MAC report not in favour of unskilled EU workers - The BESA
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Wednesday, September 19, 2018

MAC REPORT NOT IN FAVOUR OF UNSKILLED EU WORKERS

Alexi Ozioro, BESA Policy and Public Affairs Manager

In July 2017, the Home Secretary (at that time, Amber Rudd) commissioned a report from the Migration Advisory Committee (MAC) to analyse current patterns of European Economic Area (EEA) migration to the UK and the impact it has on the economy and wider society. Publishing their findings earlier today, under a new Home Secretary, Sajid Javid, the MAC have released their final report, with some interesting conclusions being reached.

 

In a similar line to Theresa May’s Panorama interview last night the MAC report states that EU workers should not get any special access to the UK after Brexit. The report also calls on the Government to end the current cap on highly-skilled workers that are granted visas to the UK each year, which is currently set at 20,700, and widen the range of jobs permitted under this scheme. From a societal perspective, the report concludes that there is no evidence that increased EU migration has increased crime or added additional strain on the NHS.

 

However, the MAC report may come into some criticism from certain industries and businesses for dismissing the need for low-skilled labour from the EU and beyond after Brexit. This would effectively be the most significant change to UK migration and labour policy since the War, basically ending low-skilled migration to the UK.

 

The full report can be found on the Government’s website, but to summarise, the report’s key recommendations are:

 

Impact on Labour and Skills

The report assesses the impact on employment and wages, concluding that migration has little or no impact on overall employment and unemployment in the UK. In terms of wages, the report also suggests that migration is not a major factor in wage rates.

When looking at the overall impact on productivity and on education and training, overall the report points toward migration having a positive impact on productivity and there is no evidence that migration has had a negative impact on the training of the UK workforce. There is some evidence however that skilled migrants in fact have a positive impact on the quantity of training available in the UK, but the report [broadly] concludes that the overall impact on the quality of training provided is unknown.

 

Impact on House Prices

The report looks at the impact of migration on consumer and house prices, questioning whether migration may have affected prices by altering the supply and demand balance of goods and housing. The analysis suggests migration has increased house prices, but emphasises that this cannot be seen in isolation from other market factors. The evidence points towards a higher impact of migration in areas with more restrictive planning policies, making it harder for the housing stock to increase in line with demand.

 

MAC Policy Recommendations

The recommendations to Government range from broad to very detailed, but some of the key points raised are concerning free movement. Some outcomes that may be relevant for BESA members include:

 

  • The report recommends no explicit work migration route for low-skilled workers. This is however with the possible exception of seasonal agricultural workers schemes, although employers may have to pay a higher minimum wage in return for privileged access to labour. If there is to be a route for low-skilled migrant workers in other industries, i.e. construction, MAC recommend using an expanded youth mobility scheme rather than employer-led sector-based routes.

 

  • Free movement has the advantage of a low bureaucratic burdens, but comes with less control over both the level and type of immigration. The report notes the specific case of Canada, implying that the UK could emulate their system of no free movement but with a relatively open policy towards skilled migration.

 

  • Some interesting wording comes into play regarding negotiations with the EU, specifically: “if the UK decides on its new immigration system in isolation from the negotiations about the future relationship with the EU we do not see compelling reasons to offer a different set of rules to EEA and non-EEA citizens.”

Jargon buster: If we have a no-deal Brexit, EU citizens will need a visa like the rest of the world.

 

  • Recommendations on free movement come to conclude that with “high-skilled migrants having a clear benefit” and “the same is not true for lower skilled migrants,” as a result, “higher-skilled migration while restricting access for lower-skilled workers to enter the UK would be consistent with the available evidence.”

Jargon buster: After Brexit teachers, doctors, IT professionals and highly skilled migrants will get a visa before others.

 

  • From a regional perspective, the UK has a very limited regional variation on immigration policy. There have been a number of calls, especially from Scotland and Northern Ireland, to have more regional devolution and control over policies however. The most common call is for control in the form of lower salary thresholds, but as with previous MAC reports, they do not recommend introducing more regional variations.

Jargon buster: Nothing is going to change on regional immigration policy for England, Scotland, Wales and Northern Ireland

 

Despite nobody really being able to predict what Brexit will mean for the UK and for the construction industry, it is fair to conclude that the priority for the Government, in negotiations with the EU, are industries that depend on their international supply chain. In terms of goods and services, with parts and components crossing numerous borders, industries such as finance, aerospace and automotive are taking priority.

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