With net immigration into the UK estimated at nearly 150,000 last year, and with more than 600,000 national insurance numbers allocated to non-UK nationals, tackling immigration has become a key battleground for this general election.
Now, two years after the introduction of the points-based immigration system (PBS), the Conservatives and the Liberal Democrats have pledged to transform the way overseas workers can enter the UK.
But employment experts have warned the proposed changes to the PBS could restrict HR’s ability to use migrant labour to address skills shortages which exist in the British workforce.
The Lib Dem policy to allocate more entry points under the PBS for areas with smaller immigrant populations will limit the pool of overseas skills available to HR in areas traditionally popular with migrants, according to Sarah Mulley, senior research fellow at the Institute of Public Policy Research (IPPR).
She told Personnel Today: “The policy would direct migrants to particular places and it would make it potentially harder for employers in an area judged to be suffering from too much migration if the local population doesn’t meet their needs.”
John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), warned industries like financial services in London and the South East would suffer most under the policy, and migrants could be put off coming to the UK.
“In may be that in economies like London there are employers that need to fill particular vacancies, and if they can’t get them, then those workers will be lost to the UK entirely,” he said. “This is because there won’t be similar roles for them to do in other parts of the country, as businesses in those areas won’t be looking for the same sorts of workers.”
He added it was “totally unrealistic” to assume employers could easily replace these migrant skills with UK job-ready staff.
“If businesses can’t get hold of those employees, the likelihood is that they will either lose those jobs to other countries, or they will simply be less effective as employers because they will be under-skilled in terms of the workforces they have here,” he said.
Jim Hillage, director of research at the Institute of Employment Studies (IES), said larger companies operating across more than one region and wanting to move migrant staff between sites could also struggle. The policy was also reliant on the availability of detailed regional skills shortage information which was “hard to come by”, he cautioned.
The Tories’ bid to restrict immigration to “tens of thousands a year” could be purely political rather than linked to business needs, according to employers’ groups.
David Yeandle, head of employment policy at manufacturers’ group the EEF, said: “Inevitably with a cap there’s a danger that it will be set not on the needs of businesses but what politicians feel will be acceptable to the general public, but the two might not be the same.”
Official figures indicate that EU nationals made up 36% of net migration into the UK in 2008.
The Conservatives have pledged to introduce transitional controls on any new EU countries, allowing them to restrict migrant numbers from these regions for up to five years.
He added: “A cap is very inflexible and doesn’t take into account the differences that take place in the economy during the year, and we could end up in a situation half-way through the year where companies need people but they have all been taken, and employers then can’t meet their business needs.”
Hillage warned this could lead to an artificial flow of migrants into the UK, with employers having to focus their recruitment in the few months after a new cap is set.
In the short-term, Philpott warned the cap, like the Lib Dem’s policy, would leave employers struggling to find skills, while wages could be forced up as competition for workers increases. But a continuing severe restriction on migrant numbers could lead to the up-skilling of the UK workforce to meet the need.
“When a cap is put on the supply of labour, demand that otherwise would be met is not met. That means either vacancies are unfilled, or that employers compete for staff and drive up wages costs. Either way, you see an incentive for employers to try and meet the gap through increasing the supply of trained workers themselves,” he said.
But with a hung parliament now a likely outcome of the election, little change could be made to the PBS in reality.
Hillage said: “Neither the Lib Dems nor Labour are particularly keen on the cap, so it’s unlikely that the Conservatives would be able to put that through unless they had a majority.”
Philpott added a Labour-Lib Dem parliament could see the introduction of a regionalised PBS, but on a more flexible basis than first proposed by the party.
HR panel: what they think
“While we clearly need to offer opportunities and skills development to those resident within the UK, migrant workers do provide an excellent diversity of skills and experience to the service sector.”
“The ideal solution for most businesses is to have a skilled workforce locally available to hire from, and the parties would be better to focus on practical policies on training and up-skilling the millions of people who lack adequate skills to prosper in the modern economy, rather than arguing over numbers to be allowed in.”
“The Conservative cap seems to reflect the mood of the nation. If we are keen to assure more people working again in Britain, that may necessitate a cap to avoid swamping the market.”