23 February 2017

  |  CBI Press Team


It's time for plain speaking on immigration

As the UK leaves the EU, there will be trade-offs to make when it comes to designing a new immigration system, writes CBI Director-General Carolyn Fairbairn in The Telegraph.

It's time for plain speaking on immigration

Put simply, there are public concerns about immigration – but significant further restrictions to movement will come at a cost to investment and jobs, the delivery of strong public services and economic growth.  A YouGov survey following the Referendum found that almost two-thirds of people would not want to reduce numbers of EU migrants if doing so would reduce their pay. As Phillip Hammond, the Chancellor of the Exchequer, memorably put it at last year’s Conservative Party Conference - ‘people did not vote on June 23rd to become poorer’. All this underlines the need for a calm and open debate about the right path ahead.

What was true before the EU Referendum is true now. The vast majority of people come to the UK to work, which benefits our economy. Any new immigration model must ensure those benefits continue, but that they are felt more evenly across the country. A new industrial strategy that delivers for people in all regions and nations of the UK, coupled with reform of public services, will help achieve this.

Against the backdrop of funding crises in the NHS and social care it is important to remember that immigration helps to pay for and deliver our public services. EU citizens account for 10 per cent of registered doctors and 4 per cent of registered nurses. Non-EU migrants make up an even larger proportion in social care with around 200,000 already in the workforce. Another one million new workers are needed by 2025. No one expects this can be achieved through domestic workers alone. Immigration is rarely the cause of overstretched public services, but too often it gets the blame. Making faster progress on effective public service reform will be key to ensuring public support for a balanced approach to immigration.  

Access to skills and labour is also a vital consideration for firms wishing to invest in the UK.  The latest EY Attractiveness Survey confirms Brexit is weighing on investors’ minds. Previously, the EY study showed that the UK was the number one location for inward investment in Europe. Whether this continues will be shaped to a significant extent by the Government’s future attitude to labour mobility. This matters as investment is vital for productivity growth, the only route to sustainably higher wages.

What should a new immigration system look like?

So businesses need a migration system that helps companies to grow, gives our public services access to people and talent, and enables the UK to be globally competitive. How can this be achieved?

Firstly, we need to give certainty to those from abroad who are already here. Company leaders tell me that retaining EU staff is becoming a challenge following the referendum vote as they grapple with the uncertainty of their future right to remain. Workers from the Continent must be allowed to continue contributing to our prosperity.

Any new system should also allow some non-graduate migration. We already have record levels of employment. Therefore David Davis’s recent remarks, about the door remaining open to low-skilled EU migrants for some time yet, will be welcome in sectors where skills shortages are a real problem, such as care, construction, logistics and hospitality. 

Next, we need the expertise and experience from the smartest people in the world – including from the EU.  Skilled migrants from economic powerhouses further afield, such as China and India, should be welcomed with open arms. Businesses and our world-beating university sector will rely on this. Indeed, higher education is one of the UK’s most successful exports, and an important contributor to our ‘soft power’ around the world.

Explaining the link between immigration and industrial strategy

Immigration is not the cause of a lack of opportunities for young people, but it can feel that way when pathways to high-skilled, high-paying jobs don’t always exist. In parts of the UK, many feel they have not benefited from Britain’s embrace of the global modern economy. This is why a new industrial strategy has such an important role to play. A migration system that signals Britain is open for business will create more and better opportunities for UK citizens. An industrial strategy must help remove regional inequalities that have plagued the UK for decades. And, amid rising inflation, one of the key measures of success must be a positive impact on people’s living standards and wages.

So it is essential business works together with Government in developing an industrial strategy that includes education reforms, from early years to adulthood, to help people prepare for the challenges of a post-Brexit world. This means improving the quality of pre-school and primary education together with high quality apprenticeships, meaningful technical education and adult training. The majority of businesses recognise this. It’s simply not right to accuse firms of relying on cheap labour when they spent £45bn on training in 2015, according to the latest figures. There is more that firms can and want to do, but we should not shape a new immigration system around the wrong problem.

It's time for an honest debate about immigration

Recognising and appreciating the positive aspects of immigration for the UK economy must be the starting point for a sensible conversation. But so must an acknowledgement that these benefits can be obscured if opportunities for our young people are not improved and public services remain under pressure. By putting aside the rhetoric, politicians and business will be able to address this thorny and controversial question with the seriousness it deserves.

As the latest migration statistics are published today, let us take the opportunity to reframe the conversation and begin with outcomes we want for people – in work and in public services. Only then can we have the honest debate that the UK needs.