Statement on Implications of UK Immigration White Paper by Fiona Hyslop, Cabinet Secretary for Culture, Tourism and External Affairs
Thursday, 10th January 2019
In the last week before Christmas, the United Kingdom Government published its long-delayed plans for the immigration system after the UK leaves the European Union. I will provide Parliament with an assessment of the impact that those retrograde proposals will have on Scotland, to build on the reaction that the First Minister outlined in Downing Street.
It is sometimes difficult for politicians to make the positive case in support of immigration. It is undoubtedly true that concerns about immigration were an important driver of the vote to leave the EU in some parts of the UK, and immigration remains a contentious issue for many.
People who have concerns deserve to have them listened to and treated seriously. It is true that such concerns are often based on misconceptions that are not supported by evidence. Political leaders have a responsibility to listen but also to respond in a way that builds understanding and raises awareness. It is greatly to this Parliament’s credit that its members have risen to that challenge. We all agree that migration to Scotland supports economic growth, helps to address the serious issue of long-term demographic change and enhances and sustains our communities.
When the Migration Advisory Committee reviewed the impact of migration on the UK labour market last year, it found no evidence that migration reduces employment or training opportunities or UK workers’ wages. Furthermore, there is clear evidence that migrants contribute more through taxes than they receive in benefits or public services. The committee found that migration increases productivity, innovation and gross domestic product per capita, which helps to raise living standards for all of us.
It is therefore extremely disappointing that the policy measures that the UK Government has proposed fail to lead the debate or respond to the evidence. The proposals in the UK white paper would economically damage the whole UK and especially Scotland. I will briefly remind members of the white paper’s key measures before I describe why Scotland would fare worse than other parts of the UK.
The UK Government plans to end freedom of movement of people from the European Economic Area after the implementation period and to manage all economic migration to the UK through a single system. In effect, that will be the current tier 2 employer-sponsored route for most workers, with some adjustments. Tier 2 is widely held by business to be complex and costly; in the main, it is limited to highly paid graduate-level roles.
Once European migration comes into tier 2, the UK Government proposes to lower the skill requirement, so that skilled roles that are below graduate level are eligible for it. However, it intends to maintain a salary threshold, which is expected to be set at £30,000. That will price out many roles, even if the skill barrier is reduced, and it does nothing to address the fact that the administrative and financial cost of tier 2 means that many small and medium-sized enterprises cannot use it. The Federation of Small Businesses estimates that, because of those barriers, 95 per cent of small businesses in the UK have never used tier 2. Cutting off access to international talent by ending free movement would be a disaster for those firms.
No route is proposed for what the UK Government terms lower-skilled roles, although such roles and the important skills for them—such as those in social care, tourism, hospitality and construction—make a vital contribution to our economy and society. The 12-month visa for such workers that has been announced as a transitional measure will be inadequate for business. Without a route to settlement, that will prevent people with the valued and valuable skills that we need from living, working and—importantly—raising their families here and helping to tackle demographic challenges.
We must remember that all our projected population growth is meant to come from migration in the next 25 years. The proposals will have a negative impact on the economy of the whole UK—the figures in the white paper show that clearly—and it is important that members understand that the changes will have a greater impact on Scotland than on the UK as a whole.
UK Government figures published in the white paper show that 80 per cent of projected long-term EEA worker inflows to the UK would be affected by these changes, rising to 85 per cent for Scotland.
That accords with Scottish Government economic modelling published earlier last year in our discussion paper, “Scotland’s Population Needs and Migration Policy”. Using official population projections from the Office for National Statistics and from the National Records of Scotland, the paper showed that the slow-down in migration as a result of the Brexit vote would result in reduced GDP growth in the UK of 3.7 per cent by 2040, but 4.5 per cent in Scotland.
An alternative scenario, using the 50 per cent less EU migration projection, estimated a 6.2 per cent reduction in GDP growth for Scotland, relative to growth in the economy under pre-Brexit population projections. That scenario also estimates that the UK economy could be 5.9 per cent smaller as a result of lower population growth.
Separate modelling has also highlighted the importance of migration and productivity. Under a hard Brexit, trade and tariff barriers are estimated to have the most immediate economic impact, but in the medium to long term, the impact of reduced migration, and the decline in productivity will overtake that, accounting for up to 85 per cent of lost economic growth compared to remaining in the EU.
Migration is particularly important to supporting growth in our working age population. In the 50 per cent reduction scenario, Scotland’s working age population will decrease over the 25 years to 2041. However, the UK Government says that migration to Scotland will fall not by 50 per cent—it is 85 per cent of future workers who would not be eligible under these plans. It has never been clearer that keeping free movement of people would be in both Scotland’s and the UK’s best interests. Free movement is also a set of reciprocal rights that British people, as EU citizens themselves, can enjoy, allowing them to live, work and study across the continent.
We want our fellow EU citizens already in Scotland to stay. They are part of the fabric of our country. In December we announced that the Scottish Government will deliver an advice service for EU citizens in Scotland in partnership with Citizens Advice Scotland and their network of citizens’ advice bureaux. There is an urgent need for clear and trusted information on citizens’ rights and the existing network of Citizens Advice Scotland, together with their trusted status, will allow the service to be delivered quickly across Scotland.
Of course, the Scottish Parliament voted on 19 December, calling on the UK to scrap the settled status fee, but if it goes ahead, the Scottish Government has made the commitment to pay the fees for EU citizens working in our devolved public services. They include doctors, nurses and other public sector workers on whom we all rely. We will shortly provide further details of that process.
As the disastrous approach of the UK Government unfolds, there is growing support for a new tailor-made solution for Scotland. In response to the white paper, the Scottish Trades Union Congress said:
“The First Minister is right to highlight both the negative effect of pandering to anti-migrant sentiment and the need for a separate Scottish approach. The STUC supports additional powers on migration for the Scottish Parliament.”
Business groups and employers have made similar statements. FSB Scotland said:
“We have argued that there should be a system in Scotland which responds to the particular needs of Scottish industry and demography.”
The Scottish Council for Development and Industry points out that:
“Other countries successfully operate regional migration schemes which target the specific needs of their economies … there are workable options for more differentiation in the UK’s system.”
I strongly encourage business to make its voice heard by responding to the white paper. It is important that the UK Government understands what business across the UK needs, and what opportunities employers in Scotland see in a tailored approach.
The minister, Ben Macpherson, last year commissioned an independent expert advisory group to review the policy options before the UK Government, and consider the impact of those choices on areas of devolved responsibility in Scotland. It will provide its initial report next month, and the minister will return to Parliament with its findings.
The white paper is described as
“the UK’s future skills-based immigration system”
but, as the Immigration Law Practitioners’ Association points out, it has very little to do with skills or, even more importantly, little to do with social values. Instead, it envisages a narrow, selective system based on wealth and ability to pay, and focuses on cutting numbers at the expense of all else.
Scotland has a different experience and we want to forge a different society in which the contribution of the nurse, the carer, the restaurant worker and the technician are all seen and valued as being core to our society and economy. The UK immigration white paper is not only wrong-headed but wrong-hearted.