Mr Bell, thank you very much for coming today. I remind members of the Committee that at 11 o’clock the bell will ring and there will be a minute’s silence for George Floyd. We will stand for that minute. Would you like to introduce yourself, Mr Bell, for the benefit of the record?
Q I will start with perhaps a slightly more general question. The Migration Advisory Committee has recommended that in the context of the Bill ending free movement with the European Union there should not be a dedicated general route for employers to recruit at or near the minimum wage from outside the UK and the Republic of Ireland. Would you like to explain to the Committee the reasoning behind that recommendation?
If you move to a system in which you take control of immigration and are no longer subject to free movement under the European Union, you essentially have to have a selective immigration policy, and the question is where you think that selectivity should be. All the evidence that the committee reviewed in its 2018 report pointed to the benefits to the United Kingdom being highest when we focused on high-skill immigration—often high-wage immigration—and the gains, to the economy as a whole and also the resident population, which is our key metric, as it were, being highest with those kinds of workers. If you are going to have any kind of selectivity, that is where you want to tilt the balance, as it were.
That does not necessarily mean that you do not have any access to workers at low wages and with lower training or educational requirements. There are other routes that are already available within the system for immigration. For example, the family route allows you to recruit people who come through the family route for immigration, and there is the asylum route—once applicants are granted asylum they can be employed in the United Kingdom without regard to their skill level. There are alternative routes, and in fact that is extremely common. There are an awful lot of non-EEA workers employed in British firms across sectors who would not meet the requirements of the new immigration system but still have a job because they can come through different routes.
At the end of the day, there is a crucial distinction that we draw. With jobs where the training requirement and the education, both academic and vocational, to begin that job are reasonably low, firms can actually compete against each other, and we sort of want firms to compete against each other for workers, because that is good for workers; whereas for more technical, highly skilled jobs with very high training requirements there is often a practical difficulty in getting a new supply if you need it. You cannot just turn on the tap, so migration is a more obvious response for that.
In terms of that general route for recruitment, the MAC made some specific comments on the care sector, again in the context of the Bill ending freedom of movement. It was very specific against a sectoral scheme. Could you explain some of the rationale for that?
The first point to bear in mind when thinking about the social care sector is that it is often described as being dependent on migrant workers. Nothing could be further from the truth. Something like 80% of those working in the social care sector are British, so actually it relies on British workers. The European Union is a relatively small fraction of the social care employment sector relative to the economy as a whole, accounting for about 5% of it, depending on which statistics are used.
We do not think there should be a particular route for social care because we think that immigration has historically been used as an excuse to not deal with the problems of the social care sector. The problems of the social care sector are fundamentally nothing to do with immigration. They are to do with the fact that, frankly, Governments of all stripes have failed to grasp the funding issue of social care. If people say that the response to the social care issue should be, “Well, employers should be allowed to bring in as many migrants as they want at the minimum wage,” first, that does not sound like the low-wage problem of the social care sector is being dealt with, and secondly it suggests that one of the groups that will really suffer from that is the social care workers. You are saying that you are going to keep on allowing their wages to be held down by allowing employers to bring in workers at the minimum wage, whereas we want to see wages rising in that sector. That will not happen if there is a continuous supply of free labour from abroad willing to work at the minimum wage.
Q Some of the earlier witnesses—particularly those from the London Chamber of Commerce and Industry and especially from the Federation of Small Businesses—talked about the need for flexibility when it comes to those sections of the Bill setting how we will empower Ministers to set the future migration system. Given that the Migration Advisory Committee’s role is to provide expert advice to the Government—to myself and the Home Secretary—how do you see it being able to respond to the demands of the new system in the context of the Bill?
The Migration Advisory Committee has a key role in making sure that we keep a pretty constant view of what is happening across sectors, occupations and industries as the new system is rolled out, to see where problems are emerging. When you switch from a system that has been running for 40 years to a new one that incorporates all European Union countries as well, there will inevitably be teething problems. It would be surprising if that were not the case. We will be focussed on looking for the evidence: where is the system having problems? We will be highlighting those to the Government, and we can do that. We have an annual report that we will be publishing, and we will be highlighting to Ministers where the problems are, as well as potentially what solutions might be available.
Q The Migration Advisory Committee also advised specifically against having regional variations in the migration policy, specifying that there should not be any in the Bill. Is there any particular reasoning behind that recommendation?
We were asked explicitly to think about whether there should be regional variation in the salary thresholds that are a key part of the system. The easiest way to answer that is to think about the fact that the median wage in Edinburgh for a full-time worker is higher than it is in Newcastle, Manchester, Leeds, Birmingham, Cardiff and Belfast. Compared to Dumfries and Galloway, it is 25% higher. In other words, regional wage variation—if by that you mean either the nations of Britain or the regions of England—demonstrates that variation within those areas is much greater than variation across them. If you really wanted to go down that route, you would need an immigration system that set thresholds in every local community around Britain. I do not quite know how that would be enforced. You would be explicitly saying that low-wage areas should stay low-wage areas and that high-wage areas should stay high-wage areas. I am not sure that it is a very sensible policy.
Q Just to come back to the points you made about social care, I am inclined to agree with a great deal of what you have said about social care. There will be a shock to the social care sector delivered by that cut-off when free movement comes to an end, combined with—we hope—the UK’s emergence from the coronavirus pandemic. We have heard concerns about the Migration Advisory Committee, including concerns that it is not particularly dynamic. When you factor in all those considerations, would the committee need to do a lot more to assess shortages in social care workforces at that moment in history?
So senior care workers are eligible for the new system and will therefore potentially be considered for the shortage occupation list. I certainly would not like to prejudge what the Committee will decide on that, but one would expect a strong case from the social care sector. If they are put on the shortage occupation list, the new system will allow them to trade off points and reduce the salary threshold that they will need to meet, which will help for that group. Care assistants and care workers are not eligible for the system because they are categorised in RQF1 and 2 occupations.
The Government have asked us—we will respond in our report—to think about how we should more dynamically update the shortage occupation list. Historically, we waited for the Home Secretary to write to us and say, “Would you mind looking at the shortage occupation list again?” That has not been a frequent process and has often been a case of, “A particular occupation has campaigned for it, so let’s look at that.” The plan going forward is to have a more comprehensive and regular review so employers know when we will be thinking about it again, and we will update it in a more dynamic way to try and capture that effect.
Q When you talked about those who fall below the skills and salary threshold not being considered by the MAC, is that not entirely the problem with this approach? Are we still not identifying where there are workforce and skills shortages because we are looking at only half of the workforce?
About 60% of the workforce are RQF3 and above. Again, in a sense it goes back to my first answer: if you are going to have a selective policy, you need to draw the line somewhere. To the extent that you say, “This sector should get an exemption,” you really need to say that what that means logically is that we are going to take away some of the other occupations and say they are not eligible any more, or we are going to make the system more liberal and expand the remit. In one sense that would be fine. Fundamentally, it is a political decision as to where you draw that line. You could have completely free movement for the entire world if you wanted it. No other country does that, but that is a choice. Our evidence was that if you are to draw that line favouring the higher paid and higher skilled, it is better for the UK economy and the public finances as well.
The one thing I can guarantee is that we will look carefully at what happens in social care going forward. To the extent that the system causes problems for them, we will report on that. There is not quite a knife edge. It is sometimes described as a knife edge, but it is not. Every single person who is a European Union citizen who is employed on
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?
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.
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?
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.
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.
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?
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.
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.
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.
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.
Q Is it fair to say that your report says the decision was finely balanced, that there were arguments on both sides and that the majority of people responding to the consultation supported the idea of regional variations in salary threshold?
I agree it was certainly finely balanced, although there was an extensive discussion on the maths. It is fair to say that that was primarily driven by Northern Ireland. The differences in wages between Northern Ireland and the rest of the United Kingdom are more significant than in other devolved Administrations, and they had different issues because of the land border.
You are probably right that the majority of our respondents were in favour of it. That partly tells you that when you call for evidence, you get very interested parties on one side, and not many on the other. A classic example is that when we did our major report in 2018 on the impact of immigration from the European Union, we got some 450 responses, almost none of which were not in favour of freedom of movement. Almost all were kind of in favour, which did not properly reflect what the British people as a whole thought. That is the nature of a call for evidence.
Q The report called for a pilot scheme about our remote areas. What was the reason for that, and are you troubled in any way that the scheme seems to have since disappeared?
The reasoning was that we received reasonably strong evidence, not just from Scotland but from other areas, nations and regions of the United Kingdom, that there are rural communities that find it difficult to recruit in the way that employers can in more urban and suburban areas. Often those employers are key to that small community, so they are sometimes more important than your average employer in a big city. That was our thinking about that.
We suggested a small pilot—it is important to emphasise that we thought it should be a small pilot. Such a scheme has clear risks, two of which I suppose I should highlight. One is that you issue a visa to someone and say, “You have to stay in one small area, with one employer, and you cannot move, because it is a rural scheme.” We generally do not like the idea of saying to workers that they have to stay with one employer, because that gives the employer lots of power and does not give the worker much power. There is an uncomfortableness about that kind of scheme.
The second problem is our worry that it does not deal with why rural communities are losing population. As soon as you have this type of scheme, you might get an immigrant to go there, but as soon as they have freedom to move—for example, if they get permanent leave to remain and can go anywhere in the UK—if the reasons why people in those communities do not want to stay in the first place still exist, why would we not expect that migrant to move as well?
There are problems, but we recommend the scheme. As I understand it, the Government have not yet decided whether to have such a pilot or not. If I have to be honest, part of that is because an enormously complicated system is about to be introduced. You want to go in steps, so the Government are focused on the main work route at the moment.
Q I appreciate that there are challenges, particularly around tying a person to an individual employer, but that is not dissimilar to what we do now with tier 2. There are procedures to transfer to another employer, if criteria are met. That is a something worth exploring. In relation to Northern Ireland, did the report go as far as saying that consideration should be given to regional variations in salary there?
Q Is that simply because you could be an employer in Northern Ireland and just a few miles down the road somebody is able to access labour without reference to tier 2, experience, salary thresholds or whatever else might be in place?
There is a clear difference because of the border. To be clear, the shortage occupation list that we are reporting on at the moment has the ability to have a Northern Ireland SOL that is separate from the UK-wide SOL. If there are representations made to us that there are particular recruitment problems in Northern Ireland in some occupations, that are not true for the UK as a whole, we have the ability to recommend to the Secretary of State that they be put on the Northern Ireland SOL but not on the UK-wide SOL, as is true of Scotland.
Q I just wanted to ask for clarification. I may have misheard or misunderstood you in relation to one of your earlier answers, when I think you said that there were alternative labour pools—for example, family members or refugees who have secured status. To what degree is that potential pool of labour already fully employed in the UK, and what do you think the shape of that pool of potential labour is likely to look like in the future? I guess I am interested in the degree to which we really could look forward to seeing that as replacing lost labour supply should fewer EEA nationals come to the UK.
It is both a good question and a very difficult question to answer. If you look at social care as a good example of this, something like 15% of workers in social care are non-EEA born. They can’t have been employed by the social care sector through the work route, as the work route is not open to the social care sector until next year because it has been RQF6 and that has excluded almost all such workers. Fifteen per cent. of the workforce has come through some other route. That is quite a big pool. Whether it is fully used—to be honest, we have not looked at that. We can do, because we have data on that, in the sense that we can see, to a certain extent, what all the non-EEA people in Britain are doing. Using the labour force survey, we can ask the question, “If you were born outside the United Kingdom and you are non-EEA, what is your current status? Are you in employment, are you looking for work or are you inactive but potentially available for work?” That is an interesting question. The one thing we cannot do—it just so happens we do not collect the data—is look at the visa you came in on. It would be nice to see whether asylum seekers are different than family route. I encourage the Office for National Statistics to ask that question.
That is an interesting question to look at, and we would be happy to do that—to think about whether there is a ready supply, potentially, of workers who are not actively looking at the moment but who, historically, have moved. There are an awful lot of people who would say they are inactive in the labour force survey but who, a few months later, have a job. We could look at that.
Q In relation to part-time work, there is no pro-rating of part-time salaries in the Government’s £25,600 threshold. Were you asked to look at the implications of that, including the gender equality and other implications? If so, what are your conclusions?
We were. That was another difficult decision we had to make. The difficulty is the following: for the worker route, the system works where you are sponsored by a principal employer—a main sponsor for your job. The question, again, is, where you would draw the line if you said part-time work was acceptable? We were given representations by some firms that said, “Lots of our workers almost have a portfolio of jobs, and they might do a day here, a day there and a day here.” That fits very badly into the system, because you need one employer. Frankly, I don’t think Home Office enforcement would be enough to really follow through every single worker and say, “When you add up all your jobs together, are you earning a sufficient amount that you are not burdening the Exchequer?”, which is one of the criteria we are focused on.
The issue became, if we did something like, “If you are willing to work at least 16 hours,” would that be okay? In the end, we concluded that the fiscal costs were significantly higher for that type of worker than for a worker who would come on a full-time salary. In the end, if you are going to be selective, we did not think that was an area you would be selective of.
I should say that we were mindful of the fact that that disproportionately affects women rather than men. Part-time work is, of course, much higher among women than men. In the end, we did not find that strong enough because, although that is true, the gender patterns of migrants as a whole are not that dissimilar between the sexes.
One thing that we discussed, and left open for Ministers to think about, is that, at the moment, tier 2 is quite restrictive, in that, if someone takes maternity leave, they are sort of supposed to go back to the full-time job as soon as they finish that maternity leave. We said that consideration could be given to whether, once someone is on a visa, there could be some flexibility for people who have a child to go back part time, and for that to still count. I think that might be worth considering.
Q I want to ask about an issue that Make UK raised in their evidence. They talked about the lack of people with the relevant green-skills qualifications that we need. We know from today’s news that we are relying on renewable energy at the moment, and moving away from coal. The evidence they gave was that a lot of the people with those skills are based in Denmark and Germany. Listening to what you said, there is obviously a longer term issue about skilling up our own population. Could you explain how the provisions the Government are introducing will assist us now in dealing with the shortages that we have in that important sector, around offshore wind and renewables generally?
I should say that, if they have green skills at RQF3 and above, they are eligible for the scheme, so they will be able to enter the UK on a visa, so long as the employer is sponsored and they are paid the minimum salary threshold. I am not sure why green skills should be any different from normal skills. If there is a qualification or experience required for that job, and the person meets those criteria, the scheme is open for them. The scheme is not open for people who are at RQF1 and 2, which are essentially the jobs that either require fairly low formal qualifications or for which the training requirement to get that job is not very long. If that is the case, my response would be that we can recruit from the UK domestic workforce to fill those jobs.
Q Thank you, Mr Stringer. To go back to the shortage occupation list, I am sure that it will be very welcome that there will be a shortage occupation list for Northern Ireland. However, when I speak to businesses in Scotland, and also elsewhere, there is a criticism that people find it slow, not very responsive and rather clunky. You spoke a little about the work to try to make that a better process. Could you give us a broad understanding of when a job becomes a shortage occupation? A couple of vacancies in Cornwall or Caithness are clearly not enough. Where is the point at which it becomes in shortage?
Obviously, there is a difference between there being a UK-wide shortage and a devolved Administration shortage. For the second, we only look within the country. Broadly, we are looking for a broad shortage across employers. That is the first thing. As you say, it would not be very compelling to us if one employer said, “We find it difficult to recruit,” because our first response might be, “Perhaps you are not a very good employer.” We want to see, broadly within that occupational sector, that there is a recruitment problem. We want to think that it is more than just an extremely short-term problem. To be honest, this work route will not be ideal if you just want to fill a very short-term vacancy, for the simple reason that you have to pay fees and go through the process of applying. It is more suitable for permanent, long-term positions. We want to see that the shortage is likely to last into the medium term.
The final criteria that we use, which in one sense is the most important, is that we want to be convinced that migration is the appropriate response. In answer to your earlier question, we were talking about how skills are an important aspect of all this. One thing that we say to employers is that, if they want to be put on the shortage occupation list, and if they want us to recommend that, they need to show us evidence that they are going out and trying to train up British workers. They need to show that they have a training programme themselves, or that they are working with further or higher education colleges to try to increase the supply of British workers.
Either that takes time, which we understand, and which is an argument for putting it on the shortage occupation list until that has successfully come to fruition, or quite frankly, if they can show that they have done that kind of thing and it just has not worked, we also think that that is quite strong evidence. That suggests that there are structural problems in that sector or industry, so we perhaps have to accept migration as a response to that, and that British workers either do not want to do those jobs or there are alternatives that they would prefer to do.
What do you say to those who have criticised the system for being too slow and not responsive? What is changing?
Historically, it has been, because, as I said, we only ever reviewed the SOL when we were asked to. It was, frankly, probably low down in the priorities, so, often, it was looked at every three or four years. We will recommend to the Government how we should review it going forward. I cannot tell you what that will be, because we have not decided, but I will say that most other countries that have an equivalent, such as Australia, Ireland and Canada, usually have a regular review process about once a year. I think there is a trade-off. If you do it too often, you do not actually get any new information; the employer just sends you the same thing they sent you last time—