New migration system risks Covid economic recovery due to curbs on carers and key workers, warns IPPR
Almost 80 per cent of EU social care workers would have been found ineligible to migrate under new rules
IPPR proposals for a more flexible approach to new immigration system backed by key employers in joint statement
A new report from the IPPR think tank today reveals the stark challenge posed to some of the UK’s most vulnerable industries by the government’s new points-based immigration system. The research finds that restrictions could inhibit recruitment in critical sectors of the economy, and also exacerbate the risks of informal working and exploitation by unscrupulous employers.
The think tank found that the vital care sector is likely to be one of the hardest hit. Even before the crisis there were over 100,000 social care vacancies, but with the government’s proposed salary threshold and ‘skilled worker’ visa stipulations, recruitment will be even harder at this critical time.
IPPR found that almost 80 per cent of people from the EU currently working as employees in the care sector would have been found ineligible by the new immigration system.
The report argues that the government’s decision to not immediately adopt their own Migration Advisory Committee’s recommendation to add senior care workers to the shortage occupation list will further exacerbate the recruitment crisis in the sector.
Researchers found that other industries highly reliant on EU migration would also be hit hard, such as in food production where they make up one in every four workers. The paper notes that the typically EU worker reliant hospitality sector is less likely to be affected due to the rapid fall in vacancies due to the pandemic.
Under the new system almost two-thirds (63 per cent) of EU-born workers currently living in the UK would not have been eligible for a skilled worker visa under the new rules. This has serious implications for important sectors where:
- 84 per cent of EU-born transport and storage workers would have been ineligible for the skilled worker visa
- 85 per cent of EU-born retail and wholesale workers would have been ineligible
- 78 per cent of EU-born social care workers would have been ineligible
- 68 per cent of EU-born manufacturing workers would have been ineligible
The think tank warns that the economic recovery from the pandemic could be jeopardised by the new immigration system. In some areas where economic prospects are returning – such as manufacturing, logistics, and construction – employers may struggle due to recruit the skills they need due to the new restrictions. Inhibiting recruitment at this vital moment could slow the recovery, according to IPPR.
The researchers recognise that the government’s priority will be to support unemployed UK workers into these jobs but warn that it is likely to take some time to retrain and up-skill workers for them to fill such vacancies.
Exploitation of the system
IPPR warns that the new immigration system could lead to an increase in poor working practices and exploitation. Unscrupulous employers who were previously reliant on EU workers could turn to informal work arrangements to fill vacancies, placing migrants in more vulnerable situations, according to the report.
Interviews with migrant workers carried out as part of the research found a range of instances of pre-existing poor practices, including unfair deductions, inadequate health and safety measures, and firing and hiring on weaker terms and conditions. With more stringent restrictions on formal recruitment, a harmful rise in informal working and dangerous working practices could take place if left unchecked, warns the report.
In addition to revealing the shortfalls of the reforms, the report also highlights the opportunities a new points-based immigration system could bring to tackling the UK’s deep economic challenges. The flexible design of the points-based system can help immigration policy to become more responsive to the needs of the country, according to the report.
The report recognises that the end of free movement and the new points-based immigration system will likely cause a reduction in European migration. However, it concludes that this will not in any way benefit UK workers in the long run. Migration does not only increase the supply of workers, it can also increase demand for workers, typically resulting in no significant impact on wages or employment.
The report proposes a number of recommendations to improve the points-based system to support the government’s efforts to respond to the pandemic and help spur the economic recovery. IPPR calls on the government to:
- Support critical sectors - Follow the Migration Advisory Committee's advice to add new occupations such as senior care workers to the shortage occupation list to address existing skills shortages in sectors critical to the pandemic response. IPPR also recommends extending the shortage occupation list to allow for the inclusion of jobs at all skill levels, reflecting the fact that skills shortages can exist in any part of the labour market.
- Scrap the salary threshold- Replace the £25,600 salary threshold with a commitment from employers to pay the living wage, which will bring the immigration system in line with labour market needs while preventing undercutting.
- Foster local talent – Reward employers who offer secure work with minimum contracted hours and who invest in skills and training by granting them additional points in the points-based system, incentivising employers to act responsibly.
- Tackle exploitation - Require employers to inform workers of their employment rights as part of their sponsor duties and expect them to commit to monitoring and identifying potential labour exploitation along their entire supply chain. IPPR also recommends resourcing more labour inspectors to monitor at-risk sectors and to tackle exploitation.
The report’s key reform proposals have been backed by a number of major employer and professional associations in a joint statement. Organisations such as Care England, the Federation of Master Builders, the North West Business Leadership team, London First, the Recruitment and Employment Confederation, UK Homecare Association, and allianceHR have signed.
Marley Morris, IPPR Associate Director for Immigration, Trade and EU Relations, said:
“We are now weeks away from one of the greatest changes to our immigration system in decades. Our research finds that sectors such as social care and construction could face increasing skills shortages as a result of the coming changes. As our care system struggles and businesses reel from the effects of the pandemic, it is vital that the new points-based system helps to support the country’s response to coronavirus and the economic recovery.
“The government can use the new system to ‘build back better’ from the current crisis. The rules should be reformed to allow employers to address immediate skills shortages across all parts of the labour market, while also encouraging employers who sponsor migrant workers to pay the living wage, offer secure work, and invest in skills and training.”
Robin Harvey, Digital and Media Officer: 07779 204798 [email protected]
Marley Morris is available for interview
NOTES TO EDITORS
- The IPPR paper Building a post-Brexit immigration system for the economic recovery by Marley Morris, will be published at 0001 on Tuesday 3rd November. It will be available for download at: http://www.ippr.org/research/publications/post-brexit-immigration
- Advance copies of the report are available under embargo on request
- Advance copies of the employers’ statement in support of the IPPR recommendations and the full list of signatories is available on request. The statement will be published on the IPPR website at 0001 on Tuesday 3rd November at: https://www.ippr.org/blog/immigration-policy-statement
- Figure 4.1: Density of skills-shortage vacancies by occupation within sector
- Table 3.3: Costs for employers and applicants under skilled worker visa. IPPR analysis of Home Office fees
- The report's analysis aggregates quarters 1–4 of the 2019 ONS Labour Force Survey. The analysis uses the country of birth variable to define EU migrants. For the modelling of the impacts of the new points-based system, the researchers have developed a simplified version of the eligibility criteria for the skilled worker route. EU-born migrants are categorised as eligible if they meet the relevant skills and salary threshold. Skill level is defined on the basis of SOC code. Salaries are defined on the basis of annualised gross weekly pay. Migrants are categorised as eligible for the skilled worker route if their occupation meets RQF level 3 and if their earnings from their main job are above the salary threshold of £25,600. The salary threshold is varied depending on whether individuals are PhD holders, aged under 26, employed in jobs on the shortage occupation list, or employed in listed health/education jobs. Self-employed people are excluded from the analysis.
- IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, IPPR is Britain’s only national think tank with a truly national presence. www.ippr.org