The Migration Advisory Committee (MAC) has released an interim update on its review of the economic and social impact of the UK’s exit from the EU on the UK’s labour market. This highlights UK employers’ experience of hiring EEA workers and some of the key issues it is concerned about following the EU referendum.
The update comes ahead of the final report, which is due on September 2018, and summarises more than 400 responses from a range of UK employers that answered the MAC’s call for evidence. The update also provides commentary on the responses, giving insight into the evidence gathered so far.
What the report aims to achieve
In July 2017, the Home Secretary Amber Rudd commissioned the MAC to look into current patterns of EEA migration and the likely impact of the UK leaving the EU on future EEA migration. The goal is to provide a body of evidence to inform the creation of a new migration system to be used after the end of the transitional period following the UK’s exit from the EU.
The interim update is intended to summarise the 417 responses from UK employers received by the MAC so far, giving an early indication of the type of evidence gathered.
What does the interim update tell us?
According to the interim update, the responses received from UK employers so far highlight a number of key points, including:
- the majority of employers claim they do not deliberately look to fill vacancies with migrant workers
- EEA migrants are typically employed when they are the best, or only available candidates
- workers from older EEA member states (who joined pre-2004) are considered more likely to work in high-skilled jobs
- workers for newer EEA member states (who joined from 2004 onwards) are considered more likely to work in lower-skilled jobs
- employers from all sectors are concerned about the impact of future restrictions on EEA workers with increased costs and bureaucracy being the key worries
- some sectors are already experiencing issues recruiting and retaining EEA migrants
Various reasons were given for why EEA migrants are sometimes the best candidates for jobs, such as:
- a lack of relevant skills amongst available UK-born workers
- migrants can be more motivated, productive and reliable than UK workers
- a willingness to do jobs in difficult conditions that UK workers won’t accept
- low unemployment meaning a lack of UK workers applying for positions
A key point the interim update draws attention to is that the employers did not generally mention wages as a factor in choosing to hire EEA migrants. The overall consensus appears to be that employers claim they pay workers the same wages for the same work regardless of their nationality.
The update does mention that workers from the pre-2004 EEA member states (France, Germany, Italy etc) earn on average 12% more than UK-born workers, while those from 2004-onwards (Poland, Czech Republic, Hungary etc) EEA members earn 27% less than the UK-born.
What this means for UK businesses
The MAC’s interim update makes clear that many employers in lower-skilled sectors have been reliant on the easy availability of EEA migrant labour and these businesses could struggle if future UK immigration policy leads to a decrease in EEA migrants coming to the UK to work. It is suggested that a fall in the value of the pound and perception that the UK is less welcoming to migrants following the EU referendum has already led to fewer EEA migrants coming to the UK for work, having a negative impact on some businesses.
The update also suggests that many UK businesses seem ill-prepared for changes to the labour market – a problem compounded by uncertainty over what restrictions any new immigration policy will introduce to EEA migrants.
With the MAC’s final report not due until September and the UK Government unlikely to set out its future immigration policy for some time to come, this uncertainty over the future is likely to remain a significant problem for months if not years. Unfortunately, this leaves UK businesses with needing urgent clarity over what they need to plan for and how to go about ensuring they are well placed to continue to attract the workers they need in the coming years. For help with any uk business immigration issues related to your business, please get in touch with Vanessa Ganguin.