IPPR Proposal for Regional Work Permit System

28 February, 2017


1. The IPPR proposal for a regional immigration system is incompatible with a target for net migration, a manifesto commitment on which they won a majority in the 2015 General Election. The proposal would likely lead to a rise in net migration, with significant implications for population growth and public service provision against the wishes of the public. The proposal would require a total overhaul of the immigration system and the establishment of at least thirteen individual immigration services across the country administered by regional government that has no previous experience dealing with immigration or labour market needs. This would lead to chaos and confusion. The new system could not protect the domestic labour force due to a lack of a resident labour market test, a minimum income or a minimum skills threshold and could be used by employers to keep wages low.

IPPR Contributions

2. Since the referendum result, the IPPR has made a number of contributions to the debate on the future of EU immigration control when the UK leaves the EU. In the immediate aftermath, the IPPR suggested that the UK seek to negotiate an emergency brake on EU migration which would be triggered when wages in particular sectors, locations or occupations were harmed.[1] If the brake was triggered it was proposed that restrictions would be in place on the number or type of migrants permitted to work in the affected sector.

3. The IPPR has also proposed a regional immigration policy. The two proposals are distinct and in our view cannot both be implemented. This note analyses the latter proposal.

IPPR Proposal for a Regional Immigration System

4. The IPPR propose that when the UK leaves the European Union, free movement should continue for EU citizens with the exception of those wishing to work in the UK.

5. For those wishing to work, the IPPR have suggested a regional work permit system in which devolved governments, metropolitan governments such as the London Assembly and proposed ‘Grand Committees’ (formed of local authorities, MPs and local representatives for those areas without devolved government, with voting in an electoral college, determined by population size) are given control of work permit arrangements for their region.

6. Regions would have the ability to impose a quota on the number of Regional Certificates of Sponsorship that would be available for employers in each sector of the economy. Regions would also have the ability to decide against imposing quotas, essentially allowing free movement of workers into jobs in a specific sector. They also envisage that quotas could differentiate between EU and non-EU migrants.

7. The system would allow, for example, the East of England to allow an unlimited number of workers to to work in the agricultural sector but also to impose strict quotas or indeed a total restriction on workers in other sectors, such as retail, hospitality or construction. It is argued therefore that the immigration system would be more responsive to the different interests of the different regions of the country.

8. Employers in local areas would need to ‘draw down against agreed quotas’. They would be required to register a place of work for migrant employees, and ensure that their home address was in a commutable distance from their place of work. For those sectors without restrictions, registration would take place but would not be subject to quotas.

9. The IPPR suggest that migrant workers would be allowed to move around the country but only where there is quota availability in that region.

10. The IPPR admit that the system would be reliant on the continuation of free movement to London otherwise the system would become a backdoor to London. They argue however that London would wish free movement to continue on the basis that it voted to remain. It would also allow Scotland, which voted remain, to allow free movement.

11. On the issue of enforcement the IPPR admit that the system would ‘need to be robustly policed’ although there is little detail beyond suggesting that employers face stiff penalties for abuse or for allowing abuse to take place.

12. The IPPR argue that a regional system will resolve the following issues:

  1. The differing labour market needs of the regions.
  2. A lack of democratic decision making in immigration policy.
  3. The impact that migration has on public services and housing.
  4. The possibility that Britain could end up with a bad deal from Brussels (the continuation of free movement to Scotland and London it is argued makes it less likely that Brussels will give Britain a bad deal in terms of access to the Single Market).

13. The IPPR also note that a regional policy would allow for the government to abandon its net migration target since they themselves admit that a regional policy decided at the local level is inconsistent with a national target.

Analysis of IPPR Policy

14. The IPPR are clear that their policy would allow for the abandonment of the net migration target which they suggest would be a positive development. This is despite the fact that the Conservative government won a majority in the 2015 General Election on a manifesto commitment/ambition to reduce net migration to the tens of thousands. With no target for net migration there would be little chance of the level being reduced overall and it is quite likely that the level of net migration would increase with significant implications for population growth and the ability to provide services and housing to a population growing at such a rate. The IPPR are ignoring the overwhelming desire of the public to see net migration brought down to sustainable levels.

15. Implementation of a regional policy would require a total overhaul of our immigration system. This would be a mistake. Employers are familiar with the existing framework and it works well. The Home Office also has a huge administrative task ahead of it in terms of documenting over 3 million EU nationals. Overhauling the immigration system at the same time would bring chaos and would not be good for employers who need to be able to access skilled workers in a timely manner.

16. Under the IPPR proposal local bodies would be faced with a huge administrative and bureaucratic burden, for which they have no previous experience. The Scottish, Welsh, and Northern Irish assemblies as well as metropolitan areas such as the London Assembly and the Greater Manchester Combined Authority would need to establish an immigration service. Excluding London there are eight Government Office Regions in England which could form the basis for the proposed ‘Grand Committees’. This would entail the establishment of thirteen individual immigration services across the UK. It is suggested that ‘Grand Committees’ would include local authorities but there are serous question marks surrounding the capacity of local authorities to take on this responsibility at a time when budgets are being cut. Such a system would likely cause a postcode lottery of different standards and competency, causing a serious drag on growth.

17. The proposal does not include any minimum skill threshold or income threshold. By failing to include a minimum income threshold the proposal will discourage employers from assessing the extent to which low pay and poor conditions might be hindering local recruitment.

18. There is no mention of employers having to demonstrate that they have carried out a resident labour market test (RLMT) by attempting to recruit from the labour market either regionally or nationally. Without a RLMT and with no minimum income requirement then it is likely that migration will be used as a means of keeping wages low.

19. Regional policies are notoriously difficult to enforce and the IPPR do not offer any detail in this respect beyond suggesting stiff penalties for those employers who abuse or allow the system to be abused. The proposal places considerable regulatory burden on employers by requiring employers to ensure that their workers are living in the vicinity. This could also have the unintended and unpalatable side effect of giving employers unchecked power to exploit workers and make them vulnerable to illegal practices such as confiscation of documentation, as highlighted by Emma Carmel of Bath University and Catherine Jones of Coventry University in their piece on regional policy.[2]

20. It is not clear how often quotas will be set. Assuming that this is carried out on an annual basis then businesses would have little possibility to plan over the longer term. Annual quotas would also require the regional governance structures to carry out annual assessments of the needs of the local labour market which would be a considerable task.

21. The proposal fails to explain how often permits would become available. If permits were issued in one annual tranche then it is possible that the quota would be taken up early in the year leaving employers having to wait a year before they could recruit. This is a problem which affects the US H1B visa system.

22. It is not clear whether the permits in the quota would be prioritised based on skills or income. Without some means of prioritising the more skilled, places could be taken up by lower skilled workers at the expense of highly skilled migrants.

23. The proposal would also give businesses in London (and other regions where quotas are not imposed) an unfair advantage over businesses in other parts of the country where immigration is restricted. Yet it would also be unfair on London residents since for the system to work London would have to continue to permit free movement, regardless of the views of locals. It might be the case that London voted to remain and the Mayor is in favour of free movement however in an opinion poll in March 2015 (ahead of the 2015 general election), 72% of Londoners said that they thought the next government should try to reduce the level of immigration into Britain.[3]