In the wake of the London bombings this summer, several separate issues were lumped together to explain what had happened and several measures were put forward to avoid a repetition. Too few commentators wanted to make a distinction between illegal immigrants, asylum seekers, economic migrants and any other category of foreigner which might be seen as a threat to society.
Such a superficial approach ignores the valuable economic contribution made by a significant number of non-British national employees in the UK. Their residential status is irrelevant. The important point is that they have been allocated a National Insurance number, which makes them an integral part of a very buoyant UK labour market.
Government figures show that 272,000 overseas nationals entering the UK in 2002-2003 were allocated a National Insurance number. About 25 per cent came from other EU countries.
Since then, the enlargement of the EU in May 2004 has changed the geographical balance. The UK did not impose the temporary restrictions allowed under the accession treaties on the free movement of workers from these countries. In the first 12 months, more than 230,000 eastern European migrants applied to work in the UK.
Denied easy access to benefits, the attraction for migrants was the prospect of a job. From the UK’s perspective, a growing economy and record levels of employment have led to a tightening of the jobs market, with the potential for labour shortages and wage demands to build up. The incoming workers clearly helped to relieve these pressures.
The Chartered Institute of Personnel and Development reported that, during 2005, 85 per cent of employers experienced recruitment difficulties, with 38 per cent turning to migrants to fill vacancies.
More than half of those using migrant labour said they had increased the proportion of vacancies filled by overseas workers compared with the previous year. More revealing was that 75 per cent of employers recruited migrant workers on permanent contracts; 19 per cent on one-year contracts; and 16 per cent on short-term contracts.
The government, aware of the arguments about a low-wage economy and de-skilling the workforce, has launched initiatives to resolve these conflicting pressures, resulting in a complex regime of about 50 ways in which people can come to Britain to work or study.
A consultation paper issued in July proposed a radical overhaul by introducing a points-based system that would rank migrants into five tiers, with priority given to the most highly skilled and to those working in areas where there are skills shortages. The government states that the changes are not intended to increase or decrease the number of skilled workers coming to the UK, but to ensure that the system is effectively targeted.
In the longer term, demographic trends will be of crucial importance. An ageing population in the UK, in which those of working age account for a declining share, means that the UK will need migrant labour. But just as the need for immigrants is rising, so is the demand from some quarters to keep them out. The message is simple. If people are not allowed to come to the work, the work will go to them, with obvious consequences for growth and living standards.
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