The government has been accused of taking a huge gamble with both the economy and the welfare of the frail and elderly by proposing new controls on immigration which will take effect at the beginning of next year. Ministers claim there is no risk at all and that their new plan provides ‘a fantastic opportunity’ to get more British workers into jobs. Is this dangerous pie-in-the-sky thinking, or do the changes add up to an overdue reform that will pose no risk to either the needy or the economy as a whole?
Immigration policy was always going to be one of the most significant and contentious areas of change following Britain’s withdrawal from the European Union. For the past two decades, and most especially since 2004, the British economy has become increasingly dependent on inflows of EU labour, especially from the more recently-joined countries in Eastern Europe. Figures for ‘net migration’ into Britain have been among the most politically sensitive statistics and governments of all persuasions promised to get the figures down. They failed. A substantial number of those new immigrants came from countries outside Europe, but in spite of that immigration was one of the chief motivations of many people who voted to leave the EU in the referendum the following year.
The challenge for post-referendum British governments has been how to cut the numbers without unduly harming the British economy. This week the government came up with its plan for controlling immigration after the transition period for Britain’s withdrawal from the EU expires at the end of this year. At that point the right of free movement for EU nationals not already living here to come to work in Britain will end. The big question is: what sort of controls should then be introduced?
The government’s answer is that EU nationals (not already here) will be treated exactly the same as any other would-be immigrants. There will be no right for ‘unskilled’ immigrants to come to work here except in some very closely defined instances where they are vitally needed. And ‘skilled’ workers will qualify to be admitted for work only if they pass a points-based test being set up to sort those who are wanted from those who are not.
The government’s new policy builds on proposals initially made by Theresa May’s government and which led to much criticism from business. Boris Johnson’s government claims it has taken many of these criticisms on board and that for skilled workers at least, the new controls will be more accommodating. The government has abandoned plans to put a cap on the number of skilled foreign workers allowed into Britain; it has reduced the annual salary a would-be skilled worker would need to earn to qualify from £30,000 to £25,600 (or £20,480 for specifically designated ‘shortage occupations’); it’s adding new categories of work, including carpentry, plastering and child-minding, to the list of skilled professions; it’s allowing foreign students studying here to gain working visas after completing their degrees; and it’s easing the definition of what ‘skilled’ means so that an applicant would no longer need a degree but would be deemed ‘skilled’ with an ‘A’ level-equivalent qualification.
Applicants would need to reach a target of 70 points. They’ll gain 50 simply by being able to speak English and have the offer of a skilled job above the minimum annual salary and will be able to gain the extra twenty points from a list of criteria including having higher than minimum qualifications, a higher salary and coming to work in sectors of the economy where there are a shortages of labour. The new proposals have been welcomed by the tech industries, among others, who had feared they would be starved of vital employees under the old proposals.
But it’s the government’s proposals for unskilled workers that have raised the greatest alarm. It wants employers to ‘move away’ from relying on ‘cheap labour’. To put it bluntly (and ministers do), the government wants to kick the arses of employers who they believe have neglected their duty to invest in the training of young British workers because they had the easy alternative of hiring cheap foreign labour.
On the face of it the government has a point. Spending on workforce training has fallen by 20% since 2004 - precisely the time when the hundreds of thousands of largely Eastern European workers started migrating to this country. And although employment rates in Britain are at record highs and the overall unemployment rate very low, at just over 3%, youth unemployment is at 11.7%, not high by European standards, but higher than it should be, ministers believe. So by turning off the taps of foreign unskilled workers they believe they can incentivise employers to start training young British workers.
The Home Secretary, Priti Patel, said: ‘If we invest in people and also if we put in the right investment in terms of new technology and skills, more people would be able to work in many sectors’.
But there is an obvious danger that this simply won’t happen and that the economy will suffer grievously because of an acute shortage of labour. Ms Patel did not help her case by blithely remarking that ‘we have 8.4m people in the UK aged between 16 and 64 who are economically inactive’, implying that there is this deep pool of potential labour just waiting to be trained by lazy employers.
These figures, though, are not quite what they seem. The Office for National Statistics confirms the overall figure of 8.4m economically inactive people in this age group but 27% of them are students; 26% are sick; 22% have given up work in order to care for dependent relatives; and 13% have simply retired early because they can afford to and have no intention of going back to work. That leaves a mere 33,000 the ONS defines as ‘discouraged workers’ who might be up for a spot of retraining. It also leaves Ms Patel being accused of talking through her hat and of irresponsibly exposing the economy to great risk because she either does not understand or simply ignores the figures.
Her critics say she is allowing far too few exemptions from these rules. In particular the horticulture and food processing industries claim they will be savagely hit, not least because, they say, experience has shown that work in their sector is ‘too demanding’ for most Brits. That means employers are heavily dependent on foreign workers made of sterner stuff. The construction industry says it will be badly hit as well, in part because the new rules allow no opportunity for self-employed foreign workers to gain work permits in Britain. In other words the celebrated ‘Polish plumbers’ will be turned away because they tend to work by contract as self-employed workers rather than being offered permanent jobs.
The government’s own economists produced an economic impact forecast of the effect of stopping flows of workers from Europe and concluded that both the size of the economy and per capita GDP would fall.
But it is the social care sector that looks set to be among the hardest hit by the new rules. At the moment a sixth of the 840,000 social care workforce is made up of foreign workers. There are already 122,000 unfilled vacancies in the sector, which provides carers to visit elderly needy people in their homes and to staff care homes. Average pay is less than £20,000 a year, lower than the average paid by supermarkets to their staff, and not many have qualifications at ‘A’ level or above. In other words there is no way that foreign care workers could get work visas under the proposed points system for skilled workers.
The government’s response has been to suggest that employers in the social care sector should up their game and pay their staff more. No doubt their staff would be delighted. But the bulk of the sector is dependent on local authority funding and that has been massively cut by central government over the last ten years. There just isn’t the money around to foot the bill. Care England, an industry group, has estimated that to raise the average care worker’s pay to the new figure of £25,600 necessary to qualify as a skilled worker would cost £7.9bn. This is simply not going to happen.
Nadra Ahmed, the executive chair of the National Care Association said of the government’s plans: ‘Their ideas around social care amount to a leaky bucket and don’t hold up’. She points out that the government is refusing to deem the social care sector a ‘shortage industry’ (where the new conditions would eased), despite the severe pressures already being experienced. The obvious danger is that, from next year on, there will be even greater shortages of staff in the social care sector and that it will be the elderly and needy who will suffer.
The overall risk the government seems to be taking with the economy in general can be summed up in a single statistic. It’s estimated that of the 3.2m European workers currently in Britain, 70% would not qualify to come here under the new rules. Of course those that are here are able to stay. But in time they may choose to go home, as many of them are already doing. The point is that the government is not allowing them to be replaced and this, say its critics, spells ‘havoc’ for the economy and potential suffering for the elderly.
Some commentators are predicting that the policy will have to be modified before the end of the year if the government wants to avoid such an outcome. But with a government that is gaining a reputation for relishing ‘creative destruction’, this is by no means a certainty.
The question for now is: should the government plough on with its new policy despite the risks or listen to its critics and think again?
What do you think? Let us know.
