The important role of migrant workers

Andrew Taylor has two descriptive pieces in today's Financial Times on migrant workers' important role in the UK. In Figuring out a role for migrant workers, he assesses their impact on the economy:

Mervyn King, governor of the Bank England, has said that the availability of cheap foreign labour may be one reason why wage inflation has not taken off as expected in a tight labour market.

A steady flow of young, tax and national insurance paying, immigrant workers may also be required to replenish an ageing workforce: to help to finance future pensions. According to the Institute for Fiscal Studies, there will be only 2.3 workers for every pensioner by 2040 compared with 3.3 currently.

Yet both Conservative and Labour politicians, seeking to ride the tide of popular electoral concerns, have announced plans to restrict the number of foreign workers coming into the country. The Tories would place a cap on the number of immigrants while Labour proposes a points system that would favour higher-skilled workers.

The plans have been attacked by business leaders such as Sir Digby Jones, director-general of the CBI employers' body, who says a cap on immigrant workers would tie the hands of employers, reducing the "flexibility which is the hallmark of the British labour market".

Attempts to cherry-pick higher-skilled workers could also rebound by reducing hiring options for contract cleaners, residential care homes, farms and food packagers and processors, all of which employ large numbers of immigrants. To this list could be added Indian restaurants and transport companies hiring eastern European bus drivers.

Critics of current policies claim that Britain is being swamped by successive tides of foreign workers, most recently from eastern Europe. The populist images are of illegal people-trafficking by mafia gangs; sweat shops, rising crime rates and large numbers of foreign-born benefit claimants.

A Home Office study reported that in 2000 there were 4.5m foreign-born people accounting for 9 per cent of the working population. These contributed 10.2 per cent of all income tax, according to separate figures from the Institute for Public Policy Research. The number of non-European Economic Area foreign nationals granted work permits almost doubled from 63,000 in 1997 to 119,000 in 2003.

To this number must be added workers from the European Union accession countries, which since last May have a legal right to live and work in Britain. About 133,000 people from the eight east European accession countries had applied to work in the UK by the end of last year, according to the Home Office. This was higher than the 5,000 to 13,000 annual applications forecast in government-commissioned research, but still small compared with the country's total employment of 28.64m and 631,800 job vacancies reported in March.

Only 774 of the east European applicants had claimed benefits such as housing support and of these, only 21 had been accepted for further consideration, said the Home Office. There are no official estimates of the number of illegal immigrants. A best guess - by Professor John Salt, director of the Migration Research Unit at University College London, in Home Office research - is about 500,000. These people are unable to claim benefit and are lost in the black economy.

It is the employment conditions of many immigrant workers that most worry trade unionists and bona fide businesses. A study by the Trades Union Congress found many instances of foreign workers being forced into debt and intimidated into working for less than the legal minimum wage.

In Recruits fill staff shortages in construction, catering and health, he looks at the jobs they fill:

Outside of ethic minority restaurants, the employment of immigrant labour is most visible in hospitals and residential care homes where foreign nurses, doctors and cleaners are widely used to overcome staff shortages.

According to the Nursing and Midwifery Council some 65,000 nurses and midwives, representing about 10 per cent of its register, were foreign, making "a huge contribution to healthcare in the UK", says Sarah Thewlis, NMC chief executive.

...The transfer of residential care homes to private-sector operators has also increased the use of contract labour, which in areas such as London relies heavily on immigrant workers, who are more willing to accept low-paid jobs with anti-social hours. Some 42 per cent of foreign-born workers were based in London in 2000, according to Home Office figures.

Contract cleaners which employ about 800,000 workers are also heavy users of immigrant labour. However, the Trades Union Congress said actual numbers were hard to determine "because there are no visas as such for work . . . workers can be on business visas, students, and those who have indefinite leave to remain".

Immigrant workers suited employers because they were more prepared to accept temporary contracts and were often more reliable than British workers, who had wider opportunities if they did not like their current job, says Tom Hadley, director of external relations at the Recruitment and Employment Confederation.

Construction is another industry with a tradition of immigrant labour. Irish builders have been coming to this country for more than a century. Recently, many have been returning home to take advantage of a surge in Irish building. They have been replaced by Portuguese labourers and workers from eastern European countries such as Poland, Ukraine and Lithuania.

...Catering is another heavy user of immigrant labour. Keith Best, chief executive of the Immigration Advisory Service, is concerned by Labour's plans to wind up the sector's special quota schemes on the grounds that restaurant jobs previously filled by Bangladeshis could now be filled by workers from the eastern European accession countries. Czech and Polish staff would be unable to understand the Bangladeshi language used in kitchens and some restaurants might be forced to close, he says.

Farmers, who rely heavily on foreign workers to pick fruit, vegetables and flowers for supermarkets, have complained about plans to curb the seasonal agricultural workers' scheme, which this year saw the number of available work permits reduced from 25,000 to 16,250.

Clearly the UK economy would grind to a halt without foreign workers. I should know. I'm one of them.

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