Immigration and Brexit: A tool kit for responding to the ... workers in the UK labour market. e C...

1 Immigration and Brexit: A tool kit for responding to the Migration Advisory Committee© 2017 Fragomen, Del Rey, Bernsen & Loewy, LLP, Fragomen Global LLP and affiliates. All rights reserved.

Immigration and Brexit: A tool kit for responding to the Migration Advisory Committee


Table of contentsEEA workers in the UK labour market

Your elevator pitch

Your job in the short, medium and long term

About the MAC

Timeline

The UK labour market and EEA workers

Composing your response

We can help

3

4

5

7

8

9

11

18

EEA workers in the UK labour market

The UK Government is adamant that the free movement rights of Europeans

will end when the UK leaves the EU and be replaced with an entirely new

immigration system. Home Office ministers and officials have been thinking

about the design of that immigration system for some time and are now

beginning to involve businesses and the public.

The first step is to gather the evidence. The Home Secretary, Amber Rudd, has

asked the MAC for advice on:

• The economic and social impacts of the UK’s exit from the European Union

• How the UK’s immigration system should be aligned with a modern

industrial strategy

She has asked the MAC to provide this evidence by September 2018. The MAC, in

turn, is asking businesses to provide their own advice and evidence by

27 October 2017.

It is really important for businesses to respond to the MAC’s consultation. An end

to free movement could limit or end your access to European workers who bring

scarce skills or are able to take vacancies that are harder to fill. The Government

has been clear that immigration won’t end entirely after Brexit, but has also been

clear that numbers will fall. The MAC’s work will inform where the UK labour market

can afford less immigration and, indirectly, whether the European workers you need

are still able to work here after Brexit.

This is only the start of the process. The second step will come when Home Office

policy makers publish a White Paper, most likely later this year. The White Paper

will contain their broad thinking, but invite comment, ideas and concerns from

businesses, the public and other interested groups. The final immigration system

will be informed by that feedback and, fundamentally, by the MAC’s advice.

This tool kit explains how you can respond to the MAC’s consultation. We set

out how to structure a response, the information you can collect and how you

can help colleagues in the business understand why this is important. We will

follow up with a second tool kit when the Home Office White Paper is published.

The Migration Advisory Committee’s (MAC) consultation in 350 words


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/633321/Commission_to_the_MAC.pdf

http://www.parliament.uk/site-information/glossary/white-paper/


Your elevator pitch

The Government is beginning to consult on how the immigration system should work after Brexit and when employers will be able to access European skills and labour

We employ [insert number] Europeans in the UK so we need to take it seriously

We have until late October to respond, so between now and then we will need the time and information to understand what jobs our European employees are doing, why they are important to us and how many we are likely to need in the future

This is an important exercise and ought to be managed through our [Brexit working group/ HR management group?]

This is the first of two fundamental immigration consultations – the second will be published later this year – so the sooner we can begin to plan our response the better



Impact analysis How many Europeans do you employ? What jobs do they do?

Where are they based?

Could you readily employ UK workers to fill these jobs in the future?

The answers to these questions should help you understand how important EEA workers are to your business and whether you should engage directly with the MAC, respond via Fragomen (a client survey will inform our written response and any meetings) or take no action.

Who needs to know? At board level Within HR Business managers

EEA employees Corporate affairs or government affairs team

Short term

Medium term

Data collectionWherever possible you should provide qualitative and quantitative responses. Provide as much data as you can – anecdotal evidence helps paint a picture but unqualified, it carries very little weight with the MAC. Back in September 2016, we conducted a benchmarking survey in the wake of the Referendum vote and at that time, 25% of businesses did not feel they had an accurate understanding of who their EEA national workers were. Since then, many have made efforts on this and here are some key places to start:

First step: Identify what data you may already have available. This will include identifying your EEA population and what they do. Does the skill level of their role match the qualifications they hold? What percentage of your overall workforce are EEA nationals? Are they part time, full time, seasonal or temporary? Are they based in London or regionally in the UK?

Secondly: From the above data, can you identify why your EEA workforce perform those roles for your UK business? Is it because they are part of the general labour force, or do they have specific skills – such as cultural knowledge, particular language skills or key qualifcations – that are not common in your UK workforce?

Almost 48% of businesses surveyed in our report last year saw recruitment of EEA workers as very important for their UK operations. This is your opportunity to demonstrate with hard facts why that is the case.

What data am I able to disclose?



Long term

Your responsePage 10 of this guide onwards contains a template for responding to the Call For Evidence. We have provided the outline of a covering letter and proposed content for a full response to each of the MAC’s questions. You probably won’t be able to respond to every question in full – some aren’t really for employers – but the template should help you make a start.

Do not be misled by the phrase “long term”. Your response will be the final step but needs to be submitted by 27 October 2017. All of this needs to happen quite quickly.


About the MACThe Migration Advisory Committee (MAC) is an independent, non-statutory, non-time limited, non-departmental public body that advises the Government on migration issues.

The MAC is made up of a chair and three other independent economists that are responsible for providing transparent, independent and evidence-based advice to the Government on migration issues. Their reports cover issues including:

The impacts of immigration The limits on immigration under the points based system

Skills shortages within occupations

MembersProfessor Alan Manning (chairman)

Madeleine Sumption Dr Jennifer C. Smith

Professor Jackline Wahba

The MAC is supported by a secretariat which is based in London.

Alan Manning is Professor of Economics at the London School of Economics and is director of the Centre for Economic Performance’s

research programme on community. From 2009 to 2012 he was Head of the Economics department at LSE and from 2004 to 2011 he was a member of the NHS Pay Review Body.

His expertise is on labour markets including, but not confined to, the impact of migration.

Jackline Wahba is Professor of Economics at the University of Southampton, where she leads migration research at the ESRC Centre

for Population Change.

She has advised national governments and international organisations, including the World Bank, the Organisation for Economic Development and Co-operation, the International Labour Organisation, the International Organisation for Migration, the European Training Foundation and the European Commission.

Ms Sumption is currently the Director of the Migration Observatory at the University of Oxford.

She was previously Director of Research for the International Programme at the Migration Policy Institute in Washington DC. She has written more than 40 reports and articles on migration, typically involving theoretical and empirical analysis of the economic impacts of policy design. She has also produced numerous evidence based reports for policy audiences and has advised governments on the economic effects of migration policies.

Dr Jennifer C. Smith is Associate Professor in the Economics Department at Warwick University and Associate Researcher at the Centre for

Competitive Advantage in the Global Economy (CAGE).

Her previous roles include:• Academic Consultant at the Bank of England on a

project assessing wage rigidity in the UK• Economist at the Bank of England• Lecturer at Queen’s University Canada


Timeline

232016

JUNReferendum on membership of the EU takes place in the UK

29MAR

2017

Article 50 of Lisbon Treaty triggered, starting the 2 year

negotiating period

262017

JUNUK publishes immigration

proposal on safeguarding the position of EEA citizens living

in the UK and UK nationals living in the EEA

PHASE

1

292021

MAR

A new permanent immigration system expected covering migration of EEA citizens,

designed according to economic and social needs

and reflecting the future partnership with the EEA

PHASE

3

29MAR

2019

I. A temporary immigration system for new EEA entrants is

expected.

II. A 2 year grace period for EEA citizens already in the UK to apply for settled status or a

residence document

PHASE

2

27JUL

2017

Home Secretary Commissions the Migration Advisory

Committee (MAC) to report on the impact on the UK’s labour

market of the exit from the EEA and how the UK’s immigration system should be aligned with a modern industrial strategy

28MAR

2019UK is expected to exit the EU

MAC Call for Evidence

*Interim reports could be published by the MAC*

042017

AUG

SEP2018

I. Home Office begins to accept settled status applications

II. MAC expected to publish final report

Closing date to respond to the Migration Advisory Committee

(MAC)27OCT

2017


The UK labour market and EEA workersYour response to the MAC only needs to consider your own workforce needs, but it does no harm to understand the substantial contribution EEA nationals make to the labour market more generally. Here are some useful statistics, taken from the Recruitment and Employment Confederation’s review of UK labour market: Building the Post-Brexit Immigration System: An analysis of shortages, scenarios and choices.

The EEA population represents close to 6% of the UK population, but 7% – or 2.2 million – of the labour force.

The EEA population is more likely to be in work than the native population

(81 per cent versus 75 per cent employment rate).

versus

EEA Population

Over half of EEA nationals (not counting Irish nationals), or nearly

1.7 million people, would not qualify for permanent residence under

current rules.

OccupationsIn low skilled jobs, EEA nationals represent:

15% of low skilled jobs such as

agricultural workers

33% of process operatives

18% of cleaning and housekeeping

managers

15% of mobile machine drivers and operatives

Among high-skilled occupations, EEA nationals represent 14% of natural and social science professionals.

Research by Olympia

https://www.rec.uk.com/__data/assets/pdf_file/0005/376160/Buiding-the-Post-Brexit-Immigration-System-09.06.17.pdf

https://www.rec.uk.com/__data/assets/pdf_file/0005/376160/Buiding-the-Post-Brexit-Immigration-System-09.06.17.pdf


Different sectors that would be particularly impacted by Brexit:

Agriculture: EEA nationals are estimated to represent 8% of the workforce, which rises to up to 18% in the East of England and remote areas, but the true figure is likely to be higher. Seasonal jobs such as fruit picking may be particularly affected. Shortages here are likely. UK nationals are reluctant to take these jobs.

Construction: 1/3 of workers in London, i.e. 33%, are EEA nationals. 43% of respondents turned down projects in the last 12 months due to lack of skilled workers.

Health and social care: High reliance on EEA workers, particularly in London. A number of occupations here are on the Shortage Occupation List. NHS will be strongly affected. 5% are EEA workers, 11% in London.

Hospitality: EEA nationals make up 14% of the workforce across the UK. High reliance on migrants due to seasonal fluctuations of work and temporary contracts.

Retail and logistics: EEA nationals make up 7% though mainly in less skilled roles.

Higher education: 17% of academic staff and 6% of non-academic staff are EEA nationals. Brexit may imperil research funding.

Digital technology (“Tech”): In London, 1/5 workers in Tech are EEA nationals. Particularly vulnerable due to domination of start-ups. 30% of start-up founders were born overseas.

Financial services: EEA nationals make up 6% of UK workforce in financial services.

Research by Olympia


Composing your responseYour response to the call for evidence should be composed of two main parts, although you may choose to include a separate annex if you are providing large amounts of data. This section of the tool kit contains a template for a simple covering letter before working through each of the questions in turn.

The covering letter: Your covering letter should explain why you are writing, who you are and what information you are going to provide in the full response.

Crucially, it should also draw out any key points from your full response. If you think immigration controls on EEA nationals will work well or is not a problem then say so; if you are worried that it will impede your ability to sustain or grow your business then make that clear. Likewise, if you just need time to plan that should also be made clear.Do not worry about providing too much detail at this stage, that will come later.

If your response contains any confidential information make that clear in the letter. The MAC’s call for evidence explains that: “If you think your response contains confidential information, we would consider not publishing it. The MAC is, however, subject to the Freedom of Information (FOI) Act and we would assess confidentiality accordingly to the FOI rules on exemptions.” You may also want to seek business approval before including this information, sharing the MAC’s line.

The full response:Open your full response with your top line position. That might be that you are relaxed about the prospect of immigration controls on EEA nationals, that you are very concerned or somewhere in the middle. Either way, do not worry about repeating yourself. The MAC will read every response that is sent in but will dip in and out afterwards and may jump the covering letter to get to the qualitative and quantitative information.

The MAC has asked lots of questions and the likelihood is that you won’t be able to answer all of them. The questions are very broad and are being asked of employers, business groups, economists, civil society bodies and the public, among others. They won’t all be right for you.

Most employers are likely to skip the final section.Provide as much data as you can – anecdotal evidence helps paint a picture but unqualified it carries very little weight.


The covering letter, a templateObjective: The covering letter should leave the MAC with a very clear understanding of:• Your company sector, size and geographic spread• What you think the MAC, and in turn the Home Secretary and Prime Minister, need to understand• The information you are providing to back up your claims• Whether the information you provide can be made public

Email: [email protected] Advisory Committee2nd FloorPeel Building2 Marsham StreetLondonSW1P 4DF

Dear Professor Manning

I am writing on behalf of [insert company name] in response to the Migration Advisory Committee (MAC) call for evidence on the economic and social impact of the UK’s exit from the EU.

Our company is... [Insert a one paragraph description of sector, size and geographic spread].

We welcome the opportunity to respond to your call for evidence and are encouraged by your open and transparent approach to this very important issue. We employ [insert figure] EEA nationals in the UK. They perform a variety of roles, including but not limited to [insert]. Those EEA nationals complement our wider UK workforce, including [insert number] UK employees. EEA nationals therefore make up X% of our UK workforce.

Annex A to this letter contains a full response to the questions in your call for evidence, where they were appropriate for us to answer. The key issues for your consideration are:

[Please add to or delete as appropriate. For these purposes, we have assumed that the prospect of immigration controls for EEA nationals will be a concern for the respondent. If it is not, and for many companies it won’t be, do say so.]

• We plan to expand our business over the next x years and UK [skill/ labour] shortages mean we expect to need around [x] EEA nationals to make a success of it.

• Our workforce changes year on year and UK [skill/ labour] shortages mean we expect to need around [x] EEA nationals to replace staff leaving the organisation.

• EEA nationals bring skills that are in short supply in the UK and that we will need to continue to employ therefore, unduly inhibitive immigration controls would stunt our growth and wider success.

• EEA nationals take vacancies that we have historically struggled to fill with UK workers, thus unduly inhibitive immigration controls would stunt our growth and wider success.

• We have a well-developed strategy to train UK workers to fill the skills gaps we face. This strategy is in place, but it will be x years before it is realised and even then, we will need to recruit some number of EEA nationals.

• We have a well-developed strategy to make our roles more attractive to UK workers to fill the labour gaps we face. This strategy is in place, but it will be x years before it is realised and even then, we will need to recruit some number of EEA nationals.

[Please add if you think the information you have provided is confidential and should not be released under the Freedom of Information Act. It may be sensible for a Freedom of Information expert to check your wording]

We hope our response to the call for evidence is instructive. We would be very happy to speak to the MAC direct to answer any questions you may have.

Yours sincerely


Responding to the questionsIn this section, we suggest how you might respond to each of the MAC’s questions. You may not be able to respond to every question and most employers will skip question 3 altogether.

Wherever possible provide qualitative and quantitative responses. Anecdotal evidence will add context to the MAC’s final report, but ultimately they care most about data.

EEA Migration Trends

Please provide evidence on the characteristics (e.g. types of jobs migrants perform, skill levels, etc) of EEA migrants in your sector/local area/region. How do these differ from UK workers? And from non-EEA workers?1

We recommend that you provide a simple table setting out the roles in your organisation, differentiating between UK, EEA and non-EEA workers. If the numbers are small, you should speak to a data privacy expert, rather than inadvertently disclosing sensitive information.

Skill level UK workers EEA workers Non-EEA workersTotal numberJob type 1Job type 2Job type 3...

To what extent are EEA migrants seasonal, part-time, agency-workers, temporary, short-term assignees, intra-company transfers, self-employed? What information do you have on their skill levels? To what extent do these differ from UK workers and non-EEA workers?2

Again, simple tables should suffice here. We suggest providing two tables – one for employment characteristics and one for skill level – but a single larger table could work too.

For skill level, you will have addressed the level of the jobs in response to question 1. We suspect that the MAC would also like to understand the skill level of the employees. Recent research by the Chartered Institute of Personnel Development found that about one in seven (15%) UK nationals are overqualified for the role they do, compared with 37% of EU8 and EU2 nationals and 40% of EU14 nationals. It is likely that the MAC want to better understand this phenomenon.

Characteristics of employment

UK workers EEA workers Non-EEA workersTotal numberSeasonalPart-timeAgency workersIntra-company transfersSelf-employed


Skill levels

UK workers EEA workers Non-EEA workersTotal numberEducated to the level of the roleOver-educated to the level of the roleUnder-educated to the level of the roleIntra-company transfersSelf-employed

Are there any relevant sources of evidence, beyond the usual range of official statistics, that would allow the MAC to get a more detailed view of the current patterns of EEA migration, especially over the last year?3

It is unlikely that most employers will be able to respond to this question.

Have the patterns of EEA migration changed over time? What evidence do you have showing your employment of EEA migrants since 2000? And after the Brexit referendum? Are these trends different for UK workers and non-EEA workers?4

This question is likely directed at economists and business/employer associations. However, it does provide you with an opportunity to talk about your company’s history of employing EEA nationals, should you have that data to hand.

• Did employment rates increase after Poland and the other Accession 8 countries joined the EU in 2004, or when Romania and Bulgaria joined in 2007?

• Did this access to a greater pool of workers help you grow?

• Can you hypothesise on how different your business would look today, without those flows of EEA workers?

• What has happened since the referendum? Have you, for instance, found it harder to recruit or retain EEA workers? Can you evidence that?

• Have behavioural changes of your EEA workers or other changes since the referendum caused you to rethink how you run your business?


Have you conducted any analysis on the future trends of EEA migration, in the absence of immigration controls?5

This is a counter factual question. It is now well understood that free movement will end with Brexit and many employers are thinking about how they will fill labour gaps or otherwise produce goods and services if it is harder to employ EEA nationals. The MAC would like to understand what your business plan would be if that were not the case.

Here you might set out what your plans were before the referendum – did you expect to expand, were you forecasting labour needs for business as usual?

Ensure you contextualise your response. Simply stating that you expected to recruit x workers will not be sufficient. You will need to explain why those workers would be needed.

Have you made any assessment of the impact of a possible reduction in the availability of EEA migrants (whether occurring naturally or through policy) as part of your workforce? What impact would a reduction in EEA migration have on your sector/local area/region? How will your business/sector/area/region cope? Would the impacts be different if reductions in migration took place amongst non-EEA migrants? Have you made any contingency plans?

6This is a very important question. If you are worried about the impact of immigration controls on EEA nationals it is your opportunity to explain those concerns.

It is not an easy question to answer, given the uncertainty. We suggest you frame your response against three hypotheses:

• That EEA migration will be stopped entirely

• That the requirements for non-EEA nationals will be directly transposed on to EEA nationals, for instance no access to workers below degree level, £30,000 minimum salary for new hires and £41,500 minimum salary for assignees

• That there will be less strict requirements for EEA nationals, including access to lower skilled workers

It is highly unlikely that the Government will entirely prevent EEA migration. Nevertheless, by clearly setting out the impact of the policy you can ensure the Government understand why it would be a red line for your organisation

Your response to each hypothesis should cover:• How you might scale back EEA recruitment or increase UK employment• Whether it would lead to an increase in off shoring or automation• How it would affect company growth or sustainability• How rigid requirements for EEA workers might affect your UK workforce – would strict and high

minimum salaries need to apply to the UK colleagues of EEA workers and would it be affordable, for instance?

• Would the impact be different by region – are there areas of the UK where wages are lower, are there areas where it is harder to access skills and labour, could a consequence of controls be the internal movement of your workforce and operations?

• How does it correlate to the employment of non-EEA workers? If the Home Office were to vastly reduce their numbers, enabling larger flows of EEA workers, would that help or hinder your business?

• What contingency plans have you made – are you, for instance, already thinking about changing recruitment strategies, off shoring or automation?


Recruitment Practices, Training & SkillsPlease provide evidence on the methods of recruitment used to employ EEA migrants. Do these methods differ from those used to employ UK and non-EEA workers? What impact does this have on UK workers? Have these methods changed following the Brexit referendum?

7Do recruitment practices differ by skill-type and occupation?8

Set out how you find EEA nationals to fill vacancies in your business. If your approach differs between EEA and UK workers explain why, including whether, for instance, the roles they are filling affect how you recruit.

What are the advantages and disadvantages of employing EEA workers? Have these changed following the Brexit referendum result?9

This is a very broad question. You could think about:

• How easy it is to recruit each group (EEA workers / non EEA workers)• Whether expectations around pay, flexible working and other terms and conditions differ• Their contribution once employed• Their career expectations• How long they remain in employment

To what extent has EEA and non-EEA migration affected the skills and training of the UK workers?10

The MAC probably want to understand whether easy access to EEA workers has led employers not to invest in the training of UK workers. Your response might cover:

• Your supply chain of workers, e.g. work with local colleges by your sector or your business

• How you train existing workers – does a ready supply of European skills have any impact on the developmental prospects of your existing UK and EEA workers?


How involved are universities and training providers in ensuring that the UK workforce has the skills needed to fill key roles/roles in high demand in your sector? Do you have plans to increase this involvement in the future?11

Another broad question. Here you could set out your view on the skills system as a whole – is it growing you the workers you need?

Your response need not focus on universities and training providers – it may be that colleges and schools could do a better job of preparing younger workers. You can also set out what you or your sector more generally are doing to help local colleges and similar bodies to find the workers you need.

It may be that access to highly skilled workers is not the issue, what you need is access to labour. If that is the case you should say so. You can also say if there is some cross over to the skills system – are schools properly preparing students for employment?

How aware are you of current UK migration policies for non-EEA migrants? If new immigration policies restrict the numbers of low-skilled migrants who can come to work in the UK, which forms of migration into low-skilled work should be prioritised? For example, the current shortage occupation list applies to high skilled occupations; do you think this should be expanded to cover lower skill levels?

12You should begin by setting out how well you understand the immigration rules for non-EEA nationals. Feel free to say that Fragomen does it all for you, and does it brilliantly... Tell your friends too.

From there, the MAC appear to be considering restricting lower skilled EEA workers by sector. You should set out whether you believe a sectoral immigration system should work. Many employers would worry that labour and skills shortages are job specific rather than sector specific – many sectors need IT experts, for instance – so say if you share that opinion.

The final part of the question is interesting. The shortage occupation list removes the need for a resident labour market test, i.e. you can offer a job to a non-EEA national without first looking for a suitable UK worker. We can infer that the MAC are considering ways to make it easier to recruit EEA nationals in some lower skilled roles, rather than turning the tap off completely for others.

Many employers will think that extending the shortage occupation list to lower skilled roles seems to make intuitive sense, but that would only be the answer so long as they can still access lower skilled workers for other jobs. Turning the tap off could cause real difficulties.

Economic, Social and Fiscal Impacts13. What are the economic, social and fiscal costs and benefits of EEA migration to the UK economy? What are

the impacts of EEA migrants on the labour market, prices, public services, net fiscal impacts (e.g. taxes paid by migrants; benefits they receive), productivity, investment, innovation and general competitiveness of UK industry?

14. Do these differ from the impact of non-EEA migrants? 15. Do these impacts differ at national, regional or local level? 16. Do these impacts vary by sector and occupation? 17. Do these impacts vary by skill level (high-skilled, medium-skilled, and low-skilled workers)?

These are very big and broad questions that are probably best left to economists and other experts.


We can help

Speak to your Fragomen contact if you would like help thinking through, composing or

drafting your response

We can help you understand how other companies are approaching the questions

How you can emphasise any concerns What type of data will be of most use to the MAC

We will also be responding to the MAC on behalf of our clients

In September we will distribute a policy survey to clients and use the results to provide advice to the MAC, without naming contributors.

You would not be alone in preferring to be part of that collective response.


Atlanta • Auckland • Beijing • Bengaluru • Boston • Brisbane • Brussels • Chicago • Coral Gables • Dallas • Doha • Dubai • Frankfurt

• Hong Kong • Houston • Irvine • Johannesburg • Kochi • Kuala Lumpur • London • Los Angeles • Matawan • Melbourne •

Mexico City • Nairobi • New York • Perth • Phoenix • Rio de Janeiro • San Diego • San Francisco • San Jose, Costa Rica • Santa Clara •

Sao Paulo • Shanghai • Sheffield • Singapore • Sydney • Toronto • Troy • Washington, DC • Zurich

This document is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or email to [email protected]

© 2017 Fragomen, Del Rey, Bernsen & Loewy, LLP, Fragomen Global LLP and affiliates.All rights reserved.

For further information contact [email protected]

MORE ABOUT FRAGOMENTo learn more about how we can help you with your immigration needs

and challenges, please visit: www.fragomen.com.

Immigration and Brexit: A tool kit for responding to the ... workers in the UK labour market. e C...

Documents

Transcript of Immigration and Brexit: A tool kit for responding to the ... workers in the UK labour market. e C...