Following an inquiry into Brexit and the Labour Market, the House of Lords Economic Affairs Committee has published a paper stating the importance of improving Government migration data and the need for a transition period.
The House of Lords Economic Affairs Committee has today published its report on Brexit and the Labour Market. The inquiry aimed to understand the expected impact of Brexit across industries, taking into account EU and non-EU migration.
techUK provided both written and oral evidence to the Committee, and our recommendations have been reflected in the final report.
The report assesses the data used to calculate the net migration target, the ability of the domestic labour market to adapt to lower levels of migration, the future of the net migration target, and finally sets out a series of recommendations in relation to the above factors. The influential House of Lords committee reached the conclusion that the Government’s methods of measuring immigration are “wholly inadequate” and data gathering provisions must be dramatically improved to gain an accurate picture of migration trends in the UK.
Similarly, the report found that businesses will require a significant adjustment period to adapt their business models accordingly. techUK asserted in oral and written evidence that upskilling of domestic workforces is critically important to the sector, however international talent is vital to supplement domestic talent and fill a necessary gap in the short-medium term. As such, the report recommended a transition period post-Brexit as to not hinder business growth.
Finally, the Lords made the point that the net migration target is unlikely to the best method to reduce migration to sustainable levels. They stated that a numerical target runs the risk of causing significant disruption by failing to allow the UK to respond flexibly to labour market needs in evolving economic conditions. This is a point techUK has also made previously, emphasising that the dynamic nature of the tech sector means it will need an agile migration system that will respond to labour market needs over numerical targets.
Some of the additional key conclusions and recommendations from the report are:
- Increasing reliance has been placed upon the migration statistics to formulate and judge government policy. Many of the available measures are inadequate. Measures contained in the Digital Economy Act will allow the ONS to access more administrative data & Government should prioritise plans for the comprehensive sharing of data across departments.
- The report recommends that the Government develops a systematic understanding of the movement of immigrants within the UK economy using analysis of multiple sources of information, including PAYE and National Insurance registrations, self-assessment records and tax contributions.
- The Lords also highlighted the low levels of capital investment and productivity in some sectors. As such, a recommendation was made to consider ways it can help businesses, such as capital allowances for investment in automative processes.
- A suitable implementation period will be necessary to allow for the necessary training of the British workforces and investment in new technologies.
Commenting on the report, Giles Derrington, Head of Policy for Exiting the European Union, said:
“This report rightly highlights the importance of a flexible, responsive migration system to our economy. The tech sector added 85,000 jobs last year alone, twice the rate of other sectors, and the opportunity for tech to create more prosperity, more high-wage jobs and ultimately more benefits to everyone is directly linked to its access to talent.
“techUK particularly welcomes the recognition of the need for a long transition period if we are to ensure businesses are ready for a new migration system put in place. A soft landing for Brexit will require a long runway, and that means allowing businesses the time to adapt, including in how they manage their workforce.
“We also welcome the Committee’s recognition that the data used to determine labour market needs lag behind the real time demand of our economy. Fast growing, dynamic businesses need to be able to plan for the future, and that means not relying on systems designed in the distant past.
“Finally, we also strongly support the report’s warning that businesses across all sectors need to do more to increase investment in systems that boost productivity. The Government needs to look again at what can be done to help businesses, and particularly SMEs, to invest in tools they need to meet their productivity challenges and increase wages. That means supporting these businesses to utilise new digital processes.”
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