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Five reasons why the MAC report is on the button, one big area where it isn’t
19 September 2018
It has been a busy time for the Migration Advisory Committee (MAC), the government’s independent panel of migration advisors. Yesterday saw the release of the second major report from them in two weeks, this time looking at what impact leaving the EU will have on migration and the UK. This report will help to set the direction of immigration policy after Brexit, so all eyes were ready to see what the recommendations suggested.
Once again, the MAC has shown itself to have a vice-like grip of the data. Hundreds of businesses, government departments, local councils, and business groups responded to the call for evidence and the MAC has delivered a clear assessment of the value of migration. There is no doubt – migration benefits, and doesn’t damage, the UK.
But once again, the MAC has left people scratching their heads with disappointed surprise. Last week, the question was why didn’t the recommendations go further on liberalising the international student immigration system. This time, the vexed issue is so-called ‘low-skilled’ workers.
Let’s start with the good news first. The MAC’s evidence shows:
Overseas workers aren’t ruining our careers
Migrants have no impact on unemployment levels of UK workers, and nor do they, on balance, affect wages. Migration doesn’t lead to employers not training UK born workers. In other words, as London First members will attest, business both hires migrants and develops apprentices.
They are part of the productivity puzzle solution
Immigration has a positive impact on productivity. This chimes with London First’s research in our Facing Facts report, which illustrates that migrants do not, on the whole, displace UK workers, because their economic activity generates new jobs.
EEA migrants pay more in taxes than they receive in benefits. It is hoped that this finally puts to bed the myth of widespread benefit tourism.
Migration is good for public services
The MAC report states that “EEA migrants contribute much more to the health service and the provision of social care in financial resources and through work than they consume in services”. In other words, the tax they pay and the hard work they do keeps vital public services like the NHS and care homes functioning.
Furthermore, there is no evidence “that migration has reduced parental choice in schools or the educational attainment of UK-born children”.
This unequivocal evidence underpins some welcome policy recommendations:
Make it easier to access high-skilled migration
High-skilled migration is an unalloyed benefit to the UK and the system should reflect this. The MAC makes a number of recommendations to government, including axing the Tier 2 cap and the Resident Labour Market Test, and widening the shortage occupation list to include mid-skilled roles.
Strip out troublesome bureaucracy
This has been a huge concern for London First members. The time, resource, and cost involved in hiring non-EU workers is a direct drag on productivity. Tier 2 must be made simpler with less documentation requirements and the current system should not apply to EU workers. The MAC suggests that a single post-Brexit system that manages both EU and non-EU workers is the right way to go and we would support this. Time and again, business have told us they want streamlined access to overseas workers from wherever they come from.
At the same time, if the detail of migration policy was to be part of the Brexit negotiations, and preferential access for trading partners including the EU and non-EU countries would help to secure a better trade deal whilst not adding to the bureaucracy burden, then that would be welcomed.
Turning now to the not so good:
Low skilled workers have been thrown under the bus
This is the big klaxon moment. The MAC recommends against a low-skilled migration route, other than for seasonal working. They haven’t seemed to realise the extent to which so-called low skilled overseas workers – and that’s an unsatisfactory term – underpin the economy.
In London, construction and hospitality rely heavily on workers who are classed as low-skilled. Thirty per cent of the construction and hospitality workforces in London are from the EU.
Across the UK, there are already 824k unfilled vacancies. Our historic high levels of employment mean the labour pool is not sufficient to fill these. It is obvious that cutting migration and restricting the size of the available labour pool will make it harder for employers to fill jobs.
Of course, business must step up on training more homegrown workers, so they get the skills to access the jobs available and the volume of low-skilled migration can be reduced. But this takes time and even if the UK was at peak performance on training, which it isn’t, substantial gaps would remain without overseas workers.
We hope the government thinks very carefully on this point, not least because the recommendation does not seem to flow directly from the evidence that has been presented.
The MAC may now wish to put their feet up and take a well-earned rest. Employers on the other hand will be gearing up to make the case for an immigration system that works for Brexit Britain.
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