Meeting of the Parliament

Meeting date: Thursday, February 28, 2019

Official Report 1019KB pdf

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European Union Exit (Impact of United Kingdom Immigration Policy)

Good afternoon. The next item of business is a statement by Ben Macpherson on United Kingdom immigration policy after leaving the European Union: impacts on Scotland’s economy, population and society.

In October 2018, I established an expert advisory group on migration and population. I asked it to review UK Government proposals for immigration policy after leaving the EU and to advise on the impact that such proposals might have on areas of devolved responsibility in Scotland—the health of the Scottish economy, the delivery of our public services and the sustainability of our communities. Earlier this month, the group presented me with its initial conclusions. Today, I have published its report, and I want to update Parliament on the implications of those conclusions.

I thank the members of the group for their efforts in producing that considered analysis. I am grateful to Professor David Bell of the University of Stirling; Dr Andrew Copus of the James Hutton Institute in Aberdeen; Professor Rebecca Kay of the University of Glasgow; Professor Hill Kulu of the University of St Andrews; and Professor Christina Boswell of the University of Edinburgh, who chaired the group. I also greatly appreciate the engagement and input throughout the process from the Convention of Scottish Local Authorities on behalf of local government.

The Scottish Government believes that Scotland is a European nation that belongs in the EU, and that is what the people of Scotland overwhelmingly voted for in 2016. The benefits of membership of the EU—or, at the very least, membership of the European single market and customs union—are abundantly clear compared with the risks that we now face standing on the precipice of a no-deal Brexit.

Freedom of movement is one of the greatest achievements of the European project. It has facilitated trade, protected workers’ rights and opened up new horizons for people—young and old—to learn, live and love across a continent. We enjoy the right to free movement just as much as other member states do. Losing the reciprocal benefit of shared EU citizenship will be one of the most significant negative impacts of Brexit.

For Scotland in particular, free movement has helped to turn around our long history of population decline. Migration has been a key driver of economic growth, it has added to our working-age population, and it has grown our tax base. That is all now at risk.

The current UK Government is determined that freedom of movement should end. That is one of the Prime Minister’s red lines. The Scottish Government believes that that is a mistake by the Prime Minister, both in principle and for very practical economic and demographic reasons.

I asked the expert advisory group on migration and population to look into the impacts in Scotland of recommendations that the Migration Advisory Committee made in September 2018, which were subsequently adopted as policy by the UK Government in the immigration white paper. In line with its remit, the group’s report addresses economic impacts, including labour market and fiscal effects, demographic impacts and impacts on Scotland’s communities.

The group’s headline conclusion is that, if enacted, the policy measures in the UK Government’s immigration white paper would reduce overall

“net migration to Scotland by between 30% and 50% over the coming two decades.”

That would lead to a decline in the size of the working-age population and would increase the overall age profile of workers, which would only exacerbate the challenge of managing the pressures presented by an ageing society.

The group considered that the proposed new system might allow for a slight increase in migration from outside the EU. Indeed, the white paper proposes some minor improvements to the main route for skilled workers outside the EU, compared to the status quo. However, if free movement ends and migration from Europe is managed through that same route, the overall impact is set to reduce migration to Scotland significantly.

The UK Government’s proposal for a salary threshold of £30,000 or more has already attracted much comment. That is the only element of the white paper on which the UK Government is seeking input formally, and I encourage employers to set out their position clearly. The message that I have heard from my engagement with business has been that the £30,000 salary threshold proposal is completely unrealistic.

The salary threshold is just one of the measures that, together, will serve to deprive key sectors and industries of people and skills, as I have heard in my discussions with representatives from tourism, social care, transport and many other sectors. For those businesses, the UK proposals simply will not work. The Confederation of British Industry Scotland said that most clearly, stating:

“The proposals outlined in the white paper don’t meet Scotland’s needs or the needs of the UK as a whole, and would be a sucker punch for many firms”.

Furthermore, the expert group envisages that the white paper proposals would have a disproportionate impact on women. Fewer women than men are likely to meet a salary threshold, especially in less prosperous areas and in remote and rural communities.

The report also highlights issues faced by rural Scotland as a consequence of the changes. Historical depopulation in some rural and island communities is so pronounced that it is not possible for natural change to sustain those communities. Migration to areas such as Dumfries and Galloway, the west Highlands, Argyll and Bute and the Western Isles is essential.

Although there are particular concerns in rural communities and in specific sectors, I emphasise that the challenge that the group describes in its report is one that faces all Scotland—urban and rural areas alike—and all sectors of the economy. That is why it is so important that we build consensus on what Scotland needs.

Finally, the report is clear that the implications of the UK Government’s proposed 12-month temporary visa for so-called low-skilled migrants mean that the scheme is unworkable. That route would not meet demand sufficiently in areas that already suffer labour shortages; it would inhibit settlement and cohesion in Scotland’s local communities; and it is contrary to the UK Government’s own stated aim of discouraging economic precarity.

The expert advisory group report on migration and population clearly sets out to all of us the potential impact on our economy, our public services and our communities of the UK Government’s immigration proposals. It presents a challenge to this Parliament, and we need to find solutions that work for Scotland. I will work with businesses, local government and third sector bodies, and with members across the chamber, to build common ground and, together, to influence the direction of UK policy.

However, it is also becoming increasingly clear that, if migration policy is to remain with the UK Government, we need the ability to introduce additional, tailored policy approaches to address the particular issues that Scotland faces. We had an example of such an approach in the previous fresh talent scheme. When that scheme was withdrawn, all parties in this Parliament supported its reintroduction, following the work of the Smith commission. The arguments in favour of a post-study work visa still apply today, and we need that route back.

The challenges we face on migration and population have only grown, and our collective ambition needs to grow in response. We want to implement a clear, fair approach that encourages and supports people who want to make Scotland their home, and to live, work and raise their families here.

Together, we need to think seriously, with an open mind, about what solutions could be provided through the devolution of immigration powers to this Parliament. Crucially, we also need to step up efforts to encourage people who have already come to Scotland under free movement to stay. Ensuring that EU citizens continue to feel valued and welcomed has been at the centre of our work since the EU referendum in 2016. Together with partners, we successfully argued for the abolition of the settled status fee, and we are providing funding to Citizens Advice Scotland to enable it to provide information and advice to EU citizens.

We will shortly launch a new phase in our campaign to encourage EU citizens to remain in Scotland. Now, more than ever, it is critical for every one of us to reassure those who have built their lives in Scotland that this is their home, that they are welcome here, that we want them to stay and that we will support them to stay. I hope that we can build agreement on what might come next, reflecting on the findings of the expert group’s report, and do together what is right for Scotland.

Thank you. The minister will now take questions.

I thank the minister for early sight of his statement. It is a welcome statement, particularly the minister’s remarks about building consensus and effective cross-party working.

Every Scottish Conservative MSP who spoke at every stage of our recent budget debates talked about the need to grow the Scottish economy. We are serious about that. We know that we cannot grow the economy without addressing the productivity puzzle, and that we cannot do that without addressing the economic imperative of migrant labour. Managed migration is a social good, too, of course.

A key opportunity of Brexit is that we can end the period of uncontrolled EU migration to the UK and replace it with a managed migration system that works for EU and non-EU citizens alike. I am not in favour of devolving immigration powers to this Parliament, but I am very strongly in favour of ensuring that the UK’s new system of managed migration works effectively for all the nations and regions of the United Kingdom. One size may very well not fit all, and where there are genuinely discrete Scottish needs, those should be accommodated within the UK’s immigration system.

With that in mind, I ask the minister whether he will commit to working with me and my Scottish Conservative colleagues, both here and at Westminster, to explore whether the tax system could form the basis of a new immigration system, either through our Scottish tax codes or through national insurance numbers. While such an approach would be UK wide, it could be tailored to the specific needs of the Scottish economy, where appropriate.

I welcome the open-mindedness that was expressed in some of that question. However, the report shows very starkly that although we are interested in being attractive and supporting the needs of business in the Scottish economy, proposed UK immigration policy after Brexit will have exactly the opposite effect. The expert advisory group concludes that there will be a 30 to 50 per cent reduction in the number of people coming to Scotland over the next 20 years, which is a 5 per cent decline in our workforce. How can we support the Scottish economy if such a situation is presented to us?

Business is opposed to the proposed £30,000 salary threshold, which, as the expert advisory group report states, 63 per cent of the Scottish working population would not reach. How can we be an attractive country if UK immigration proposals will make coming here more bureaucratic, more costly and less welcoming?

The UK Government’s proposals will not work for business, so we need to be solution focused in Scotland, working together to bring the powers that we need to this Parliament in order to come up with tailored solutions. We will try to implement UK Government policies and to influence the shortage occupation list for Scotland. We have asked for direct input to that list, but the UK Government has yet to enable that.

The truth is that it will not work for Scotland if the UK takes a policy direction that is based on its white paper. That is the expert advisory group’s conclusion. We must think creatively and focus on coming up with solutions that will work for Scotland, and the Parliament should help to design those solutions and make them happen.

I thank the minister for providing an advance copy of his statement. I also thank the chair of the expert advisory group, Professor Christina Boswell, and the rest of the group for producing their detailed report on the impact of the UK Government’s white paper.

Regardless of one’s views on leaving the EU, it is difficult to ignore the evidence on the negative impact that the UK Government’s proposals will have on Scotland’s population, economy and society. The process of leaving the EU is chaotic and it is not clear when the exit will happen or on what basis, but we must assume that the UK will require a new immigration system. The UK Government must not ignore the pressures that will be put on Scotland’s population, economy and society if its proposals are enacted.

This area is one in which members of the Scottish Parliament have previously worked together across political parties, and the evidence clearly pointed us towards the need for policy that is tailored to Scotland’s needs. The minister proposes the devolution of immigration powers, but I believe that there is an alternative way to address the problem that would provide for flexibility and regional variation within a UK framework. Will the Scottish Government approach cross-party discussions with an open mind? Has the minister commissioned any work on other models, such as those that operate in Canada and Australia?

I thank Claire Baker very much for the tone of her question.

I agree that the conclusions of the expert advisory group make it clear that Scotland faces acute and more pronounced demographic challenges, which we must consider along with the potential economic repercussions of the removal of freedom of movement and the implications of the UK Government’s white paper. Those implications are serious in the short and medium term, and the demographic challenges are long term.

Since February last year, when we put our discussion paper before Parliament, we have explored the possibility of working together to utilise devolution to focus on the creation of solutions. The devolution of immigration as a whole is one option; the devolution of powers within a UK framework is another. I am open to dialogue on that other option and to considering the possibilities that it raises.

We are considering how to develop that discussion, building on last year’s discussion paper. We want to look at what Scotland could learn by example from other countries. Claire Baker mentioned Canada and Australia, which have regional powers in their immigration systems that provide the flexibility to come up with differentiated solutions. We also want to think about how we could design a Scottish visa, based on a points system that we would decide, that would work to the benefit of Scotland and would keep it open, attractive and welcoming.

As colleagues have done, I thank the minister for advance sight of his statement and the expert group for its work.

One of the many traumas that are inflicted by the UK’s immigration system for non-EU citizens is that of family separation, which is caused—significantly but not entirely—by the minimum income threshold. Expanding that system to EU citizens will result in more family separation.

What work has the Scottish Government done, or what work will it do, to assess not just the advice but the support that will be needed by families who suffer that trauma as a result of UK immigration policy?

One of the benefits of free movement has been the positive impact that it has had on family migration to Scotland. Through a robust academic analysis, the report of the expert advisory group rightly highlights—this is borne out by my anecdotal experience—the positive impact that the migration of families from elsewhere in the EU under freedom of movement has had on the age profile of our working-age population and our demographics. We understand the significance of family migration. We are considering both the impact of the UK Government’s proposals on family migration post-Brexit and how Scotland could support such migration in the future. We will announce those proposals in due course.

Adam Tomkins seems to be living in a parallel universe to his colleagues in the UK Government. Seasonal fruit and veg farms in my constituency are already struggling; they are running short of workers right now. Processors, such as Kettle Produce, need workers all year round.

There is no doubt that Conservative immigration policy is bad for business and many organisations agree, including the Confederation of British Industry, the National Farmers Union and the Federation of Small Businesses. We need a UK solution to this UK problem. A Scottish solution would not help the UK economy as a whole, and I urge the minister to work with colleagues across the UK to fix the problem.

The minister has discussed the matter with his Conservative counterparts. Do they get the impact that this narrow-minded policy is having on business and our economy?

I would not want to speak on behalf of the Scottish Conservatives. I have engaged across all sectors in Scotland, including the business, third and public sectors. The people of Scotland understand the negative consequences of the UK Government’s proposals, as do many people across the UK.

Although the white paper proposals will have a negative impact on many parts of the UK, the expert advisory group’s report that I have published today clarifies that population ageing in Scotland is more pronounced than in the rest of the UK, so reduced migration from the EU will lead to a gradual decline in the working-age population in Scotland, but the effect of the policy will not be the same on the working-age population across the rest of the UK. As we face challenges that are more pronounced than elsewhere in the UK, we need to be solution focused and think about how we get the solutions that we need here and the powers to deliver them.

Willie Rennie mentioned seasonal and temporary worker programmes. I have been to farms not too far from his constituency. The seasonal agricultural workers scheme caters for an inadequate number of people. The temporary worker programmes in the UK Government’s white paper are also inadequate, because they would not allow family migration, people would have no recourse to public funds and they would be subject to a 12-month cooling-off period. The temporary and seasonal solutions that are on the table are not adequate for Scotland.

The minister will be aware that the chair of the UK’s Migration Advisory Committee, Professor Alan Manning, admitted to the Scottish Parliament’s Culture, Tourism, Europe and External Affairs Committee that he had done no modelling of the demographic or fiscal impacts on Scotland of his proposals, and that he had done no in-depth study of the differentiated migration systems in countries such as Canada. Therefore, the Scottish Government’s analysis is welcome. What does the minister’s analysis tell us about the proposed £30,000 minimum income threshold for EU workers in Scotland?

As I said, the expert advisory group estimated in its report that 63 per cent of workers in Scotland earn below the proposed £30,000 threshold. If the UK Government introduced such a threshold, that would dramatically constrain the ability of Scotland’s employers in many sectors, including the agriculture, tourism and social care sectors, to access the skills and labour that they need. Those sectors, which make such an important contribution to Scotland’s economy, rely on freedom of movement to attract and retain the talent that they need throughout the country, in rural and urban areas alike.

The UK Government’s proposals are unworkable, unrealistic and ultimately damaging to Scotland and its local communities. I think that the UK Government knows that. In promising to engage on the threshold and listen to others, it has acknowledged that the proposed salary threshold is completely unrealistic and unworkable.

Interestingly, though, the expert advisory group concluded that a salary threshold of £25,000 would exclude 53 per cent of workers in Scotland. That is another reason why we need powers in this Parliament—we must be able to decide whether we want a salary threshold at all and, if we do, whether it should be different in Scotland. Those are the questions that we could be asking if we were able to design our own policy solutions, and we need to take the debate in that direction.

We have plenty of time this afternoon, but we still need to make some progress with questions. I call Rachael Hamilton.

I refer members to my entry in the register of members’ interests.

I, too, welcome the minister’s statement and the analysis, but it is worth noting that, in discussions with Ben Macpherson, the CBI and the FSB both stated that a UK-wide system was their preferred option. However, we on these benches agree that a specific threshold of £30,000 could be detrimental to key sectors such as manufacturing, hospitality, food and drink and tourism. Given that the minister is against that particular threshold, what analysis, if any, has his Government done to pinpoint a threshold that he believes is workable?

Given that this Government believes in freedom of movement, I would, in the first instance, want to consider whether a salary threshold was necessary at all. The expert advisory group’s analysis and conclusions clearly state the need for us to be able to attract more people, the risk of the UK Government’s immigration policy making us less attractive—or, in fact, unattractive—and the negative economic consequences and demographic challenges that arise from that. We will seek to influence the UK Government on the salary threshold, and I encourage all businesses and others to state their opinions in that respect.

However, there are other aspects of the UK Government’s immigration white paper proposals that will put people off by being bureaucratic and costly. For example, there is the immigration skills charge, and the fact that after we leave the EU, each employer will, with the removal of freedom of movement, have to sponsor individuals to come here: think of the extra bureaucracy and cost for big and small businesses alike. The UK Government’s proposals do not make sense—we can come up with better solutions in Scotland.

Given that all of Scotland’s population growth over the next 10 years is projected to come from migration, can the minister clarify the impact of the UK Government’s disastrous post-Brexit immigration policy on not just Scotland’s gross domestic product, but Scottish Government revenue?

According to the Scottish Government’s analysis, each additional EU worker in Scotland adds, on average, £30,400 to GDP and contributes £10,400 to Government revenue. In the evidence that it gathered and submitted to the UK Government, the MAC showed that migrants pay more in to the public purse than they take out in benefits or services, and the report that we are discussing today emphasises the same point. The expert advisory group has strongly reiterated that finding, and all evidence shows that migrants to Scotland, especially from EU countries, are young, healthy, well educated, highly skilled and ready to take up work and contribute to the economy. That is why we want to keep attracting people from the EU, why we believe in freedom of movement and why Brexit is such a tragedy and mistake.

Does the minister agree that the best way of achieving any concession from the UK Government on a flexible or differentiated immigration system, if that is possible, is for all parties in this chamber—the Tories, Labour, the Liberal Democrats, the Greens and the Scottish National Party—to find a way forward? In that respect—and given the need for us to stick together on this matter—will he consider the point made by Adam Tomkins about the tax system providing part of the solution to achieving a variation model?

As I have said, I am looking to work cross-party in a solution-focused manner and to consider all the aspects that we can look at together. However, we need to be careful about thinking that people might be motivated by changes to the tax system, if the message that they are hearing is that they are not welcome in the UK and that it will be bureaucratic and costly for people to come here to do business or settle down.

We need to think about how we continue to create openness and continue to be attractive. If Labour and Tory members want to give me suggestions, I am open-minded about considering them and having a dialogue. However, the fundamental point is that without the flexibility that we need to have in this Parliament, if UK policy goes in the direction that it appears it will, we will be less attractive, we will realise less of our economic potential, we will struggle to provide the public services that we want to because we will not have the people to do so, and there will be a significant challenge to our demographics.

Does the minister agree that the UK Government’s approach of linking people’s perceived skills to earnings is flawed? What will the UK Government’s scheme mean for vital professionals such as nurses, paramedics, midwives, junior doctors and healthcare assistants, as well as the many people in my constituency who work in the vitally important tourism industry, many of whom may be earning below the minimum threshold and will now be viewed as being low skilled? Is the scheme not just downright wrong and will it not damage the Scottish economy as well as the social fabric of Scotland?

I absolutely agree with that sentiment. We cannot judge the social and economic value of an individual according to their earnings. This Government believes in the value of all skills, and the Scottish economy and public service provision benefit from all skills. That is why freedom of movement has been so beneficial—it has allowed us to bring people here to fill jobs across sectors and across urban and rural communities in order to make a positive difference and contribute to creativity and growth. I want solutions so that we can continue to attract people and value all skills in our economy and I absolutely share the sentiment of that question.

Does the minister not recognise that, as the Office for National Statistics said in the report that it published today, although EU immigration is marginally down since 2016, overall UK immigration is roughly unchanged and non-EU immigration is up? Does the minister not agree that that represents an opportunity for Scotland?

Restricted routes for EU immigration will put significant strain on our ability to attract individuals. We welcome an increase in the number of people from beyond the EU, but we disagree with the Prime Minister’s stated ambition to reduce immigration to the tens of thousands and to create a hostile environment.

The analysis in the expert advisory group report that was published today shows that the positive impact of EU immigration in Scotland has been felt to a higher extent than elsewhere in the UK. Also, our demographic challenges are more pronounced and the growth of our working-age population is more reliant on immigration than is the case elsewhere in the UK. We need more people to come here and we want more people to come here. Freedom of movement is important as part of that, and we would like to see it continue. It is certainly a pleasure to welcome anyone coming here to Scotland to contribute to making this country better.

The chief economic adviser’s report, “No Deal Brexit—Economic Implications for Scotland”, notes:

“The impact of a No Deal Brexit economic shock will not be uniform across Scotland”

and particular sectors

“are anticipated to see the greatest impact”.

Aberdeenshire was ranked as one of the local authorities with the highest concentration of EU workers in the most exposed sectors, and the levels of EU employment in Aberdeen and Aberdeenshire were identified as being among the highest in Scotland.

Can the minister confirm whether there is any indication that the UK Government has identified the north-east’s unique demographics and challenges and taken them into account in developing its immigration policy?

Having been to the north-east to visit Macduff Shellfish and Camphill, which provides social care, I have seen at first hand the positive difference that EU immigration has made to the economy and society there. Unfortunately, whether it is the Migration Advisory Committee report or the UK Government white paper, UK Government policy making has not catered for the nuances and the differences in different parts of the UK in relation to demand for migration.

The expert advisory group report that I published today highlights the benefits of migration for Scotland and the fact that our need to keep attracting individuals to live and work here in order to benefit our economy and our society is greater than that in other parts of the UK. We must continue to attract people here. Unfortunately, we have not seen the consideration of Scotland as a whole, let alone parts of Scotland, by the UK Government.

If we are to be progressive internationalists and if we are to have a new migration system, the movement cannot be all one way and the system cannot be just about what we get from migration without consideration of that migration’s impact on the countries that people leave. Has the Government analysed the impact of the movement of people who come here on their country of origin?

We want to attract people to come here who make personal choices about whether they want to come here. The challenge for Scotland is to continue to be attractive and to give people who come here a positive experience of living here, whether they continue to live here or do so temporarily.

Global trends of migration impacts on countries are a wider geopolitical question. We need to think about how we continue to attract people to Scotland from near and far, because we want to grow our working-age population and we want to keep the contribution. That is why freedom of movement has been beneficial; it has given individuals across the EU, including people from Scotland who have gone to other parts of the EU, the chance to travel, contribute, learn and love in other places. I wish that that could continue.

The impact of the UK Government’s post-Brexit immigration policy on prospective EU students and on our universities cannot be overestimated. In the event of no deal, the UK Government proposes European temporary leave to remain for three years. As we all know, the majority of Scottish degree courses last for four years, so prospective EU students would be put off from applying to Scottish universities, as they would have no guarantee that they could complete their course. Given that about 9 per cent of students and 27 per cent of full-time research staff in Scottish universities are EU nationals, does the minister agree that the UK Government must change course and recognise the threat that its plans pose to Scotland’s higher education institutions?

Yes—absolutely. Ministers and officials have relayed those concerns directly to the UK Government; Mr Russell did that most recently at the joint ministerial committee on EU negotiations, and the Deputy First Minister has engaged with the sector on the issue. I will raise the matter again next month when I meet the Minister of State for Immigration, Caroline Nokes.

The example shows exactly why a one-size-fits-all approach for the UK does not work and why decisions about what Scotland needs should be taken here. I refer again to the past operation of the fresh talent scheme, which encouraged students to come to Scotland and stay here once they had graduated and around which a cross-party consensus was built.

It is time to start exploring solutions that can work for all of Scotland. I emphasise that point in relation to Maureen Watt’s question, given that the Russell group said today that the UK Government should scrap its plans for a bizarre and discriminatory no-deal visa for EU nationals who want to study here.