Migration Policy and the Economy — [Stewart Hosie in the Chair]

– in Westminster Hall at 9:30 am on 29th November 2017.

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Photo of Mark Harper Mark Harper Conservative, Forest of Dean 9:30 am, 29th November 2017

I beg to move,

That this House
has considered the effect of the Government’s migration policy on the economy.

It is a pleasure to serve under your chairmanship, Mr Hosie, and to see the Minister in her place. We had a crossing of paths in Gloucestershire when she stood as our police and crime commissioner candidate in 2012. She was not successful on that occasion, but Gloucestershire’s loss is very much the House’s and the Home Office’s gain. It is also a pleasure to see Afzal Khan here to speak for the Opposition. I will be happy to take interventions from hon. Members and listen to their contributions.

To summarise what I plan to say, my proposition is that migration can be good for Britain if it makes all of us richer, not just the people who have come here to work. It can benefit the public finances and help with the budget deficit, but only if the people coming have sufficient skills and earn a sufficiently high salary. After we have left the European Union, we should treat people who come to Britain from the European Union in the same way as people from elsewhere in the world. Anything else would be indefensible. The system should be based on people’s skills and what they can contribute to the country, not where they are from. That will also make a tremendous difference to our efforts to strike trade deals around the world. That is the nub of my argument; I will now set it out in more detail.

I will talk primarily about migrants who come here to work or to look for work; I will not cover people who come here seeking refugee status, for family reunion or as students, although I will touch briefly on students towards the close of my remarks. I want to be clear that migrants who come to Britain with the right skills are to be welcomed: they come here, they do valuable jobs and they can benefit our economy as well as themselves. However, we should also consider our primary responsibility to the people who elect us to this place and ensure that our migration system benefits not only the people who come here, but the people who are here already.

When we debate the performance of the economy, the measure that we most commonly look at is the growth of GDP—the size of the economy—which has been positive since the Conservatives came to power soon after the economic crash, but we should also look closely at GDP per head, which is the size of the economy adjusted for the fact that there are more people in Britain. Perhaps that is something the Minister can pass on to colleagues in the Treasury. Of course not all population growth is to do with migration, but according to the Migration Observatory, just over half the population increase between 1992 and 2015 was due to migration. That is quite a significant amount. The rest was to do with things such as the ageing population. GDP growth per head in the time that we have been in office is about 0.75% per year lower than GDP growth, and over a considerable period that makes a significant difference to how well off we are. We need to ensure that the people coming here contribute to the extent that they are not just making themselves better off, but increasing GDP per head. It is important to make British citizens better off as well.

I want to flag up how migration relates to the conversation we are having about productivity performance, which has been somewhat disappointing since the financial crash. The Chancellor spent a fair bit of time on that in last week’s Budget, which we voted on last night. I do not want to overstate my case, because the academic research shows that there is no single cause of what some of the academic literature calls the “productivity puzzle”. A lot of bright, smart people—far brighter and smarter than me—are not entirely certain what is at the root of it, but I posit that at least one aspect of productivity is to do with migration.

If we say to businesses that there is effectively an unlimited supply of all different sorts of labour that can come from the European Union and that can be hired relatively cheaply, it does not make much sense for those employers to invest significant capital sums in their business for the latest technology and labour-saving innovations that could help their existing workforce to become and stay more productive. If we were to say to employees that after an appropriate adjustment period that unlimited supply of labour from across the European Union will no longer be available, employers would look at investing capital into their businesses and at different and smarter ways to do things that would improve the productivity of their existing workforce. That would make Britain more competitive and deliver the only sustainable way to drive up wages in the public and private sectors: increasing productivity.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

My right hon. Friend is making a powerful argument. Is not the nub of his case that importing cheap labour from overseas disincentivises businesses from investing not just in kit, but in improving the skills of their employees and our workforce?

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

My hon. Friend makes a good point. This is a big issue in his constituency of Dover, one of the gateway parts of our country.

It is perfectly right for us to look at what people can pay; we have rules in Britain about paying the national living wage. However, research done by the Bank of England in its staff working paper, “The impact of immigration on occupational wages: evidence from Britain”, concludes that although there is not an impact at the higher end of the skills spectrum,

“in the semi/unskilled services sector…a 10 percentage point rise in the proportion of immigrants is associated with a 2 percent reduction in pay.”

I do not want to overstate it, but there is certainly some evidence that at the bottom end of the labour market, there is an impact on pay. It is also a question of the availability of labour and saying to employers that they need to think about smarter ways of working, not just assume that they can access an unlimited supply of labour.

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

My right hon. Friend is making a very good speech. On the point of productivity, which he was discussing when my hon. Friend Charlie Elphicke and I simultaneously attempted to intervene on him, he will no doubt be as concerned as I am that the productivity figures we have just seen show a heavy concentration of higher productivity in London and the south-east. That suggests to me that the area that has had the highest level of migration and has the highest migration-derived population actually does have high productivity. We have to think about that.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

My hon. Friend makes a good point. The literature shows that many factors contribute to productivity. To digress for the moment on the regional aspect, which is not too far from the main topic, the strongest action the Government should take is to continue to invest in infrastructure across the United Kingdom, particularly transport infrastructure. One of the reasons for the focus of our former colleague George Osborne, when he was Chancellor of the Exchequer, on the northern powerhouse was that if we improved the transport infrastructure to join up the northern cities of England so that people could commute much more quickly between them, we would effectively create a group of cities that together would be globally competitive and would make a real difference to the productivity not just of their region, but of the United Kingdom. Ensuring that we invest in all parts of the United Kingdom and not just in London and the south-east is a valuable point.

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs)

To go back to the right hon. Gentleman’s earlier point, is he aware that he has mis-stated the results of the research on the effect of immigration on wages? In fact, the research to which he refers shows a fall of only 1% in the wages of low-skilled workers as a result of immigration, according to the immigration expert Jonathan Portes. Does the right hon. Gentleman accept that that is the true result of the research that he misquoted?

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

No, and I take slight exception to being misquoted by the hon. and learned Lady. Some people have misquoted the research, but I have been careful to have a copy of the document in front of me and quote exactly from its conclusion without overstating it. I am familiar with Jonathan Portes’ research, but that is different research.

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs)

Jonathan Portes is an expert in economic immigration. His commentary on the document states that the actual results suggest a fall of only 1% in the wages of low-skilled workers due to immigration. That is Jonathan Portes’ expert conclusion.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

I am pleased that the hon. and learned Lady has just confirmed that that is Jonathan Portes’ opinion about the research.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

I was quoting from the document itself; I carefully explained what it was and read out its precise words. What the hon. and learned Lady has done is read out someone’s opinion on it. Jonathan Portes is indeed an economist—in fact, I was debating and disagreeing with him on this very subject on the “Today” programme this morning. Someone may call himself an expert and be an economist, but I suspect everyone here knows that when a number of economists get together, the room ends up with more opinions than economists in it.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

No, I will not give way again yet. I will make some progress.

Much of this debate is about the assumptions behind economic models. Changing the assumptions can often lead to different conclusions. We often hold different views about these things, so we have to make our case with arguments and let our ultimate bosses—the voters —take a view on who they believe. I am content to let them reach that conclusion.

My second point is about migrants’ contribution to the public finances. When we came into office, there was a budget deficit of approximately 10% of GDP, which was completely unsustainable. We have reduced that budget deficit by three quarters, but despite the considerable progress we have made, we still have a fiscal challenge to solve. It is important that we look at the contribution made by those coming here.

The Migration Advisory Committee is an independent, expert committee, so I hope the hon. and learned Lady will listen carefully to what it has to say. It did a very detailed piece of work for the Government in 2011, looking at the minimum income requirement for sponsorship under the family migration route. One of its conclusions from the 2011-12 figures was that a household had to earn £25,700 to make a neutral contribution to the public finances—in other words, for the tax it paid to be sufficient to offset its share of public services such as education, health and defence.

That suggests that the migrant workers in Britain who do not earn significant salaries but have access to benefits such as our welfare system are not making a net contribution to public finances. I am not suggesting that they are not working; they are, but they are earning a lower salary and are therefore entitled to things like in-work tax credits and—as the system changes—universal credit. Lower-paid migrant workers are coming to Britain, working, earning money and paying taxes, but the taxes they pay are not sufficient to contribute properly to public finances. In effect, British citizens and those already working here are subsidising some of those migrant workers.

To come back to our friend Jonathan Portes, on the radio this morning he made the point that if we take all EU migrants together, they do make a positive contribution. I have not checked the figures since I debated him, but I think he is right about that. However, he is mushing together all EU migrants of all skill levels. My argument is that we should absolutely continue to have people coming here who are sufficiently highly skilled, are earning income and are making a positive contribution to the public finances, but we should not allow everyone to come here.

Photo of Kate Green Kate Green Labour, Stretford and Urmston

I congratulate the right hon. Gentleman on securing the debate. Does he accept what a number of employers have told me: that people who may have entered the UK to fill relatively low-skilled and low-paid jobs in shortage occupations develop and progress their skills in the workplace and make a greater contribution over time to the UK economy?

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

That may be true, but if the hon. Lady will allow me, I will say more later about what business thinks and about the opportunities that will arise if we make the change I propose. Then, if she does not think I have covered her point, of course she should feel free to intervene.

Photo of Charlie Elphicke Charlie Elphicke Conservative, Dover

My right hon. Friend is being generous in giving way. Will he address ensuring that we can end free movement when we leave the European Union and get the right balance with work permits?

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

Yes, I will come to that.

It is worth saying that Britain’s unemployment rate of 4.3% is relatively low, compared with 7.5% in the EU as a whole and 8.9% in the euro area. Some countries in Europe have unemployment rates of more than 20%. Our record is very positive, and businesses have created 3 million new jobs since this Government have been in power. I am always careful to say that businesses have created the jobs, because it does not happen automatically. Although we can help to create the conditions, it is businessmen and businesswomen who actually take the risks and start the businesses. In this country there are still 1.4 million unemployed people, as well as a number of people not in the labour market, to whom we should give opportunities. I think that addresses my hon. Friend’s point.

When we leave the EU in March 2019, we will leave the single market and the customs union, and freedom of movement will end. The Government were absolutely right to make a generous offer to EU nationals already in Britain who came here before we triggered article 50. We were not able to make that offer unilaterally, because we had to ensure that we protected the 1 million British citizens elsewhere in the EU, since the British Government’s first responsibility is to defend the interests of British citizens, wherever they may be in the world. In the Chamber today, we will debate an Opposition day motion from the Scottish National party that we should unilaterally make an offer to EU nationals, casting aside the essential interests of British citizens elsewhere in the world.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

I see that that point has engaged SNP Members, but we will have plenty of time to debate it later. I mention it now because the Government have published a very clear document for EU nationals called “Rights of EU Citizens in the UK”. Every hon. Member who speaks to EU nationals already in Britain should ensure that they see that document, so they know that the Government have made it very clear that they are not just welcome, but positively encouraged to stay here after we have left the EU. If they have been here for five years, they can get settled status; if not, they can stay for that period and then get it. We want them to stay. My point is about what we do after we have left the EU when new EU nationals want to come and work in Britain. It is worth distinguishing those categories so that there is no opportunity for mischief-making or for anyone to pretend that we do not want existing EU nationals to stay under the Government’s very generous offer.

There has been some debate in the media today about our negotiations, but from the document produced by Michel Barnier’s team, which sets out the British Government’s offer on EU citizens and the demands of the EU27, we can see that we are not a million miles away. There are some issues left that still have to be negotiated on, but on the vast majority there is complete agreement, including residence, exportable benefits and access to the health service. We are within touching distance of reaching a deal on that basis, which will set the mind of many people—EU nationals and British citizens—at rest.

I am also very keen that students keep coming to the United Kingdom to attend our fantastic universities. It is worth mentioning that over the last year the number of international students coming to Britain has increased. Students make very little net impact on the immigration figures because usually they complete their course and then leave; those who want to stay are welcome to do so if they get a graduate-level job, but then they are counted as a worker and not as a student. We have a fantastic offer for international students and I am very pleased that the Home Secretary has asked the Migration Advisory Committee to examine the contribution that international students make to our economy. I look forward to seeing the results of that research.

Photo of Alex Chalk Alex Chalk Conservative, Cheltenham

My right hon. Friend will know that the University of Gloucestershire has a campus in Cheltenham. Does it not always bear emphasising that our fantastic universities are effectively one of the great exporters in the British economy, because they bring in so much foreign currency? They are one of the jewels in our crown and we should nurture them at every opportunity.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

I am very grateful to my hon. Friend, who is not quite, but almost, my Gloucestershire neighbour, for that intervention. He is absolutely right that we have some fantastic educational institutions. In my constituency, Hartpury College is a provider of both further and higher education. It has international students from around the world, particularly on some of its sport courses, and is a global leader. Those are the sorts of educational opportunities that we should be extending; I want to see that continue, and there is no reason why it should not be able to.

Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton

I am not sure where the right hon. Gentleman got his figures from, but the ones that I am looking at are from the Evening Standard. In fact, his former right hon. Friend —the ex-Member for Tatton and former Chancellor—is very worried about the fact that the migration targets include students. He said on 27 August in the Evening Standard, “International student numbers are down by 27,000, because we look like an unwelcoming nation”. I wonder whether the right hon. Gentleman has any comment on that.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

Well, the figures I looked at suggest that is not true. There has been a small reduction in the number of students coming from the European Union, but that has been more than offset by the number of students coming from outside the European Union. Also, the whole issue of whether students are counted in the migration figures or not is a complete red herring. There is no limit on the number of international students who come to Britain. The only things that students have to be able to do is speak English to an appropriate level, be properly qualified for the course they are taking and be able to pay for that course. There is no limit on the number of students coming here.

Of course, what the Government have done over the last seven years is make sure that students are indeed genuine students, and are compliant with our immigration regime. When we came to power, there were tens of thousands of students who were not really students; they were pretending to be students, but they were actually here working. We have removed sponsor licences from, I think, 916 educational institutions, which were bringing in students but were not complying with our immigration rules. That did no one any favours.

We now have an almost entirely compliant system, in which everybody coming here as a student is a genuine student, does their course and, at the end of it, either goes back to their country of origin or, if they have a graduate-level job opportunity, stays and contributes to our country. They are very welcome to do so. If smart, talented students want to come to Britain and study, I welcome them; if they want to stay here afterwards and take a graduate-level job, I welcome them; and if they want to stay here and start up a business, creating wealth and job opportunities for others, I welcome them. We have seen more people doing those things, not fewer, and I hope that trend continues.

We should base our offer to EU nationals post-Brexit on skills. One reason for that is that there are 1.4 million unemployed people in our country, but there are also some people who do not get the opportunities that they ought to get from employers, because employers are sometimes a little too ready to ask people to come from elsewhere in the European Union to work here.

I am thinking about some of the people who need employers to think about them a little more. There are around a million people in the UK on out-of-work benefits who have some kind of mental health problem but are perfectly capable of working, and who would like to work; some, but certainly not all, of them are included in the 1.4 million people who are unemployed. They may need employers to make reasonable adjustments for them, or they may need some support from the excellent Access to Work system that the Department for Work and Pensions has, but they deserve an opportunity to get into the labour market. We should say to employers, “Before you bring someone in from outside the United Kingdom, you should think a little harder about the people we already have here, and ask yourself if you are doing enough to engage them in the labour market.”

I declare an interest as the chair of the all-party group on learning disability, but there are also around 600,000 people with learning disabilities in the UK who Mencap estimates are perfectly capable of working, and who would love nothing more than to enter the workforce. Again, they should be given the opportunity to do so, and we should just challenge employers a little to look at some of the people we have here. I accept they may not be completely job-ready, but I will come back to the point that my hon. Friend Charlie Elphicke made about encouraging employers to invest in the skills of employees, so that they get the opportunities to participate. Such encouragement would help enormously.

It is also important that we have an immigration system that commands public support. I was looking at some very interesting work that an organisation called British Future has done. It looked at some of the options that will be in front of us in its report, “Time to get it right: Finding consensus on Britain’s future immigration policy”, which was published in September. The report considered whether we should effectively continue to have free movement, whether we should do what I suggest and have a system like the one we have for migration outside the EU, or whether we should have some other system.

Interestingly, British Future did some polling. I always think that we should not make our policies fit polling, but when we have come to the conclusion that we think is right for other reasons, it is quite helpful and heartening, when one looks at what the public’s views are, to find that actually the public are broadly supportive. When I look at the tables about that polling, I see, first of all, that there is a very considerable consensus, and that people think we should not prioritise business and the economy over immigration, or prioritise immigration over the economy, but that we should have a compromise that balances immigration and the economy. That position commanded very significant support from people, whether they were Conservative or Labour supporters, leave or remain, and men or women, which is encouraging.

The report also considers two options for the Government. One is controlling low-skilled immigration through a cap while allowing skilled migrants to come to the UK, as before. Again, that approach has overwhelming support from a whole range of people, whether they were leave or remain, Labour or Conservative, or whatever. The other option is to consider whether we should have different targets for different types of immigration, and that also commands overwhelming support.

Interestingly, particularly for Scottish National party colleagues who are here, the report also put those questions to voters in Scotland and in London. In Scotland, 62% of voters agreed that we should control low-skilled immigration through a cap while allowing skilled migrants to come to the UK as before, which was far more than the proportion of people who wanted to keep free movement or—at the other extreme—wanted to stop EU migration all together. In London, there was broadly the same figure, with 59% of people wanting to control low-skilled immigration but being very relaxed about higher-skilled migrants, and both those numbers were broadly consistent with those for the UK as a whole.

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs)

That is, of course, an opinion poll. Is the right hon. Gentleman aware that the majority of voters in Scotland have voted for political parties that want to keep free movement, and indeed that the Scottish Parliament has recently voted, on a cross-party basis, to support keeping free movement for Scotland and a differential immigration policy for Scotland?

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

That may well be true, but of course in the referendum on Scottish independence, when Scotland was asked whether it wanted to remain part of the United Kingdom, it clearly said that it did, and in the EU referendum the United Kingdom, which Scotland is part of, decided that it wanted to leave the European Union, and the single market and free movement of people. The hon. and learned Lady is absolutely right that I am citing an opinion poll; it is an opinion poll that is not only consistent with the result of the EU referendum, but shows very considerable support for the proposition that I am setting out, so I think that my proposition would command widespread consensus.

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk

My right hon. Friend is very kind to give way to me a second time. There is one key point I want to raise, because I am not sure whether he will come to it. Were we to bring in such visas or such a system, would he expect that we, our children or whoever would then be subject to similar visas, should we want to visit France or Germany, or work or study in those countries?

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

My hon. Friend makes some interesting points. He mushed together several things, including visiting and working. I cannot see any reason why, once we have left the European Union, we would require people coming from the EU for visits—people coming on holiday or for travel—to have visas or vice versa. For example, we do not require visas from citizens of the United States of America coming to Britain on holiday or for visits. It is perfectly reasonable to have rules about people coming to work in Britain, and it would not be unreasonable for European Union countries to have similar rules. We could hardly complain if such rules were reciprocal, but to require visas for visits would not be sensible.

The final point I want to make is about the views of business. It is certainly true—I read the paper that the CBI produced ahead of the debate—that businesses, particularly larger businesses, are basically saying, “We want to carry on importing labour as we do already”, but I think we should push back a little. It is not surprising that businesses want to carry on doing things as they are, with unlimited supplies of inexpensive labour, but we should remind businesses that they should not only do what is in their economic interest, but what is in the economic interest of our country. We should challenge businesses to think about those who are already here and ensure they invest in them and improve their skills. We should also challenge businesses a little about whether they are investing enough in their capital, in the technology available to their business and in their productivity before we automatically say, “Let us just import people from overseas.”

The Home Secretary has commissioned the Migration Advisory Committee to look at the businesses that depend on EU nationals in their workforce, and that work will be helpful. It will enable us to identify those businesses that are using that labour, particularly at the unskilled end of the spectrum, and it will enable the Government to work with those businesses, particularly over the two-year transition period or implementation period that we have said there will be once we have left the European Union, during which people from the EU will still be able to come here. In that period we will be able to work with business to ensure that they can make the changes they need to make ahead of not having access to the unskilled labour that I talk about in my proposition.

Photo of Alison Thewliss Alison Thewliss Shadow SNP Spokesperson (Cities), Shadow SNP Spokesperson (Treasury)

The right hon. Gentleman has been making very broad assumptions about who owns and runs businesses in this country. A great number of my constituents who have been in touch with me on this issue have come from other countries to Scotland to set up and establish businesses, but have found that Home Office rules and processes mean that they are then at risk. They employ people from Glasgow, and their businesses are being put at risk by the Home Office, in particular through delays to entrepreneur visas.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

The hon. Lady makes a good point, which is that we allow and welcome people to come here to set up businesses with appropriate rules about the investment of capital and so on. If she has any specific cases, she should raise those with either the Minister or my colleague the Immigration Minister. I have done that job, and I used to deal with specific cases. The hon. Lady is right: officials, fabulous though they are, are not perfect and mistakes do get made. Part of what we do in this House is fix those mistakes where they happen. We enable Ministers to ensure that systems work more smoothly, and that work is very welcome. She should continue to raise her concerns, as I know she does.

In conclusion, migration can have a positive effect on the economy, but we should look at the growth of our economy per head of population, and not just at GDP growth overall. We have to ensure that the existing population is better off. People coming to the country should earn enough to make a positive contribution to the public finances. That will support the public perception of migration and make people more welcoming. Finally, a migration system based on skills and not the country of origin will be essential for a global Britain that goes out looking for trade deals. It will be very difficult to explain to countries outside the European Union why a citizen of their country with the exact same level of skills finds it more difficult to come to work in Britain than someone from the European Union. Arguably, that would be a discriminatory system that would be difficult to defend once we are no longer a member of the European Union. For all those reasons, I commend my proposition to the House and look forward to the contributions from other Members.

Several hon. Members:

rose—

Photo of Stewart Hosie Stewart Hosie Scottish National Party, Dundee East

Order. Before I call the next speaker, I note that five Back Benchers wish to speak. Although I cannot enforce a formal time limit, if they can keep their remarks to around five minutes each, the Front Benchers can start at half-past 10.

Photo of Kate Green Kate Green Labour, Stretford and Urmston 10:05 am, 29th November 2017

It is a great pleasure to serve under your chairmanship, Mr Hosie. I will pick up exactly where Mr Harper left off in talking about the attitudes of business, and I do so in my capacity as chair of the all-party parliamentary group on migration, which recently produced a report on the needs of business for access to labour post-Brexit. I have a somewhat shop-soiled copy here that I am happy to share with the Minister.

In the report, we particularly focused on the views and needs of small and medium-sized enterprises. We felt that their voice had not been heard very much in the debate so far. I put on record my thanks to the Migrants Rights Network, which helped with the research, and Ernst and Young, which provided funding, as well as to all the businesses and organisations that provided evidence. We had evidence from 19 organisations and we held oral evidence sessions with businesses and representatives in London and Manchester covering the retail, hospitality, manufacturing and social care sectors, all of which employ a high proportion of EU and European economic area nationals.

The first thing we were told was that the characterisation of jobs as highly skilled or low skilled and the potential over-restriction of inward migration of so-called low-skilled workers was unhelpful. Many jobs that would not be classed as highly skilled under the 2011 definition that currently applies to non-EU and non-EEA nationals require significant skills and experience. It was inferred that that definition might in future apply to EU and EEA nationals. We know from Office for National Statistics data that non-UK nationals are more likely to be in jobs for which they are overqualified than UK nationals. Businesses saw that as potentially having a positive impact. The issue of skills was therefore complex.

Secondly, businesses said that the description, whether implicit or explicit, of some jobs as low-skilled caused an image problem in some sectors, making recruitment in the domestic workforce more difficult, as it made the jobs unattractive. Thirdly, employers found that migrant workers were often more flexible than UK workers. They described them as highly motivated and hard-working. More to the point, migrant workers were more willing and able to move around the country or work more flexible hours, because often they did not have the same family commitments as UK workers. Indeed, ONS stats show that on average EU2 and EU8 nationals work more hours than UK nationals and so supply important and much needed capacity. Finally, the businesses we spoke to were clear that EU free movement has been an important safety valve for employers in accessing the labour they need. That was especially true for SME employers and sectors where recruitment is more difficult.

Given all those factors, the employers who gave evidence to our inquiry were concerned that immigration policy post-Brexit should not inhibit their access to the labour they need. That concern has been echoed by businesses across all sectors in my constituency, from food processing to paper-making to construction. Flexibility is especially important. In some cases, the need for labour is seasonal, as the Minister knows. Some businesses need to be able to move workers from site to site, depending on where the work arises. I mentioned this in an intervention on the right hon. Gentleman, but employers also spoke about the need for flexibility to enable lower skilled workers to progress and develop higher skills as they progressively acquire experience and knowledge. That flexibility is important in terms of the productivity and progress of the business.

In our inquiry, we asked employers about their preferred model for management of migration post-Brexit. They cautioned against introducing a points-based system similar to the system that applies to non-EU and non-EEA nationals, expressing concern about the cost to employers, the complexity of the system and the bureaucracy. They were worried that such a system would not only limit the number of workers who could come to the UK, but inhibit the flexibility business needed. They were particularly anxious to ensure that any system did not impose unnecessary administrative burdens on employers. They suggested that work needed to be done to identify sectors that were likely to face acute labour shortages in certain skillsets when we can no longer freely access EU labour, and that the shortage occupation list should be expanded if necessary to reflect the new shortages.

Charlie Elphicke, who has not been able to stay for this part of the debate, rightly spoke about the need to upskill the domestic workforce. The businesses we spoke to favoured more emphasis on training and upskilling of domestic workers and potential workers, although they also said they thought the existing apprenticeship and training schemes were too inflexible, especially for small and medium-sized businesses. They suggested that as part of the post-EU migration strategy, the Government need to look at developing apprenticeship schemes that more effectively address the labour needs of small businesses. They also asked for Government to provide support for positive efforts in sectors that are considered, often wrongly, to be unskilled and to build a public relations campaign to promote the attractions of working in those sectors. They highlighted in particular the hospitality, food, retail and social care sectors.

I hope the report will be helpful to the Minister in formulating post-Brexit migration policy. The APPG has already had the opportunity to meet the Migration Advisory Committee to discuss our findings. I am concerned that the MAC report commissioned by the Home Secretary will not be with us until later next year. I anticipate that the Government intend to introduce their immigration Bill rather sooner than that, and so will not have the benefit of the MAC research in preparing it. I hope the Minister will say how engagement with business, especially SMEs, will take place in anticipation of the introduction of the legislation to ensure their needs are fully reflected in it.

Finally, we should also be aware that restricting immigration will create other additional and new pressures. We will increasingly have an ageing settled population and a proportionately smaller working-age population; that will lead both to increased demand for labour to care for the ageing population, and to pressures on the supply of labour. As the recent report by the Institute for Public Policy Research shows, that will potentially have a negative impact on tax revenues. We must not forget the benefits of immigration. As the APPG’s report makes clear, the flexibility, innovation, commitment and ready availability of migrant labour has benefited business and our economy, and it must continue to do so post-Brexit.

Photo of James Cartlidge James Cartlidge Conservative, South Suffolk 10:12 am, 29th November 2017

I am thrice blessed—to serve under your chairmanship for the first time, Mr Hosie; to follow Kate Green, who made some excellent points; and for the first time to attend a debate to which my hon. Friend Victoria Atkins will respond as Minister. We congratulate her as the first member of our intake in 2015 to have a red box. I am sure she will do the Home Office proud.

I congratulate my right hon. Friend Mr Harper on securing the debate. I mean that sincerely, because it is extraordinary how immigration featured so prominently in the referendum campaign but has been barely debated in Parliament since, so I very much welcome this debate. I did not know what the essence of his argument would be, but I have to say I fundamentally disagree with one point that is extremely important and we need to reflect upon it: the point about discrimination and the two different systems that I think will eventually become far more important than perhaps many people realise.

My right hon. Friend is right to say we have a discriminatory system. In fact, the official Leave campaign vowed to end that system. Under our system a person can enter the country to work as an unskilled migrant only from the EU; it is illegal to do so from outside the EU. Tier 3, a form of non-EU migration, is closed and has been for many years. In a written answer, Jacqui Smith said it was because we get sufficient unskilled labour from the EU. The key word is “unskilled”. Some 75% of people who come from the EU to work in this country would not be able to enter under the non-EU high-skilled migrant route. That tells us that the vast majority of EU migrants are doing jobs whereby they would not even be able to get into the country were we to reform the system as suggested. The problem is that the jobs are not menial and unskilled.

I will give the example of a firm in my constituency. Challs, based in Hadleigh, is a chemical manufacturer that exports around the world. It is ambitious, but its owner has said there is a real problem: he has key members of staff who are EEA nationals who are classed as unskilled under the non-EU system, but they are not unskilled and his company depends on them and he would not be able to recruit replacements; it is simply not feasible. We have a significant issue here. I campaigned to remain, but I think the referendum result was driven—quite legitimately—by a concern about unsustainable levels of migration. To honour the referendum result, it is necessary not only to bring about control of immigration, but to reduce the numbers to a sustainable level in the long term.

We have to remember that in the last quarter non-EU net migration was 50,000 higher than EU net migration. If we have a single non-discriminatory system—the same system for EU and non-EU—it is mathematically impossible that non-EU migration will do anything other than rise, perhaps significantly. On the streets of Clacton and other places where the people voted leave in overwhelming numbers, if we had said that a direct result of leaving the EU will be a significant rise in non-EU migration, they would have been shocked and appalled. That is a democratic point that we have to consider. I am a strong supporter of immigration, but it has to be controlled. Consider the people from eastern Europe and the impact they have had: they had a century of brutalisation, but we set them free in 1989; they came into the single market that Mrs Thatcher created and they have worked their socks off in this country.

How do our recycling centres keep going? Almost entirely from east European labour. This is the key point. Would we fill jobs? It is not about what skills are available. It is simply whether we have people available to do those jobs, and people with the will to do those jobs. I agree strongly with my right hon. Friend and the hon. Member for Stretford and Urmston that we have to train our own workforce to fill those positions, but it will take time. I remember representatives of the hospitality sector coming to speak to the Work and Pensions Committee when I was on it before the election. They said they supported a greater proportion of workers coming from the UK, but there would need to be a transition.

When I stay overnight in the Park Plaza, I do not see a single British member of staff. They are all from Europe and they work their socks off. They might be unskilled and low paid, but we and our economy depend on them. We have to move away from that dependency, which has become damaging. That is the reality of the position we are in now, so we must be very cautious before equalising the system. In my view, for what it is worth, were we to maintain some form of membership of the EEA and have some form of emergency brake on European migration, such as Liechtenstein has through the European Free Trade Association, and were we maintain the division we have where we are strict on non-EU numbers, we might get a better system, because instead of the Migration Advisory Committee determining the number of people coming into the country, it would be a different system altogether called the free market, which I support. We should be very cautious before changing that.

Photo of David Linden David Linden SNP Whip 10:17 am, 29th November 2017

It is wonderful to see you in the Chair, Mr Hosie. I congratulate Mr Harper on securing this debate. I very much welcome the opportunity to speak about the positive contribution that migration makes to the economy, particularly in Scotland. As you might expect from an SNP MP, Mr Hosie, I will focus my remarks today on this Government’s obsession with an unrealistic and counterproductive one-size-fits-all net migration target, which I believe is deeply flawed in economic terms.

It is important to set the scene and provide a bit of context for this debate. Scotland’s estimated population was 5.4 million in mid-2016—the highest on record and an increase of 6.7% since 2001. Net migration has contributed to a population increase every year for the past 16 years. In contrast, the rate of natural change has remained low for the past 50 years, and over the past two years has been negative. That contrasts with the situation in the UK, where natural change contributes significantly more to population increase. Migration has therefore been critical to growing Scotland’s population, and any reduction in migration has the potential to seriously damage Scotland’s demographic resilience.

Looking ahead, Scotland’s population is projected to increase by 5% by 2041, driven solely by migration. Scotland has a markedly different demographic profile from the rest of the UK, which is why I believe immigration policy should be devolved to the Scottish Parliament, a topic I will return to later. If current trends continue, net inward migration is projected to be the sole contributor to Scotland’s population growth. EU migrants make an enormous contribution to our economy in Scotland, so I am especially fearful about the consequences of restricting free movement in a post-Brexit Britain.

I was recently out in Glasgow enjoying a dinner and was struck that from the moment I entered the hotel to the moment I left, every single member of staff I came across was a European national. That echoes the point made by James Cartlidge only a few moments ago. The reality is that our tourism sector is heavily and increasingly dependent on workers from other EU countries. According to the annual population survey, in 2016 there were approximately 17,000 EU citizens working in tourism in Scotland, representing 9.4% of all those working in the sector overall, with that share rising to 15.3% in the accommodation sector specifically. That compares to an EU citizens’ employment share of 5% in the Scottish economy as a whole.

We know that the UK Government’s position on EU citizens in the Brexit process is already having a detrimental impact on flows of inward migration. For example, the number of nurses from the European Union registering to work in the UK has fallen by 96% since the Brexit vote last year. Figures collated by the Nursing and Midwifery Council show that the number of new applicants from the EU fell from 1,304 in July last year to just 46 in April. If that does not cause us concern, I do not know what will.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

I was trying not to intervene because I did speak for a fair length of time, but just to be clear: there are more EU nationals working in the NHS this year than last year. There were 61,891 EU nationals working in the NHS in June 2017, compared with 58,698 in June 2016. The idea that after the referendum decision all the EU nationals working in the NHS went away is simply not true.

Photo of David Linden David Linden SNP Whip

Those figures will presumably include doctors; the figures that I quoted are from the Nursing and Midwifery Council. If the right hon. Gentleman wants to conflate the figures, that is absolutely fine, but that is where my figures are from.

Restrictions on migration will also have an impact on Scotland’s soft fruits sector—a vital part of our rural economy. That impact will be of interest to you, Mr Hosie, and to Kirstene Hair, who I presume will speak about it as well. It is vital that our sectors retain the ability to recruit staff from across the EU. We know that 15,000 non-UK seasonal workers are employed in our soft fruit and vegetable sector, so that should be a cause for concern as we approach leaving the EU.

Before summing up, I want to focus on calls—not from the Scottish National party, but from civic Scotland—for immigration powers to be devolved. We know that the one-size-fits-all approach to which the Government are wedded will not work for the future sustainability of our economy.

Photo of Kirstene Hair Kirstene Hair Conservative, Angus

There have been a number of suggestions about having a separate immigration policy for Scotland and England, but there is of course no border there. Countries like Australia, for example, have separate states with separate immigration policies. Does the hon. Gentleman agree that that creates issues, with leaks of migrants across the states?

Photo of David Linden David Linden SNP Whip

Given the mess that the United Kingdom Government are currently in regarding the situation in Ireland, I am not sure that a Member from the governing party lecturing us on borders necessarily suggests the right frame of mind at the moment.

The calls for immigration to be devolved do not necessarily come from the SNP, although we support them; they come from civic Scotland. Let me quote Grahame Smith, head of the Scottish Trade Union Congress, who I believe was right to say:

“We believe migration has an entirely positive contribution to make to Scotland’s economy, demography and culture, particularly in a properly regulated labour market in which workers’
rights are protected.”

He went on to say:

“UK immigration policy is increasingly encroaching on the devolved powers of the Scottish parliament, including how it runs its public services and who works within it.”

Grahame Smith is right: immigration powers must be devolved to the Scottish Parliament. We in the SNP believe that migration is about more than economics. It is about individuals and their families having the right to choose to build their lives in Scotland. It is about the contribution that they make to our culture, communities and society, as neighbours, friends, family members, and work colleagues. That contribution will be lost if people from the EU are no longer able to come here.

Photo of Kirstene Hair Kirstene Hair Conservative, Angus 10:23 am, 29th November 2017

It is a pleasure to speak under your chairmanship, Mr Hosie. I thank my right hon. Friend Mr Harper for introducing such an important debate on the future of migration after Brexit.

Since being elected, I have heard concerns specifically from soft fruit farmers across my constituency about how we will continue to provide for seasonal agricultural labour after we depart from the European Union. In Angus, we produce over 30% of Scotland’s soft fruit, and I am incredibly proud of my many constituents who collectively deliver such a significant contribution to our vital food and drink sector. As I set out in my submission to the Migration Advisory Committee last month, Angus requires an excess of 4,000 seasonal workers every year to make that vital contribution to our economy. I will continue to urge the UK Government to provide clarity on how they will field those much-needed staff going forward.

Labour accounts for approximately 50% of a soft fruit farm’s costs. If there are further declines in the numbers returning to the United Kingdom, overtime payments will be essential to cover the hours of work required to complete the production process. I am deeply concerned that those higher wage overheads will put pressure on the price for our consumers. If the cost of our fruit increases, I am anxious about not only competitiveness with outside markets, but the possible implications for the ability of consumers to afford our produce.

Many colleagues on both sides of the House will have similar issues in their constituencies; I hope that they, too, take this opportunity to work constructively with the Brexit process, rather than heckle from the sidelines. I know that behind the scenes there is a power of work is going on in the Department for Environment, Food and Rural Affairs and the Home Office to ensure a viable solution after Brexit, but I hope that the Minister can give some reassurance to my constituents that they will be told how they can continue to grow their great British businesses as we depart the EU, sooner rather than later.

Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton 10:25 am, 29th November 2017

It is a pleasure to serve under your chairmanship, Mr Hosie, and to see the two rapid-risers of 2015 and 2017 on the Front Benches. I want to touch on three separate issues, the last of which has already been extensively discussed: curry, students and fruit-picking. The metric I want to use is how much those sectors contribute to our economy, through productivity and other means.

Let us start with curry. I am a product of that industry as my father had two Indian restaurants. It was the late Robin Cook who said that chicken tikka masala is now the national dish, not fish and chips. Chinese and Indian restaurants combined contribute £5.5 billion to our economy—employing 250,000 people—but since the Government started meddling with the tier 2 visas, we hear that two Indian restaurants a week are closing in this country. That is on the eve of small business Saturday.

In all three areas, there is a theme: a dogmatic target—tens of thousands, just for the sake of it—can lead to skills shortages and gaps in our labour force that need to be addressed. If we are wedded to that ridiculous target, we have no room for manoeuvre. I think Mr Harper and my hon. Friend Kate Green were making the same point: inflexibility is hamstringing our economy.

We now have several world-class, Michelin-starred Indian and Chinese restaurants. We could introduce a system of temporary visas, like the seasonal agricultural workers scheme for fruit-picking, for bringing people in and out to do those kinds of job. I wonder whether the Minister might be able to do a review—they are always popular—on how to alleviate those shortages. The curry colleges that Eric Pickles, no longer a Member of the House, suggested have been a complete flop. The idea was to train curry chefs here, but that is just not happening.

To add insult to injury, the Leave campaign used the hashtag #saveourcurry. I think it was the former Secretary of State for International Development, Priti Patel, who said that if we stop EU migration, the curry chefs will be welcomed in with open arms. I remember querying that in Home Office questions, during my brief time at the Dispatch Box. I was told, “No—the target remains the tens of thousands.” The curry industry was hoodwinked, which was really unhelpful, and now feels very cheated.

It is time to get rid of the arbitrary target altogether, but students should certainly be taken out of migration figures. The general public at large do not see them as immigrants, because they are here temporarily; I think Home Office figures show that 97% of them go back after their studies. They contribute £10 billion per year to our economy and this is a huge export industry. There are many advantages to having students, such as the contribution they make to our soft power, and to having international staffers come to our universities, including the University of West London in my constituency.

Photo of Rupa Huq Rupa Huq Labour, Ealing Central and Acton

I am sorry; I would have done so earlier, but I have only one minute left to conclude.

Hon. Members have already mentioned fruit-picking. We need a stable and predictable flow of people to stop our fruit, hops and vegetables rotting away in the fields. The National Farmers Union—not the Socialist Workers party—has said that there is an urgent labour crisis in that sector. We had that workers’ scheme from 1948 to 2013. The agriculture industry is worth £3 billion to the UK, and it relies on a seasonal workforce. As James Cartlidge said, indigenous people do not want to do that work—that is why it is not happening. I would urge the Minister to reintroduce that kind of scheme. There are academic studies from the University of Sussex, but again we see dogma trumping reason, with a counterproductive result. Attracting Brits is difficult.

The right hon. Member for Forest of Dean mentioned settled status. Members of the 3 million campaign—my constituent Wiktor Moszczynski is very vocal in that—do not like what they are being offered. They think it is a lesser status and a secondary tier. They have lost their rights to family reunification, appeal rights, protection from deportation—the list goes on. It is seen as not really satisfactory.

We need some flexibility. The fixed target is unmet, unachievable and unrealistic. George Osborne says:

“Advanced nations that have shut the door to newcomers now find themselves ageing fast and shrinking as a presence in global affairs—whereas those with open societies maintain a big role in shaping the world we live in.”

I did not used to agree with him when he was in here, but I agree a lot more with him now he is out at the Evening Standard. I will end there!

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs) 10:31 am, 29th November 2017

It is a great pleasure to welcome you to the chair and to serve under your chairmanship, Mr Hosie. It is also a pleasure to welcome the Minister to her place. We may disagree about politics, but I have always found her unerringly professional and courteous in her approach.

We have had a very interesting debate today, but these debates should be evidence-based. I want to start by taking the opportunity to correct for the record what was said by Mr Harper on Sir Stephen Nickell’s research. I quote from an article published in The Independent on 25 January 2017 following an interview with Sir Stephen Nickell, where he said that his work had been misrepresented by those who wished to slash immigration:

“The author of an influential piece of economic research frequently heralded by leading Brexiteers as evidence that immigration from the European Union undermines native British wages has stressed that the negative impact is ‘infinitesimally small’
and that his findings had been widely misrepresented.”

Sir Stephen’s research, originally published in December 2015, is frequently cited by those who are

“asked to provide evidence that immigration has had a negative effect on...living standards” in the United Kingdom, yet

“the 10 per cent claim was based on a significant misunderstanding of the research’s findings. As...Jonathan Portes has pointed out, the actual results suggested only a 1 per cent fall in the wages of low-skilled workers due to immigration—and this impact was spread over a period of eight years.”

That is 1% spread over eight years.

Sir Stephen said that his research had been “grossly misrepresented”, that the wage impact is “very small” and that low-skilled workers

“lose out by an infinitesimally small amount.”

He said that he was cross that he had not been able to get cross in public about the

“public bowdlerisation of his research findings” because he was a senior official at the Office for Budget Responsibility until recently, and added that

“his co-author, Ms Saleheen, who works at the Bank of England, has also been unable to speak out publicly to correct misleading statements.”

I am pleased to quote from the horse’s mouth—the author of the research—that the research has been misquoted, and from Jonathan Portes, who is not a self-appointed expert, but a professor of economics and a widely recognised expert on immigration.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

I was very clear in what I said. I agree with the hon. and learned Lady—I do understand that some people have misrepresented what Professor Nickell said. I read from the conclusion of the report, which said that the 10% increase in the proportion of labour led to a 2% reduction in wages. I did not overstate it. I do understand that some people have exaggerated that, and I was very careful not to do so, because I take what economists say seriously.

Photo of Joanna Cherry Joanna Cherry Shadow SNP Spokesperson (Justice and Home Affairs)

I hear what the right hon. Gentleman says and I am happy to have had the opportunity to clarify the matter.

What I really want to speak about is the evidence of the impact of immigration on the Scottish economy. It is increasingly clear that UK immigration policy does not and cannot address the demographic and social needs of Scotland. If that continues to be the case, the Scottish economy will be adversely affected. The contribution of citizens from the European Economic Area to Scotland has recently been addressed in detail, with substantial evidential analysis, by the Scottish Government, in their response to the Migration Advisory Committee’s call for evidence on the role of EEA workers in the UK labour market. I commend that to the Minister. It shows that EU migration in Scotland is essential to ensure sustainable population growth, which is the single biggest driver of our economic growth.

All the projected increases in Scotland’s population over the next 10 years are projected to come from migration, in contrast with the UK as a whole, where only 54% of population increase is expected to come from overseas migration. That is why Scotland needs a different immigration policy and why the Scottish Parliament has voted to support the Scottish Government’s policy of a differential immigration policy, although it is a matter of regret that the Conservatives and the Liberal Democrats did not support that. I am very pleased to say that the Labour party and the Greens did.

As my hon. Friend David Linden said, the Scottish Government also have the support of the Scottish Trades Union Congress. In particular, Unison has spoken out strongly about the need for a differential immigration policy for Scotland. I am also pleased to say that the Scottish Chambers of Commerce and the Scottish Institute of Directors have said that Scotland should look closely at a differential immigration policy.

To address the point about borders raised by Kirstene Hair, Australia and Canada are two examples of countries that operate differential immigration systems. As the hon. Lady ought to know, because it is her Government’s policy, immigration is not controlled so much at borders these days but in the workplace, when people go to look for a job or a benefit, or go to rent a flat. In Scotland, we now have a separate national insurance code, so it would be easy for Scotland to have a differential immigration system from England without any need for a hard border. Indeed, we are repeatedly told by the UK Government that the Republic of Ireland can have a separate immigration policy from the north of Ireland without the need for a hard border.

I am constrained by time, but I want to look briefly at the macroeconomic modelling that has been done by the Scottish Government, because it shows the contribution of EU migrants to the Scottish economy: on average, each additional EU citizen working in Scotland contributes a further £34,400 per head in gross domestic product per year. As there are approximately 130,000 EU citizens working in Scotland, that means they are contributing approximately £4.42 billion per year to the Scottish economy. It is also estimated that, fiscally, they contribute £10,400 per head in Government revenue. So, the evidence shows that EU and EEA migrants are making a huge contribution to the Scottish economy.

With regard to migration from outside the EU, we do not think a one-size-fits-all approach applies either. We would like the UK Government to abolish their net migration target, which, let’s face it, they have missed for the past seven or eight years, so there is not really much point in it anyway. We would like them to abolish the immigration skills charge. We would like a more flexible and responsive approach to the existing mechanism of the shortage occupation list for Scotland, and most importantly—this has cross-party support from every single political party in Scotland—we want the post-study work visa introduced in Scotland. I would really like the Minister to tell us why the post-study work visa has not been reintroduced in Scotland, despite the support of her own party in Scotland for that to happen. We are often told how tremendously influential the Scottish Conservatives are now at Westminster. If that is so, let us see the post-study work visa come back, because the Scottish National party has been calling for that for a long time.

Immigration policy must be evidence-based. When we quote evidence, we have to look at it carefully to make sure that we understand it properly. If we are in any doubt about the conclusions, we are perhaps best to go back to the author of the research, as I have done with Sir Stephen Nickell.

As regards Scotland, the evidence shows that the Scottish economy benefits from immigration. Business in Scotland accepts that, the trade unions in Scotland accept it and most of the political parties accept it. It is time for immigration policy to be devolved to Scotland so that the Scottish Parliament can ensure that migration works to the benefit of the Scottish economy.

Photo of Afzal Khan Afzal Khan Shadow Minister (Home Office) (Immigration) 10:39 am, 29th November 2017

I congratulate Mr Harper on securing this debate, and I thank all hon. Members for their contributions. I welcome the Minister to her position, and I look forward to our exchanges. I was an immigrant, but I am an adopted Mancunian and I am here representing Manchester, Gorton.

The Government’s migration policy is not driven by economics. Since 2010, the focus has been on meeting the net migration target, whatever the cost—and there certainly has been a cost. One of the first groups they went after was students. International students contribute £25 billion to our economy. They are also an easy target for reducing migration numbers. Students are the largest group in the net migration figures, and the numbers for that group are easier to control than for other forms of migration. Attempts to reduce international student numbers have worked: 72 British universities have lost more than 43,000 international students over the past five years.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean

With the greatest respect, the Government have not gone after students at all. There are more international students here. What the Government have done is to tackle colleges that were pretending to educate people who were actually working. We have taken away their sponsor licences. We actually have more genuine students studying here than we did—I welcome that—but it is not right that people come here pretending to be students when they are really working. We have got rid of that abuse.

Photo of Afzal Khan Afzal Khan Shadow Minister (Home Office) (Immigration)

I have no problem with stopping abuse, but if the right hon. Gentleman will hear some of my further arguments, what I am trying to say may become clearer.

Photo of Carol Monaghan Carol Monaghan Shadow SNP Spokesperson (Armed Forces and Veterans), Shadow SNP Spokesperson (Education)

What we have seen in Glasgow is not a drop in the number of international students, but a change in the demographics. Whereas in the past we had students from India, the States, Australia and New Zealand, now the majority of our students come from China. They come and study, and are welcome—we love having them—but they leave immediately after finishing their course. We want them to stay and help improve the economy, but we need the post-study work visa in place for that to happen.

Photo of Afzal Khan Afzal Khan Shadow Minister (Home Office) (Immigration)

I thank the hon. Lady for that contribution.

Let me make progress on my point. Those students would have supported about 24,000 jobs and brought £920 million-worth of positive economic impact to those universities and their local economies—50% of the jobs would have been in the local economies and 50% in the universities. International students pay higher fees and subsidise UK higher education spending. Students not only benefit local economies but have a lasting impact on our links with other countries. They increase our soft power abroad: 55 world leaders from 51 countries have studied in the UK.

Research is a major reason why the UK is attractive to investors. International students go on to fuel innovation and research. I am from Manchester, and graphene—a wonder material—was discovered at Manchester University. The two professors who discovered it were migrants. They won Nobel prizes, and we will continue benefiting economically from their discoveries. International students have also been shown to benefit the UK students who study alongside them.

Despite all those benefits, the Government made it more difficult for students to get visas, which discourages them from staying in the UK. The Government have chosen their misguided net migration targets over the benefits students bring to local economies. Their approach to EU nationals is already making skills and labour shortages worse. The NHS, nursing and social care are being hit. Those sectors face a crisis. The Government have used EU citizens as bargaining chips in negotiating with the EU. EU citizens are still waiting for clarity about their rights 18 months after the EU referendum. The number of EU nurses registering to work in the UK dropped by 96% in the year since the Brexit vote, and staff shortages in social care are causing homes across the country to close.

This issue does not just affect the public sector. The Confederation of British Industry, the Institute of Directors and the British Chambers of Commerce have all said that we will need more migrant workers, skilled and unskilled, in the years ahead. Despite the rhetoric that immigration policy will attract the brightest and best, we are losing out on skilled workers. The Government’s distinction between skilled and unskilled workers makes no sense. Apparently, to be a skilled worker, a person must earn at least £35,000 a year, but people in a number of skilled occupations earn less than that, including non-medical nurses, many teachers, language teachers and engineers. Outside London, many people earn less than £35,000. A tech genius in Manchester is likely to earn less than she would in London, but that does not mean she is any less skilled.

The Government asked the Migration Advisory Committee to investigate immigration policy and our economy, but it seems that the Government will publish the immigration Bill before the Committee publishes its advice. What could be a clearer sign that immigration policy is not guided by economics? The Government are already planning to ignore the advice they requested.

When the Government draft the immigration Bill, will they ask businesses what they need, and will they seek input from unions? Will they examine the impact that their own austerity policies have had on access to the NHS, schools, housing and public services? Will they take account of the fact that the Migration Advisory Committee missed the nursing shortage altogether, and that it was the Secretary of State for Health who had to lift the visa restriction for nurses?

Labour has promised fair and reasonable management of migration. We will always put economic prosperity first. We will scrap the meaningless and unworkable migration target, which has never once been met in seven years. The reality is that the target for non-EU migration alone, which the Government are solely in charge of, has never once been met. Labour would not include international students in the immigration numbers. We will work with employers, unions and others to establish our real needs and meet them. We want fairness between EU and non-EU migrants. That means levelling up decent treatment and establishing fair rules. We will crack down on all exploitative employers who deny rights and breach national minimum wage rules. Migrants make a great contribution to this country, to our social and cultural life, and to our economy. Tory rules are an obstacle to maximising those benefits.

Photo of Victoria Atkins Victoria Atkins The Parliamentary Under-Secretary of State for the Home Department 10:47 am, 29th November 2017

It is a great pleasure to serve under your chairmanship, Mr Hosie, and to appear opposite Afzal Khan. I welcome him to his place. I thank my right hon. Friend Mr Harper for this important, topical and genuinely interesting debate. It is so important that we have this debate now. As we move towards leaving the EU, we begin to formulate ideas and plans for our future, not just in the European area but in the world as a whole. As a former Immigration Minister, my right hon. Friend’s expertise and experience precede him. He spoke with clear authority and eloquence—particularly about the issue of skills and productivity. I found his submissions about GDP per head very interesting. I hope those sorts of ideas will come to the fore as we debate the future of immigration in this country.

My right hon. Friend and a number of other hon. Members rightly mentioned students. The Government absolutely believe that our world-class educational establishments are a major success story for the United Kingdom. There is no limit on the number of international students who can visit. International students are included in the net migration figures because the independent Office for National Statistics follows the policy of Australia, the United States and other countries, which also include those figures in the net migration statistics. It is worth bearing in mind that when students leave the United Kingdom, they are taken out of the net migration figures.

Photo of David Linden David Linden SNP Whip

May I press the Minister on the point about the post-study work visa made by my hon. and learned Friend Joanna Cherry? The Conservative education spokesperson in the Scottish Parliament, Liz Smith MSP, made comments about, and was hoping to see action on, this issue. Will the Minister give us an update on the post-study work visa before she moves on from education?

Photo of Victoria Atkins Victoria Atkins The Parliamentary Under-Secretary of State for the Home Department

The hon. Gentleman has pre-empted me; I was going to deal with that at the end, but I will deal with it now. We have no plans to reintroduce the post-study work visa. Joanna Cherry was quite right to talk about evidence, and I thank her for her kind comments, but evidence from previous schemes showed that large numbers of people were undertaking low-skilled work. We now have the much more targeted tier 2 scheme, so that when graduates leave UK universities we know that they go into highly skilled jobs, using the skills that they have developed at university. Indeed, the evidence goes even further: we found that in October 2010, three in five users of the post-study work visa were in unskilled work. A 2014 analysis of migrants who had switched from the tier 1 post-study work category to the tier 1 entrepreneurial category found that the majority had no declared economic activity or were working in breach of their conditions of stay. That is why we are focusing on skills and productivity— precisely because we hope that students who come to our universities will deliver those skills and will be able to contribute.

I am conscious of time, so I thank all hon. Members who have contributed to this debate and I reassure them that the Government are clear that carefully controlled economic migration benefits our economy. It is vital for our country’s prosperity that we select and attract the right mix of skills to the UK, ensuring that we continue to support wealth creation, employment and productivity. We know that migration supports United Kingdom growth by allowing employers greater choice and enhancing the labour market’s ability to respond quickly to capacity constraints. I listened carefully to the comments of my hon. Friend James Cartlidge on the concerns of local employers. I hope that the independent Migration Advisory Committee report will draw on those views, so that in September 2018 we will have an evidenced-based report on what our migration system should look like.

Migrants do not just bring the skills needed but enhance our society and contribute to British life. However, we must strike a balance. We need to attract migrant labour, which boosts our economy, while ensuring that migration does not reach unmanageable levels to the detriment of domestic labour, skills and local communities. Our commitment to reducing net migration to sustainable levels must be balanced by our determination to ensure that UK businesses have the labour force that they need. Our immigration system must strike that balance.

I was most interested to hear the speech of Kate Green, particularly as she is the chair of the all-party parliamentary group on migration. She mentioned skills; in setting in our immigration policy we have followed the advice of the independent Migration Advisory Committee, particularly when it comes to drawing up the shortage occupation list. Again, we will look at the evidence of the committee’s report in September 2018.

David Linden and the hon. and learned Member for Edinburgh South West both mentioned Scotland having its own immigration system. I make the simple point that the United Kingdom is united: there is free movement between England Wales and England and Scotland. The whole point of having a united immigration policy is to keep our kingdom united. I know that that does not play with the views of the—

Photo of Victoria Atkins Victoria Atkins The Parliamentary Under-Secretary of State for the Home Department

Will the hon. and learned Lady forgive me if I do not, as I know that my right hon. Friend the Member for Forest of Dean wants to speak for two minutes at the end? I just wanted to make the point that we have freedom of movement in the United Kingdom.

I am grateful to my hon. Friend Kirstene Hair for raising the issue of agricultural workers. That is being kept under review, and the Immigration Minister is visiting many members of the agricultural sector to discuss those concerns. We note in passing that the latest labour market statistics from the Office for National Statistics show that more EU nationals are coming to this country to work than ever before. That is why we have not implemented a seasonal agricultural workers scheme, but that is kept under review and we will listen carefully to the National Farmers Union and others.

Dr Huq mentioned curry, students and fruit picking. We have already dealt with fruit picking, but I am delighted that she raised the subject of curry. Curry chefs are not subject to the freedom of movement rules that EU chefs enjoy. We do not want to discriminate between non-EU and EU migrants. There will be a system for all our international partners. I make no promises as to how that will impact curry chefs in particular, but the point is that we will be free of that current difference between EU and non-EU citizens because we are leaving the European Union.

The hon. and learned Member for Edinburgh South West spoke about the post-study work visa issue; I have already answered that point by way of an intervention. We continue to review our immigration arrangements regularly, and we are committed to ensuring that the system continues to serve the national interest.

Very quickly, on the point about the immigration Bill and rules, which was raised by a number of hon. Members, the MAC report is due to report in September 2018. The immigration Bill will be drafted before then; it will be about dealing with the European Union (Withdrawal) Bill repealing freedom of movement. The detail of EU migration policy that will apply to EU nationals will be set out in immigration rules. The report is a very important part of creating those rules. I hope that the Bill will come next year; it will set out the framework within which those rules will work.

Mr Hosie, I want to give my right hon. Friend the Member for Forest of Dean time to make his closing remarks. It has been a pleasure to listen to this debate and to the informative contributions; they have made for a very interesting morning. Allow me to finish with this thought: we all know that successful businesses are essential to the success of our economy. It is through successful businesses that we have employment, pay packets and prosperity, which is precisely why the Government established its immigration policy, and measures such as its modern industrial strategy and flexible working arrangements, through universal credit for example. I hope that that will have an impact on bringing people into the job market. All those policies draw together to try to ensure that the United Kingdom remains a great place to do business. We welcome the contribution that migrants have made historically, and will make in future.

Photo of Mark Harper Mark Harper Conservative, Forest of Dean 10:58 am, 29th November 2017

I am grateful for the opportunity to sum up the debate. To come back to what my hon. Friend James Cartlidge said, part of the reason for this debate was to kick off the discussion. I am grateful for the views that colleagues have given. I am very conscious that all the debate about migration so far has been about the existing EU nationals in Britain and our British citizens overseas. That is very important, but it has rather obscured the question of what we will do after we leave the European Union. That is exactly why I called this debate. Clearly, it will not be the last debate, but the first in a series. It has brought out some of the issues and has enabled us to have discussion. What has come through very clearly—this is supported by the polling that I quoted from British Future—is that the public want us to balance the needs of the economy and the requirement to control migration. They do not want us to prioritise one issue over the other; they want to balance them, and getting that balance right is important.

I have set out a proposition, and the Minister can listen to that. The Migration Advisory Committee is doing work to inform the debate, and colleagues on both sides of the House and from all parts of the United Kingdom will bring valuable insight. That was my intention. We have had an excellent debate, with contributions from many parts of the United Kingdom and from both Front Benches, and I am grateful for those. I am sure that this will not be the last time that we debate this important subject, and it was a great pleasure to do so under your chairmanship, Mr Hosie.

Question put and agreed to.

Resolved,

That this House
has considered the effect of the Government’s migration policy on the economy.