Migration and the UK labour marketEamonn Davern

Prague November 2011

UK Policy Headlines on Migration

A commitment to reduce net migration from hundreds of thousands to tens of thousands during this Parliament (2014/15).

Following a public consultation, a limit on Tier 2 migration for non EU nationals has been set at 20,700 for the year to April 2012.The MAC are currently reviewing this for the following year.

Tightened guidelines around English language requirements and definitions of highly skilled workers.

UK Policy Headlines on Migration

Long run net migration levels

-200,000

-100,000

0

100,000

200,000

300,000

400,000

500,000

600,000

700,0001

97

5-7

6

19

77

-78

19

79

-80

19

81

-82

19

83

-84

19

85

-86

19

87

-88

19

89

-90

19

92

-93

19

94

-95

19

96

-97

19

98

-99

20

00

-01

20

02

-03

20

04

-05

20

06

-07

20

08

-09

20

10

-11

P

Net Flow Inflow Outflow

Long run net migration refers to those who

enter or leave the UK

for at least 12 months

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

EU

A8

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Foreign worker employment levels by nationality

The largest group of employed migrants come from the expanded European Union (EU) of 27 countries; around 595,000 from

the EU15, 651,000 from the eight Central and Eastern European countries (A8), 220,000

from Africa (excluding South Africa) and just under 200,000 from India.

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

Q22000

Q22001

Q22002

Q22003

Q22004

Q22005

Q22006

Q22007

Q22008

Q22009

Q22010

Q22011

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

Employment level UK nationals Employment level Foreign nationals

Employment rate UK nationals Employment rate Foreign nationals

Foreign and UK National Employment

Foreign nationals make up a small proportion of the total

number in employment.

Number of foreign born in selected countries

Figures show foreign born population in selected OECD countries as a proportion of total population:

Country 2004 2006 2008 2009

Germany n/a 12.7% 12.9% 12.9%

France 10.8% 11.2% 11.4% 11.6%

UK 8.9% 9.6% 11.0% 11.3%

Canada 18.4% 19.0% 19.4% 19.6%

Australia 23.8% 24.6% 25.8% 23.5%

New Zealand

19.5% 21.0% 22.3% 22.7%

Migration policy in the UK

Aside from asylum and refugee policy, UK policy on immigration falls into two distinct categories:

migrants from within the European Economic Area (EEA) are guaranteed free movement and right to reside in any nation within the area, meaning no restrictions for people moving to the UK (or for UK nationals moving within the EEA); and

since November 2008 migrants from outside the EEA have had to pass a Points Based Assessment to enter or remain in the UK.

The Migration Advisory Committee (MAC) provides independent and evidence-based advice to government on specific sectors and occupations in the labour market where shortages exist which can sensibly be filled by migration. It can also be asked to advise on other matters relating to migration.

Existing system

Measures are in place to control immigration from the new EU member states, including the Worker Registration Scheme (WRS) and some limited schemes for A2 (Romania and Bulgaria). Under EU law these can run for maximum of seven years, so they must be removed for A8 nationals by May 2011 and for A2 nationals by January 2014.

The MAC has recently published a report on the impact of removing restrictions on A2 nationals – the government will announce its decision on whether to extend these by the end of the year.

Measures in place to control migration from outside of the EU Points Based System (PBS) - rolled out between February 2008 and the end

of March 2009, individuals can enter the UK using five tiers:Tier 1: Highly Skilled migrants

Tier 2: Skilled workers with a job offer – jobs are either on the Shortage Occupation List or subject to the Resident Labour Market Test (RLMT)

Tier 3: Low skilled workers (currently closed)

Tier 4: Students

Tier 5: Temporary workers and youth mobility – mainly non-economic reasons.

Inflows and Outflows by Reason for Migration - 2009

Further restrictions for non EU migration

Controlled Migration: The UK Government believes that Britain can benefit from migration but not uncontrolled migration. Britain remains open for business and we will continue to attract and retain the brightest and the best people who can add to our economic growth, but unlimited migration places unacceptable pressure on public services. Reduction in Net Migration: It is our aim to reduce the level of net migration back down to the levels of the 1990s - tens of thousands each year, not hundreds of thousands. Migration Limit: a limit on Tier 2 migration for non EU nationals has been set at 20,700 for the year to April 2012.The MAC are currently reviewing this for the following year. Non-economic Migration: Other entry routes outside of Tiers 1 and 2, such as students and family, will also be reviewed.

Shortage Occupations: We have a key interest to maintain labour market flexibility and avoid a rise in skill shortages, the supply of domestic workers will need to be able to meet any gaps caused by lower migration.

Improved Signposting: The Work Programme and benefit reform are designed to address shortage occupations. We will introduce further actions to point jobseekers towards sectors with a shortage of skilled domestic workers.

Increased Labour Market Participation: By ensuring that people are better prepared, have more incentive and face more requirements to take up work, demand for migrant workers can be reduced.

The Resident Labour Market Test: ensures resident jobseekers have early access to vacancies in skilled jobs not on the shortage occupation list.

DWP/Jobcentre Plus role