TUC Evidence to Home Office on Free Movement for Government 'Balance of Competences' review
TUC submission to Home Office
Balance of Competences review
July 2013
Introduction
The Trades Union Congress (TUC) has 54 affiliated unions, representing almost six million members, who work in a wide variety of sectors and occupations. The TUC welcomes the opportunity to respond to the Department for Business Innovation and Skills' Call for Evidence on the Internal Market: Free Movement of Persons.
The Call to Evidence document repeatedly makes reference to 'national interest'. In its submission to this Call for Evidence, the TUC interprets 'national interest' as the protection of rights, safety and quality of life of those working and living in the UK. From this perspective our concern with the free movement of persons is that members of EU states moving to other states to study or work have their working rights respected.
This submission will consider questions in the Call to Evidence document of particular concern - they are addressed by theme below.
Call for Evidence: Questions
1. What evidence is there that the ability to exercise free movement rights in another member state impacts either positively or negatively on a) UK nationals; and b) the UK as a whole?
5. What evidence do you have of the impact on the UK economy of EU competence on the free movement of persons?
6. What is the impact of this area of EU competence on employment sectors, such as ?distribution, hotels and restaurants?, ?banking and finance?, agriculture, or other sectors?
7. What evidence do you have of the impact on UK nationals and non-UK nationals in the UK in terms of employment opportunities, wages, employment conditions or other factors?
It is difficult to quantify the economic benefits of citizens from member states exercising their right of free movement to study in the UK whilst it is almost impossible to quantify the economic impact of citizens from EU-17 countries entering the UK to work as no mechanism was put in place to monitor their behaviour in the labour force. It is possible to assess the impact of citizens from A8 countries in the labour force, however, due to the requirement between 2004 - 2011 for A8 migrants to register with the Workers Registration Scheme (WRS) within a month of joining a new employer in the UK. The fact self-employed people were exempted from the WRS meant it did not provide a complete portrait of the impact of A8 migrants, however, significant conclusions could be drawn from the data collected. The most exhaustive study of the WRS data is provided by Chistine Dustmann et al (2010). It concludes:
'A8 immigrants are unambiguously net fiscal contributors... [they are] highly educated, young people, entering the UK predominantly to work, with subsequent positive net contributions to the tax system.'
Lemos (2010) also finds that A8 migrants had a positive impact on wages.
Certain sectors of the UK economy depend on migrant labour, particularly to fill 'hard to fill' and low-skilled jobs. Migrants also make up a significant share of those employed in elementary plant, processing, cleaning, construction and food preparation jobs. Employers in the care sector, which is vital to support the UK's aging population, have also made frequent the EURES job mobility portal to source staff.
The TUC is concerned that the free movement of A8 migrants did not match a migrant workers' skill level with job vacancy, as was the intention of the Freedom of Movement directive (2004/38/EC). Rather migrant workers from poorer Eastern European countries were being recruited to work in jobs in the UK that were far below their skill level due to the fact they were willing to work for low wages. Thus UK employers have greatly benefitted from cheap labour from A8 countries, however, migrant workers gained little reward for their contribution to the UK economy. The TUC believes all EU workers should have decent job opportunities that make proper use of their skills.
2. What evidence is there that EU competence in this area makes it easier for UK nationals to work, access benefits and access services in another member state?
The rules governing the European Market mean that social support is provided to aid mobile workers to receive the same support in another member state as they would in their home state. The Office for National Statistics estimates there are 286, 000 UK citizens working in other member states. EU competences meant that these citizens have the right to claim sickness and unemployment benefit and have free access to public services in their country of residence.
Meanwhile, UK citizens also benefit from supports provided by the EU in retirement. Over 103, 000 British retirees currently live in Spain and 56, 000 in France - they have free access to health and care provision due to European legislation on the common market and benefit provision.
3. What evidence is there of the impact on welfare provision and access to public services in the UK?
9. What evidence is there of the extent to which the current EU provisions on social security coordination are necessary to facilitate an effective EU labour market?
10. What evidence is there that changes to the current balance of
competences are needed to ensure that rules on social security
coordination do not have a disproportionate impact on the UK benefits system, or undermine public confidence in that system?
In response to a Freedom of Information request, published in March, the DWP said 'that it is not credible to accurately forecast likely inflows from Romania and Bulgaria once restrictions are lifted, because it is dependent on too many uncertainties to draw robust conclusions.
'This concurs with the independent Migration Advisory Committee who concluded in 2011, 'it would not be sensible or helpful to policymakers, for us to attempt to put a precise range around this likely impact'. Therefore we have not made estimates.'
It is unlikely to be high. In 2012, DWP-commissioned research found that, among people of working age, 83.4 per cent of UK nationals were not claiming a working age benefit; for non-UK nationals, this figure rose to 93.4 per cent. Census data show that 59.7 per cent of those not born in the UK are employed compared with 58.5 per cent of those born in the United Kingdom. This is largely because a much smaller proportion of the non-UK born are retired.
In 2009, Dustmann, Fratini and Halls, in the most comprehensive study so far of the costs and benefits of migration to the UK, used the Labour Force Survey and other official data sources to study A8 immigrants with at least one year's residence (to take account of the fact that they were unable to claim benefits before this). This research found that, far from being 'benefit tourists', the A8 migrants paid in more than they received. Members of this group were 60% less likely than natives to receive benefits or tax credits, and 58% less likely to live in social housing. In each fiscal year after EU enlargement in 2004, A8 immigrants to the UK made a net contribution to the public finances because they were more likely to be in employment, paid more in taxes and were less likely to use public services.
More recently, research by the National Institute for Economic and Social Research calculated that:
Migrants' share of education expenditure is 'slightly greater' than their share of the population, but migrants account for 11.8 per cent of spending on personal social services compared with 13 per cent of the population, and migrants account for 10.8 per cent of spending on health, compared with 13 per cent of the population. NIESR has also pointed out that migrants account for 7 per cent of out-of-work claimants but about 13 per cent of workers.
http://www.ucl.ac.uk/uctpb21/Cpapers/DustmannFrattiniHalls2010.pdf, p.29
http://www.migrationobservatory.ox.ac.uk/briefings/migrants-uk-labour-m…
http://www.ucl.ac.uk/uctpb21/Cpapers/DustmannFrattiniHalls2010.pdf
http://www.britishinfluence.org/stats-and-facts/item/british-retirees-living-in-the-eu
See Art 17, http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2004L0038:20110616:EN:PDF
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