'Guest worker' plan would hurt the economy
Matt Cavanagh 5:30pm
The economists who advise the Home Office on immigration policy have come out against a
plan to turn economic migrants into 'guest workers'. Last week, the Migration Advisory Committee (MAC) published their response to the government's proposals on restricting settlement rights for
skilled workers from outside the EU.
With all the debate around David Cameron's pledge to cut net immigration to the 'tens of thousands', many of the detailed policies for achieving that overall aim have been somewhat neglected. It should be clear, however, that these particular proposals would represent a very significant change, with serious implications for employers. While a few exceptional migrant workers would be invited to stay, the great majority would be told to leave after a maximum of five years, regardless of how well they are doing in their job and what contribution they have made.
The MAC consulted a wide range of employers in preparing its report, and it is worth quoting in full their summary of what they were told:
The report cites explicit opposition from, among others, the CBI and the British Chambers of Commerce, Rolls Royce, Deloitte, Research in Motion, Microsoft, the Indpendent Games Developers Association (representing the computer games industry), Oxford University, Sheffield University, and – ironically – a number of government departments commenting in their capacity as employers of doctors, teachers and other public sector workers.'Employers we met were generally, albeit to differing extents, hostile to many of the government's proposals. There was a good deal of general concern expressed over the potential impact of restricting or removing settlement rights and, particularly, the implication that migrants would be required to leave the UK after five years. It was felt that a negative signal could be sent about the UK's position as being seen as "open for business". Many respondents said that uncertainty about prospects for future settlement in the UK would deter top talent from coming at all, with repercussions for the UK's international competitiveness.'
Given this reaction, it is not surprising that the MAC refuse to endorse a blanket ban on settlement for economic migrants, although they do support a major tightening of the rules. Of course, MAC's advice is not about whether reducing net immigration is a good idea or not. Instead, it's about the least economically damaging way to achieve this objective.
They recommend allowing a sizeable proportion of economic migrants to settle permanently, based on a salary threshold higher than those which already apply at entry. They suggest a threshold somewhere between £31,000 and £49,000 per year. According to their estimates, this would disqualify between 20 and 60 per cent of migrant workers. Without any changes, the MAC estimates 10,000 and 40,000 migrants would be granted settlement per year, so the highest threshold would reduce this to 4,000 to 16,000.
This may seem on the face of it to be a model of good policymaking: the democratically elected government sets the broad objectives, the technical experts advise on the best (or least damaging) way to achieve them, and the government makes the final choice. Many will also welcome the resistance to lobbying from employers, who they see as just another interest group, with a preference for cheap foreign labour rather than investing in local talent.
But while there is some force in this view, it is too simplistic. The broad objective of reducing immigration does indeed have strong democratic support, but there is far less support for the way
the government is going about it. The area where people really want to see reductions, apart from illegal immigration, is among low-skill migrants – but for many years now, the great majority
of low-skill migrants have come from the EU, which the government can do nothing about (at least in the short to medium term). Only a minority support reductions in the categories which the
government is actually cutting, namely foreign students and skilled migrants. It is perverse to end up targeting these categories simply because they are the easiest to control, especially given
that they are the most economically valuable. And the problem for democratic legitimacy is that the Conservatives, the only mainstream party to advocate a big overall reduction in immigration
before the election, never attempted to explain the difficulties and trade-offs involved, implying instead that it would be a simple matter of 'getting it under control'.
At the IPPR, we were able to ask the questions the MAC cannot: whether it makes sense to have the net immigration target driving decisions in every area of policy – and whether the detail of
the government's plans really does have public support. We looked not only at economic considerations, but also implications for integration. Even more important, we looked closely at how similar
policies have fared in other countries – starting with the infamous 'Gastarbeiter' programme, launched fifty years ago last week, in which Turks were invited to come to Germany as temporary
workers. Decades later, the German government was forced to admit that the policy was a spectacular failure, as millions of Turkish migrants ended up staying permanently, but suffering a legacy of
segregation. The government will reject this comparison, arguing that it fails to compare like with like: the 'Gastarbeiter' were unskilled workers. But the evidence shows that a wide range of
similar programmes, including more recent ones which apply to skilled workers, have evolved in exactly the same way: as the moment approaches when the workers are supposed to go home, the
enforcement of this policy is first postponed, and then quietly abandoned. At the very least, any such policy requires a serious analysis of the issues around compliance, incentives, and
enforcement – issues which are entirely absent both from the Home Office's consultation and the MAC report.
There is nothing wrong in principle with trying to shift the balance of migration towards the temporary, but the current proposals are the wrong way to go about it. The MAC's recommendations, while welcome as far as they go, would merely limit the damage. They concede that their recommended approach may still 'have a negative impact on GDP and, to a lesser extent, on GDP per head', and they also accept the less easily quantifiable risk that it will deprive Britain of some of our best migrants – or even discourage them from coming here in the first place. The majority of economic migrants don't stay permanently anyway, but they value the option – and if Britain no longer offers it, the 'brightest and best' may choose to go elsewhere. Finally, as noted earlier, the MAC have nothing to say on whether the policy will actually work – whether the migrants will go home when they are told to.
Rather than trying to turn economic migrants into guest workers, the government would be better advised to go with the grain of migration patterns, which are becoming increasingly temporary anyway. For example, they could divert a share of National Insurance Contributions for each migrant to act as an incentive to return home. Such an approach would be fairer for those who come here, work hard, and play by the rules. It would also be more realistic, and better for our economy.
Matt Cavanagh is an Associate Director at IPPR.
Previous
Peter From Maidstone
November 8th, 2011 5:41pm Report this commentIn what way are the hundreds of thousands of 'students' who come here to study at places such as the 'Peckham International College of Life Skills' of any benefit to English society, especially when they disappear into the population?
All such 'students' should be blocked immediately unless they are on a degree course or other validated and degree equivalent course.
Chris
November 8th, 2011 5:54pm Report this commentInternational students are a huge source of income for this country. They're vital if we're to keep funding people like Peter of Maidstone to wittily make up imaginary colleges.
TomTom
November 8th, 2011 6:21pm Report this commentWhy not abolish taxation altogether and shrink Government to what we can afford ? We have far too many Ministers, far too many Civil Servants, far too much local government.
We could embrace the future of limited government, much less intrusive government, abolish biometric passports and the ID requirements for everything under the sun. We could abolish Car Tax, we could abolish Speed Cameras.....in short we do NOT need Government and these proposals on immigration show just how unnecessary government has become
William Blakes Ghost
November 8th, 2011 6:23pm Report this commentWho cares? Its becoming clear that this Coalition is as incompetent and dishonest as the previous Government and will fail in equal store.
Until the putrid cancre of the EU is removed from our nation we will not start heading in the right direction. Immigration policy that does not consistently address all foreign migration was always destined to fail. The Coalition will fail on this as they will fail on the economy and many other areas because they refuse to deal with the Black Hole Of Brussels. They will be punished by the electorate accordingly.
Whilst the parasite poltical classes and their flunkies in the think-tanks, the lobbys, the corporate arena and the public sector fail to recognise the general contempt that they are held in for failing to trust and respect the people and take their concerns and wishes seriously then they are going to destroy themselves.
The Westminster freakshow and all its offshoots is no longer a novelty, it is a blight on this country and one we need to be rid off.....
Heartless P.
November 8th, 2011 6:27pm Report this commentAh! - the Great Cop Out!, - wondered when it would appear.
(Also, well said Peter from M.)
Dennis Churchill
November 8th, 2011 6:34pm Report this commentThe majority of immigrants come from outside the EU.
The highest rates of unemployment are among those of Pakistani and Bangladeshi descent.
The highest proportion of foreign prisoners is from the West Indies.
Go figure.
Dennis Churchill
November 8th, 2011 6:37pm Report this commentChris
November 8th, 2011 5:54pm
A huge source of income for the colleges.
Like cheap foreign labour favoured by certain industries it is cheap for them because it is often subsidised by taxpayers with various welfare payments.
Titus Salt
November 8th, 2011 6:48pm Report this comment@ Chris
Peter isn't joking. Some very dubious institutions were granted the right to issue student visas under the last government - you know, the kind that you find located above takeaway shops.
http://www.dailymail.co.uk/news/article-2056391/Student-visa-crackdown-hits-1-5-colleges-hundreds-licences-revoked.html?ito=feeds-newsxml
Matthew Tysoe
November 8th, 2011 6:52pm Report this commentIt is the sheer numbers that come here - the problem is dependants. Immigrants need to pay a cash bond upfront, £5000 for themselves and another £10,000 for each dependant (if it is a company transfer they can pay this, if that employee is worth it). This will be paid back once they either leave the country or pay back the equivilent in income tax. This should limit the students to degree courses only, to be honest if our economy depends so much on mass immigration then clearly it is a completely unfair and unsustainable economy. Ignore what these 'business people' say, a small island like the UK needs strict controls. New Zealand and Japan know this hence why their controls are very strict. Recap: The only immigrants we should be accepting are skilled people and people who are on the highest value degree courses. Unskilled migrants should not be accepted at all, and a seperate premium must be paid as a bond for every single dependant. The NHS is simply not fit for purpose when immigration is this high. We simply cannot tolerate people turning up here on a whim and simply compete against the existing population for jobs. It has caused a housing crisis, it will cause social unrest and it will cause huge food and water security problems in the medium to long term future if this is not stamped on NOW. Vested interests must be ignored now, it is gone too far.
Matthew Tysoe
November 8th, 2011 6:59pm Report this commentIt is the sheer numbers that come here - the problem is dependants, especially dependants of students. Immigrants need to pay a cash bond upfront, £5,000 for themselves and another £10,000 for each dependant (if it is a company transfer they can pay this, if that employee is worth it). This will be paid back once they either leave the country or pay back the equivilent in income tax. We must limit the students to degree courses only, to be honest if our economy depends so much on mass immigration then clearly it is a completely unfair and unsustainable economy. Personally I dont think it will be damaged if controls on immigration are enforced, it is just a smokescreen. Ignore what these 'business people' say, a small island like the UK needs strict controls. New Zealand and Japan know this hence why their controls are very strict. Recap: The only immigrants we should be accepting are skilled people and people who are on the highest value degree courses. Unskilled migrants should not be accepted at all, and a seperate premium must be paid as a bond for every single dependant. The NHS is simply not fit for purpose when immigration is this high. We simply cannot tolerate people turning up here on a whim and simply compete against the existing population for jobs. When it comes to education for their children they must pay for private education. It has caused a housing crisis, it will cause social unrest and it will cause huge food and water security problems in the medium to long term future if this is not stamped on NOW. Vested interests must be ignored now, it is gone too far. Why on earth should we sacrifice our countryside, our unemployed and our national character to sustain an economy that is simply unsustainable?
Thomas Paine
November 8th, 2011 7:03pm Report this commentHigh time employers put their hands in their pockets and started providing jobs AND TRAINING to locals rather than taking the easy option of international recruitment.
Matthew Tysoe
November 8th, 2011 7:03pm Report this comment'Rather than trying to turn economic migrants into guest workers, the government would be better advised to go with the grain of migration patterns, which are becoming increasingly temporary anyway'...How about upskilling BRITISH CITIZENS?
Biggestaspidistra
November 8th, 2011 7:04pm Report this comment"– starting with the infamous 'Gastarbeiter' programme, launched fifty years ago last week, in which Turks were invited to come to Germany as temporary workers. Decades later, the German government was forced to admit that the policy was a spectacular failure, as millions of Turkish migrants ended up staying permanently, but suffering a legacy of segregation."
This doesn't make sense. The Turks of Germany are no more or less separate than similar communities in countries that had a different policy.
Verity
November 8th, 2011 7:13pm Report this comment"International students" are a "huge source of income to this country", until they get their BSc in Manicures, at which point they go on the dole. What they do not do is go home, because their own country already has people with those "skills".
Chris, why don't you tell us how much revenue these people bring to Britain by renting bed sits, drinking beer, renting TVs and taking the bus to "class" (if I may so dignify it). And how much do they cost by remaining illegally and unable to gain employment because 16 year old Brits are already filling those "jobs" they've "trained" for. Once they are in, they do not leave and the government does not shovel them out.
This whole "foreign student" scam should be shut down.
Noa.
November 8th, 2011 7:14pm Report this commentThe lack of any removal enforcement policy. The continued easy availability of welfare benefits and the ability for non British citizens to purchase UK property regardless of UK citizenship, clearly demonstrates that the Government has no ability or intention of controlling immigration.
toco
November 8th, 2011 7:18pm Report this commentThe concert is sold out.If someone is particularly qualified to attend then ways can be found but it should certainly be a very high hurdle to overcome.
daniel maris
November 8th, 2011 8:11pm Report this commentThe problem needs to be broken down and dealt with piece by piece. But one piece it to put economic migration on a guest worker basis.
Let's not forget that "economists" let us sleep-walk into the recent financial Armageddon...99% of economists were tell us that the economy was essentially sound.
So we don't need to listen to economists or businessmen. We need to make sensible decisions in the national interest, using reason and evidence.
I'd like to see some emergency measures taken to bring a halt to mass immigratino while a Royal Commission chaired by Sir Andrew Green looks into all aspects of migration (to and from the UK) and the pressures of population growth.
daniel maris
November 8th, 2011 8:13pm Report this commentMatthew Tysoe =
Not just restriction to skilled entrants, but also ones who share our values.
In2minds
November 8th, 2011 8:36pm Report this comment"the Conservatives, the only mainstream party to advocate a big overall reduction in immigration before the election, never attempted to explain the difficulties and trade-offs involved, implying instead that it would be a simple matter ......... "
Or perhaps they just fibbed, again?
Peter From Maidstone
November 8th, 2011 8:49pm Report this commentMy family used to run the Reindeer pub on Rye Lane in Peckham. Now it is a shoe shop, and upstairs there is some odd African 'church' offering exorcisms, and on the second floor there is the London Tower College.
I wonder what legitimate courses are offered in the attic of an old pub? Certainly I wonder what courses are offered which are of such quality that international students are attracted?
Funnily enough, at the same address as the 'London Tower College', there is a firm of solicitors who specialise in immigration.
What a happy coincidence for these students! The same people who are running a bogus college can also take care of all manner of bogus documentation as well! Need a PhD? No problem! Need a Visa? No problem!
And how many other such 'colleges' are there, with 300,000 students all doing non-University courses?
In2minds
November 8th, 2011 8:58pm Report this comment@Thomas Paine - November 8th, 2011 7:03pm -
"employers put their hands in their pockets and started providing jobs AND TRAINING to locals...."
I agree. By the way, how is Philadelphia at this time of year, I bet the trees are pretty?
Jayu
November 8th, 2011 9:13pm Report this commentYou Ultras just don't get it, do you? This is how true Capitalism, which you purport to champion, works. Labour is the major cost of business. It therefore follows that business wants the best workers at the lowest cost. True Capitalism is not nationalistic, in fact it is fervently anti-nationalism and anti the nation state. The role given to the nation state is that of facilitator and Gangmaster. That is what the NI number is all about. Business pays the government for the use of us as work units. The government will also use the number of NI payers as collateral for raising funds from the money markets. We are all just slaves in all but name. So for true Capitalism to work the nationality of the work unit has to be an irrelevance.
daniel maris
November 8th, 2011 9:17pm Report this commentI'd like to see some proper accounting of the costs of net migration, in terms of
1. The cost of dependants.
2. The cost of income support and welfare payments.
3. Use of the NHS.
4. The cost of providing additional housing infrastructure (HUGE!)
5. The cost providing additional transport, and other infrastructure.
6. Displacement of UK citizens out of employment.
7. Depression of wage rates in unskilled work (again there is a cost in terms of income support and so on).
8. Additional ESL support in schools and other environments.
9. Specialists services provide for immigrants. For example I was amazed to learn that in Leicester the maternity wards have specialist units to deal with the problems of pregnancies involving women who have been subjected to female genital mutilation.
10. Possibly increased prison population of immigrants.
Let's see some proper accounting.
Cynic
November 8th, 2011 11:03pm Report this commentWhy are we importing skilled workers? Why aren't we training our own?
2trueblue
November 8th, 2011 11:21pm Report this commentdaniel maris, we wish. 13yrs and not one mention of the above realities or neccessities. Schools where there were 150 languages and not one person in the previous government saw it as a problem. We then provide translation services for those who do not wish ar attempt to integrate. You just could not make it up. The whole thing is a farce. If people want to come here they should have something to contribute and speak the language. We are not a nursery. It really does make you want to weep that those in power did not think about any of the realities of what happens when you flood this island with people. But then we are talking about a government who actually spent their 13yrs lining their own pockets. The paucity of talent in the prvious government who gave us this legacy is astounding. Who will deliver us?
In2minds
November 8th, 2011 11:41pm Report this comment@Peter From Maidstone - November 8th, 2011 8:49pm -
"the Reindeer pub on Rye Lane in Peckham. Now it is a shoe shop, and upstairs there is some odd African 'church' offering exorcisms, and on the second floor there is the London Tower College. I wonder what legitimate courses are offered in the attic of an old pub"?
This is not an isolated case. Most cities in the Midlands can match this for weirdness. Cameron is always going on about 'growth'. Well dodgy churches and colleges are two areas that have grown to problem proportions.
The exorcism trade is, according to my local trading standards people, 'unregulated'. Thus they will not take any action, not even discuss it, in fact they sneer then put the phone down. Some of these practitioners do acupuncture, so dirty needles, anyone interested? No!
Ruby Duck
November 9th, 2011 1:55am Report this commentThe point of a 'guestworker' classification is that it enables them to be treated differently in terms of NI/Income Tax, benefits, employment protection, dependants etc.
They are here because we need their skills, but when we have sufficient people with those skills they will no longer be needed and should go home.
As long as the rules are clear and simple, understood by all parties and uniformly enforced, there will be no problem.
It doesn't add up...
November 9th, 2011 2:00am Report this commentCheck the stats from HESA: there are 125,000 EU students in residence getting the same fee deal as UK students (e.g. free in Scotland, etc.) with loans for the rest of their cost that may prove difficult to collect if they leave.
There are 280,000 non EU students in residence paying £2.6bn - or just over £9k a head - at HESA recognised institutions. That's about the same fees as students in England, who are still being subsidised. The idea that these students make lots of money for the UK isn't backed by the data.
Recognised migration of students is 360,000 - these are people staying for more than a year (otherwise they only count as student visitors e.g. if they do 6 months at Berlitz, which does earn real money). Accredited students get to do paid work - officially 20 hours, but many do more, competing with our own youth unemployed including recent graduates. The massive disconnect between the numbers admitted and the numbers doing HESA recognised courses (bear in mind that most are here on multi year courses) is a measure of the extent to which the student visa route is being abused. Clamp down on the abuse, and there's be no problem finding space for skilled migrants.
I strongly suspect we could restrict student numbers back to the 50,000 a year we took in in the 1990s without losing out at all - in fact it would probably be economically beneficial. The "redundant" academics could do some remedial education for those who were cheated out of acquiring suitable workplace skills by Labour's failed schools.
daniel maris
November 9th, 2011 3:28am Report this comment2trueblue -
Well this is not a new phenomenon...although it has accelerated in numbers in recent years, but you can't say it's Labour or Tory. Both have accepted mass immigration, both have done nothing about the language and infrastructure issues, both have ignored the social division that this immigration is causing.
I really don't know where we go from here. This government seems just as reluctant to tackle the issue as previous governments.
TomTom
November 9th, 2011 7:19am Report this comment""International students" are a "huge source of income to this country",
Not really. They get FREE Health Care unlike the US; Permanent Residence after 5 years UNLIKE the US;
It is simply another case of the Taxpayer SUBSIDISING another sectional interest group and running up huge bills and waiting lists in the NHS
RMH
November 9th, 2011 9:54am Report this commentDo we honestly think the NET contribution of people doing rubbish courses is worth it?
Seems like the drain on services is high and their contribution is neglibile.
Peter From Maidstone
November 9th, 2011 1:10pm Report this commentI notice another 'college'. It has an attractive website and is called the C***n International College. It provides vocational and pre-degree courses for 'students'.
Why? If they want to learn get a Diploma in Tourism then surely it would be best to gain it in their own country and in the context of their own tourism industry?
It is rather a matter of concern that the FAQ page begins with 'How to get a VISA' and continues by explaining how much paid work you can do in the UK.
There is no benefit to England in most of these students. They are taking up work which our own young people need, housing which our own young people need, NHS resources that we all need, and then staying here!
michael
November 9th, 2011 2:06pm Report this commentGuest workers... the German heavies would be bankrupt without them.
RichardH
November 9th, 2011 2:15pm Report this commentI think there are (were?) 132 recognised universities for which LEAs used to give out student grants.
That should be the list used as acceptable colleges for student visas to be issued.
Certainly the salary qualification should be set about £40k, just to stop the hundreds of thousands of outsourcing companies that undercut indigenous staff by shipping over Indians to live 8 to a house while they learn your job, then can return to do it from India.
Sadly the inevitsble Human Rights crock of shite will prevent restricting dependants right to accompany everyone. Personally I'd scrap any such rights. Married a foreigner? Good for you. Live there. Unless he/she will earn 50K here too.
peejay
November 9th, 2011 5:30pm Report this commentIt's time MAC
peejay
November 9th, 2011 5:39pm Report this commentIt's time employers and MAC began to realise that their opinions don't matter any more. We are faced with an impending national catastrophe if immigration is not reduced, or better, halted right now. Whatever their views on the economy, what's the point if our health service, social services, teaching, housing, our whole ''infrastructure'' collapses?
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