that the MAC’s expertise is focused on economics, but one strength of the MAC is that it does not represent any one sector or industry. The MAC is well used to running large-scale consultations and assimilates evidence from many employers, businesses and sectors to produce carefully considered conclusions that apply to the best interests of the whole of the UK. This is exactly what the MAC did in reaching its findings and recommendations in its September 2018 report. I note the point that the noble Lord, Lord Green, made about the MAC’s view on the salary threshold at the time.

The decision to abolish the resident labour market test was not simply a U-turn undertaken given pressure from businesses. I highlighted this during our debate on this subject in Committee, but it is worth reasserting what the MAC said given the concerns of many Peers—which I and the Government share—around the uncertainty that many UK workers will face as a result of the current pandemic.

In addition to the economic arguments, as part of its September 2018 report the MAC said:

“We do think it important to have protection against employers using migrants to under-cut UK-born workers. The best protection is a robust approach to salary thresholds and the Immigration Skills Charge and not the RLMT.”

The Government agree, and that is why we are maintaining a firm requirement in the new points-based system for migrants who come under the skilled worker route to be paid a salary which does not undercut domestic workers.

We are also retaining the immigration skills charge. The requirement to pay that charge—alluded to by the noble Lord, Lord Paddick—the proceeds of which contribute directly to the UK skills budget, helps ensure that employers are unlikely to employ a migrant when there is someone more suitable to undertake the role within the domestic labour force. Given the expansion of the skills threshold and the fact that UK employers will no longer be able to rely on recruiting EEA citizens coming to the UK under free movement, we consider it very likely that the charge will create an appropriate barrier and will result in businesses thinking twice before looking immediately to the overseas labour force.

On the basis that we are maintaining robust protection for resident workers, and because the key expert advisers have said that we should not apply a resident labour market test, which echoes views heard by the Government from extensive engagement with stakeholders across the UK, I hope that the noble Lord will feel happy to withdraw his amendment.

Photo of Baroness Henig Baroness Henig Deputy Chairman of Committees, Deputy Speaker (Lords)

There are no requests to speak after the Minister, so I call the mover of the amendment, the noble Lord, Lord Green of Deddington.

Photo of Lord Green of Deddington Lord Green of Deddington Crossbench

My Lords, I thank the Minister for her response. This is not the time to counter anything that she might have said, but I fear that the Government may come to regret their reliance on a group of economists, however capable they certainly are. For example, she made no mention of the concept of fairness. I think that most of us who have dealt with employees of any kind understand the overriding need for people in charge to be fair. Therefore, I was amazed that the noble Lords, Lord Paddick and Lord Kennedy, care so little, it would seem, about the genuine concerns of what I like to call real working people.

I will leave it at that, except to thank the other noble Lords who spoke with most effective support for our proposals. With that, I beg leave to withdraw the amendment.

Amendment 7 withdrawn.

Photo of Baroness Henig Baroness Henig Deputy Chairman of Committees, Deputy Speaker (Lords)

We now come to the group consisting of Amendment 8. I remind noble Lords that Members other than the mover and the Minister may speak only once and that short questions of elucidation are discouraged. Anyone wishing to press this amendment to a Division should make that clear in the debate.