“Too much and never enough”

Aside from being the title of a biography of a former US president, the title phrase here is also a fair representation of some of the conflicting views, often expressed about migration into the UK. In the run-up to Christmas, two significant reports were published with a bearing on the subject, but which perhaps understandably did not garner as much attention as they deserved given the timing.

On 20 December 2022, the House of Lords’ Economic Affairs Committee issued a report into the UK labour market entitled, ‘Where have all the workers gone?’ The Committee found that more than 500,000 working-aged people had left the UK workforce since the pandemic began, mainly due to a combination of early retirements and an increase in long-term sickness rates. This had reportedly contributed to severe staff shortages across the country, placing the economy at risk of weaker growth and contributing to higher inflation.

The previous week, the Migration Advisory Committee (MAC), the non-departmental public body which advises the Home Office, issued its annual report. In the year to June 2022, net migration into the UK was reported to have been 500,000 people, according to figures from the Office for National Statistics, the highest since records began, and an increase of around 331,000 on the previous year. According to MAC this was largely due to the new visa routes which had been introduced for citizens of Afghanistan, Hong Kong, and Ukraine. The figure also included a significant increase in the number of international students coming to the UK, but MAC noted that most of those would leave on completing their studies.

In MAC’s opinion, the increase in migrant workers should not have come as a surprise. It referred to the pressures on the UK labour market in recent months and it was therefore only to be expected that employers would need to recruit from overseas. The demand for labour was particularly high, as the economy recovered from the effects of the pandemic, and outstripped supply because of low unemployment and high levels of economic inactivity among certain groups of working-age people.

However, it expects demand will weaken and that there will be a substantial reduction in the number of applications for Skilled Worker visas in the coming year. MAC advised the government against “becoming too focused on particular net migration numbers” and expressed disappointment that there was no coherent strategy with the public and private sectors. More should be done to encourage those who are currently economically inactive, back into employment, and a greater emphasis on skills infrastructure, improvements in pay and conditions and automation where appropriate, should all help reduce the need to recruit from overseas.

Even within the UK government it frequently seems there is no coherent strategy. As recently as November 2022 the Chancellor of the Exchequer, Jeremy Hunt, was reported as stressing that immigration was important in growing the UK economy. However, this view does not seem to be shared at the Home Office.

Just after Christmas the Home Secretary, Suella Braverman, was again reported to be keen on reducing annual net migration to the oft-stated figure of 100,000 – seemingly chosen more for its political than economic significance and contrary to MAC’s recommendations on avoiding a specific figure. At the same time, it was reported that a raft of measures was being considered, including raising the income threshold for UK nationals looking to bring in their non-UK dependants under the family visa route; making it more difficult for dependants to accompany international students coming to study in the UK; and increasing the salary levels for sponsorship under the Skilled Worker visa route.

Both MAC and the House of Lords noted that the UK is not unique and that other countries also face shortages in skills and labour. However, the UK government’s position (or lack thereof), is in sharp contrast to some of our competitors. In November 2022, the Canadian government unveiled plans to encourage around 500,000 migrant workers to move to Canada each year for the next three years to address critical labour shortages. And the German government, faced with its labour force shrinking by up to a third by 2060, announced in 2019 that it requires to attract around 260,000 migrant workers annually with half of those likely to come from outside the EU. This will enable it to keep growing the German economy and at the same time, help maintain the dependency ratio – the proportion of the population in employment compared to those dependent on the welfare state.

At a time when our competitors are actively encouraging immigration, the Home Office frequently seems to take the opposite tack. If that continues, and in the absence of a coherent government strategy, we run the risk of losing out on attracting the skilled workers the country needs. The answer to the question, “where have all the (migrant) workers gone?” could well turn out to be “anywhere, but the UK.”