The New Londoners magazine

The pledge to bring down net migration to tens of thousands has turned out to be a headache for the Conservative party leading the coalition government. Because net migration reflects the difference between the number of people moving into Britain and those moving out, the Government faces significant challenges in its attempt to bring it down to a fixed target.First, the Government cannot restrict the movement of EU citizens, so it has to focus exclusively on non-EU migrants in order to achieve its goal. Yet changes in migration patterns of EU citizens can significantly alter the figures in unexpected ways, scuppering the efforts made on other fronts.

Second, if the number of people leaving the UK goes down, net migration figures can go up even if the number of arrivals remains the same. This seems to be precisely what is happening: fewer British people are leaving the UK than in previous years and the number of East European migrants returning to their countries has been lower than expected.Therefore, the net migration figure actually went up in 2010 despite tighter immigration rules imposed through the interim cap on non-EU migrant workers.The net migration figure for 2010 stands at more than double the Conservative party’s aim, at 239,000. So in order to stand a chance of achieving its goal by 2015 the coalition government has to look at the full range of options for reducing the numbers of non-EU people coming to the UK and increasing the numbers leaving the country.

Part of this drive has been capping the number of highly skilled workers (Tiers 1 and 2 of the Points Based System). However, reducing the number of non-EU migrants entering the UK will not be enough to reach the target and the Government is now looking at increasing the number of migrants leaving the UK by restricting settlement rights. Specifically, the Government has laid out plans to restrict the options for skilled migrants to settle in the UK.The restrictions focus on Tier 2 of the Points Based System, i.e. skilled migrants who come to the UK with a job offer. For 2011/12 the limit of Tier 2 (General) visas was set at 20,700. In summary, Government is proposing to categorise all Tier 2 migrants as ‘temporary’, making exceptions for a very limited number who would become eligible to switch into a permanent visa once in the UK. The majority of Tier 2 workers would be expected to leave after five years, driving the net migration number down. But is it really sensible to target this group of migrants by restricting their ability to settle?

The proposals to withdraw the option of settlement from Tier 2 workers seems unfair to prospective migrants. Government argues that it will make clear to applicants that their stay is temporary and they will be expected to leave once it is finished. Migrants will be expected to come to the UK on the understanding that their stay will be temporary. However, five years is a significant period in time in which personal and family plans can change significantly.In this period of time people can settle down and become attached to the new place. Their children may grow up with a sense of belonging to the UK and may be affected by abreak in their education, making parents reluctant to move out. Skilled migrant workers will be contributing to their employers and therefore the British economy; they will be paying taxes and into pension pots, and yet they will be expected to leave without being able to access some of the benefits accrued from these contributions. Workers with a good track record within a business and with a career ahead will see their progress trumped as they have to leave the country. People’s lives and career prospects will therefore be undermined by immigration policy even if their performance is good. Removing the flexibility to have the option to settle is failing to acknowledge that personal plans can change significantly in a lapse of five years and that what was expected to be a temporary sojourn can be transformed into a desire for a more permanent stay.

In the present context, however, these arguments have little purchase with Government or the wider public. The overriding concern is reducing immigration, not the circumstances of individual migrants. So what about the economic argument? Does it make economic sense for the UK to introduce these changes? The first point is that Tier 2 migrants are, by definition, workers that the UK economy labour market needs and does not have. They are either qualified in professions with a short supply of workers or recruited after an employer can show they have been unable to recruit within the EU. Second, because of the nature of their work, skilled workers tend to be net fiscal contributors and therefore pay more in taxes than they take in services. These are, therefore, workers that are needed and that make a positive economic contribution.

The private sector, on which the hopes of an economic recovery are pinned, is particularly reliant on the skills of these workers: in the most recent quarterly labour market outlook survey 25% of employers stated that they were planning to recruit migrant workers (continuing an upward trend in the proportion of those planning to do so) but the private sector is the main driver of recruitment of foreign nationals doubling the public sector (32% vs. 15%). Regionally London has the highest proportion of employers planning to hire from abroad (40%) confirming the demand for migrant workers within London´s private sector economy, itself the economic powerhouse of the country.So these workers are clearly needed by the British economy. Government argues that they can still come but will be in-country only for a limited time-period. However, UK-based businesses are competing for international workers with businesses from across the world and the attractiveness and barriers of moving to the UK will be a factor in the decisions of workers on where to move.

As emerging economies become stronger they are joining the traditional world economic centres in this competition for global talent. In future China, India and the Middle East will be increasingly aiming to attract skilled labour from the same pool of international workers as the UK. States have often sought to restrict the rights of low-skilled migrants, frequently giving them only temporary leave, while seeking to attract high-value migrants by making their migration easier. With the new proposals the UK seems to be going the other way and actually putting restrictions on skilled migrant workers. The key question becomes what weight do skilled workers give to restrictions such as the opportunity to settle when deciding between working in one country or another?

If the UK becomes less attractive for skilled workers at the same time that other countries are competing for that pool of labour then in the future there is a risk that the current set of regulations will end up harming the economic potential of the UK.