Immigration and the Labour Market – MACs Latest Findings

The Migration Advisory Committee (MAC) recently released its latest findings from studying work Immigration and the labour market. The report found that Immigration numbers are currently more than double those for emigration, with half of the inflow since 2008 being work-related. MAC’s analysis concludes that migration flows are heavily influenced by other polices—e.g. spending, and that skilled migrants yield positive benefits. It stresses that enforcement of minimum Immigration standards is vital to ensure the UK’s flexible labour market boosts the welfare of all British residents.

What is MAC?

MAC is an independent public body that advises the UK government on migration issues. It is made up of a Chair (currently Professor Sir David Metcalf CBE), and five other economists.

They are responsible for providing transparent, independent and evidence-based advice to the government on migration issues such as:

• the impacts of Immigration
• the limits on Immigration under the points based system
• skills shortages within occupations

The body’s most recent work includes a report criticising the Tier 1 (entrepreneur) and investor routes, stating that they were not fit for purpose.

The MAC found that the route for “graduate entrepreneurs” — those just out of university who want to set up a business — works well but Professor Metcalf stated, “By contrast, the Tier 1 (entrepreneur) route has a long tail of low-quality projects which contribute little or nothing to UK plc”.

Key Findings of the latest report

The report’s conclusions and recommendations are:

Immigration (630,000) is currently more than double emigration (297,000). Half of the inflow —308,000—is work-related, a record figure. Analysis suggests three main conclusions:

• migration flows are heavily influenced by other polices,
• skilled migrants yield positive benefits to the UK economy and society
• enforcement of minimum standards is vital to ensure a flexible labour market for all

The influence of other policies on migration

Immigration does not occur in a vacuum. Numbers are heavily influenced by other public and employer policies. Two examples mentioned by the report are:

• In the private sector, employers have invested too little in the science, technology, engineering, and mathematics (STEM) and IT skills of UK residents, with constant pleas being made for such jobs to be given priority in Immigration policies. MAC states that it hopes the higher migrant pay thresholds and the Immigration skills charge will encourage much greater investment in British workers’ human capital.
• In the public sector there is a potential trade-off between constraints on public spending and Immigration. Examples include nurses, paramedics, care sector, science and maths teachers.

The report also found that compared with less skilled workers, skilled migrants are much more likely to be complementary to British labour and capital, and to contribute to productivity.

Finally, it was concluded that low skilled migration benefits labour intensive UK employers. However, there is also evidence of low pay for low skilled workers and serious exploitation of migrants, and possibly UK, labour. It is therefore crucial that minimum labour standards are enforced. Unfortunately, evidence suggests that such enforcement is lacking. There are still businesses which do not comply with the national minimum wage, use labour gangs (e.g. in the horticulture sector) and engage Employment agencies for migrants, which may direct vulnerable arrivals into exploitative situations.

The report hopes the new Director of Labour Market Enforcement, established by the 2016 Immigration Act, will bring about fuller compliance through regulation and stronger penalties.

Is the report balanced?

Although MAC is an independent body, one does not have to examine its reports too deeply to come to the conclusion that most of its recommendations are tailored to the Government’s aim of reducing Immigration.

The claim that UK employers are investing too little in the science, technology, engineering, and mathematics (STEM) and IT skills of UK residents could be seen as a harsh assessment, and the state abdicating responsibility for ensuring these skills are encouraged through our education system and that graduates are attracted to STEM jobs.

For instance, according to analysis by the Royal Academy of Engineering, the UK will need over one million new engineers and technicians over the next five years, but only 15.8% of engineering and technology undergraduates in the UK are female and women make up only 9% of the workforce.

It is also well documented that many UK STEM graduates go on to work in the fields of finance and law, as these sectors are seen as better paid and more prestigious.

Employers must work to attract UK STEM and tech graduates to their workplaces, but they need government support. Further initiatives focused on making science, engineering and technology attractive options for girls leaving school and financial incentives for organisations who have policies in place to attract and retain UK STEM and tech graduates require the government and industry sectors to work together.

Collaboration between government and employers will ensure that high standards are maintained, migrant’s rights are protected and employers are able to hire the talent they need to grow their businesses.

OTS Solicitors is one of the most respected Immigration law firms in London. By making an appointment with one of our Immigration solicitors, you can be assured of receiving some of the best legal advice available in the UK today. We will assist you with all aspects of business immigration law. If you wish to discuss any of the points raised in this blog, please phone our London office on 0203 959 9123.