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Annual review of the ending of free movement in the United Kingdom

Part of Immigration and Social Security Co-ordination (EU Withdrawal) Bill – in a Public Bill Committee at 11:00 am on 5th March 2019.

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Photo of Alison McGovern Alison McGovern Chair, Speaker's Advisory Committee on Works of Art, Chair, Speaker's Advisory Committee on Works of Art 11:00 am, 5th March 2019

I wish to speak about proposed new clause 13. Often this discussion is focused on the procedural matters of immigration law, and rightly so; as we have discussed, these are important issues that affect the lives of many of our constituents and they should be scrutinised in detail. However, my proposed new clause is concerned not with the detail of immigration law but rather with economic analysis of the impact of free movement on our labour market. It seeks to require the Secretary of State to conduct

“an annual review of the impact of the ending of free movement of people in the United Kingdom”,

specifically the impact on:

“(a) the UK economy;

(b) the NHS and social care workforce; and

(c) opportunities for British citizens in the European Economic Area.”

The Secretary of State should also “consult with UK businesses” and, I would add by way of commentary, others in the UK, including civil society and trade unions, about the impact they have experienced, should free movement end in this country. Such a review is necessary for several reasons, which I will explain briefly.

When considering the impact of immigration in the labour market we tend to rely on emotional arguments and anecdote much more than we do on data. That is perfectly understandable—people tend to refer to their lived experience of economic matters, rather than on statistical analysis, and there is no reason why it should be otherwise. That is not always a good way to consider the labour market, however, because one person’s experience might be quite different from another’s, and we must look at the reality and consider the research.

However, there is a problem with that. Labour market data can tell us much to help us understand the impact of ending free movement on our economy, but there is much it cannot tell us and a lot we do not know about the way labour markets function in general. There is certainly much we do not know about the UK, and the driving reason behind the new clause is to suggest that the Government ought not to take decisions of this magnitude without having a much better understanding than we currently have about the way immigration impacts on our labour market.

Let us consider the data for local areas between 2008 and 2015, when there was a change in levels of EU migration. The change in employment rates for those born in the UK shows no statistically significant relationship, either negative or positive, between EU migration and employment rates for those born in the UK. That is what the data say, but unfortunately most people in politics would dismiss that fact almost immediately. Clearly, something has been going on, and in anecdotal discussion people will mention the way immigration has affected local labour markets.

Unfortunately, we are poor at analysing local labour market statistics, and we do not do a lot of research at sub-national level. Certainly, the analysis of such information for the formulation of Government policy is very poor, and if the Government accept the new clause, that might provide an opportunity for us all to have a more in-depth, specific and reasonable debate on immigration, rather than the one that has characterised political discussion in recent years.

The same is true of wages. If we consider what the data tell us about the impact of EU immigration on local economies, there seems to be no apparent link or statistically significant relationship between EU immigration and changes to the real wages of UK nationals. We know, however, that the picture must be a lot more detailed than that, and if the Government want to get this issue right, they could do worse than accept this new clause, or that tabled by the Scottish National party, and take seriously the job of analysing local labour markets, working out what drives changes in wages—especially at the lower end of income distribution—and trying to put in place policies that will deliver.

We have gone through this terribly painful process for our country, and immigration has been treated as a kind of political cure-all by political parties that want to make hay in general elections. After all that, and after a Brexit vote in a referendum that was characterised by a terrible quality of political debate, if we find that restricting immigration does not raise the wages of those at the lower end of income distribution, what on earth will we say to people then?

We should do a little bit better than that in our policy making, and I encourage the Government to really investigate what could increase wages. I have my suspicions that if we perhaps allowed lower-paid women—I will come to them in a minute, in relation to the care sector—to work more flexibly and supported them with universal childcare, so that they could perhaps get training and increase their productivity, that might do a lot more to increase the wages of the low-paid in this country, who are by and large women, than the current policy on immigration does. But I do not know, and I simply encourage the Government to find out.

The NHS has an interesting place in our labour market. It is a huge employer and it has had centralised workforce planning almost since its inception. For the rest of the labour market, there is an element of market forces at work and the Government cannot be expected—I would think, anyway—to control the entirety of the labour market, but the Government have a huge input into the labour force for the NHS. We have rarely got it right in the history of the NHS; we have rarely managed to get the supply of good-quality staff for the NHS correct. The NHS has often run short and that is why it interacts with immigration in the way that it does; it has always done so. Many people came here from Commonwealth countries to work in the NHS, in just the same way as EU nationals have done recently.

We know from the evidence that we received as a Committee that this Bill will impact the NHS and— crucially—the social care system very significantly. Unfortunately, that negative impact on the NHS of immigration changes is not really helped by the Government at the moment. If the Government perhaps wanted to give the NHS a hand and do what I think a lot of British people would like to see—namely, train more qualified health staff—they could do a lot worse than reinstate nursing bursaries.