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Return of the MAC – Business makes the case for EEA migration

28 March 2018

There are clear signs that the government is prepared to listen to concerns from business about the impact of restricting EEA migration.

The Migration Advisory Committee is a public body that offers independent advice to the government on migration issues.

They received a record number of 417 responses in response to their call for evidence of July 2017, when employers and stakeholders took the opportunity to give strong views on EEA migration and the impact on business.

Yesterday they took the unusual step of publishing an interim update ahead of the full report in September 2018, and to showcase the opinions of UK business and employers across industry sectors.

This indicates that the MAC and the government are highly engaged with business and if employers have not already done so, now is the time to lobby for changes to the post-transition immigration system.

The MAC investigation focussed on why employers choose to hire EEA migrants rather than UK-born workers and what might happen if a more restrictive migration policy is introduced. They went so far to state it is plausible that EEA migrants are sometimes a high quality, motivated workforce compared to British workers in similar occupations.

Whilst it is not the aim of the interim report to outline a new migration system, it is clear that the MAC and by extension the government, will endeavour to resolve some of the concerns businesses have about the existing Tier 2 system.

Reasons for hiring EEA migrants

Skills shortages

Employers were keen to point out that they do not deliberately set out to employ EEA workers and skills shortages meant that employing EEA nationals was a necessity. Whilst training UK-born workers to fill skills shortage may be a strategy in the longer term, many employers were clear in their submissions that they needed EEA migrants to fill the gaps.

The MAC acknowledged that issues with basic skills and vocational education have persisted in the UK labour market for decades. They conceded that given the length of training in high-skill occupations, migrant labour may be the only way to alleviate some of the reported skills shortages. In a welcome change from the DIY-employer approach of their Review of Tier 2 report of December 2015, they stated that it is unlikely that skills shortages can be left to individual employers and they would very likely need government support.

Flexibility and motivation

Employers also took the view that EEA workers were more motivated and flexible than UK workers, more willing to work anti-social hours and are often better qualified than UK workers.Whilst the MAC states that these claims are difficult to assess objectively, their analysis on absenteeism uncovered that on average EEA workers report lower rates of absences than UK-born workers, even when factoring in differences in age, industry and occupation. For example, across some occupations EEA migrants in low skilled jobs reports an absenteeism rate 40% lower than that of their UK-born counterparts. Statistics also showed that migrants are slightly more likely than the UK-born to work unsociable hours.

Low wage growth and low unemployment

Low unemployment rates have also caused employers to recruit EEA migrants.

The MAC point out that the “central puzzle” in the current UK labour market is that wage growth is very weak despite very low unemployment rates.

Employers would almost always be able to recruit resident workers if they paid wages sufficiently above the going rate and therefore they do not find employers’ claims that they could not improve the supply of UK-born workers by offering higher wages to be credible.

They found it much more likely that small margins and higher cost pressures mean that higher wages are unaffordable and cite an example of an engineering firm in the Midlands where UK applicants for more senior roles had unrealistic expectations of wages in the sector.

What might happen if a more restrictive migration policy is introduced?

Employers in every sector were concerned about the prospects of future restriction on EEA migration Many respondents stated that there were no alternatives to EEA migrant labour in which case employers would contract or disappear, with some potentially re-locating overseas and exporting to the UK.

Some employers discussed other strategies, for example, training UK-born workers but the MAC acknowledged that effectiveness is hard to assess as some are more feasible in the long run.

The majority of employers expressed negative views about the Tier 2 system, which they feel is expensive, time consuming and overly complex. A range of sectors felt Tier 2 did not take account of their requirements and wanted a system that paid regard to training, experience, and social value of work more than qualifications or salary.

Shortage occupations and the cap

Employers were also concerned about the rules and caps in the Tier 2 system being applied to EEA migrants.

A number of employers requested that specific jobs were added to the shortage occupation list and suggested that it was regularly updated to meet changing business needs.

Although this data was gathered back in July 2017, this ties into the current concerns being raised about the monthly cap for Tier 2 workers, which has been exceeded for the fourth month in a row. If EEA migrants’ roles were also capped in line with the present system and further shortage occupations were added, this would clearly have disastrous consequences for business.

The solution may be to extend the shortage occupation list and remove shortage occupations from the cap. This may not go far enough and we could see roles for EEA migrants being excluded from the cap altogether.

What will the new migration system look like?

The interim report has a number of ideas from businesses as to what the immigration system for EU nationals could look like.

  1. The MAC may persuade government to extend the shortage occupation list. They may tweak skilled roles or expand the definition to include “soft skilled roles” but the report indicates that they are committed to the labelling of many jobs as “unskilled” or “low skilled.”
  2. Lobbying from the National Farmers’ Union and the agricultural and horticultural industries may well result in the re-introduction of the Seasonal Agricultural Workers’ Scheme.
  3. Talk of a revamped Tier 5 Youth Mobility visa (currently open to a small number of nationalities, aged 18 – 30 and for a two year period) may result in an equivalent visa of longer duration and broader age limits for lower skilled European nationals. However, if the sharp reduction in net migration from the EU continues, a temporary working holiday style visa is unlikely to draw in workers who would like the option of improving their career prospects in the UK and of obtaining permanent residence.

The remit of the MAC is to protect the UK labour market but they are taking the views of business and individual employers very seriously indeed. We would urge business to continue to lobby government to seek the concessions they need.

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