Cera Murtagh considers the current issues for economic migrants in Scotland
Surprisingly for its size and peripheral location, Scotland has always been an outward looking nation with a steady flow of incomers. Since the industrial revolution, economic migrants looking to improve their fortunes from places like Ireland, Italy and Eastern Europe, have been enticed north by Scotland’s jobs markets. It seems fair to say that immigration has played a formative role in Scottish history and to a certain degree, makes the country what it is today. But far from waning in recent years, with increasing globalisation and EU enlargement, the influence of economic migrants continues to loom large in the Scottish economy. And considering Scotland’s twin challenges of skills shortages and an ageing population, their role is arguably more pivotal now than ever before.
Whilst it may not appear the most pressing national issue nor be treated as such by governments, demography poses a serious challenge to Scotland in the coming years. The population is projected to rise to 5.13 million in 2019 but then to fall to below 5 million in 2031 and again to 4.5 million by 2043. The dependency ratio, of people under 16 years and over pensionable age to those of working age is projected to rise from about 59 per 100 in 2006 to 67 per 100 in 2031. This will have obvious consequences for public services and the standard of living as those ‘demanding’ the services will rise while those ‘supplying’ them will fall. Some estimates suggest Scotland needs about 25,000 new migrants a year in future to mitigate this effect.
Recent events have altered the demographic landscape, however. The
big-bang enlargement of the EU in 2004 saw the nature of migration
across Europe change fundamentally and the impact on Scotland was no
exception. It heralded the virtual opening of doors to thousands of
Eastern European migrants from the so-called “Accession eight” (A8) of
the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland,
Slovenia and Slovakia. About two thirds of this influx came from Poland
with an estimated 35,000 Poles living in Scotland.
A8 migration has clearly changed the face of the Scottish economy and
society as a whole – this is no longer news. Moreover, it seems to have
offered a convenient solution to some of its skills shortages and
demographic problems. While Scotland was a net exporter of people in
the past, losing about 825,000 overall between 1951 and 2006, the A8
accession has helped to finally close this gap, with positive net
migration, (the difference between emigration and immigration) between
2001 and 2006 of about 80,000 people. But four years on, how has the
picture changed? And as we look to the future will economic migrants
continue to plug gaps in our skills market?
Not according to one of the leading academics in Scottish demographics.
Professor Robert E. Wright from Strathclyde University’s Business
School, believes that Scotland’s new-found steady supply of EU migrants
may soon begin to dry up. In his recent paper ‘The Economics of New
Immigration to Scotland’ published by the David Hume Institute, Wright
makes his concerns clear and issues a stark warning that Scotland
cannot rely on an unlimited supply of highly skilled EU migrants in the
future.
Over-reliance on A8 migration to fill gaps in the Scottish market is a
short-term measure and a major problem, according to Wright. Part of
the difficulty is that the majority of these workers are highly skilled
and overqualified for the low-skilled, low-paid jobs they are filling.
In 2007 about 72 per cent of EU migrant workers in the UK earned
between £4.50 and £5.99 per hour. Meanwhile, a recent study by Glasgow
City Council indicated a considerable skills mismatch amongst this
group with 16 per cent of respondents having a degree and 19 per cent
having a postgraduate degree though 69 per cent were in jobs classed as
low skilled or manual. Not a sustainable situation, Wright argues.
With the economies of A8 countries now growing steadily, the value of
the pound in decline while the euro’s strength rises, plus the
increasing competition for migrants from countries like Germany which
is set to lift its EU migration restrictions by 2011, Scotland’s pull
on economic migrants will diminish in the coming years, Wright tells
us. He argues: “Particularly now that the new set of population figures
are out, it’s clearly the case that the A8 immigration is drying up
very, very quickly so we’ll see what the next set of numbers are going
to be on this. I think very rapidly we’re going to be back in
the situation we were in five or six years ago where you’re going to
have very low levels of net migration
I think very rapidly we’re going to be back in
the situation we were in five or six years ago where you’re going to
have very low levels of net migration 
, perhaps even negative
net migration in Scotland once again and we’ll start talking about all
these doom and gloom issues again. And what we’ve effectively done is,
we’ve waited five or six years, hoping that a bunch of highly educated,
highly skilled people are going to keep coming to Scotland to work in
lowly skilled, low paid jobs and it’s just not going to happen.”
Likewise, SNP MSP Alex Neil believes the contribution of EU migrants to
Scotland has been a very positive one but says there are signs that
some are now returning to the homeland. He comments: “There are signs
now that some of them are returning home and there are two things that
are driving that. First of all, the Polish economy is now beginning to
be able to offer job opportunities at the kind of income that makes it
worthwhile for them to return. And the second thing is because of the
rising value of the euro and the declining value of the pound, the
benefits of coming to work here are a lot less, particularly when
they’re sending money home which most of them do, than what they were
before.”
Neil goes on: “But the third thing is the attraction of other
countries. For example, the German economy is starting to grow again
and therefore some of these Polish workers might prefer to go to
Germany because it’s not as far away. So I don’t think you can rely on
such a high figure. I suspect that what we’ve had is a bit of a bubble
because it was part of the immediate aftermath of Poland coming into
the European Union and the creation of the single labour market and
it’s plateaued out, obviously. So we’ve probably seen a bunching of the
numbers in the early stages and now it’s evening itself out. I still
think you’ll get a churn of people coming in and going but I suspect
the numbers won’t be as high in future years as they’ve been in the
recent past.”
But EU migrants are only part of the picture. Figures show that of the
immigrants living in the UK in 2006, 30 per cent came from the EU while
43 per cent came from the Commonwealth and 27 per cent from other
foreign countries. Non-EU migration is equally a key asset to Scotland
and with EU migration looking likely to decrease, it will only become
more central.
The immigration system for non-EU migrants is now being overhauled with
the introduction of the UK Government’s points-based system, which is
designed to simplify the immigration process by creating five channels
or tiers for different types of migrants who can live and work in the
UK if they meet the required number of points in terms of different
criteria including age, qualifications, education, language, salary and
UK experience. The system, created to manage the flow of immigrants to
the UK, is currently being phased in and the independent Migration
Advisory Committee (MAC), which was established to make recommendations
to the Government on immigration needs, is touring the UK to consult
with stakeholders. But north of the border its potential benefits for
Scotland have been questioned.
Wright sees the system as a missed opportunity for Scotland, as it
fails to incorporate a regional dimension to attract immigrants to the
country. Borrowing from Canada’s region-specific immigration programme,
he believes a system could have been devised whereby migrants gain more
points if they are willing to live and work in Scotland for the
duration of their visas. The Canadian Provincial Nominee immigration
programme, in operation since 1967, allows provincial governments to
choose immigrants for permanent residence according to the economic
needs of that province. It is sensitive to the distinctive skills
shortages in each region and tailors immigration to those needs.
Figures show that, despite making up 10 per cent of the UK population,
only about 4 per cent of all immigrants to the UK choose to come to
Scotland. The system could have helped halt this trend with a built-in
mechanism to attract people to Scotland, Wright believes.
The points-based system will cater to Scotland’s distinctive skills
needs, to some extent. As part of the scheme, a Scotland-only Shortage
Occupation List is being compiled by the Migration Advisory Committee
for Tier 2, ‘Foreign nationals with a job offer in the UK’. The Fresh
Talent Initiative for international graduates will be subsumed by the
system and made available across the UK, meaning Scotland will
effectively lose its competitive edge on this front. However, as a
consolation the initiative will be extended to HND graduates of
Scottish institutions.
On the new system’s impact on Scotland, a Scottish Government
spokesperson said: “Scotland faces a different immigration situation,
with different skill needs. It makes sense for Scotland to have a
competitive edge vis-à-vis the rest of the UK. That is why the Scottish
Government has been working closely with the Home Office and the
Migration Advisory Committee (MAC), the body set up by the Home Office
to compile the UK-wide Shortage Occupation List and a Scotland-only
list. As part of its evidence-gathering, the MAC visited Scotland in
late March to meet employers and other interested parties. The MAC is
due to produce its first lists in June 2008.
“The Scottish shortage occupation list will allow us to bring in people
with skills that are in short supply in Scotland even if these
shortages do not exist elsewhere in the UK.
“Once this first list has been produced, it may be possible to invite
the MAC to come to the Parliament to present and explain its findings.”
But for Wright, these concessions are not enough. He argues: “The
Government in Westminster boasts about putting in a points-based system
that has been well proven in places like Canada and Australia yet they
tend to forget, particularly in Canada, that the regional dimension of
the policy is at the centre. And if you want to try to direct people to
certain areas where they’re in need for whatever reason then you have
to have some kind of leverage to do it.
“But the bottom line is that what will happen is that this wave of A8
immigration has given us a little bit of breathing space. Bring this
points system in and we could have adopted it and then in a sense, let
that system operate in the same way that it operates in Canada,
Australia, and to a lesser extent the United States and New Zealand.
But we haven’t.
“Scotland is not a very mature country in terms of its ability to
govern itself; it’s never had the opportunity to think about these
things.
“The UK [in policy terms] is essentially England because that’s almost
90 per cent of the total population of the UK… And what’s happening in
England is driven a lot by what’s happening in London and the South
East because this is the area that attracts the bulk of immigrants;
this is where there are serious issues with immigration. This area has
the political clout; it’s where the vast majority of policy issues are
concentrated because it’s where the population is concentrated so it’s
not an unreasonable response from people in that part of the world.”
Alex Neil believes it is too early to predict the effect of the
points-based system on Scotland but also advocates more regional
flexibility. He says: “I think there should be a degree of flexibility
in the system to encourage people to come to Scotland. There is still a
huge problem with immigration into the UK and that is that about 70-80
per cent of all immigrants into the UK settle within a 35-mile radius
of London. Now that’s got two negatives. First of all, that means
they’re crowding into an already well over-populated part of the
country, London and the South East, with the impact that has on
housing, education and so on. But it also means that the growth that
other areas like Scotland, the North of England and Wales could get
from increased immigration is lost to us because they’re crowding into
the South East of England. So anything that encourages a wider
dispersal throughout the UK of immigration will be better for
everybody. Better for the South East but also for regions of England,
Scotland, Wales and Northern Ireland.”
Iain Ferguson, Policy Executive at CBI Scotland, highlights the value
of economic migrants to the Scottish economy in filling gaps,
particularly in the hospitality, construction and care sectors. The CBI
welcomes the introduction of the points-based system as a flexible way
of managing migration, Ferguson says, whilst it remains concerned about
potential costs to the employer. He believes a regional dimension would
be a positive addition. He says: “I would say that there are obvious
region-specific requirements, beyond Scotland itself, within the UK,
and it may be the case that that is built into it. I think it’s
something that we would support because to the extent that there are
very region-specific requirements when it comes to skills and around
Scotland as well, different sectors tend to cluster around different
areas.”
Furthermore, Tier 3 of the points-based system, ‘low skilled workers’
has been suspended, the reason being that the UK Government believes
the current supply of EU migrants are fulfilling these needs. It will
look to the advisory committee for advice on whether it needs to be
reinitiated in future. And if Wright’s projections are correct, it may
well have to.
Economic migrants have clearly served Scotland well in terms of their
contribution to the economy and effectiveness in staving off the
negative effects of Scotland’s skills shortages and ageing population.
However, with the potential decline of A8 workers, this positive impact
could dwindle in the coming years. With immigration the responsibility
of Westminster, Scotland’s ability to act is limited. However, if
Scotland is to continue to reap the benefits of healthy economic
migration, it seems that some innovative and proactive measures
distinct to Scotland will be needed.
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