In this speech Lord Bilimoria discusses the report by the European Union Committee on UK-EU movement of people. He stresses the need to reintroduce exit checks at UK borders and highlights the issue of international students being included on UK immigration statistics. He also discusses immigration from the EU to the UK and its effect on the country and its economy, especially how a lower level of immigration will affect both skilled and unskilled employment in areas ranging from farming to the NHS. He concludes by stating that according to a recent survey the UK public now favour a deal that resembles Norway’s relationship with the EU which involves the free movement of people. He states that the public opinion has moved against a hard Brexit and that there will be no Brexit. The question posed by Lord Green and Lord Bilimoria’s response is also included below.

Brexit: UK-EU Movement of People (EUC Report)

17 July 2017

Motion to take note

Lord Bilimoria:

My Lords, as recorded in this excellent report, on 17 January, the Prime Minister said in her Lancaster House speech:

“The message from the public before and during the referendum campaign was clear: Brexit must mean control of the number of people who come to Britain from Europe”.

In order to achieve this, the Government have undertaken to put an end to the free movement of persons, one of the four freedoms underpinning the single market. I congratulate the noble Baroness, Lady Prashar, and her committee on producing a report on this crucial area. It examines the Government’s pledge and what it might mean in practice. It states clearly and right up front that if Article 50 were to conclude with a hard Brexit, it would be a real problem. For its part, the UK could place EU immigrants on the same footing as non-EU immigrants; that is one option. At the other end of the spectrum, there could be new reciprocal and preferential arrangements for UK-EU migration falling short of free movement as it exists today, but coming close to it in some way.

The Government seem to want to put an end to free movement based on the Brexiteer mantra of, “Take back control and vote leave”. This is a big element of taking back control—the restoration of national control. However, we can see from the report that the reality is that three-quarters of EU migrants come to the UK either to work or to look for work. The unanimous view, whether it be that of the private sector or the public sector, is that these migrants are valued and want to work. We are talking about a work permit system. Employers have warned that this would disproportionately affect the ability of some employers to sponsor EU workers and could result in labour shortages. Moreover, the composition of UK migration to the EU is completely different from that of EU migration to this country. People who go to Europe from here are either retired or nearing retirement. They are over the age of 50. A reciprocal deal would not really be reciprocal because we are not comparing apples with apples, which is another challenge.

The Government have set out their direction of travel and they keep talking about “skilled” and “non-skilled” workers. This is a key aspect: where is the evidence for all this? The report highlights a major problem. What are we basing these statistics on? I challenge the Minister on this. I feel like a lone voice in the wilderness because time after time I have been asking like a stuck record both in Parliament and outside why the Government do not reintroduce physical, visible exit checks at our borders. I travel extensively around the world, including to European countries. Everywhere I go, whether it be South Africa, India, the United States or Switzerland—I have just come back from the Netherlands—my passport is checked when I go in and it is checked when I leave. If we scan passports both in and out of the country, we know who has come in, we know who has left, and therefore we know who is here and who should not be here. It is very simple, so why do the Government not do it? I tell them that it is negligent on their part. From the security point of view, given the dangerous world we live in, it is negligent. The Government’s primary responsibility is the security of their citizens, but they are letting those citizens down by not doing this, let alone not being on top of immigration. I am sorry, but e-borders are a nonsense because they are not visible or physical. Passports need to be physically scanned. That is my challenge to the Government. I have said it time and again and I will keep saying it until something happens.

EU immigration as a proportion of all immigration into the UK in 2016 was estimated at 44%. The Government want to reduce net migration to the tens of thousands. We know that the figure has been around 300,000 and that it is now about 275,000. In the year ending June 2016, some 49% of all EU immigration was made up of people from the old EU 15 member states, and by that month 72% of the EU nationals moving to the UK reported doing so in order to work. In contrast, the reason given by most non-EU nationals coming to the UK is to study, but we continue to include international students in our net migration figures. Once more, like a stuck record, I will ask the Government again: why do they not remove international students from the net migration figures? This is damaging our reputation. I am the chancellor of the University of Birmingham, a Russell Group university, one of the finest in this country and among the top 100 in the world, and I chaired the advisory board of the Cambridge Judge Business School. These institutions and everyone else are unanimous in asking, “Please take international students out of the net migration figures”. They can be counted as immigrants when we submit figures to the UN; that is fine, but take them out of these net figures. Our competitor countries, such as the United States of America, Canada and Australia, all do so.

Here we are with our international student intake either flat or declining while the number of international students from countries such as India is rising at a rate of 8% a year. The United States has seen an increase of 25% in the number of Indian international students while the number coming here has halved over the past five years. Wow, we are doing really well in this global race. International students bring £25 billion to the economy of this country. As the president of the UK Council for International Student Affairs—which represents the 450,000 international students in this country, of whom 130,000 come from the European Union—has said, they are a very valuable source of export income and they enrich the experience of our domestic students as well as the collaborations that are built up with foreign academics, many of whom are from the EU.

This is a point I have made time and again. We are worried about losing university research funding from the European Union, but we are more worried about losing our collaborations. When two universities collaborate anywhere in the world, the weighted impact of their research is three times higher than when they work on their own. Why do the Government not understand all this?

When we talk about weaknesses in the migration statistics, let us look at the International Passenger Survey. It is a joke. I have seen it. I have seen Jo Johnson, the Universities Minister, who I accompanied on a visit to India when the Prime Minister was there in November, being stopped and asked the International Passenger Survey. We started laughing.

The net migration figures exclude short-term migration flows, such as seasonal agricultural workers. I stumbled across a programme on Radio 4 in which the interviewer interviewed Romanian workers in east England, where there are lots of seasonal agricultural workers. They were very happy. The interviewer asked, “Have you ever had any British workers work alongside you?”. They replied, “Oh yeah, I think I remember one”. Then they interviewed the owner of the farm. They asked, “Are you happy with these workers?”, to which the owner replied, “They are excellent. They work really hard”. One of the Romanians said, “I am saving up money for my house in Romania”. The interviewer asked the owner of the farm, “Have you ever had any local, British workers working here?”, to which the owner replied, “Oh yes, we did hire one. He lasted one day”. The interviewer asked, “Which way did you vote in the European union referendum?”. The owner replied, “I voted to leave”. The interviewer asked, “Why?”—you could hear him muffling his laughter. The owner replied, “For sovereignty. Take back control and vote leave”. It is brilliant.

On Article 50, we will be negotiating with 27 countries to conclude this agreement. As predicted, the other 27 countries have said that when we are negotiating we cannot say, “We will have this movement of people with Spain and this movement of people with Romania”. We will have to have the same movement of people rule with the whole of the European Union. The emergency brake that the report has spoken about is a practical method that can be used. A work permit model would put it on the same footing as we have for non-EU citizens at the moment.

This point was brought up in the speech on construction: what would we do without these people? We keep talking about low-skilled and high-skilled people. Whatever skill you look at, we have 4.5% unemployment. That is the lowest level of unemployment in living memory. We have the highest level of employment in living memory. We will have a labour shortage without access to this free movement of labour from the EU. The CBI has concurred that the impact on wages would not be dramatic. The TUC has said that immigration was not the reason for low pay in specific sectors. The NFU does not expect,

“increased wages to result from a fall in EU immigration”.

On the low levels of unemployment, we have concluded that we will just hire British workers. What is stopping our employers from doing that right now? The Institute of Directors has said:

“The best way to control immigration and reduce employers’ reliance on recruitment from overseas is to increase the supply of British workers with the skills that those employers need”.

I ask the Minister: why is that not happening? We have had the option. We have the apprenticeship schemes. We are trying to skill up our local workers, but we still need these 3 million people from abroad. That is the reality. The British Chambers of Commerce has said that we,

“need to make sure that we can access the labour required … it is going to be very difficult to do that purely through UK workers”.

There is another point: if an EU person comes here and has not found work after three months we already have the ability under the rules to ask them to leave. Other European countries do that. We have an in-built system. Will the Minister confirm that that is the case?

This is the irony of what I call the wretched referendum: the report says that the UK and the EU,

“find themselves negotiating a Free Trade Agreement in reverse—starting from … full integration”,

and moving backwards. Normally with a free trade agreement you try to do it the other way round. We have skill shortages. In my business, Cobra Beer, we supply 98.6% of curry restaurants in this country. They cannot get the chefs they need. Why? It is because of our Immigration Rules. I have mentioned international students. Then there is the public sector. The argument made during the referendum was that EU nationals here are a burden on the state. The noble Lord, Lord Green, actually conceded that their impact is neutral. They are not a burden; the EU workers over here contribute six times more, in the statistics I have seen, than they take out. Their young do not use the NHS and they work in the public sector, whether it is the care sector or the health service—in every area they work in the public sector. Quite frankly, areas of the public sector would collapse without their contribution. Will the Minister confirm that we have already seen a 96% drop in applications for nurses from the EU? How will we make up this shortage?

I shall conclude by talking about the reality of the backdrop. Her Excellency, Madame Sylvie Bermann, estimates that there are 300,000 French people living in the UK. This figure could be higher. Approximately half of those people are highly qualified. Again, this is completely contradictory of the noble Lord, Lord Green, who said that these are primarily unskilled workers: these are highly skilled workers. Her Excellency said that the French community in the UK was “worried” and had lots of questions about the consequences and the great uncertainty. She reported a rise in xenophobic behaviour, which is really worrying.

The EU population represents 6% of the UK population, but 7% of the labour force. They are more likely to work than the native population, according to the Recruitment & Employment Confederation—81% compared with 75%. Relative to their share of the UK workforce, EU nationals are overrepresented in a number of sectors: 11% of manufacturing; wholesale and retail trade, hotels and restaurants 9%; transport 9%—I could go on. They are making a huge contribution. The creative industries respect and appreciate their collaboration.

I now come to the crux of it: public support for continued EU freedom of movement in exchange for access to the single market. A survey from just now—14 July—finds that Britons favour a deal that resembles Norway’s relationship with the EU. That very clearly involves the free movement of people. Cambridge University was a part of that survey. Here is the news: on free trade deals, the high commissioner of India has very clearly said that India has welcomed and wants to do a free trade deal, but it has to include talking about movement of people and students. India has nine bilateral free trade agreements in the whole world. The United States—the biggest economy in the world—has 20 bilateral free trade agreements around the world. Guy Verhofstadt has said:

“Improve the Brexit offer to EU citizens, or we’ll veto the deal”.

The EU has said very clearly that it is very disappointed with the proposition put by the British Prime Minister. Guy Verhofstadt and Michel Barnier are not going to accept the deal that is put forward and Guy Verhofstadt has said that it,

“seems that Britain wants to become the new champion of red tape”.

British public opinion has moved now. This is no longer a question of a soft or a hard Brexit. The country does not want a hard Brexit. When it comes to a soft Brexit, the reality is the public have seen very clearly that the Brexit emperor has no clothes. Quite frankly, there will be no Brexit.

Lord Green of Deddington:

Before the noble Lord sits down, could he tell the House whether he agrees that we can continue with net migration of a quarter of a million indefinitely? If not, what would he do about it?

Lord Bilimoria:

For a start, I challenge the net migration figures. We do not know what the accurate figures are. That is a challenge for the Government. The reality is that we have 4.5% unemployment. We need people from the EU and outside of the EU, whether they are academics or any sector, private and public, otherwise this economy would not be where it is today—the sixth largest economy in the world.

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