In the run up to the General Election on 7 May, our Business Immigration team will answer some of the most topical immigration issues being raised by UK voters. Party policies in response to immigration could have an important effect on a number of businesses, as well as the UK economy in general. Over the next 10 days, we will look at matters including individual party approaches to immigration, the effect of immigration on the UK, and any immigration changes.
We will answer one question per day. Each answer will be posted below as our team makes them available.
1. What effect would a Labour-SNP coalition have on UK immigration?
Whilst the Labour Party has up until now denied any intention of a coalition with the SNP, it may not have much of a choice come 7th May. Labour has made controlling immigration one of its key election promises (producing a souvenir mug to prove it!) and Miliband has apologised for immigration-related “mistakes” by the former Labour government. In its manifesto, the party has outlined the following steps that it proposes to take in order to control immigration, although they lack enough detail to determine their likely prospects of success:
- Low skilled migration has been too high and needs to come down.
- Stronger action will be taken to stop illegal immigration, starting with making the UK’s borders stronger by the introduction of more staff and full exit checks.
- There has been a dramatic increase in the number of short term student visit visas and so the system will be tightened to prevent abuse. At the same time, university students will be welcomed.
- The cap on non-EU workers will be maintained.
- Low skilled migration to be reduced through the introduction of a new law to stop employers undercutting wages by “exploiting workers”. Recruitment agencies will be banned from hiring only from overseas.
It is possible that a coalition with the SNP – or any of the other smaller parties – may see Labour taking a softer stance. The SNP appears from recent debates to favour a more relaxed immigration regime. Although the SNP manifesto refers to “sensible immigration policies that meet our economic needs”, it is markedly lacking in specific proposals other than the reintroduction of the post-study work visa, which allowed non-EEA graduates from UK universities to work for two years following their studies.
A recent rather alarmist report by the right-wing think tank Migration Watch claims that immigration levels would “spiral out of control” under a Labour-SNP coalition. In practice, however, drastic changes to the current system are unlikely for fear of losing public approval for what may already prove to be a controversial partnership (particularly given that immigration does not now appear to feature highly on either party’s legislative agenda).
2. Will the Conservatives attract the best and the brightest workers to the UK?
The Conservatives have frequently stated their commitment to attracting the brightest and the best to the UK, but what have they done in this respect and what are their plans for the future?
The Tier 1 (Exceptional Talent) visa has been in place since 2011 but has had an extremely low take-up because, as the name suggests, it is aimed at the very highest skill level. Applicants must show that they have been endorsed as an internationally recognised leader or emerging leader in their field of science, humanities, engineering, medicine, digital technology or the arts. Not just possessing high-level skills, therefore, but widely recognised as doing so.
A recent report by Techworld reveals that only 160 applications were submitted under the visa scheme in the 12 months to April 2015. Of these, 106 were endorsed, 37 rejected and 17 were still under review. Tech City UK (a Government quango tasked with supporting UK technology businesses) endorsed only seven visas.
Many argue that that the closure of the Tier 1 (Post Study Work) visa in 2012 exacerbated a shortage of skilled workers with STEM backgrounds and this was highlighted by the recent All Party Parliamentary Group on Migration’s inquiry into the issue. The Chair of the inquiry, Labour MP Paul Blomfield, commented: “The report lays bare the negative impact that closure of the former post-study work visa has had on British businesses and universities. Alternative visa routes have failed to attract talent and have actually prevented skilled graduates from contributing to the UK jobs market.”
In December 2014, Theresa May also announced plans (albeit later withdrawn) to prevent non-EEA graduates of UK universities from switching into Tier 2 sponsorship with employers from within the UK (for more information see our blog posting).
In short, these strategies mean that the UK has become far less attractive for talented international students than the US, Australia and Canada that have all retained a graduate visa system. The number of international students applying to study degree level or higher qualifications in the UK has decreased dramatically over the past few years as the “brightest and best” that the Conservatives wanted to attract have simply started to apply to study elsewhere.
As for future plans, the Conservative manifesto makes no mention of any new policies designed to attract the brightest and the best, from which we conclude that little or no progress will be made in that respect.
3. What immigration-related changes would UKIP make?
Even though immigration has been at the forefront of UKIP’s rise to prominence, its manifesto pledges in this regard are lacking in detail and frighteningly ill-informed on the restrictions already in place. Whether this is somewhat surprising or entirely predictable is hard to assess. The proposed pledges include the following:
- Leave the EU and “take back control of our borders”. It’s not clear what status would be given to EU nationals already living and working in this country.
- Limit work visas to 50,000 per year, with work visas for EU nationals included within this quota (the current cap is 20,700 per annum for one type of visa only for non-EEA nationals). Note that this UKIP limit is distinct from an overall net migration target, which has not been promised.
- Introduce an Australian-style points-based immigration system to assess all potential migrants to Britain “on a fair, ethical and equal basis” (the UK in fact already has an Australian-style points-based immigration system in place since 2008, introduced by the Labour Government). One also wonders about UKIP’s ability to introduce equal and ethical criteria given Nigel Farage’s stated intention to do away with much of our anti-discrimination legislation as no longer being necessary.
- Those coming to work in the UK must have a job (this is already a requirement under Tier 2 (General) of the existing Points Based System which also requires a minimum graduate equivalent skill level), speak English (again already a requirement for many visas), have accommodation agreed prior to their arrival and have NHS-approved health insurance.
- End immigration for unskilled jobs for a five-year period “to re-balance the work economy”. No further information on this has been provided. Note that the UK’s current Points Based System (Tier 3), intended for lower skilled migrants, has never actually been used.
- Introduce “a new visa system for workers, visitors, students, families and asylum seekers”. No further detail has been provided.
- End access to benefits (in work and out of work) and free NHS treatment for new immigrants until they have paid tax and National Insurance for five years. Currently non-EU migrants coming into the UK under the existing Points Based System have no access to benefits until they have obtained permanent residency after five years. In addition, all non-EU migrants – with certain limited exceptions – have been required to pay an Immigration NHS health surcharge since 6 April 2015.
- Require all visitors and new immigrants to the UK to have their own health insurance.
4. What is the evidence that immigration has either a positive or negative effect on the economy?
It is difficult to ascertain for certain what impact immigration has on the UK economy. Most commentators and studies around this question lack objectivity in their approach, or the analysis is aimed at a particular group or statistic or area not representative of the whole picture.
A report by fullfact.org summarises the position as follows:
- The net fiscal impact of immigration is the difference between the taxes and other contributions migrants make to public finances, minus the costs of the public benefits and services they receive.
- There is no single “correct” estimate of this impact. Results of existing studies all depend on the methodology and the assumptions researchers must make (for example, about whether to include the costs of educating UK-born children of migrants).
- Most studies suggest that the fiscal impact of migration in the UK is relatively small either way (costing or contributing less than 1% of the country’s overall GDP) and is therefore statistically negligible.
- The fiscal impact depends on the characteristics of migrants. Migrants who are young, skilled and working in highly-paid jobs are likely to make a more positive net fiscal contribution than those working in low-wage jobs or with low employment rates.
- Migrants from the EEA and recent migrants are more likely to have a positive net fiscal impact/less likely to have a negative net fiscal impact.
At the same time, a recent analysis by the Business Insider indicates that, were the Government to achieve its target of reducing immigration to "the tens of thousands", it could have disastrous impacts on the UK economy. According to the National Institute of Economic and Social Research (NIESR) cutting net migration to those levels could reduce GDP by 11% by 2060 and reduce GDP per person by 2.7%.
While there is a wide body of evidence on this topic, both positive and negative, none of the research is definitively conclusive if you do not look at it through the prism of politics or self-interest. As Benjamin Disraeli said, after all, there are “lies, damned lies and statistics”.
5. Have more or fewer working migrants arrived in the UK since the 2010 election than during the previous Labour Government?
A recent article in the Financial Times points to a study by the Migration Observatory showing that 117,000 fewer working migrants arrived in the UK since the 2010 election than during the previous Labour term in office (a decrease of 16%). The same report indicates that lower skilled migration from within the EU has also decreased in the last five years. However, other reports indicate that both skilled and unskilled migration from the EU is now increasing as the UK economy grows stronger and attracts the manpower necessary to support that growth.
6. Which parties have promised an EU referendum?
- The Conservatives have promised an in/out referendum on the UK’s membership of the EU before 2017 but only after the UK’s position within the EU has been re-negotiated. In practice, this may mean that the referendum never takes place or, if it does, that it will be on the basis of some sort of reformed membership with pros and cons not currently in play.
- UKIP has promised a ‘Brexit’ without any referendum at all. The party instead proposes to replace the UK's current membership with a free trade treaty with the EU (if any of the other Member States are still talking to us!).
- Labour has not promised a referendum in its manifesto (with Ed Miliband saying that David Cameron’s pledge to do so “is a clear and present danger to British jobs and business”).
- Despite the Liberal Democrats’ pro-EU stance, their manifesto lists five “non-negotiable” areas in any future Coalition talks and holding (or not holding) a referendum is not one of them. This leaves the Liberal Democrats open to the possibility of a future coalition with the Conservatives, including as to the promised EU referendum. The omission also, of course, leaves them open to a coalition with any other party, though they have drawn the line at UKIP.
- Pro-EU Plaid Cymru has stated that if there is a referendum on the EU, there should be no withdrawal unless this is supported by all four nations of the UK. This would effectively give each nation a right of veto over any UK exit.
- The SNP is pro-European and will oppose a referendum on membership of the EU. If an in/out EU referendum does go ahead, it will seek to ensure that no constituent part of the UK can be taken out of the EU against its will. It will propose a 'double majority' rule – meaning that unless England, Scotland, Wales and Northern Ireland each vote to leave the EU, the UK would remain a member state.
- The Green Party has pronounced that it is “Yes to Europe” in its manifesto, but also supports proposals for an EU referendum, stating that endless debate on whether or not to do so is “a diversion from more important matters” such as inequality and “One-Planet Living”.
7. How would a Labour Government fund a larger border control agency?
In Labour’s manifesto it has pledged to recruit an extra 1,000 border agency staff to tighten the UK’s borders. More recently, Ed Miliband has said that this would be one of a number of ‘credible’ measures on immigration his party promises to introduce by way of an Immigration Bill within 100 days of taking office. The Labour Party proposes to finance the increase in border agency staff by levying a small charge on non-visa visitors to the UK, meaning that citizens of the United States, Canada and Australia (amongst others) would be required to pay a fee to visit the UK. The views of the relevant tourist boards on this proposal have yet to be published.
8. What impact will the recently introduced Immigration Health Surcharge have on the size of the NHS funding gap?
The Immigration Health Surcharge was introduced in April 2015 with James Brokenshire, the Immigration and Security Minister, stating that the Government is set to recoup “up to £1.7 billion” over the next 10 years to help pay for the cost of NHS treatment given to temporary migrants. With limited exceptions, the surcharge applies to all applications made outside the UK for grants of leave exceeding six months. Both migrants and their dependants are required to pay £200 per person for each year of their visas at the time of making their application. Students will pay a reduced fee of £150 per year. The surcharge also applies to migrants who apply to extend their stay in the UK.
Alongside the introduction of the Immigration Health Surcharge, the Department of Health is working on proposals which mean that, from April 2015, non-EEA visitors who use the NHS will be charged 150% of the cost of their treatment. This reflects the additional cost burden the NHS carries when managing the administration for visitors to the UK.
However, a recent fullfact report explains how according to the NHS’s Five Year Forward View (published in 2014) there will be an estimated shortfall of £30 billion by 2020 if the NHS makes no savings and funding rises only with inflation.
Thus it seems that the funds hoped to be recovered from the Immigration Health Surcharge will only make a small dent in the NHS funding gap. Somebody somewhere has presumably also done the maths necessary to convince the Government that the costs of administering the Surcharge Scheme will not swallow up a material part of the income it is supposed to generate.
9. Will the recently introduced exit checks give a more accurate picture on net migration?
One would think so (if only in the sense that any information is better than none) but there is still a long way to go. The Advance Passenger Information system was introduced in 2004 but only gives the Government some details on passengers flying in and out of the UK. The information gathered from the new exit checks on people leaving by any form of commercial transport will provide a more comprehensive picture of whether people leave the UK when they are supposed to (until now, net migration figures have been based on a survey of just 4,000-5,000 migrants interviewed at ports).
But as a recent fullfact report explains, whilst counting everyone in and out is a step forward, counting migrants and filtering out everyone else is complex. Passports provide names and numbers but do not confirm why a passenger is travelling, how long they are staying in the country or where they will be staying – this can only be achieved through carrying out entry and exit interviews. Of course, visas provide another potential source of information but only for non-EU nationals because EU citizens do not need a visa to enter the UK. In light of this and other problems with implementation, the Government has admitted “while valuable, this data is by itself insufficient to provide a direct measurement of migration flows. As the information on entries and exits from the UK gets more comprehensive however, it will, when combined with other data sources, help improve our statistics in this area.”
One recommendation from MPs last year was the possible creation of a new “routine migrant survey”, an option the Home Office investigated back in 2011. This could provide more detailed information on migrants’ reasons for coming and what they are contributing to the UK. For now, the Government thinks a new survey would be bad value for money and continues to indicate its commitment towards bringing back full exit checks at the UK border. The programme has recently been clarified by the Government. It does not include certain routes, such as the Common Travel Area with the Republic of Ireland and those leaving on private boats and flights. Furthermore, some transportation companies’ IT systems do not facilitate data collection and there are disagreements with certain EU countries about whether they should be mandated to collect and share this information. It has also been confirmed that coachloads of under-16s on day-release from school won’t be included in the checks!
10. Does the British electorate have a broadly negative view on all types of immigration to the UK?
A recent report by fullfact.org highlights the following:
- A quarter of people in Britain say that immigration is the single most important issue facing the country today, more than any other single issue.
- About three quarters say immigration should be reduced and a majority have opposed immigration for over half a century.
- People define ‘immigrants’ very differently and their views vary depending on the group of immigrants concerned.
- Student and high-skilled immigration has more support than low-skilled immigration and immigration for asylum purposes.
- Most people overestimate the scale of immigration and about the reasons people claim to come here.
And yet, the current poster campaign ‘I AM AN IMMIGRANT’ launched by the Joint Council for the Welfare of Immigrants, championing successful migration stories, has received significant media and public support over recent weeks. It is evidence that many British people do recognise the benefits of immigration and make a distinction between skilled immigrants and low skilled or illegal immigrants. Recent polls also suggest that immigration is actually not a top priority for voters, with the NHS taking the lead closely followed by the economy and education.