Brexit and Fair Movement of People

Securing Wales’ Future

Securing Wales’ Future | 1

Contents

Preface from the Cabinet First Minister’s Secretary for Finance Foreword and Local Government 1 Page 4 2 Page 5

Background, Context Summary and Definitions 3 Page 6 4 Page 9

A Picture of Migration Future Policy and its Effects in Wales Considerations 5 Page 13 6 Page 26

Conclusion Annex A 7 Page 35 8 Page 37

Annex B Annex C 9 Page 41 10 Page 49

Annex D Annex E 11 Page 73 12 Page 79

The way in which the UK In our White Paper, ‘Securing effectively, and fair to those Government deals with the issue Wales’ Future’, we set out an across our country who feel of migration to and from the approach which would allow vulnerable to what is seen as European Union (EU) is critical Wales and the UK to continue competition for work, benefits to securing the right outcome of to benefit from inward migration and public services. the UK’s negotiations on leaving while taking on board these the EU – an outcome that is right concerns. It is an approach for all parts of the UK, and which consistent, we believe, with our reflects the varying and specific top priority of securing continued needs across the devolved full and unfettered access to the nations and English regions. Single Market. The results of the General In this paper – the latest in Election showed clearly that the a series of policy documents Carwyn Jones UK Government has no mandate examining in detail the First Minister of Wales for a ‘hard Brexit’ in which our implications for Wales of leaving economy is sacrificed, and the European Union – we public services damaged, for develop these ideas, based self-defeating, arbitrary limits on on further research and migration. More than ever, there analysis, and also consider is a need for a broad-based the implications should the UK consensus to be developed Government nevertheless pursue which is in the best interests of a policy based on quantitative Wales and the whole of the UK. restrictions on EU migration. At the same time, we recognise The fair migration policy which that concerns about migration we propose – in which migration featured prominently in the is linked more closely to work debate leading up to the and in which exploitation of referendum on the UK’s workers is tackled properly – membership of the EU and that is one which I believe would too many people here in Wales command wide support from feel vulnerable and exploited. people across Wales and the whole UK. That’s why the Welsh Government that I lead is It is a policy which would be fair committed to making Wales a to EU citizens who have already fair work nation where everyone made Wales their home – a can access better jobs closer group which the UK Government to home, where everyone can has treated like pawns in a develop their careers, and game – fair to those who come where we can all expect decent, in the future, who we will need life-enhancing work without if our economy is to flourish and exploitation or poverty. our public services are to work

4 | BrexitFair Movement and Fair Movement of People of People 2 Preface from the Cabinet Secretary for Finance and Local Government

Wales welcomes people from of exploitation of workers which The consequences of closing around the world – people will, we believe, improve wages our borders would be damaging who want to visit and conduct and conditions for all workers. to Wales’ economy and public business in the short term; That is why an integral strand of services. That does not need people who want to move here this document is concerned with to happen, as this document for longer periods to work or looking at how existing legislation demonstrates. study; and people fleeing danger to prevent exploitation of workers such as refugees and asylum can be better enforced to We do not intend here to seekers. improve wages and conditions, describe a new immigration particularly for the lowest paid. system in full detail – that is the We celebrate the fact that UK Government’s job – instead many citizens of other countries The evidence-based position we describe a framework for choose to make Wales home, we set out in this document future migration which we believe and those who live and work in contrasts with the UK will meet Wales’ needs, and work Wales play a crucial role in our Government’s blinkered view on for the UK as a whole. society – they are employed immigration which has distorted in our key business sectors, their approach to negotiations deliver vital public services with the EU. Their insistence, for and strengthen the academic example, that students should excellence in our universities. be counted within net migration Mark Drakeford targets was based on a flawed Cabinet Secretary for Finance Although levels of immigration estimate of the number of and Local Government in Wales are relatively low students overstaying their visas, compared to some other parts but recent statistics have shown of the UK, immigration was a this to be grossly overstated. We concern for a significant number maintain that students – who of people who voted ‘leave’ in contribute to our economy and to the referendum on membership our society as a whole – should of the EU. For some, these views not be counted in net migration were based on ‘taking back targets. control’ of immigration, and perceptions that immigration We will also continue to need creates pressures on public to recruit doctors, nurses, services, jobs and wage levels. engineers, workers for the tourism, food and agriculture Wales’ interests are best served sectors, academics and others through full and unfettered from Europe after Brexit. We access to the Single Market. are starting to see a worrying Consistent with this we advocate number of EU citizens leaving a flexible – but managed the UK. This is putting pressure – approach to migration on employers who, in some more closely connected to cases, are already experiencing employment. This must be recruitment challenges. coupled with rigorous prevention

Brexit and Fair Movement of People | 5 3 Summary

In our White Paper, ‘Securing contribute immensely to our of our key economic sectors and Wales’ Future’, we set out our economy and society. Their rights delivery of our public services. priorities to ensure Wales’ future should be protected, as should In the longer term, we would like to prosperity after the UK’s exit those of Welsh and UK people discuss with the UK Government from the EU. These priorities living elsewhere in the EU. The a reform of wider UK migration include a managed but flexible continuing uncertainty over policy which would recognise that approach to migration that their future rights and status the distinct needs of Wales and supports our ambition for full is unwelcome and, we believe, indeed other nations and regions and unfettered access to the unnecessary. within the UK cannot easily be met Single Market, linking migration through the blunt and resource- more closely to employment. Our proposals are summarised intensive UK-wide approach We address concerns about below. currently in place. the perceived role of migration in undermining wages and Future UK Immigration If the UK decides to adopt an conditions for workers, by System for EEA and Swiss immigration approach which emphasising better enforcement nationals favours specific sectors at a UK of legislation to prevent their We are committed to developing level, we believe that this could exploitation. the skills of people in Wales severely disadvantage Wales by to ensure that they have the making it very difficult to recruit to This document sets out abilities needed to seize job sectors where we currently have a information and evidence opportunities. Alongside this, high demand for migrant workers. about migration in Wales, and the Welsh economy will continue We would be firmly opposed to describes our ideas for the to need and benefit from the such an approach. Rather, our future, focusing specifically contributions of immigrants. preference would be for a spatially- on future migration from the Our analysis shows that the differentiated approach, where the European Economic Area (EEA). majority of EU nationals who Welsh Government would have a This does not mean that we live in Wales are part of a family stronger role in determining how believe the current system for unit; future policy must recognise future migration to Wales would non-EEA migration is necessarily that migration is not just about be managed, in order to ensure well-suited to Wales’ needs: individuals but families too. that Wales’ key sectors, public but we recognise that, firstly, services and universities can the movement of people We believe that, after our continue to recruit from Europe. between the UK and the rest of departure from the EU, our Any such approach must be based the EEA will be a key issue in future special relationship on fairness, proper enforcement discussing the future relationship with Europe should include a of rules and proportionate between the UK and the EU; differentiated and preferential administration. and secondly, that given the approach to immigration for challenges of Brexit, significant EEA and Swiss nationals. Self-employment is a critical part of reform of wider migration policy Leaving the EU should not our economic mix and appropriate will need to wait until after we affect the arrangements for arrangements must be factored have left the EU. the Common Travel Area (CTA), into any new immigration system. which has existed since 1922 We need careful controls to ensure Although this document focuses and therefore pre-dates the that migrants proposing to work on mainly on future migration policy, UK and Republic of Ireland’s a self-employed basis are doing we also consider the EU and UK membership of the EU. so in accordance with clear rules Government proposals for the in order to prevent the exploitative rights and status of EU citizens We oppose the UK Government’s practice of false self-employment, who are already in the UK, and aim of reducing migration or other abuses of the system. for UK citizens in the EU. The numbers to an arbitrary target, Any abuse or exploitation must be EU citizens who live in Wales as this risks the sustainability tackled vigorously.

6 | Brexit and Fair Movement of People We believe that migrants from immigration, but by unscrupulous established social partnership the EEA and Switzerland who are employers, and tackling this fora with employers and coming to work in the UK should exploitation will benefit all trade unions – in particular, be able to access benefits and workers. Vigorous enforcement the Workforce Partnership public services in a broadly of the law will also address Council and the Council for similar way as they do now. concerns on the potential for the Economic Development. exploitation of migrant workers to Students undermine wages and conditions The UK Government must do for other workers. more to ensure that all workers Students should not be counted are more aware of their rights, as migrants for the purpose The onus for reporting and for example, through using of net migration targets – they seeking redress for exploitation innovative tools such as mobile come to study, pay fees, spend in the workplace falls at phone applications. money, enhance our universities present too heavily on the and our economy, and the individual who is affected. The UK Government must majority returns home. We The Welsh Government supports also put more resources into do not wish to see additional stronger enforcement by public enforcing the National Living immigration restrictions for EU, authorities of existing legislation Wage (NLW) and focus their EEA and Swiss students. against exploitation and also the efforts on the nations and regions which have the greatest Changes to immigration policy extension of collective bargaining arrangements and widening proportion of workers covered by for students have a direct the NLW. It must also be more impact on our devolved policy on access to trade unions. This is to ensure that workers have the transparent and provide more Higher Education. In the Welsh detail about investigations and Government’s paper ‘Brexit and support that they need, both to prevent exploitation in the prosecutions in Wales related Devolution’, we call for a new to non-payment of the NLW. approach that recognises the workplace and to tackle it when reality of such inter-connected it occurs. The UK Government should responsibilities, ensuring that, Most of the levers to address support the EU’s efforts to through agreement, the UK and this issue lie with the UK tighten the EU Posted Workers Welsh Governments’ powers Government, but the Welsh Directive to ensure that its are exercised in the interests of Government is already doing provisions bring equal pay for better governance and delivery a great deal to drive stronger equal work. Crucially, it must for citizens. compliance and good practice ensure that this principle is among employers in Wales, and reflected in domestic law in The Welsh Government wants the future, and in any new to ensure that any post- will seek to do more. The Fair Work Board will identify the steps arrangements between the UK study visa flexibilities on offer and the EU going forward. elsewhere in the UK can be needed for Wales to become a offered to overseas students at fair work nation. Much of the UK’s current Welsh universities, and calls for The Welsh Government will employment law is based on the current, narrowly-focused work with trade unions and EU law. The Welsh Government pilot scheme to be extended far core funded advisory services believes that the employment more widely across all parts of to support them in identifying and social protections provided the UK. exploitative practices, providing by EU law should be preserved advice to workers who need it, and enhanced once the UK Tackling Exploitation and driving greater compliance leaves the EU. in the Workplace in the workplace. Some migrant workers are Engaging with People particularly vulnerable to The Welsh Government will and Communities exploitation in the workplace also seek ways to influence We acknowledge that some though such exploitation is by behaviours through its key people have genuine concerns no means confined to them. employer and business networks about migration for a number Exploitation is not caused by as well as working through its of reasons, including perceived pressures on public services

Brexit and Fair Movement of People | 7 and access to employment Our vision for Wales is an opportunities, as well as feelings inclusive country in which of apprehension about the people from all backgrounds are change that migration might welcomed, and where there is no bring to local communities. room for xenophobia, racism or Through our Community bigotry. The Welsh Government Cohesion National Plan we are will continue to show leadership working to ensure that cohesion here, but this is an action for all. takes root in all communities.

A note on references and data used in this document: Throughout this document, we refer to the EU, EEA, non-EU EEA countries and Switzerland, depending on the context. Where we refer to the EU, we are usually referring to the remaining 27 Member States of the European Union (not including the UK) – as we are describing what will happen once the UK has left the EU. When we refer to the EEA, we are usually referring to the remaining 27 EU Member States, plus Iceland, Liechtenstein and Norway. When we refer to the non-EU EEA countries, we are referring to Iceland, Liechtenstein and Norway. Third countries are those countries which are outside the EU, EEA and Switzerland. We attempt to make it as clear as possible what grouping of countries we are referring to throughout this document and any exceptions to the definitions above. The data and analysis set out in this document reflect our best understanding at the time of writing (August 2017). Data throughout the document comes from a range of sources and this may result in what appear to be inconsistencies, but can be because the basis of data is slightly different (for example, we have data on EU citizens based on nationality, as well data on those born in the EU by country of birth). We have been as explicit as possible about the source and scope of the data. The Annual Population Survey (APS) was revised in July 2017 to take on board the 2015 population estimates. All APS analysis in this document was conducted prior to the re-weighting of the APS. Therefore, the figures presented here may differ to estimates produced using the APS from July 2017 onwards.

8 | Brexit and Fair Movement of People 4 Background, context and definitions

Introduction • Analyse the impact of In particular, we distinguish In total, 176,600 people born potential options for future UK between: outside the UK are currently immigration policy, and set • Citizens of different countries: resident in Wales, including out what Wales needs from a in this paper, which focuses on 79,1001 from other EU Member future policy; and the consequences of Brexit, states. The majority of these • Consider the wider range of we concentrate on citizens people are working – in our policy responses that will be of the EEA – people from the key economic sectors, public needed in respect of changes 27 other member states of services or higher education to migration, and to strengthen the EU and the other EEA institutions – and contribute efforts to tackle exploitation of members, Norway, Iceland and greatly to our society. We know low-paid workers. Liechtenstein, as well as Swiss that this is a two-way process, nationals who are treated in and many Welsh people live and In considering the future, we the same way for migration work in other countries around focus principally on migration purposes. But we also the world. from the EEA and Switzerland, consider the evidence about not from the rest of the world. the role and characteristics of The decision for the UK to leave This is not because we believe all migrants in Wales. the EU means that a new UK the current system for third immigration system will be country migration is necessarily • People with different needed with respect to nationals well-suited to Wales’ needs: but involvement in the labour of the 27 remaining EU Member we recognise that, firstly, the market: jobseekers, workers States, the non-EU European movement of people between (those already with a job) and Economic Area countries of the UK and the rest of the EEA the self-employed; students; Iceland, Liechtenstein and and Switzerland will be a key ‘self-sufficient’ individuals Norway, and of Switzerland. issue in discussing the future (people who do not need to relationship between the UK work, such as pensioners); Immigration policy is the and the EU; and secondly, that and family members – people responsibility of the UK given the challenges of Brexit, who migrate to be with Government, but given its significant reform of wider spouses, parents or children significance for Wales’ economic migration policy will need to wait who are living here. sectors, public services, until after we have left the EU. • Different forms of migration – universities and communities short term visitors for tourism more widely, we need to ensure Migration and the UK – or business travel (who may or that this new system meets processes, definitions, and may not require a visa to visit, Wales’ needs. At the same time, circumstances depending on which country we need to think about the The words ‘migration’ and they come from), those who effects of migration in Wales. ‘immigration’ are often come to live here, refugees In this document we will: used to describe a range of and asylum seekers and illegal and irregular immigrants. • Describe what migration processes and circumstances. means for Wales now, In Annex A we explore some of focusing on the contribution the different types of migration, that migrants make to the and distinguish between them. Welsh workforce and to the economy as a whole, as well as considering public attitudes to migration;

1 Source: StatsWales (June 2016) based on data from Labour Force and Annual Population surveys – included in ‘Securing Wales’ Future’ Annex B, pg 50.

Brexit and Fair Movement of People | 9 It is also important to note that, and therefore pre-dates the UK at all entry points to the UK – as the UK Government has made and RoI’s membership of the EU. air, sea and rail – and under all clear, leaving the EU should not circumstances, as the UK is not affect the CTA – comprising the Finally, it is important to part of the Schengen Agreement UK, Republic of Ireland (RoI), distinguish between border which allows passport-free Isle of Man and Channel Islands control and the right to live, work travel within the majority of EEA – which has existed since 1922 or access public services in the countries and Switzerland. UK. Border control is enforced

The below table summarises the current rights and restrictions, described in Annex A, for overseas nationals travelling to the UK for a range of purposes:

Employed/ Permanent Residence/ Self Spouses and Indefinite Leave to Short Term Jobseeker Employed Student Dependants Remain

CTA Travel for all above purposes permitted without restriction, with access to benefits2 EEA and Entry Permitted, Permitted, Permitted, Rights derived After 5 years, where Switzerland3 permitted some some no access from EEA / individuals meet criteria without restrictions restrictions to benefits, Swiss national restriction for (but limited (but limited must have they are stays of enforcement) enforcement); comprehensive accompanying. <3 months access to sickness Access to some benefits insurance some benefits Third country Entry Not Visa required, no access to most Allowed to Application after 5 years – Non visa permitted permitted benefits (entitlement to benefits accompany continuous residence4 Nationals without visa linked to NI contributions) family member <6 months with student/ working visa, Third country – Visa required Not Visa required, no access to most as long as (others) permitted benefits (entitlement to benefits not relying on linked to NI contributions) public funds

Changes to immigration Government has committed to EU negotiation context policy introducing an Immigration Bill The UK Government’s Following the UK vote to for this purpose. development of a new leave the EU, the previous Immigration policy is reserved to immigration system – although UK Government signalled a the UK Government. However, within the UK Government’s preference for the UK to leave immigration policy affects Wales control – needs to be considered the Single Market, and for the UK in a wide range of devolved in the context of the UK’s to no longer participate in current areas and it is important that negotiations with the EU. EEA and Switzerland frameworks a future immigration system The negotiations are on two on the free movement of people. takes account of the distinct distinct issues: the first being on These changes will require a circumstances in Wales – the terms for the UK’s withdrawal new immigration policy to set considering our economic from the EU, followed by a out how immigration to the UK sectors, delivery of public separate set of negotiations over for EEA and Swiss nationals will services and our population. the UK’s future relationship with be managed in future; the UK the EU.

2 Subject to ‘habitual residence test’ if the individual has lived outside of the CTA for an extended period. 3 See Art. 24 of EU Citizenship Directive 2004/38 for details of social assistance entitlement. 4 Some holders of Tier 1 Visas, and family members can apply after either 2 or 3 years.

10 | Brexit and Fair Movement of People The status and rights of EU the CTA arrangement as it of legislation that prevents the nationals currently living in the currently stands. Movement exploitation of low-paid workers, UK, as well as arrangements for of goods, capital and services on the basis that tackling this UK citizens living elsewhere in between the UK and Ireland exploitation would improve the EU, are the first priority in is a separate question, and wages and conditions for all the EU’s Negotiation Directives there will need to be detailed workers, not just migrants. for the Withdrawal Agreement, consideration of the customs which were adopted by the issues between the UK and the Scotland Council of the European Union Republic of Ireland (these are ‘Scotland’s Place in Europe’6 in May 20175, and have been not discussed within this paper). similarly sets out the Scottish discussed at the negotiations Government’s priorities for EU between the EU and the UK Government Policy exit. The key recommendation which have taken place in June, Positions is for the UK to remain within July and August. It is important This document focuses on the the Single Market (the UK to note that the scope of this Welsh Government’s position Government has since rejected part of the negotiations relates on a future UK immigration that possibility) or, if not the UK only to the other 27 EU Member policy but it is useful to set as a whole, then for Scotland States, and not the non-EU this in context of the rest of to remain in the single market EEA countries plus Switzerland the UK. Each of the devolved and continue to benefit from – which the UK will need to administrations will be seeking to the free movement of persons. negotiate with separately. influence the UK Government’s On immigration, it states the policy position to ensure that the In negotiating the UK’s future need – regardless of Single UK approach will best meet the relationship with the EU, the Market status – for “greater needs of their nation. UK Government has indicated flexibilities on immigration for that it would seek to negotiate different parts of the UK” to a comprehensive free trade Wales reflect different needs. Varying agreement with the EU. The Welsh Government’s White approaches are described, The scope and ambition for Paper ‘Securing Wales’ Future’ such as post-study work routes, this is not yet clear but it is sets out priorities for the UK’s and regional visas. Later in this reasonable to conclude that exit and future relationship paper, we consider whether the more ambitious the deal with the EU. In the paper, we approaches such as this could sought, the more likely it is that set out an approach to future be appropriate for Wales. the EU will be seeking increased immigration which would support flexibility of approach on future our future ambitions for full Northern Ireland migration from the EU to the UK and unfettered access to the The Northern Ireland Executive and vice versa. In particular, Single Market, at the same has not published a position where services are part of such time recognising that there paper in the same way as an agreement, and if these have been concerns about the Wales and Scotland, but they need to be delivered in person, extent and speed of immigration have fed in views and analysis flexibility of movement for those and the need for more control to the UK Government on the people will be an important over this. Our policy position issues of specific significance consideration. The development outlines that future migration to for them. A key consideration in of a future UK immigration policy the UK should be more closely respect of movement of people will need to keep this in view. linked to employment – those will be around the ‘soft border’ wishing to come to the UK should between Northern Ireland and There is political commitment either have a job, or the ability the Republic of Ireland (which both from the UK Government to find one quickly. We also will remain an EU member state). and EU institutions to preserve advocate stronger enforcement

5 Council of the European Union, ‘Directives for the negotiation of an agreement with the United Kingdom of Great Britain and Northern Ireland setting out the arrangements for its withdrawal from the European Union’, May 2017 –www.data.consilium.europa.eu/doc/document/XT-21016-2017-ADD- 1-REV-2/en/pdf. 6 Scottish Government, ‘Scotland’s Place in Europe’, published December 2016 – www.beta.gov.scot/publications/scotlands-place-europe/.

Brexit and Fair Movement of People | 11 There appears to be widespread In its negotiations with the EU, The UK Government has also political commitment to preserve the UK Government will need to made proposals (for negotiation the existing arrangements consider the balance of priority with the EU) in respect of the covered through the CTA given to restricting immigration future rights and status of agreement, but there could compared to the economic EU citizens in the UK and UK be challenges in negotiating benefits of access to the Single nationals in the EU8, which we the details. Market. The Welsh Government also consider later in this paper. believes that this balance UK Government must come down in favour of As outlined earlier, the UK protecting and promoting the Government has set out a needs of the UK economy. preferred position that would In the absence of confirmed see the UK no longer being detail or proposals for a future part of the Single Market, immigration system, there has consequently it would no longer been speculation about what participate in EEA frameworks possible immigration controls on free movement of people. could be adopted by the UK The UK Government recently Government in its future policy, announced that there would be including sector-based schemes, a “temporary implementation and quotas and caps along the period” immediately following the 7 lines of the current third country UK’s exit from the EU but has immigration system. Analysis of confirmed that free movement some of these approaches, and will still end on the date of the their potential effects in Wales, UK’s exit. It has also continued is provided at Annex C, and to state its policy of reducing summarised in this paper. net migration to the “tens of thousands”.

7 This was referred to in the UK Government’s commissioning letter to the Chair of the Migration Advisory Committee on 27th July 2017 – www.gov.uk/government/publications/commissioning-letter-to-the-migration-advisory-committee. 8 UK Government policy document, ‘Safeguarding the Position of EU Citizens in the UK and UK nationals in the EU’, published 26th June 2017 www.gov.uk/government/publications/safeguarding-the-position-of-eu-citizens-in-the-uk-and-uk-nationals-in-the-eu.

12 | Brexit and Fair Movement of People 5 A Picture of Migration and its Effects in Wales

Introduction the implications for Wales of EU citizens in Wales Migration to and from the potential specific change options Of the approximately 80,000 EEA and Switzerland is an to the UK immigration system. EEA and Swiss citizens residing established way of life in the This section presents our in Wales, about 30,000 arrived 13 UK and we have not previously understanding of the picture of less than 5 years ago . This is needed to identify nationality migration in Wales – based on broadly consistent with the data in relation to our workforce and the above analysis, and the best from the International Passenger communities. This historical currently available information Survey, which estimates annual lack of data capture, as well from our key sectors, public migration flows to Wales from as relatively small levels of services and Higher Education the EU at approximately 7,000 14 migration into Wales, make it (HE) sector, about the people (ONS, 2016) . difficult to find detailed data who have moved to Wales from This suggests that while many, about the people who have overseas, what work they do, and chosen to live and work here. perhaps most, non-UK EU the potential impact of changes nationals may be entitled to Although the Office for National to immigration policy in Wales. Statistics (ONS) is undertaking permanent residence under the current rules, a large proportion work to improve migration data, Migration statistics and the UK Government has will not – under EU and EEA law, Based on figures from the APS11, recently commissioned the individuals only currently become the total migrant population Migration Advisory Committee entitled to a right of permanent in Wales is 176,600 (5.8% of (MAC) to undertake analysis on residence after 5 years of legal the Welsh population) of whom EEA migration patterns9 to the residence. Further examination 79,100 are from the EU (2.6% of UK, there is more that needs of the data also suggests that the Welsh population). This is low to be done, quickly, if we are to – in contrast to the general when compared to the figures understand migration in Wales perception that EU migrants are in the UK overall which are 8.8 in greater detail. mostly young and single – the million (13.7%) and 3.4 million vast majority of EU citizens are In ‘Securing Wales’ Future’, (5.2%) respectively, with the part of a family unit, and are as a high level evidence review greatest concentration in London likely as UK-born residents to of migration10 set out some and the South East of England. have children. It is estimated of the key facts and figures that there are more than 20,000 Migration is concentrated in about migration in Wales. children (of all nationalities) urban areas, such as Cardiff The Public Policy Institute resident in Welsh households and Swansea, although there for Wales (PPIW) analysis at where at least one person is an are also significant numbers Annex C to this paper, provides EU citizen; this represents 4% of migrants living in more rural further, more in-depth analysis of all Wales-resident children15. areas such as Carmarthenshire about family circumstances of and Ceredigion12. migrants in Wales, the sectors they work in, and what, based on this analysis, would be

9 UK Government Commission to Migration Advisory Committee (MAC), 27th July 2017: www.gov.uk/government/publications/commissioning-letter- to-the-migration-advisory-committee, and MAC call for evidence, 4th August 2017: www.gov.uk/government/consultations/call-for-evidence-and- briefing-note-eea-workers-in-the-uk-labour-market. 10 Public Policy Institute for Wales, November 2016, see Annex B of ‘Securing Wales’ Future’. 11 Source: StatsWales (June 2016) based on data from Labour Force and Annual Population Surveys. This data is based on country of birth. 12 Source: As above. 13 See Table 1 in Annex C to this document. 14 This estimate has, proportionally, a very large margin of error. However, the fact that there are about 30,000 EEA citizens in Wales who arrived in the last 5 years – that is about 6,000 a year – suggests it is probably reasonably accurate. 15 See Table 2 of Annex C to this document.

Brexit and Fair Movement of People | 13 Welsh people in the EU granted ‘settled status’ before The UK Government has According to ONS data16, around (and for a period after) the committed to simplifying 900,000 UK citizens were long UK’s leave date; the application process for term residents in other EU • EU citizens who arrived in the settled status compared to the countries in 2010 and 201117. UK before a specified date current process for applying for There is no available data about (to be agreed as part of the permanent residence (often how many of these UK nationals negotiations) but have not reported by applicants to be are from Wales, but we have been a resident for 5 years will complex and long). Those heard from a number of Welsh be able to apply for leave to who are not economically people living in other countries remain, which would allow them active will no longer need to since the vote to leave, seeking to stay in the UK until they have have comprehensive sickness the Welsh Government’s support been resident for 5 years and insurance in order to be eligible. and representation to clarify their can apply for settled status; Those with settled status, or future status. working towards it will be issued • EU citizens who arrive in the UK with a ‘residence document’ after the specified date would Future Rights and Status of (many reports have referred to be given a ‘grace period’ in this as an ‘ID card’, but the UK EU citizens in the UK and which to regularise their status UK citizens in the EU Government has not confirmed but would not be guaranteed the format of this document). In the context of negotiations settled status when this period between the EU and the UK, ends. At the time of writing, both the European Commission negotiations over the future and the UK Government have Settled status would give EU arrangements for EU citizens published proposals on the rights citizens access to UK benefits in the UK and UK nationals and status of EU citizens in the on the same basis as a UK in the EU are continuing. UK and UK nationals in the EU national, but is distinct from The implications of the UK’s after the UK’s exit. UK citizenship which could be proposals in particular are applied for separately. The UK considered in more detail later The European Commission’s Government indicate they will in this document. proposals18, published on be seeking similar arrangements 12th June, would apply to EU with Switzerland and the non- citizens who live, or have lived Migrants in the Welsh EU EEA countries of Iceland, Workforce in the UK (and vice versa for Liechtenstein and Norway on Our White Paper, ‘Securing UK citizens in the EU), and a reciprocal basis. would – broadly – guarantee the Wales’ Future’, highlights the same rights for those people as Family dependants who join positive contribution that EU is currently the case (Annex A qualifying EU citizens before citizens make to daily life in describes these in more detail). the UK’s leave date would be Wales; from the academic The UK’s proposals19, published eligible to apply for permission staff in our universities, to the on 26th June, are based around to stay in the UK until they have individuals delivering in our the proposal of giving EU citizens been resident for 5 years and Welsh NHS and public services, in the UK the option of applying can apply for settled status. and the significant proportion for ‘settled status’ and sets out Dependants joining after the of EU nationals working in our three scenarios: leave date would be subject to thriving tourism industry and manufacturing sector. A number • EU citizens who have been the same rules which apply to of the Welsh Government’s resident here for at least 5 non-EU nationals joining British key business sectors are ones years would be eligible to be citizens.

16 Source: ONS – ‘What information is there on British migrants living in Europe?’ January 2017 – www.ons.gov.uk/peoplepopulationandcommunity/ populationandmigration/internationalmigration/articles/whatinformationisthereonbritishmigrantslivingineurope/jan2017#number-of-british-citizens- living-in-europe-in-2011-by-age. 17 Another estimate by the UN Population Division suggests that the figure is nearer 1.2 billion, but this is calculated on a different basis (country of birth) and is less certain than the ONS data. 18 European Commission position paper, ‘Essential principles on citizens’ rights’, published 12th June 2017 – www.ec.europa.eu/commission/ publications/position-paper-essential-principles-citizens-rights_en. 19 UK Government policy document, ‘Safeguarding the Position of EU Citizens in the UK and UK nationals in the EU’, published 26th June 2017 www.gov.uk/government/publications/safeguarding-the-position-of-eu-citizens-in-the-uk-and-uk-nationals-in-the-eu.

14 | Brexit and Fair Movement of People where there is a significant be in higher skilled jobs than manufacturing, and hotels and representation of migrant either EU migrants or UK born restaurants. This is discussed workers – for example tourism, people22. However, it is important further in Annex B. manufacturing (including food to note that a majority of EU and drink production), and migrants – like UK-born people Migration in key economic construction. EU nationals also or non-EU migrants – work in sectors, public services and make an important contribution ‘lower middle’ occupations (such Higher Education to our creative industries and as administration, or caring In Annex B, we provide a more to cultural life in Wales. and leisure) or ‘upper middle’ detail and qualitative evidence skilled occupations (such as about the contribution made by Employment rates skilled trades for example in the migrants to different sectors in EU migrants in Wales have a construction industry). This has the Welsh economy. In summary: higher employment rate than important implications for policy, Migrants account for 11% the working age population as which should not be based of the tourism workforce in a whole – 79.0% of working on a binary ‘high/low’ skills Wales (5% of the workforce is age (16-64) migrants in Wales classification. from the EU23) and the British are in employment compared The reasons for the higher Hospitality Association believes to 71.3% of the total working occupational skill profile of third that, in a scenario of restricted age population and 69.3% of country nationals are not known access to the EU workforce, all migrants20. This is similar but it is possible that this reflects the sector’s future labour market to the pattern in the UK as a the number working in the health requirements may not be met whole. We also know that the sector, higher education, and from the UK resident population number of migrants claiming intra-company transferees for in the short to medium term. working age benefits in Wales multinational companies. There is relatively low. According to data is also a consideration around 9% of the manufacturing published by the Department the relative ease of access to workforce in Wales is from for Work and Pensions, 7,921 the UK labour market for EEA overseas (7% is from the EU)24. non-UK nationals claimed and Swiss nationals compared Manufacturing employers, working age benefits, of whom to third country nationals, including key employers in sub- 2,817 were from the EU. To put since the implementation of sectors such as automotive this in context, the number of the Tier 2 visa system for third and aviation have expressed UK nationals in Wales claiming country nationals is restricted concerns about access to working age benefits was skills in the event of significant 21 to migrants taking up work with 290,957 . a high skill level and/or salary. changes in the UK’s migration policies and have stressed Skills The prospect of increased the importance of rapid and The PPIW analysis at Annex C barriers to recruitment for administratively simple intra- highlights a differing profile of workers from the EEA and company staff transfers between the skill level of occupations Switzerland has implications for different EU countries. occupied by migrant workers Wales’ current and future labour in Wales. In summary, working market and skills needs. We are Although a smaller proportion age migrants from the EU are aware that skills deficiencies and of the construction sector more likely to be employed recruitment issues affect key workforce in Wales is from in middle to elementary level sectors which have significant overseas (3% in total, with 2% representation by migrant of the workforce from an EU occupations whereas non-EU 25 migrants are more likely to workers, such as construction, background ), construction

20 Source: Labour Force Survey estimates, as set out in ‘Securing Wales’ Future’, pg 59. 21 Source: DWP publication August 2017: Nationality at point of National Insurance Number registration of DWP working age benefit recipients: data to Feb 2017: https://www.gov.uk/government/statistics/nationality-at-point-of-nino-registration-of-dwp-working-age-benefit-recipients-data-to-feb-2017 22 Data behind this is based on Annual Population Survey, December 2016 – see page 64 of Annex C. 23 Source: Welsh Government data, as set out in ‘Securing Wales’ Future’ – page 61, Figure 9. 24 Source: As above. 25 Source: Annual Population Survey, as outlined in Annex C to this paper. A CITB Observatory paper which provides data based on ONS, CSN, Experian counts 110,740 for total workforce but does not break down by nationality.

Brexit and Fair Movement of People | 15 is a sector that has particular sector, 90% of meat inspection and work here could exacerbate difficulty with filling vacancies occupational vets in the UK are recruitment and retention due not only to a lack of skills, non-UK EU citizens28. pressures, as would a decision qualifications and experience to restrict EEA and Swiss amongst applicants, but also due The NHS in Wales is reliant nationals’ access to the labour to other non-skills related issues. on EU workers at every level. market in the longer term. The sector is expected to see In September 2016, 1,313 EU high growth in the next few years, nationals were directly employed 12% (2,365) of Higher driven by the strong pipeline by the NHS in Wales, with 7% of Education (HE) staff are non-UK of proposed infrastructure doctors working in Wales coming born (7% or 1,425 are from the 29 31 projects in Wales, including the from the EU . Systems in place EU) and staff from overseas Wylfa Newydd nuclear power around the recruitment of staff are key to ensuring the research development, South Wales are also vulnerable to the impact and teaching quality offered Metro, M4 relief road and Tidal of our withdrawal from the EU, in Wales’ HEIs, as well as to Lagoon developments. because systems such as the facilitating international research European Professional Card for collaborations. Around 17%32 The food and drinks sector professions such as general of the students in Welsh HE is heavily reliant on migrant care nurses, pharmacists and institutions are from overseas workers to fill roles in food physiotherapists provide a quick (both EU and non EU) and processing with over a quarter and reliable system for ensuring represent a significant source (27%)26 of those employed in correct registration, minimum of income for HEIs, helping to food and drink manufacture standards of training and sustain a wide range of courses, in Wales born in the EU. Food knowledge of languages. particularly at postgraduate and drinks manufacturers have level. Issues around migration reported that they have found In the social care sector, need to be considered alongside it difficult to recruit labour to while specific data is not a range of other EU exit undertake production line jobs available for Wales, figures for issues for HEIs, including EU and migrant workers have England show that in similar funding for research, ability to plugged a gap in labour supply, regions, around 3% of local undertake international research while there are also reported authority and independent sector collaborations, access to to be shortages in some skilled jobs were held by people with Structural Funds, and the future roles. an EU nationality, and a further of student mobility programmes, 5% were held by people with a such as Erasmus+. The veterinary sector in the UK non-EU nationality30. As with the could face particular problems rest of the UK, the social care Possible UK policy from potential restrictions to EU sector in Wales is facing a range approaches to migration migration, with 44% of newly of challenges which relate to and implications for Wales registered veterinary surgeons its ability to recruit and retain In his paper for the PPIW in the UK having qualified from the best workers, whether from (Annex C), Professor Jonathan EU veterinary schools, and 22% the UK, EU or rest of the world. Portes sets out the likely options of staff at UK veterinary schools Any short term impacts from EEA being considered by the UK being from the EU27. Of particular and Swiss nationals deciding Government in their development importance to Wales’ agricultural to leave the UK, or not to come

26 Source: Welsh Government analysis of Annual Population Survey (Jan-Dec), Office for National Statistics – www.gov.wales/statistics-and-research/ ad-hoc-statistical-requests/?lang=en. 27 Source: RCVS Facts 2015, www.rcvs.org.uk/publications/rcvs-facts-2015/?destination=%2Fpublications%2F%3Ffilter-keyword%3Dfacts%26filter- type%3D%26filter-month%3D%26filter-year%3D%26filter.x%3D0%26filter.y%3D0. 28 Source: Veterinary Policy Research Foundation, ‘Brexit – Veterinary Fact File’ Oct 2016, www.vprf.files.wordpress.com/2016/10/brexit-impacts-for- website.pdf. 29 Welsh NHS Confederation briefing, ‘Our Greatest Asset: The NHS Workforce’, March 2017 –www.nhsconfed.org/resources/2017/03/welsh-nhs- confederation-briefing-on-workforce-challenges-and-solutions. 30 Source: National Minimum Data Set for Social Care, March 2017: www.nmds-sc-online.org.uk/Get.aspx?id=/Research/Briefings/Briefing%20 28-%20Nationality%20-%20final.pdf. 31 Source: Higher Education Statistics Agency Staff Record, 1st December 2015. 32 Source: Higher Education Student Record, Higher Education Statistics Agency, February 201 – www.statswales.gov.wales/Catalogue/Education-and- Skills/Post-16-Education-and-Training/Higher-Education/Students/Enrolments-at-Welsh-HEIs/highereducationenrolments-by-domicile-level-mode.

16 | Brexit and Fair Movement of People of a new immigration policy after continue to be delivered – doing on workers, employers, or the the UK’s withdrawal from the so would seem to require some Government (at any level) – a EU, and what the implications form of compromise compared passport or identity card suffices and risks of these approaches to the strict levels of control that to prove EEA/Swiss nationality – might be for Wales’ economy would be needed to achieve the and there are no direct costs of and public services, taking into UK Government’s net migration immigration (e.g. fees for visas). account current patterns of target. migration in the Welsh workforce. Depending on the system that We understand that neither a is implemented and the extent Context points-style system (such as of control exerted, there will the one in Australia and as be additional financial and As we have seen earlier, the UK’s advocated by the ‘Vote Leave’ administrative burdens on a border controls currently allow campaign) nor an ‘emergency number of levels. This is perhaps short term stays without a visa brake’ system are likely to be best expressed by comparison for a large number of travellers. considered33. to the current UK immigration It is difficult to see a scenario system for third country nationals whereby EEA and Swiss nationals This leaves the UK Government (details in full can be found would be treated less favourably with options for limiting migration in the Visas and Immigration than citizens from the ‘non-free through work permits based on section of the UK Government countries’ outside the EEA and economic sectors, skills/salary website36): Switzerland (e.g. US, Australia). level (as in the current Tier 2 Therefore the emphasis on future visa system), or caps/quotas. Costs and administrative controls on migration will be on It also needs to consider the burdens for: permission to work and live in extent to which it will offer some the UK. form of preference to EEA and Students and migrant workers: Swiss nationals compared to the • Visa fees & application forms Options rest of the world. These options – fees range from £335 for The options that could are described in more detail in a Student Visa to £1200 for be considered by the UK Annex C. a ‘3 years plus’ Tier 2 skilled Government range from a light- worker visa; Also, although largely rejected touch registration system at one • Immigration Healthcare in public statements, the UK end of the scale (freedom of charge: Annual charge of Government has not definitively movement as currently operated £150 for students and ruled out the idea of allowing in most EEA countries), to – at £200 for workers. differential approaches to the other end of the scale – the immigration in specific areas and Employers: replication of the current system nations of the UK, as called for for third country migrants, • Application to become by the Scottish Government in its requiring visas for different a sponsor; White Paper, and as proposed employment situations prior by other actors, such as the City • Resident Labour Market Test to entry. of London Corporation34 and the (proof of need for overseas worker); The UK Government will be All Party Parliamentary Group on considering how to respond to Social Integration35. • Certificate of Sponsorship the many calls from industry and charges: either £536 for small public service stakeholders to Administrative/Financial and charitable organisations ensure that a future immigration impacts or £1476 for medium and system will meet the needs of At present, migration from the large organisations; businesses and ensure that EEA and Switzerland places • Immigration Skills Charge: essential public services can very little administrative burden Annual charge of £364

33 The idea of the ‘emergency brake’ is where immigration can be limited or stopped, if it is shown to be placing undue pressure on public services. 34 PWC report, ‘Regional Visas – a unique immigration solution?’, Oct 2016: www.cityoflondon.gov.uk/business/economic-research-and-information/ research-publications/Pages/regional-visas.aspx. 35 APPG on Social Integration, ‘Integration not Demonisation - The final report of the All-Party Parliamentary Group on Social Integration’s inquiry into the integration of immigrants’, August 2017: www.socialintegrationappg.org.uk/reports. 36 UK Visas and Immigration official website – www.gov.uk/government/organisations/uk-visas-and-immigration.

Brexit and Fair Movement of People | 17 for small and charitable risks with elements of this being we strongly believe that controls organisations or £1000 extended to include EEA and must be proportionate, designed for medium and large Swiss nationals, as outlined to support the needs of our organisations – to note below: economy and public services that the Conservative Party • Too complicated compared – the risk is that these are, outlined a commitment in their to other countries; instead, additional burdens and manifesto to double these barriers to economic growth • Creates a significant and charges. and social cohesion. costly burden on businesses and is a deterrent to growth Government and public services: Public attitudes to within the UK; • Checking entitlement to Migration access public services/ • The overall design does not Levels of migration to Wales health service; enable the healthcare service are relatively low compared to • Processing visa applications; to bring in the skilled workers most other parts of the UK, required; • Ongoing monitoring and particularly London and the enforcement to prevent • Needs to be made more South East (2% of all people overstaying, ensure genuine accessible to start-ups and in the UK born abroad live in need for overseas worker, small and medium sized Wales, compared to 36.7% in compliance with visa enterprises, as a start-up may London, 12.8% in South East 39 conditions, etc. not have the robust human England and 4.6% in Scotland ). resources (HR) systems and However, public attitude The costs and administrative policies in place to apply surveys have suggested that burdens outlined above for for (or maintain) a sponsor people in Wales seem to have employers would also apply to licence. less favourable views about public services as employers, immigration than other parts The MAC has recently been placing additional pressure on of UK40. already stretched budgets and commissioned by the UK services. An additional impact Government to undertake In ‘Securing Wales’ Future’, of restrictions to migration could analysis of the impacts to the we cite the British Social be the increased costs of hiring UK labour market of the UK’s exit Attitudes Survey (2013) which staff, either resulting from an from the EU and, more widely, found that 86% of respondents increased reliance on agency how the UK’s immigration system in Wales thought that staff, or increased competition could be better aligned to a immigration should be reduced, 38 for staff resulting in higher levels modern industrial strategy . and that 71% of respondents from Wales thought that EU of wages needing to be paid to It is not yet clear what systems migrant workers brought more attract staff. will be put in place to manage costs than benefits. There a future immigration system. The Migration Advisory have been a number of more However, given that current Committee (MAC), which recent polls which are broadly indications are for stronger advises the UK Government on consistent with these earlier controls in order to reduce Immigration Policy, undertook findings however, these polls 37 numbers, it is plausible that a a review of the Tier 2 (Skilled must be taken into context, new system could be based – Worker) immigration system. recognising their limitations in at least in part – on the existing Feedback from partners included exploring a number of complex systems which seek to reduce in this review highlights some issues and their varying third country migration. If this of the challenges of the current implications. Tier 2 system and possible course of action is followed,

37 Migration Advisory Committee review: Tier 2 migration, published January 2016 – www.gov.uk/government/uploads/system/uploads/attachment_ data/file/493039/Tier_2_Report_Review_Version_for_Publishing_FINAL.pdf. 38 UK Government’s commissioning letter to the Migration Advisory Committee, 27th July 2017 – www.gov.uk/government/publications/ commissioning-letter-to-the-migration-advisory-committee and MAC call for evidence, 4th August 2017: www.gov.uk/government/consultations/call- for-evidence-and-briefing-note-eea-workers-in-the-uk-labour-market. 39 Source: ONS (December 2015) based on data from Labour Force and Annual Population surveys – included in ‘Securing Wales’ Future’ Annex B, pg 51. This data is based on country of birth. 40 See narrative and graphs on Public Attitudes to Migration in ‘Securing Wales’ Future’ page 62-63.

18 | Brexit and Fair Movement of People This apparent public concern picture overall from the types of It should be noted that a is not necessarily consistent concerns which are highlighted 10 percentage point rise is very with high level evidence about above. We are keen to better large – far higher than that seen migration into Wales. Not only understand the broader in Wales. Other things – the level is there a relatively low level of circumstances which lead of the minimum wage, public migration into Wales, we have people to be concerned about sector pay policy, the decline in also seen that EU migrants the effects of migration. trade union power, technological of working age (16-64) in and industrial change – are likely particular are more likely to Economic and to have had far bigger impacts be in employment than the Demographic Effects on pay in low skilled sectors over working age population as a of Migration such a period. whole, and the number of EU Here, we consider some of It is also worth stressing that citizens claiming benefits is low. the evidence around the wider this finding is for the UK as a There have also not been any economic effects of migration, whole. In Wales we do not have correlations identified between at a UK level. growth in migration and the the same levels of migration, nor growth of migration, as the rest share of ‘leave’ votes in specific Wages, Earnings and of the UK. There are also not the areas41. Productivity same concentrations of migrant A number of reasons have been In a recent systematic review workers in Welsh key sectors as highlighted as concerns related of the evidence, published in there are more widely in the UK. to immigration: the Oxford Review of Economic Policy42, Jonathan Portes and Indeed, an evidence review • Perceived pressures on Giuseppe Forte find that, on by the Centre for Economic housing and on public wages, there is an emerging Performance at the London services such as the consensus that recent migration School of Economics (LSE)44 NHS and education; has had little or no direct impact also found that there is “little • A worry that greater overall, but possibly some overall adverse effects of competition for jobs could small negative impact on low- immigration to the UK on wages lead to reduced employment skilled workers (and perhaps and employment for the UK- opportunities, lower wages some positive impact on skilled born”. On the contrary, the wider and poorer working conditions; workers). evidence base45 shows that and immigration is associated with In respect of the possible • An overall apprehension higher levels of productivity negative impact on low- about the changes that might and higher average wages and skilled workers, analysis, by result from migration, and the incomes for the population as Stephen Nickell and Jumana need for effective integration a whole. Saleheen (2015)43, found that a of migrants into workplaces 10 percentage point rise in the Wages should also be seen as and communities. immigrant share in the semi/ part of a wider range of factors Below, we set out a range unskilled service sector would affecting income and the cost of high-level evidence about lead to approximately a 1.9% of living. Since the recession, the effects of migration in reduction in average wages for historically low rates of wage economic terms, and on public native workers in that sector over growth have reflected a weak services in Wales. The available an eight year period. productivity performance across evidence presents a different the UK. The real value of wages

41 Source: Welsh Government data in ‘Securing Wales’ Future’, page 64, figure 12. 42 Portes, J and Forte, G, ‘The economic impact of Brexit-induced reductions in migration’, March 2017. in the Oxford Review of Economic Policy – www.academic.oup.com/oxrep/article/33/suppl_1/S31/3066076/The-economic-impact-of-Brexit-induced-reductions. 43 Nickell, Stephen and Saleheen, Jumana, ‘The impact of immigration on occupational wages: evidence from Britain’, December 2015. In: Bank of England, Staff Working Paper No. 574 –www.bankofengland.co.uk/research/Pages/workingpapers/2015/swp574.aspx . 44 LSE Centre for Economic Performance, ‘Brexit and the Impact of Immigration on the UK’, May 2016 – www.cep.lse.ac.uk/pubs/download/brexit05.pdf. 45 National Institute of Economic and Social Research, ‘What’s the link between labour productivity and immigration in the UK?’, November 2013 - www.niesr.ac.uk/blog/what%E2%80%99s-link-between-labour-productivity-and-immigration-uk.

Brexit and Fair Movement of People | 19 has been further eroded by that EU immigrants are more inflow of people from outside higher costs of living – in part educated, younger, more likely Wales. (Increasing longevity resulting from weaker sterling to be in work and less likely reduces the rate of decline over the period since the to claim benefits than the but cannot eliminate it); 49 referendum on leaving the EU. UK-born . Portes and Forte • It is self-evident that long term This has raised the costs of conclude that, in their central population decline could have imported goods and services. scenario, the impact of Brexit- profound social, economic Average real earnings remain induced reductions in migration and political implications. about 6% lower than they were could be to reduce annual GDP These implications would approximately six years ago. per capita by between 0.22% however emerge progressively, and 0.78%. On their more so might not attract the Impact on GDP and Public extreme scenario, the reduction attention they deserve; Finances in GDP per capita would be up • The trend reduction in the The Institute for Fiscal Studies46 to 1.16%. working age population in has shown that immigration particular is projected to be creates a net benefit for the Long term demographic sharper in Wales than in many public finances as, on average, considerations other parts of the UK and immigrants pay more in taxes There are arguments for may raise particular social, and receive less in benefits considering migration in the economic and fiscal issues. than the UK born population. context of addressing longer This decline in the working age term population challenges. population is of course likely Similarly, the Office for Budget Annex D to this paper sets out 47 to be reinforced by potential Responsibility considered the in greater detail some of these reduced population inflows as impact of inward migration on considerations but the main a result of lower international net debt as a percentage of issues are summarised below: Gross Domestic Product (GDP) migration to the UK following over a 50 year projection period • A key feature of demographic Brexit; change in Wales and the (to 2066/67) compared to a • Immigration is not a panacea UK is of course that the central net migration projection for an ageing population, but population is ageing, with of 185,000 per year. In their a policy that resulted in a increasing numbers of both analysis, a higher level of inward continuing inflow of younger old and very old people; migration (265,000 per year) and more educated migrants showed reductions to the • As is the case for the UK as could have some role to play primary deficit by 0.6% of GDP, a whole, the total fertility rate in ameliorating these adverse and net debt by 26%. A lower in Wales has for a long time trends. level of migration (105,000 per been below that needed to year) showed the primary deficit replace the population – see increasing by 0.8% of GDP and Chart 1 of Annex D50. Should net debt by 31%. this persist (and there seems at present no reason to In the recent study for the assume otherwise) then over National Institute for Economic the longer run future, Welsh and Social Research referenced population would experience 48 earlier , Portes and Forte a long term trend decline – note that it is well established unless there was a continuing

46 Preston, I, ‘The Effect of Immigration on Public Finances’, published in ‘The Economic Journal’, April 2015.www.ifs.org.uk/uploads/publications/ Preston-2014-The_Economic_Journal.pdf. 47 Office for Budget Responsibility, Fiscal Responsibility Report, January 2017 www.– cdn.budgetresponsibility.org.uk/FSR_Jan17.pdf see page 75-76. 48 Portes, J and Forte, G, ‘The economic impact of Brexit-induced reductions in migration’, March 2017, in the Oxford Review of Economic Policy www.academic.oup.com/oxrep/article/33/suppl_1/S31/3066076/The-economic-impact-of-Brexit-induced-reductions. 49 For example, according to Portes and Forte, about 44% have some form of higher education compared with only 23% of the UK-born. 50 The increase in fertility seen over the first decade of the new millennium was in part a cohort effect.

20 | Brexit and Fair Movement of People Migration, Low Wages and international commitments on information about the costs Exploitation of Workers human and employment rights. they are expected to incur The Bank of England report Protecting workers’ rights is one personally as a consequence highlighted earlier points to the of the Welsh Government’s key of undertaking the work strong public perception that priorities and we will set out (e.g. provision of safety immigration is responsible for more on our actions in this area equipment). downward pressure on wages at a later stage. For the purposes • Types of exploitation include but, as we have illustrated, this of this document, the main bullying and economic needs to be considered within findings from Annex E are set insecurity, being required to a wider context and evidence out here: provide unpaid labour, being base. In some areas of Wales, • Exploitation can be mapped subject to insufficient notice combinations of low wages, high onto a legislation and of work availability, being sent poverty and patchy employment enforcement spectrum of home in the middle of shifts, create a particular propensity for violations, which range from facing the withholding of exploitation of both migrant and extreme exploitation such work as a form of behavioural non-migrant workers in Wales. as forced labour, to more control or punishment and commonplace problems such potential fear of arbitrary While it is true that migrant as underpayment of wages dismissal. workers are particularly and excessive working hours. vulnerable to exploitation by • Exploitation can be prevented employers, we also know that • Gaps in the enforcement by ensuring that low-waged workers who are not migrants of minimum employment workers, whether migrant experience forms of exploitation standards erode the or non-migrant, benefit too. It is important to emphasise opportunity of decent work from the availability and that exploitation occurs as a for all, and undermine terms enforcement of employment consequence of the behaviour and conditions of work which rights. Minimum standards of unscrupulous employers, are above the statutory compliance is an essential and is not caused by migration. minimum, for example, as underpinning of a society in negotiated by trade unions which equality and respect for The Welsh Government is or reflecting sectoral norms. human rights can be realised. committed to making Wales a • When exploitation manifests Where workers lack trade fair work nation where everyone as employment rights abuse, union representation and can access better jobs closer workers may be denied wages are not covered by collective to home, where everyone can which are at least as high as bargaining, they are at an develop their careers, and the statutory minimum, they increased risk of exploitation. where we can all expect decent, may be denied paid holiday or • Current research about life-enhancing work without the sick pay to which they are poverty in Wales focuses on exploitation or poverty. A key entitled, required to enter into a different set of indicators element of our policy position false self-employment or may from those which are most on migration is the need to be the victims of unauthorised relevant for studies of low ensure that legislation and other deductions from wages. wage working and exploitation. actions to prevent exploitation of • Exploitation is not only a Bespoke research is needed workers should be more strongly in order to understand better enforced, particularly for the low matter of low hourly pay, it is also present in low-hours the connections between paid. We believe that tackling experiences of work, access this exploitation will improve work where workers enter into contracts which do not provide to decent work and labour wages and conditions for all standards compliance in workers. them with sufficient hours to secure a sustainable income. Wales. Annex E explores this issue For workers contracted on a • Many migrant workers are in greater detail, and sets it in self-employed basis, this may particularly vulnerable to the broader context of current mean being unaware of the exploitation because of protections for workers through true value of the hourly wage language barriers, lack EU law and a wider range of on offer because they lack of family/friends support

Brexit and Fair Movement of People | 21 network, lack of trade –– HMRC National Minimum –– Employment Agency union representation and Wage compliance Standards Inspectorate being unaware of their legal unit issues notices of seeks to ensure rights in the UK. However, underpayment of National employment agencies are experiences of exploitation Minimum wage including complying with their legal are not limited to migrants, a penalty which is paid obligations. It inspects nor are the wide range of to HMRC. It investigates employment agencies and issues which make any worker reports against employers, investigates complaints or employee susceptible operating an anonymous about their conduct. It works to exploitation at work. hotline, and visits samples alongside the HSE in cases Key issues are a worker’s of employers who have where an agency worker has awareness and understanding not had complaints made been involved in a serious of their rights in a complex against them. Against a accident. framework of employment backdrop of funding –– Gangmasters Licensing law, and workers’ ability to cuts since 2010, the Authority (GLA) (now challenge exploitation when enforcement budget, the Gangmasters and they are experiencing it, their staffing and number of Labour Abuse Authority) ability to enforce their rights, investigations have risen in licenses and regulates their access to representation recent years. The increase gangmasters in agriculture, and opportunities to access in enforcement activity has forestry, horticulture, food alternative employment. occurred in the context of processing/packaging and • Although it is clear that a very large increase in the shellfish gathering sectors. exploitation can affect all number of workers covered Previous budget restrictions workers (not just migrant by minimum wage protection had narrowed the GLA’s workers), certain sectors as a consequence of the focus to target ‘gross abuse’ where extreme forms of introduction of the higher including tax evasion, exploitation have been rate National Living Wage human trafficking, health identified correlate with from 2016. and safety negligence. sectors that we identify in –– Health and Safety The Immigration Act 2016 this document as having high Executive (HSE) reports broadens the remit of the proportions of migrant workers to the Department for GLA to be labour-market (e.g. hospitality and food Work and Pensions. wide and renames it the processing). It promotes compliance Gangmasters and Labour • The enforcement regime in the with health and safety Abuse Authority (GLAA). UK places heavy emphasis standards at work and is How the GLAA’s regulatory on individual action being the enforcing authority system will be applied to its taken by workers through for relevant regulations; broader remit, and how it employment tribunals and the it shares these duties with will be resourced to do so, UK has one of the weakest Local Authorities and the is currently unclear and we systems of labour inspection Office of Rail Regulation. await the strategic report in Europe. From 2017 the Enforcement of working time of the newly appointed work of the HMRC National regulations is further split Director of Labour Market Minimum Wage compliance among other organisations enforcement. unit, the Employment Agency with the HSE primarily • The recent history of some Standards Inspectorate and leading on industrial sector, of these agencies signals the Gangmasters and Labour agricultural sector, schools increased investment Abuse Authority is strategically and hospitals. The HSE has and attention to minimum co-ordinated by a Director of seen a 46% drop in funding standards inspection. Labour Market Enforcement. over the last seven years. While tight resources are understandably focused on tackling illegal working, there is more that could be done to support general compliance

22 | Brexit and Fair Movement of People and to ensure that all workers need for their support with minimum turnover threshold53. have effective access to labour law enforcement All public sector organisations the minimum floor of legal issues. The Supreme Court’s in Wales, businesses and protection. Opportunities to ruling that employment third sector organisations in engage in paid work should tribunal fees are unlawful51, receipt of Welsh public sector not come at the price of and the UK Government’s funding will be expected to trading away entitlements to consequent decision to sign up to the code, and many employment rights protection cease charging these fees are already in the process of and decent work. are, however, welcome doing so. • The introduction of the higher developments. • The Welsh Government has rate National Living Wage is In the next section of this issued the ‘Two-Tier Code’ especially important for Wales document, we set out ways in to ensure that where public because it effectively doubles which exploitation can be tackled services are outsourced, the 54 the number of workers entitled more effectively, particularly principles of TUPE will be to statutory income protection. by the UK Government. The applied and that new recruits This will require careful Welsh Government is already are employed on terms and attention to compliance making progress on a number conditions no less favourable and enforcement issues in of key issues working in social than transferred staff. Wales in order to strengthen partnership with employers • Guidance and principles protection against exploitation. and trade unions through the on the appropriate use of • Having a restricted choice Workforce Partnership Council. non guaranteed hours of alternative employment For example: arrangements (including zero increases the risk of • A new Code of Practice hour contracts) in the devolved exploitation and those with for Ethical Employment public services in Wales was heavy caring responsibilities in Supply Chains in the published and issued to public are put at a particular Welsh public sector was service employers in 2016. disadvantage. Providing launched in March 201752. It sets out clear expectations support such as accessible It is focused on guaranteeing on practices which all childcare and social care for good employment practices public sector employers adults with disabilities can for the millions of employees should adopt, in order to help workers to engage in involved in public sector ensure non guaranteed hour higher quality employment. supply chains and covers a arrangements, are only used • The UK Government’s range of subjects including in clearly and narrowly defined introduction of employment modern slavery, blacklisting, circumstances. tribunal fees in 2013, zero hours contracts, umbrella It proposes that organisations combined with reductions schemes and false self- should ensure staff can to eligibility for legal aid has employment. The final area request a review of their created an environment which relates to the Living Wage working arrangements with discourages low-paid workers and contains a commitment a view to changing their in particular from being able to consider paying all staff a contractual arrangement if to access advice, and to Living Wage as a minimum. they have been undertaking seek redress. Citizens’ Advice On Modern Slavery, the Code regular hours over a services and Trade Unions goes further than existing UK continuous period of time and have been responding to the legislation, by including all they should also have access challenge of the increased sectors and not imposing a to the same pay progression

51 Supreme Court judgement in the appeal of Unison v Lord Chancellor – www.supremecourt.uk/cases/uksc-2015-0233.html. 52 Welsh Government: Code of Practice on Ethical Employment in Supply Chains – www.gov.wales/topics/improvingservices/bettervfm/code-of- practice/?lang=en. 53 Section 54 of the Modern Slavery Act 2015 is directed at ‘commercial organisations’ with a turnover of £36m. See www.gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide. 54 TUPE refers to the ‘Transfer of Undertakings (Protection of Employment) Regulations 2006’ as amended by the ‘Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014’. The TUPE rules apply to organisations of all sizes and protect employees’ rights when the organisation or service they work for transfers to a new employer.

Brexit and Fair Movement of People | 23 as full time employees. for the UK Government, which Resident EU citizens are entitled The guidance says that staff was intended to look at how to access NHS services on the who do not accept work – exploitation of workers can same basis as UK nationals; for whatever reason – should be prevented. The Welsh the entitlement of non-EU citizens not suffer a detriment as Government will be considering will depend on their immigration regards being offered work those findings in more detail, status. Access to NHS services in in the future. but our early view is that the Wales is the responsibility of the The guidance and principles recommendations do not Welsh Government and the rules should be adopted across the go far enough to strengthen that apply here may be different devolved public sector and enforcement of existing from those in other parts of the applied in local circumstances, legislation to prevent the UK. exploitation of workers. through social partnership, Given that migrants make up a based on the type and scope Impact of Migration on significantly lower proportion of of services. The effect of the the population in Wales than in the guidance and principles will be Demand for Welsh Public Services UK as a whole, and that their age reviewed in 2018 and if there profile means that they are likely Meaningful evidence about the is evidence that the guidance to require substantially less per impact of immigration on public has not been adopted well, capita in terms of health spending, services in Wales or its local further measures may be the likely additional costs to the authorities is difficult to find for taken to address the use Welsh NHS will be relatively small. the reasons that we articulate of non-guaranteed hours It is important to reiterate the point earlier in the paper about the contracts in the public sector. made earlier that immigration very limited amount of data • The Welsh Government has creates a net benefit for public that is collected on a nationality brought forward legislation services as a whole. basis. However, we can describe to dis-apply parts of the UK areas of policy where there is Government’s damaging Support to pupils who do not potential for immigration to have Trade Union Act for devolved speak English or Welsh an impact, and where there is public services in Wales. Welsh Government policy to In 2015/16 there were over We anticipate that the Trade support this. 25,000 pupils in Wales aged 5 Union (Wales) Bill will receive and over with a first language Royal Assent this autumn. 55 Access to NHS services other than English or Welsh . The UK Government’s Act This does not necessarily mean Overseas visitors (people who enables monitoring and that all these children are first do not normally live in the UK) restriction of trade union generation migrants – in many are not entitled to free NHS activities to support the cases they will have been born in services in the same way as workforce, and imposes the UK – but the language spoken ordinarily resident UK citizens – stringent new strike ballot at home is neither English nor charges will apply in some cases, thresholds in public services. Welsh. Nor does it necessarily depending on circumstances mean that they are not fluent in The Welsh Government will and the nationality of the person English, but clearly, in some cases, continue to use its influence accessing the service. UK those children will need language to drive stronger compliance and citizens are entitled to health support at school to support good practice among employers care in other EU Member states their learning and attainment. in Wales and, through the Fair on a reciprocal basis. Robust This is consistent with our Well- Work Board, will identify the data about the extent to which Being of Future Generations Goal, steps needed to take place people from overseas use to “enable people to fulfil their for Wales to become a fair NHS services in Wales is not potential no matter what their work nation. available, but is unlikely to place background or circumstances”, a significant burden on services. We also note the recent and our wider commitments under publication of the Taylor Review the UN Convention on the Rights of of Modern Employment Practices the Child.

55 Source: Pupil Level Annual School Census (PLASC), Welsh Government, July 2016.

24 | Brexit and Fair Movement of People The Minority Ethnic Achievement whose only right to reside is social housing has decreased Grant (MEAG) provided funding as a jobseeker, or in the initial slightly since 2001, while to schools to help remove 3 months of arriving to the UK the number of residents born the additional barriers to and, Croatian nationals who outside the UK living in social learning often experienced by are not working. housing has increased for both children from a minority ethnic EU and non-EU born residents. background – predominantly The nationality of someone this would mean support for seeking housing assistance Higher Education is not a factor for prioritisation, acquiring English or Welsh as an As an EU member state, the UK additional language. although there are considerations for refugees Government is required to Before the MEAG was and asylum seekers, whose provide access to education amalgamated into the wider circumstances make them to non-UK EEA and Swiss Pupil Support Grant in 2015/16, more vulnerable. nationals on the same basis as funding allocated for the MEAG UK nationals – similarly, Welsh across Wales in 2014/15 was Our data on access to housing students can undertake studies just under £10m56 (compared and homelessness services in other EU Member states on to an overall schools budget does not specify nationality, a reciprocal basis. The Welsh allocation in that year of but some data on housing tenure Government therefore provides £2.23bn)57. in England, recently published higher education tuition fee by ONS58, sets out some useful support to EEA and Swiss nationals studying at Welsh Housing context: Higher Education Institutions Local Authorities in Wales have • Recent migrants to the UK living in England are more (HEIs), on the same basis as responsibility for allocation Welsh-domiciled students. of housing and providing likely to live in the private rented sector; 88% of EU born (The same approach applies in homelessness support services, other parts of the UK). and the Welsh Government residents arriving between has responsibility for providing 2014 and 2016 privately In the 2015/16 academic guidance on this to Local rented, compared to 29% of year, the Welsh Government Authorities. In general terms, those arriving between 1991 provided approximately £21m59 housing assistance (apart and 2000. By comparison, in tuition fee support to 2,800 from information, advice and 80% of non-EU born residents EU students on courses in assistance in accessing help) arriving between 2014 and Wales. However this should be is not available to people 2016 privately rented. These seen in the wider context of subject to immigration control trends are also influenced how overseas students more (i.e. citizens from outside the by age, as younger people widely support the diversity EEA and Switzerland), although are also more likely to and competitiveness of Welsh there are exceptions, for example privately rent. HEIs, economic contribution of refugees, and former asylum • The percentage of migrants students and our aims around seekers. Generally speaking, who socially rent in England promoting student mobility. EEA and Swiss nationals are is 6% for EU and 9% for non- Implementation of the Diamond eligible for housing assistance EU (arriving between 2014 Review will change the overall as long as they are a ‘qualified and 2016) – for UK born emphasis of student support person’ (as described in Annex A residents, the percentage is grants to focus more on living to this paper). Exceptions to this 16%. However, the number costs from 2018/19, with loans include EEA and Swiss nationals of UK born residents living in provided for fees.

56 Welsh Government Cabinet Statement, 2014 – www.gov.wales/about/cabinet/decisions/previous-administration/2014/janmar/education/ hl4203/?lang=en. 57 Source: Welsh Government Statistical Bulletin 26th June 2014 – Local authority budgeted expenditure on schools: 2014-15. 58 Source: ONS Article, ‘International migration and the changing nature of housing in England – what does the available evidence show?’ – www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/internationalmigration/articles/internationalmigrationandthechangingna tureofhousinginenglandwhatdoestheavailableevidenceshow/2017-05-25#more-recent-migrants-are-more-likely-to-privately-rent-than-live-in-social- housing-or-own-their-own-home 59 Source: Student Loans Company: www.slc.co.uk/official-statistics/full-catalogue-of-official-statistics/student-support-for-higher-education-in-wales. aspx Support for tuition fees is currently made up of both loan and grant. With the implementation of reforms to student support from 2018/19, following the Diamond Review, loans will cover the full fee charged. EU students are not eligible for support for living costs.

Brexit and Fair Movement of People | 25 6 Future policy considerations

Status and Rights of EU that EU citizens arriving in • The difference of views about Citizens in the UK and UK the UK after 29 March 2017 how these arrangements Citizens in the EU risk being brought into future, will be governed in future Since the referendum, the Welsh potentially more restrictive, (whereby the UK firmly Government has continually immigration arrangements. rejects the EU’s proposal for called for the UK Government continued governance by the • In particular, given the European Court of Justice to assure the rights of EU uncertainty above, there is nationals living in the UK, and (ECJ)) needs to be resolved no guarantee that people quickly, through a compromise has called for those rights to arriving in the UK now will apply reciprocally to UK citizens proposal which provides the have automatic entitlement necessary independence of living elsewhere in the EU. to work towards settled Clearly, we would also want swift view, recognising the expertise status. This could act as of the ECJ in this area. assurance of these rights and a significant deterrent to status in respect of the non- inward migration even before • We do not yet know what EU EEA countries of Iceland, we have left the EU, with the arrangements will be for Liechtenstein and Norway, significant potential negative citizens of Switzerland and plus Switzerland. implications for our economy, the non-EU EEA countries of Iceland, Liechtenstein and The UK Government’s recent public services and higher Norway. The UK Government publication of proposals on those education institutions. There will be pursuing separate rights helps to provide some have already been reports discussions on a reciprocal clarity but we are disappointed of significant reductions in basis, but we do not know that the UK Government chose the number of EU citizens whether they intend to make to await the publication of the seeking to work in specific proposals that are consistent EU’s detailed proposals on sectors in the UK – indeed, with those for EU citizens. citizens’ rights before setting the latest ONS migration 60 out their own, less generous, statistics show a statistically • More generally, until the wider proposals, and that there significant increase of EU negotiation process over the continues to be uncertainty citizens emigrating from the UK’s withdrawal from the EU over a number of crucial points, UK. Further consideration of is concluded, there will not be as follows: this and additional evidence any certainty over the future in respect of these areas, rights of EEA (including UK) • The cut-off date after which EU are critical priorities. and Swiss nationals who are citizens arriving in the UK will exercising their current free no longer attract an automatic • The extent to which ‘settled movement rights. entitlement to work towards status’ will differ from rights ‘settled status’. The UK of permanent residence The above are what we would Government’s position is that and resemble instead the consider to be the most this date will be between current ‘Indefinite Leave to significant points of uncertainty 29 March 2017 (the date of Remain’ (ILR) status for which at this stage, but we recognise the Prime Minister’s letter to third country nationals may that there are many, more the European Council notifying apply. ILR has additional detailed, yet important questions the UK’s intention to withdraw requirements compared to that also remain to be answered from the EU) and the UK’s permanent residence, such – for example on future voting putative withdrawal date as the requirement to pass rights, EU citizens are currently (29 March 2019). This means an English language test, entitled to vote in local authority and ‘Life in the UK’ test.

60 Source: ONS Statistical Bulletin, ‘Migration Statistics Quarterly Report’, August 2017: https://www.ons.gov.uk/peoplepopulationandcommunity/ populationandmigration/internationalmigration/bulletins/igrationstatisticsquarterlyreport/august2017#net-migration-to-the-uk-falls-to-246000

26 | Brexit and Fair Movement of People elections. In July 2017, An approach to future We understand that this the Welsh Government launched migration for Wales will create some additional a consultation on proposed administrative burdens on changes to local government Overall approach to longer- employers and public services elections in Wales, including term immigration but the burdens and costs of a consideration of the rights of Primarily, the Welsh Government more restrictive system, like that overseas nationals to vote in believes in an approach to which is already in place for third local government elections migration that is more closely country nationals, would be far in future61. linked to work, and where greater. exploitation of low paid The continuing uncertainty workers is tackled through To illustrate the system that we around citizens’ rights is strong enforcement of existing outline above, it is useful to refer unwelcome for many reasons. legislation – such an approach to the example of Norway. We have seen earlier that the allows the UK Government to majority of EU nationals living in As a member of the EEA, control migration, and to ensure Norway has implemented EU Wales have been settled here that opportunities, wages and for a number of years and live in free movement of persons law conditions for all workers are (as incorporated into the EEA a family unit (although we don’t not undermined. have data about their residency Agreement) into its domestic status). Not having certainty To ensure control, a system legislation. This is part and over future rights no doubt has a of this type would, of course, parcel of its involvement in negative effect on family life, and require additional monitoring the Single Market, which is is one possible motivating factor and record keeping, such as underpinned in turn by the for those who are considering the recording of employee ‘four freedoms’ of the free leaving the UK. In addition, the nationality. Job seekers would movement of goods, persons, UK Government’s proposals – also need to be registered and services and capital. unlike those of the EU – would monitored in order to ensure Relevant for us, however, is the considerably restrict EU citizens’ that people seeking work do so fact that Norway imposes rights to be joined by family in a reasonable amount of time certain specific controls and members, which would make – where this is not the case, or administrative procedures in moving to or remaining in the UK if they do not have a genuine relation to immigration of EEA considerably less attractive. prospect of employment, we and Swiss nationals. Some are should be able to ask them to illustrated in the case study leave the UK. below.

Case study: Norway EEA and Swiss nationals can move to Norway and start working straight away. Jobseekers and workers must register within 3 months of arriving in Norway. Jobseekers must have found a job within six months. If they have not found a job within this time they must then leave, but can come back to Norway to search again for six months. Workers who have worked for more than 1 year in Norway but have then lost their job involuntarily (i.e. not because they have resigned) can stay as long as they wish to seek work but must register as a job seeker with the Norwegian Labour and Welfare Administration.

61 Welsh Government Consultation document, published 18th July 2017: www.consultations.gov.wales/consultations/electoral-reform-local- government-wales.

Brexit and Fair Movement of People | 27 Unlike Norway, we are not if we assume that this is to be contributes to our economy and seeking to maintain the current shared out on a population our society. EU system of free movement, basis across the UK, to and nor do we think that the achieve the UK Government’s It would equally be difficult to put rules applicable in Norway would target, annual flows of net EU a number on how many migrants meet all of the UK’s needs migration into Wales would we would need in future, even if (Norway is also part of the need to fall from around 7,000- we can estimate our future Schengen area of passport-free 10,00062, to around 2,500 per workforce needs in a range of travel, for example, whereas we year (assuming EU migration sectors. This would depend on believe the current border control continues to be around half of variables such as the number of system at all ports of entry to total migration, as currently)63. existing migrant workers planning the UK should continue). to leave, the number of people More likely though, the very not currently in work who could However, this case study limited amount of immigration take on new job opportunities, does show that it is possible permitted would be concentrated the precise timings for some of to develop a managed and in the South East of England, our major infrastructure projects, controlled immigration system, (particularly if there were a and others. ensuring that migration is sector-based scheme focused linked to employment, whilst on financial services) effectively Another factor is longer term maintaining substantial access reducing immigration to demographics, in particular, to the Single Market. It is for other parts of the UK to zero. the decline of the working the UK Government to ensure The effects of this would further age population, and extended that checks and balances, be compounded by intra-UK life expectancy. As set out in perhaps building upon the competition for workers. Annex D, migrants tend to be example above, are incorporated younger and have more children in the UK’s future immigration Businesses in Wales and the than UK born, but uncontrolled model, and to negotiate a UK are engaged in a global migration is not a panacea – new relationship with the competition for talent. Annex B those migrants who remain EU accordingly. shows how EU migrants are here will also become part of currently represented in the a growing ageing population. UK Government Net Welsh workforce, as well as Migration Target future labour market needs, Targeted approaches and this evidence shows that to Migration We do not support the UK such an approach could present Government’s approach to If the UK Government were to a real prospect of severe reducing migration numbers to pursue a sector based scheme, damage to the Welsh economy an arbitrary target, as this risks as has been suggested, and risk to delivery of key public the sustainability of our key this could be particularly services that are already under economic sectors and delivery disadvantageous for Wales, pressure. of our public services. as the sectors which are most frequently discussed in this The level of migration into Achieving the UK Government’s context (in particular agriculture, Wales is low, compared to net migration target of the but also financial services) elsewhere in the UK and it is “tens of thousands” has so are not those which, in Wales, hard to find evidence to suggest far not been possible in the rely most on migrant workers that migration in Wales puts six years that this has been a (e.g. manufacturing, tourism). pressure on public services UK Government priority. Clearly Manufacturing, in particular, over and above the pressure a different, and more realistic does not seem likely to benefit that has been created by the approach is needed. from a sector-based approach. UK Government’s policy of The risk is therefore that austerity. Indeed, it is easier to The risks of adopting such an migrants who want to come and approach are severe. At best, find examples of how migration

62 Source: ONS International Passenger Survey (IPS) 2016; see also earlier footnote about IPS margin of error. 63 Based on Wales’ 5% share of the UK’s population (according to ONS population estimates released June 2017 – www.statswales.gov.wales/Catalogue/Population-and-Migration/Population/Estimate.

28 | Brexit and Fair Movement of People work in key sectors in Wales which does not include our key and indeed other nations and would not be able to if the sectors and does not provide regions within the UK cannot sectors in Wales with vacancies employers and businesses in easily be met through the blunt are not part of a sector-based Wales with any assurance that and resource-intensive UK-wide work permit scheme. they will be able to continue to approach currently in place. This access the workers that they again might best be based on a The Scottish Government has need. spatially-differentiated approach, called for the UK Government with significant input from the to provide for differentiated In this scenario where the nations and regions of the UK, approaches to immigration UK Government’s proposed as recommended by the All in different parts of the UK. immigration system could, in Party Parliamentary Group on In Scotland, the demographic our view, disadvantage Wales, Social Integration in its Interim challenges are very different we would be minded to call for Report into the Integration of from elsewhere in the UK. the UK Government to allow Immigrants. Such a policy would Over the next 10 years, for a spatially-differentiated recognise the distinct needs of 64 90% of Scotland’s projected approach, to ensure that Wales’ the Welsh economy and might population growth is accounted key sectors, public services provide a Welsh quantitative for by immigration (of which 57% and universities can continue allocation of Tier 2 visas, which is from international migration), to recruit from overseas, given could then be managed to and is set against a policy the risks outlined earlier of respond to labour and skills context of addressing concern restrictions to immigration. shortages within the Welsh about depopulation. Wales does economy. not have the same population There are a range of mechanisms by which this challenges in the immediate Self-Employed people future, but these challenges will approach could be delivered: become more apparent in the • We would expect the system We believe that the approach longer term. adequately to reflect Wales’ to migration that we have set needs and demographic out for people with jobs, or Overall, a spatially-differentiated profile both in the short seeking work, should also be approach to migration is not and long-term; available for people seeking to what the Welsh Government be self-employed. However, we • The system would continue is seeking. There is a trade off recognise that there will need to to be based on our high level between creating a system which be careful controls to ensure that policy position which requires would avoid abuses but which people coming to the UK with migrants to either have a job would be complex to administer, a view to being self employed or able to find one quickly; potentially placing a significant are doing so on a genuine basis, burden on employers and/or • The system would have in order to prevent abuse and government (local or national) to balance the need for exploitation. in Wales or, otherwise, a system enforcement and the need with light-touch controls that to prevent unfeasible The Welsh Government has could be easy to circumvent. administrative burdens to been proactive in attempting businesses, local government to tackle the issue of ‘false However we need to consider or the Welsh Government. self-employment’, whereby how best to manage the risks, large companies seek to if a sector based approach In the longer term, after we have engage workers in a way to immigration were to be negotiated our future relationship that undermines wages and adopted by the UK Government. with the EU, we would like to conditions, by enforcing self It would seem that a spatially- discuss with the UK Government employment. Our Procurement differentiated level of control a reform of wider UK migration Advice Note on Employment would have fewer disadvantages policy which would recognise Practices on Publicly Funded than a sector-based approach that the distinct needs of Wales Projects65, published in

64 Source: National Records of Scotland, Projected Population of Scotland, published October 2015 – www.nrscotland.gov.uk/files//statistics/population-projections/2014-based/pp14.pdf. 65 Welsh Government Procurement Advice Note, ‘Employment Practices on publicly funded projects’, March 2016 – www.prp.gov.wales/docs/prp/toolkit/20160324employmentpractisespanenglish.pdf.

Brexit and Fair Movement of People | 29 March 2016, sets out vital roles in our public services, Skills for Work in Wales expectations in that regard for key economic sectors and Clearly we want to ensure that companies engaged in projects higher education institutions, Welsh people are able to access funded by the Welsh Government there needs to be an approach high quality jobs. Where there and public authorities in Wales, which continues to enable are skills shortages and gaps, but we know that this issue is accompanying family members we will of course look for ways also prevalent in the private to travel to the UK. We recognise to address these, in the longer sector. We discuss later in the that the approach set out by the term, through focused skills paper the ways in which we UK Government seeks to bring development but, in the shorter think that exploitation of workers family members of EU citizens term, will need to be able to should be prevented and in the UK on an equal footing as recruit staff from overseas to fill tackled. those of UK citizens. However, key vacancies. the system which is already in There will need to be a way place for third country nationals Over the lifetime of this to ensure that people coming to reunite with their UK family administration, Welsh Ministers the UK for self-employment members is extremely restrictive, will deliver an ambitious are not doing so as a means expensive and applied in a way programme of work aimed at of circumventing the controls that all too often separates building a Wales that is more intended to link migration to family members. confident, more equal, better work. However we would not skilled and more resilient. Post- want to see criteria implemented We believe that the UK 16 learning has a critical part which deter people who are Government should make in delivering the commitments genuinely intending to undertake changes to the current system to made as part of the Programme self-employment, for example, make it easier for third country for Government – ‘Taking Wales the current requirement for third nationals with genuine family Forward’ and the overarching country nationals applying for an connections to join their UK, aim will be to deliver more and ‘entrepreneurship’ visa (Tier 1) EEA or Swiss family members in better jobs through a stronger, to have at least £50,000 to the UK, in a way that will allow fairer economy, improve and invest, plus proof of additional those who have genuine family reform our public services, income to support themselves. connections to come to the UK. and build a united, connected and sustainable Wales. Family Members Recognising Wales and the As explained earlier, third country UK’s distinct relationship Skills priorities, as set out in direct family members of EEA with the EEA ‘Taking Wales Forward’ 2016-21, and Swiss nationals have derived Given our current ties, there is are: rights which enable them to a clear argument for ensuring • To support people seeking the accompany EEA/Swiss nationals that migration to the UK from employability skills needed to exercising free movement rights. EEA countries and Switzerland get quality jobs; If their family members did is as easy as possible – • Creating a minimum of not have these derived rights, certainly easier than it is 100,000 apprenticeship this could deter many EEA/ from other countries outside opportunities to support Swiss nationals otherwise from Europe. It would be difficult to individuals and to help moving to other EEA countries or imagine a scenario where the employers in growing their Switzerland to take up jobs, and immigration system for EEA/ businesses; undermine the functioning of the Swiss nationals should be as • Promoting, encouraging and Single Market. difficult as it currently is for third enabling innovation and country nationals to come to the connectivity – our key drivers Even if the UK leaves the Single UK. We believe that adopting for economic growth and job Market (as is currently the UK such an approach would be creation, across the whole Government’s stated policy detrimental to the UK’s future economy. position), this principle does not relationship with Europe. change. If we want to continue to have EEA and Swiss nationals coming to the UK to undertake

30 | Brexit and Fair Movement of People Overseas students and that there is a level playing field seek work. During this scheme, Post Study Work across the UK. there was a marked increase in Overseas students contribute the number of overseas students This is also an example of applying to Scottish universities67. positively to Wales. In ‘Securing changes being considered to Wales’ Future’, we said that we The scheme was subsequently a non-devolved area of policy mainstreamed across the UK do not believe that students (immigration), which would have should be counted in net and subsumed into the UK Points significant effect on a devolved Based system as the Tier 1 migration targets – students area of policy (higher education). come to the UK to study and (Post-study Work) visa. A report to In the Welsh Government’s Scottish Ministers68 highlighted the majority returns home 66 paper ‘Brexit and Devolution’ , that since the UK Government after their course is complete. we call for a new approach to Our HEIs provide a globally announced the closure of the post competence that recognises study work route in March 2011, competitive exported service, the reality of inter-connected and any restrictions to our ability there has been a substantial responsibilities, like these, decline in enrolments of to deliver this are effectively ensuring that the UK and Welsh a restriction to trade. international students at Scottish Government’s powers are universities from key overseas In terms of the future immigration exercised in the interests of markets. system, we believe that better governance and delivery continued free mobility across for citizens – this interplay The Welsh Government wants Europe is in the best interests between immigration policy and to ensure that any post-study visa of Wales and the UK as a whole. HE policy is a clear example of flexibilities on offer elsewhere in Consequently we do not wish where this new approach should the UK can be offered to overseas to see additional immigration be put in place. students at Welsh universities, and calls for the current pilot restrictions for The Home Office is currently EEA/Swiss students, in the way scheme to be extended to all parts running a pilot scheme to of the UK. that is currently in place for third allow third country Masters’ country students through the students to benefit from a Tier 4 visa system. Access to public services streamlined visa process and and benefits 6 months additional time on Part of the wider picture is the The entitlement of migrants their student visa to seek work. previous UK Government’s to access public services and Students applying for this do narrative around overseas welfare benefits is described not need to include financial students and potential future in Annex A of this document. documentation, or evidence of changes to the current Tier 4 In summary, migrants from previous academic qualifications. system for third country countries outside the EEA and This pilot scheme is currently nationals, which raised concerns Switzerland are generally not limited to four universities – for the HE sector. International entitled to welfare benefits all in England. students are valued by their (with the exception of those that institutions, contributing to This type of scheme has are linked to National Insurance the diversity of the student the potential to increase the contributions), as a condition body, generating income and attractiveness of HEIs to of their visa will be ‘no recourse securing the viability of their overseas students. In 2005- to public funds’. For nationals of courses. It is important that 2008, in a scheme administered the EEA and Switzerland, access UK Government policy and the by the Home Office, third country to welfare benefits and public messages that it sends out do nationals who had graduated services depends on length not significantly undermine the from Scottish institutions could and purpose of stay and, in ability of universities to attract apply to remain in Scotland to some cases, ‘habitual residence’ international students, and status69. 66 Welsh Government, ‘Brexit and Devolution’, published June 2017 https://beta.gov.wales/brexit 67 Scottish Government: Fresh Talent: Working in Scotland Scheme – an Evidence Review – September 2008 – www.gov.scot/Publications/2008/08/15155422/0. 68 Post study work working group, Report to Scottish Ministers, March 2015 – www.gov.scot/Publications/2015/03/7684. 69 The Habitual Residence Test (HRT) applies to applications for means-tested welfare benefits and local authority housing services, and its conditions, principally that applicants are resident and settled in the UK, must be met in order to be entitled to apply for those benefits. More information atwww. wrc.wales/migration-information/legal-briefings/migrants%E2%80%99-entitlements-to-welfare-benefits-in-wales

Brexit and Fair Movement of People | 31 We believe that our proposed from European countries, Annex E outlines more fully the system of migration connected and consider that it is important way in which the UK Government to work should largely ensure to allow those who can already focuses on more extreme forms that those who are moving to travel without visas to continue of exploitation. Individuals the UK are able to support to do so. The right of citizens to are otherwise responsible themselves – as we have seen travel freely and without visas themselves for identifying and earlier, almost 80% of EU among European countries taking action against exploitation migrants in Wales of working is a benefit worth preserving. that they are experiencing, and age are in work – but we need Equally, we would regret any their ability to do so has been to ensure that those who come such barriers being imposed in diminished by reduced access here to work can do so in the other European countries which to Legal Aid, and pressures knowledge that there will be would inhibit ordinary travel by on advisory services. There is a safety net for unforeseen people from Wales and other therefore an opportunity to do circumstances. We therefore UK citizens. more to tackle exploitation in its believe that future EEA and wider forms. Employment rights Swiss migrants should be able European Co-operation and duties are largely a reserved to continue to access benefits Programmes matter to the UK Government and public services in a broadly Wales benefits enormously (with some exceptions as we similar way as currently. from its current ability will see below) – therefore it is to participate in cross- to be expected that the bulk of As we have outlined earlier in border and pan-European responsibility should fall to them. the document, there will need programmes and partnerships, to be a process of monitoring the However, as we have also seen, enhancing and strengthening status of those who have come the Welsh Government has been academic research, economic to seek work, to ensure that proactive in using its influence to development, student mobility their receipt of benefits does drive stronger compliance and and cultural and creative not continue beyond the period best practice amongst employers collaborations. Our approach where they can reasonably be in Wales, working with Trade to immigration underpins expected to have found work. Union social partners. our ambition to continue our participation in these However, we believe that, more UK Government Action generally, the risks of more programmes, as we outlined stringent restrictions on access in ‘Securing Wales’ Future’. The UK Government should do to public funds, housing and more to ensure that workers healthcare could have a range Tackling Exploitation of and employees are more aware of negative consequences, Low-Paid Workers of their rights. The recent nationwide campaign to highlight including impact on community As set out earlier, migrants are low-paid workers rights, such cohesion, increased particularly, but not exclusively as being paid for travel time, homelessness and ill health. vulnerable to exploitation in the and not including tips as part workplace. Tackling exploitation of minimum wage, was a very Border Control will benefit the whole workforce, positive step and can be built by ensuring that, at a minimum, Our border controls should on further with more innovative all workers are paid the continue to be enforced, as ways to engage with workers. National Living Wage, work in currently, at all ports of entry For example, the ‘Check My a safe environment, and are to the UK. We believe that it Pay’ calculator on gov.uk could able to enjoy the protection of serves no purpose to impose potentially be developed into a statutory minimum employment needless barriers to short-term smartphone app, with additional standards. travel for tourists, students and features, such as calculating ordinary business travellers holiday entitlement, for example.

32 | Brexit and Fair Movement of People Projections provided by the Low receive for the same job, which and social protections. Once Pay Commission70 suggest that may have been agreed through the UK has left the EU, these Wales will be one part of the UK collective bargaining. should be preserved as far as where the National Living Wage possible within domestic law, 72 (NLW) will have the greatest A recent review of the Directive and developed and enhanced impact – i.e. it will have one has been undertaken by the to keep pace with similar of the highest proportions of European Commission, but we improvements at an EU level. all areas of the UK of workers do not believe that the new covered by the NLW. Therefore, proposals go far enough to Welsh Government action failure to enforce the legislation ensure that posted workers across the EU will get the As described earlier, the protecting this will have a severe Welsh Government has used impact on people in Wales. equal pay for equal work that they should be entitled to, and its powers in procurement to The UK Government must influence better employment continue to put resources into creates a situation that still leaves posted workers open practices by employers who enforcing the National Living supply goods and services to the Wage and consider focusing to ‘wage competition’ and exploitation. Whilst we are still Welsh Government and public their efforts on the nations and authorities. In particular, and as regions which have the greatest a full member of the EU, the UK Government should do more to highlighted earlier: proportion of workers covered by • The Code of Practice on the NLW. It should also be more press the European Commission to tighten up the provisions of Ethical Employment in Supply transparent and provide more Chains; detail about investigations and this revised Directive. Crucially, prosecutions in Wales related to it must ensure that the principle • Procurement advice notes non-payment of the NLW. of equal pay for equal work to eradicate blacklisting and is reflected in domestic law false self employment; The EU Posted Workers in the future, and in any new • The Two Tier Workforce code; Directive71 was adopted in 1996 arrangements between the UK to ensure that EU workers who and the EU going forward. • Guidance on non-guaranteed are sent by their employers hours. A great deal of the UK’s to undertake work in another The most effective way to EU country are able to access employment’s law has EU law at its source – Annex E highlights a strengthen protection of statutory minimum rates of pay, working rights is to improve and support time entitlements, health and number of EU laws which protect the rights of workers to a safe trade union representation of safety and anti-discrimination low waged workers at the level rights. By doing so, the intention working environment, parental leave and equal treatment, of their workplace and across is to prevent situations where sectors. The Welsh Government employers could use posting amongst others. The European Commission’s proposal for will work with Trade Unions as arrangements to under-cut well as core funded advisory national employment standards a ‘European Pillar of Social Rights’ sets out a number of key services, so that they have and pay rates. The reality sufficient support to provide is that the provisions of the principles and rights to support fair and well-functioning labour advice to workers who need it. Directive are limited; in the UK, We can also consider how the for example, posted workers markets and welfare systems, aiming for better working Wales Union Learning Fund could can receive the National Living help, providing courses targeted Wage, but not necessarily a and living conditions among 73 either directly at workers, or at comparable wage and rights participating Member States . These are valuable employment those who might provide advice that the local workforce would and support to workers.

70 National Minimum Wage Low Pay Commission Report Autumn 2016, Figure 2.5 – www.gov.uk/government/uploads/system/uploads/attachment_ data/file/575634/10583-LPC-National_Living_Wage_WEB.pdf. 71 European Commission website – ‘Posted Workers’ – www.ec.europa.eu/social/main.jsp?catId=471. 72 European Commission news release, March 2016 – www.ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=2488&furtherNews=yes. 73 European Commission website, European Pillar of Social Rights: www.ec.europa.eu/commission/priorities/deeper-and-fairer-economic-and- monetary-union/european-pillar-social-rights_en.

Brexit and Fair Movement of People | 33 The Welsh Government is Engaging with understand and address the exploring ways of using its Communities and People concerns of people in some of influence to drive further As we have seen earlier, the our most deprived communities. compliance and good practice relatively low levels of migration Through our Community amongst employers in Wales, in Wales are contrasted with Cohesion National Plan we are including through the range of public attitude surveys that working to ensure that cohesion business support it provides. show unfavourable attitudes happens in all communities For example, in our consultation towards immigration, in a higher across Wales to enable different on Small Business Rate Relief, proportion than other parts of groups of people to get on well we consider the extent to which the UK. We understand that together, as our communities we could prioritise the provision these attitudes may result in Wales become increasingly of rate relief to businesses which from perceived pressures of diverse. We are also working to can demonstrate alignment with migration on public services break down barriers to inclusion key Welsh Government policies, and employment, and across socially marginalised such as Trade Union recognition apprehension over possible groups, and to reduce and working towards payment of changes to communities discrimination and victimisation. the Living Wage. The Fair Work resulting from migration. This will help us to deliver Board will identify the steps our ‘Taking Wales Forward’ needed for Wales to become We believe that our proposed commitments around being a fair work nation. We will also approach to migration as set ‘United and Connected’ and consider how new powers out here and in our White ‘Prosperous and Secure’, and granted through the ‘Wales Paper, provides a framework also supports the ‘Well-being of Act 2017’ to bring Section 1 that controls migration whilst Future Generations (Wales) Act of the Equality Act74 into force at the same time meeting Wales’ 2015’ goals of more cohesive could enable public authorities future needs. and more equal communities. to have a stronger role in driving There is a need to find different compliant employment practices. The Welsh Government will and better ways of talking to consider additional ways of The Welsh Government will people across communities communicating and engaging also seek ways to influence in Wales to understand what with communities to help inform employer behaviour through their needs and concerns are, the discussion and debate the Workforce Partnership as well as explaining our policies, around migration in Welsh Council and the Council including around migration. communities. for Economic Development The UK’s exit from the EU means (which bring together the Welsh that the Welsh Government Government with employers and needs to rethink a number of Trade Unions) and through its our devolved policies, and we engagement with other employer need to engage meaningfully and business networks. We will with communities to ensure that also raise these issues in our revised policies work for people discussions with Governments across Wales. across the UK – for example Increasing social tensions through the regular Finance and concerns around Ministers Quadrilateral with the immigration and around social Chief Secretary to the Treasury marginalisation will continue and Finance Ministers of the to be a challenge. The Valleys other devolved administrations, Task Force is working to and the British-Irish Council.

74 See section 45 of the Wales Act 2017 which provides a power for the Welsh Ministers to bring the socio-economic duty into force.

34 | Brexit and Fair Movement of People 7 Conclusion

The current picture Immigration overall has a The UK Government’s recent Migration has been good for positive effect on the economy: proposals for safeguarding Wales’ economy and for people it is shown to increase the rights and status of EU in Wales. We will continue to productivity and is connected to citizens in the UK and UK welcome and need citizens of projected increases in the UK’s nationals in the EU provide a other countries to live and work GDP. Studies show a broadly belated indication of the future here in future, and Welsh people positive impact of immigration direction, but do not go far will want to continue to be able in the UK, although some studies enough to provide any certainty, to study and work overseas. have seen limited negative and continue to treat EU However, we recognise that impacts on wages, in areas citizens in the UK as bargaining some people in Wales have where there is a rapid increase chips, which is unacceptable. been concerned about the in immigration. We believe that Furthermore, there is insufficient extent and speed of migration wages are only part of a much detail about how the rights into Wales. That is why we have wider picture in relation to and status of nationals from set out a managed approach reduced real earnings – driven Switzerland, and the that connects migration to by inflation, low productivity and non-EU EEA countries of Iceland, employment, and also seeks austerity policies. Exploitation Liechtenstein and Norway, to prevent the exploitation of of workers is part of this: here, will be protected. workers, particularly the immigration is not the issue, but unscrupulous employers. The Welsh Government believes low-paid. that Wales’ future prosperity is The Welsh Government believes Immigration can, of course, intrinsically linked with our ability that a strong economy, through lead to some increased to secure full and unfettered continued full and unfettered demands on public services. access to the Single Market. access to the Single Market, Overall however, immigration To give us the best chance of is in Wales’ best interests after creates a net benefit for public achieving this, we propose a EU exit. The UK Government finances, due to the increased flexible, but managed, approach has signalled that it wishes to tax revenues of migrant workers. to migration, which is linked more pursue a comprehensive free In the longer term, migration can closely to employment. play an important role in helping trade agreement with the EU. The UK Government’s future Depending upon the scope and to address issues related to our ageing population in Wales. system for immigration for EEA ambition for this agreement, and Swiss nationals to the UK in order for the UK Government The future after Brexit is not yet known, realistically to secure such an but previous signals from the Following EU exit, securing the outcome in its negotiations with UK Government have focused rights and status of EEA and the EU, this agreement would on reductions in numbers, Swiss nationals in Wales and need to be underpinned by a whilst speculation over a future of Welsh people in Europe is of flexible approach to migration. system has included reference critical importance, particularly to sector based schemes and Although the overall number as the majority of these people salary thresholds. We do not of migrants in Wales is are settled, with families. believe that these sorts of comparatively low, certain Uncertainty over their future restrictive approaches would be services and sectors in Wales status is detrimental to family life in Wales’ best interests. Should can be particularly reliant and creates knock on effects in the UK Government pursue a on migrant workers, such as the sectors where EEA and Swiss restrictive immigration policy the Welsh NHS, social care, migrants are most likely to work. food production, tourism, which would be detrimental to construction and our Higher Education Institutions.

Brexit and Fair Movement of People | 35 Wales, we would explore options Responsibility for employment for a spatially-differentiated rights and duties is a reserved approach that would be more matter for the UK Government, fitting to Wales’ needs and and it needs to step up interests. enforcement against all types of worker exploitation. We know that some people have been concerned about the extent We recognise that some public and speed of immigration in their attitudes towards immigration communities, and have been in Wales are negative, and we apprehensive about the change need to understand better the that immigration might bring, reasons for this, particularly and that, in part, this concern when contrasted with the is underlined by perceptions relatively low levels of migration, that immigration causes wages and significant contributions of and conditions of employment migrants in Wales. The Welsh to be undermined. This type of Government is committed to exploitation does exist, but it is finding new and better ways not confined to migrant workers. to engage with people and Migrant workers are particularly, communities across Wales in but not exclusively vulnerable order to understand people’s to exploitation by unscrupulous needs and concerns. employers. Tackling exploitation of workers will, we believe, Our vision for Wales is an improve wages and conditions inclusive country in which for all workers. We believe that people from all backgrounds are more can, and must be done to welcomed and where there is no tackle all exploitation of workers, room for xenophobia, racism or particularly the low-paid. bigotry; the Welsh Government will continue to show leadership The Welsh Government is here, but this is an action for all. committed to making Wales a fair work nation, and will use whatever levers and powers it can to prevent exploitation and support low-paid workers who are being exploited. We will work with our partners in the Trade Unions in order to identify abuses and exploitative practices and to drive greater compliance. We will also work closely with third sector and employer stakeholders in this area.

36 | Brexit and Fair Movement of People 8 Annex A – Migration Processes, Definitions and Circumstances

Who are we talking Where are we talking Free movement of good, about? about? persons, services and capital are the ‘four freedoms’ which For the purpose of this paper, The Common Travel Area (CTA) underpin the European Union we reflect on the role of migrants (UK, Republic of Ireland (RoI), and the Single Market it creates. of all nationalities in Wales, but Isle of Man, Channel Islands). with a focus on changes to the There are two fundamental CTA arrangements have existed UK’s immigration system for EEA concepts which lie underneath in various forms since 1922. and Swiss nationals. We believe the term ‘free movement of The arrangements were therefore these changes will predominantly persons’ in EU law – free in place before the UK and RoI affect the following groups movement of workers, and free joined the EU, and are indeed of people: movement of citizens. referenced in the EU Treaties • Jobseekers; themselves1. Free movement of workers: • Workers (i.e. the employed) This aims to ensure that and self employed people; Individuals from the above human resources can be countries of the CTA can move • Family members; deployed wherever needed, freely between the countries and does this by ensuring that • Students; of the CTA without requiring a individuals can take up an offer • ‘Self sufficient’ people passport (although photo ID is of employment, work, and then (not working, self employed, required). Irish nationals have reside after working, in another job seeking or studying, a special status in UK law which Member State and on a non- but who have sufficient is separate to and pre-dates the discriminatory basis2. resources to support rights they have as EU citizens. themselves and any family Free movement of citizens: members). The EU, European Economic Area EU citizenship rights – and Switzerland established in the Maastricht Discussions about migration and The European Economic Treaty, and now found in Part Two immigration can also include: Area (EEA) describes the 28 of the Treaty on the Functioning • Short term visitors (generally Member States which currently of the European Union (TFEU) less than 3 months) for make up the European Union, – include rights to move and tourism or business travel; plus Iceland, Liechtenstein and reside freely around the EU and represent a departure • Refugees and asylum seekers; Norway – 31 states in total. from a purely economy-focused • Illegal and irregular immigrants Switzerland is part of the ‘workers’ approach to free (e.g. expired visas, people who European Free Trade Area movement of persons. have been trafficked). (EFTA), but not the EEA. Iceland, Liechtenstein and Norway are The EEA Agreement provides It is also interesting to note that also members of EFTA. It is for the inclusion of EU legislation the UK’s official net migration important to distinguish between covering the four freedoms figures include UK nationals these groupings because throughout the 31 EEA returning to the UK after a period although nationals of all these states. As a result, the non- of more than one year overseas, countries have free movement EU EEA countries of Iceland, or having been born overseas. rights, the legal basis for free Liechtenstein and Norway have movement differs. implemented EU free movement

1 Protocol No 20 to the Treaties on the application of certain aspects of Article 26 of the Treaty on the Functioning of the European Union to the United Kingdom and to Ireland. 2 There is no definition of the term ‘worker’ in the treaties; the CJEU has therefore been required to interpret it and has done so broadly – any person who pursues an activity which is effective and genuine, to the exclusion of activities on such a small scale as to be regarded as purely marginal and ancillary, is to be treated as a worker (C-337/97 Meeusen, para 13, for example). The case law indicates that it can include, for example, former workers/work-seekers in some circumstances.

Brexit and Fair Movement of People | 37 of persons law into their are additional provisions for this What are the key domestic legislation as part and specific group of people in the processes and parcel of their involvement in the applicable EU/EEA legislation. Single Market. frameworks? This right is known as a Border control is enforced at Switzerland implements ‘derived’ right because the family all entry points to the UK – the EU legislation on free member does not have this right air, sea and rail – and under movement through one of its themselves, it is derived from all circumstances. All people bilateral agreements with the their relationship with the EEA/ entering the UK, whether or not EU, the Agreement on Free Swiss national. The intent behind from the EEA and Switzerland, Movement of People (AFMP). this right is to enable EEA and are subject to passport and – Swiss nationals to be able to fully EEA and Swiss nationals are where applicable – visa checks, exercise their free movement apart from where this travel is entitled to travel to any other rights. If their third country EEA country and Switzerland within the Common Travel Area family members were not able to (as described earlier). without restriction for stays of accompany them, this is likely to up to 3 months. After 3 months, deter EEA and Swiss nationals Elsewhere in the EEA and EEA and Swiss nationals can from exercising those rights, Switzerland, the Schengen only remain in the UK if they undermining the contribution Agreement has, since 1995, come under the category of a of free movement to the effective allowed passport free travel ‘qualified person’, within the functioning of the Single Market. between the majority of EEA meaning of the ‘Immigration countries and Switzerland. (European Economic Area) Third Countries: Only six countries from this Regulations 2016’. Third country nationals are area are outside the Schengen A qualified person includes: required to have a visa to travel zone – Bulgaria, Croatia, Cyprus, Ireland, Romania and the UK. • A jobseeker (subject to being to the UK for any purpose, unless they are a ‘non-visa national’, able to provide evidence Visas are a pre-requisite for third in which case they are permitted that they are continuously country nationals wishing to short stays without a visa for up seeking employment and have enter the UK, except for: to 6 months3 or if, as described a genuine chance of being • non-visa nationals staying in engaged); above, they are accompanying a direct family member who is the UK for short visits of up • A worker; an EEA or Swiss national. to 6 months; • A self-employed person; • spouses and dependants Beyond this, different types of • A self-sufficient person; of EEA and Swiss nationals visa (divided into ‘tiers’) apply who have a derived right to • A student. depending on the individual’s accompany without a visa, circumstances. Visas are Qualified people also have the but may be subject to other available for high value workers right to be accompanied by their requirements. (tier 1); skilled workers (tier 2); direct family members (spouse, student visas (tier 4) and New visa applications are dependant children, dependant temporary workers (tier 5). generally only possible before parents), who may be from Tier 3 visas had previously been someone has entered the UK, countries from outside the EEA considered for seasonal workers unless the person is switching and Switzerland (e.g. someone but were not introduced, due to from one category to another from France, coming to work in the availability of workers from (e.g. a student with a Tier 4 the UK could bring their spouse within the EEA and Switzerland. visa switching to a Tier 2 skilled if they are from a third country – work visa). such as the United States). There

3 The UK Government’s guidance sets out the list of country nationals which DO require a visa even for short stays. www.gov.uk/guidance/immigration- rules/immigration-rules-appendix-v-visitor-rules. There are 56 countries whose nationals are ‘non-visa nationals’ including the USA, Australia and Canada.

38 | Brexit and Fair Movement of People Sponsorship refers to two be able to either apply for or • Housing Benefit; processes – firstly, where work towards ‘settled status’. • Council Tax reduction. the Home Office licenses This is considered in more detail an employer or educational in the main part of the paper. EEA and Switzerland institution; secondly, where the Under current rules, ‘qualified licensed employer or educational Indefinite Leave to Remain people’ (as described earlier) institution provides a ‘certificate is broadly the same status who are workers or self employed of sponsorship’ to a student or as permanent residence but – and their family members – to an employee (where a suitable is currently largely used in are able to claim welfare benefits job exists). the context of third country nationals. The conditions for if they meet the conditions of Work permits are another eligibility vary depending on the habitual residence test as means of expressing the circumstance but, in general, described above. Jobseekers are ‘certificate of sponsorship’ require the person to have lived also entitled to claim benefits issued by employers which, in the UK for 5 years legally, to (excluding housing benefit) if combined with a Home Office pass an English language test they meet the same conditions. issued Visa, permits a third and ‘Life in the UK’ test. However, their entitlement to country national to live and income-related jobseeker’s work in the UK. Access to benefits allowance is limited to 91 days. After this time, they are required The Immigration Skills Charge CTA to satisfy a ‘Genuine Prospect is levied on employers that hire British and Irish citizens who of Work’ assessment. workers from third countries. have lived within the CTA have The charge is currently £1000 Students and other non the right to reside and claim per annum (£364 for charities working ‘self-sufficient’ people benefits in other parts of the and small organisations) must have comprehensive CTA, unless they are moving but, under proposals in the sickness insurance and do back from a country outside Conservative Party’s manifesto, not have access to welfare the CTA – in which case they will would double. benefits, except – in certain need to satisfy a UK Government circumstances – child benefit, The Immigration Health habitual residence test to child tax credit and housing surcharge is levied on visa demonstrate their right to reside services. UK citizens in other 4 applicants as part of the visa and intent to settle in the UK . EU Member States currently application process. The charge The habitual residence test have rights to access equivalent is currently £150 per year for applies to the following benefits: benefits (‘social assistance’) on students and £200 per year • Attendance Allowance; a reciprocal basis. for other visa applicants. • Disability Living Allowance; Third Country Nationals Permanent residence refers • Personal Independence Most third country nationals5 to a right to reside in the UK Payment; indefinitely. Under EU and coming to the UK will not be EEA rules, EEA and Swiss • Carer’s Allowance; eligible for the majority of nationals are currently eligible • Income-based Jobseeker’s benefits, as a condition of for permanent residence in the Allowance; their visa will be ‘No Recourse to Public Funds’ (NRPF). UK if they have continuously • Income-related Employment The benefits and services that been in the UK for a period of and Support Allowance; 5 years and meet a range of are classed as public funds are • Income Support; conditions. The UK Government listed on the UK Government 6 recently outlined proposals that • Pension Credit; website . However, publicly funded services such as some EU citizens without permanent • Universal Credit; residence status would, in future, NHS treatment, education, legal aid and social services

4 UK Government news release December 2013 https://www.gov.uk/government/news/improved-benefit-test-for-migrants-launched 5 Some exceptions apply, for example, some refugees, people with humanitarian protection, and those with indefinite leave to remain (ILR). 6 www.gov.uk/government/publications/public-funds--2/public-funds.

Brexit and Fair Movement of People | 39 or benefits that are based on -- arose after the visitor’s Third Country Nationals National Insurance contributions arrival; or Third country nationals are do not count as public funds -- became acutely generally required to pay for and are therefore available. exacerbated after his/her their secondary (i.e. elective) arrival; or healthcare except for the exemptions outlined earlier or Access to NHS Services -- would be likely to become where there is a UK reciprocal Some NHS services provided in acutely exacerbated without healthcare agreement in place. NHS trusts are free to everyone treatment; regardless of the nationality or Third country overseas visitors • the treatment of chronic residency status of the patient. who are staying in the UK for a conditions, including routine These include (for example – period of longer than 6 months monitoring; not exhaustive): for specific purposes (e.g. study) • treatment given in an accident • maternity services, including are required to pay the UK health and emergency department antenatal and post natal surcharge (annual charge of or casualty department services for up to fifteen £150 for students, £200 for (this exemption from charges weeks after the birth of the others) as part of their visa ceases once the patient is child, providing the reason application. Payment of the admitted to a ward or given for visiting the UK was not health surcharge means that the an out patient appointment); specifically to give birth. individual will receive secondary To visit the UK specifically • family planning services; (i.e. elective) healthcare free of to access maternity services charge on the same basis as a • certain diseases where requires referral via an E112 UK resident for the duration of treatment is necessary to form. their leave to remain in the UK. protect the wider public health (e.g. Tuberculosis); The European Health Insurance Card (EHIC) entitles the holder • Mental health treatment, to all necessary treatment in certain circumstances. but not to elective treatment. It is not a requirement to be in EEA and Swiss Nationals possession of the card to receive Visitors from the EEA and necessary treatment. The EHIC Switzerland are exempt from confers the right to access charges for all necessary state-provided healthcare across treatment. Here, ‘necessary’ the EU at a reduced cost, or means: sometimes for free, on the • diagnosis of symptoms or same basis as a resident of that signs occurring for the first country. time after the visitor’s arrival in the UK; and • any other treatment which, in the opinion of a medical or dental practitioner employed by or under contract with a Local Health Board (LHB), is required promptly for a condition which:

40 | Brexit and Fair Movement of People 9 Annex B – Skills and Key Sector Considerations

Labour Market and Skills Requirements in Wales Skill shortage vacancies1 (SSVs) Employment projections from This is followed by affect the construction and Working Futures 2014-244 accommodation and food manufacturing sectors heavily – suggest that there will be a (10,100/11.8%) and support 40% of vacancies in construction continued movement towards services (9,100/10.3%). are SSVs and 31% of vacancies higher qualifications and Declines in employment are in manufacturing are SSVs, with higher skilled occupations. projected across a number of construction the sector most However, some lower skilled sectors including agriculture affected by SSVs. Whilst SSVs occupations are projected to (-10,700), rest of manufacturing are skills deficiencies amongst show growth (with customer (-10,000), and engineering applicants, skills gaps are skills service occupations and caring (-5,100). Due to the need to deficiencies within employers’ personal services showing replace workers who have left existing staff2. particularly high growth) and the labour market, there will still there will be a need to replace be considerable demand from Skills gaps affect manufacturing those who have left the labour these sectors between 2014 most heavily (8.8% of staff have market across all sectors, and 2024. skills gaps), followed by hotels occupations and qualification and restaurants (6.9%). levels. At the same time, we are also aware of growing demand for In addition, employers are The fastest growing sectors in workers both in the construction affected by non-skills related Wales on a percentage basis and tourism sectors, as set reasons for having difficulty filling are expected to be finance and out below, and pressure on 3 vacancies . Whilst across Wales insurance (projected growth recruitment and retention in 9% of vacancies were difficult of 17.9% between 2014 and public services, particularly the to fill exclusively for reasons not 2024), water and sewerage NHS and social care. related to skills, qualifications or (16.5%) and professional experience, this was higher in services (13.2%). However, construction at 16%, just behind the combined growth for these 18% in arts and other services. sectors (16,200) is still less than In hotels and restaurants and that projected for wholesale and manufacturing this was 9% retail trade due to their relatively and 8%. smaller size. Wholesale and retail has the largest projected increase in employment numbers of 19,700 (9.6%).

1 Employer Skills Survey 2015, UK Commission for Employment and Skills (2016). SSVs are vacancies which an employer is finding hard to fill due to a lack of applicants with the required skills, qualifications or experience. These only affect 6% of establishments in Wales, but nearly a quarter of vacancies (24%) are SSVs. 2 Skills gaps exist when staff are deemed not fully proficient. 14% of establishments in Wales have skills gaps and they affect 4.5% of staff. 3 Nine per cent of all vacancies in Wales were reported to be hard-to-fill exclusively for reasons not related to skills, qualifications or experience. The main causes were not enough people were interested in doing this type of work, low number of applicants generally, low number of applicants with the required attitude/motivation, poor terms and conditions offered, and shift work/unsociable hours. 4 Working Futures 2014-24, UK Commission for Employment and Skills (2016). As with all projections and forecasts, the results presented in Working Futures should be regarded as indicative of likely trends and orders of magnitude given a continuation of past patterns of behaviour and performance, rather than precise forecasts of the future.

Brexit and Fair Movement of People | 41 Migration in Key Economic Sectors, Public Services and Higher Education

Tourism The BHA report suggests that, about the food production sector, long term, it may be possible to which is a significant part of the Migrants make up 11% of the recruit some more unemployed manufacturing sector. According Tourism workforce in Wales or inactive workers into the to the Engineering UK 2017 (5% of the workforce are from hospitality sector through efforts report8, it is predicted that the the EU)5. The British Hospitality to attract more people to work UK will need 101,000 people Association (BHA) recently in the sector and investment with level 4+ skills in engineering published a report, prepared in related skills development, per annum and estimated that by KPMG6. which looked at the and to reduce head count the UK will provide 41,000 of hospitality industry’s reliance requirement through productivity these and the EU some 40,000, on EU workers and sought to gains and increased retention. leaving a gap of 20,000. quantify the resourcing challenge However, in the short to medium If there are future issues with it would face in the event that term, the recruitment gap is EU graduates working here, free movement ended and unlikely to be met through these then the gap widens to 60,000 no arrangements were put in routes. across the manufacturing, ICT, place for continued access and Construction sectors. to EU workers (the ‘cliff-edge’ Although as stated above, scenario). the proportion of EU nationals in Key businesses and sub-sectors the Tourism workforce in Wales from the Advanced Materials The report shows a range of is 5%, we understand from and Manufacturing sector have scenario-based figures for future talking to tourism businesses expressed views about future labour market requirements in Wales that the figure can be immigration policy for EEA and in the sector, driven by sector much higher in some individual Swiss nationals mainly at a level turnover and employment businesses. Other factors that UK level, but there are also growth, and how these could will need to be considered in considerations for Wales: potentially be increased by Wales are the concentration of the impact of the end of free workers in this sector in urban • Most of the sub-sectors movement. At a time of low areas, and the extent to which highlight the importance of unemployment and a very recruitment difficulties may be rapid and administratively high level of participation in more strongly felt by the small simple intra-company staff the labour market by people and medium sized enterprises transfers between different of working age, the BHA who make up the majority of EU countries, and express believes these requirements the tourism sector in Wales, concern about how this might could potentially not be met – and by tourism businesses in be affected by future changes. especially given the competing rural areas. • The Automotive Council resourcing requirements estimates that between 5-10% of other sectors, and the of their workforce is comprised challenge of attracting the Manufacturing of EU migrants9, and this has resident population to careers 9% of the Manufacturing helped overcome an identified in the sector. workforce in Wales is from skills gap of around 5000 overseas (7% is from the EU)7. people. We consider below in more detail

5 Source: Welsh Government data, as set out in ‘Securing Wales’ Future’ – page 61, Figure 9. 6 KPMG Report for the British Hospitality Association, ‘Labour migration in the hospitality sector’, March 2017 www.bha.org.uk/wordpress/wp-content/uploads/2017/03/BHA-KPMG-Labour-migration-in-the-hospitality-sector-report.pdf 7 Source: Welsh Government data, as set out in ‘Securing Wales’ Future’ – page 61, Figure 9. 8 Source: Engineering UK Annual Report 2017 – www.engineeringuk.com/report-2017 9 Unpublished data provided by the Automotive Council to the Welsh Government, November 2016.

42 | Brexit and Fair Movement of People • Over 20,000 aerospace sector plumbing, etc). Around 3% of According to the 2017-2021 jobs are based in Wales10 and the workforce is from overseas Construction Skills Network 1 in 3 aerospace businesses (2% of the workforce is from Report16, Wales is projected have raised concerns about an EU background). This is to see annual average output access to skills11. For example, a smaller proportion of the growth of 6.2% over the five Airbus, which employs 600 workforce than other sectors years to 2021, the strongest EU workers in the UK and but as we have seen above, of any of the English regions 1,800 UK workers in Europe, construction is a sector that has and devolved nations (the next has raised concerns over difficulty with filling vacancies highest growth is 3.1% in the any restrictions which would due not only to a lack of skills, South West with the UK average prevent them attracting qualifications and experience being 1.7%). This growth is high skilled workers or from amongst applicants, but also driven by the strong pipeline being able to move workers due to other non-skills related of proposed infrastructure around Europe, including issues. The ‘UK Commission for projects in Wales, including the at short notice and without Employment and Skills Employer Wylfa Newydd nuclear power restrictions12. Skills Survey 2015’14 highlights development, South Wales • The Defence sector the most common non-skills Metro, M4 relief road and highlights concern about the reasons for hard to fill vacancies Tidal Lagoon developments. attractiveness of the UK as in construction – to note that Infrastructure projects elsewhere a destination for investment due to small sample size (39), (e.g. Hinkley Point nuclear power and for highly-skilled workers this data should be treated plant in Somerset) will also if additional barriers to with caution: drive competition for qualified movement are put in place. and experienced workers • Not enough people interested as construction workers are • Some individual manufacturing in doing the type of job (the historically very mobile. businesses in Wales have told cause, at least in part, of 40% us that they employ between of construction hard-to-fill 30-40% of staff from the EU vacancies); Food manufacturing due to the lack of availability of • Low number of applicants and Farming staff in the local area, and this generally (17%); The Food and Drinks sector can be for both lower and is heavily reliant on migrant highly skilled jobs. This reflects • Low number of applicants workers to fill roles in food specific and isolated examples with the required processing: but, in cases such as these, attitude, motivation or personality (14%); the viability of the business • In 2015 over a quarter (27%) as a whole could be reliant on • Too much competition from of those employed in food and this section of the workforce. other employers (6%); drink manufacture in Wales • Poor terms and conditions were born in the EU. Construction (e.g. pay) offered for post (4%). • Since 2011 we have seen a 63% increase in the number The construction sector in Adding to the recruitment of people born in the EU Wales comprises over 103,000 pressure is the anticipated employed in food and drink people in its workforce13, in reduction in workforce due to manufacturing sector in a wide range of occupations retirement (19% over 5-10 Wales compared with 3% which vary in skill level – years15), as well as growth increase from the rest of the labourers, architects, project in demand due to future UK and 2% decline in those managers, and specific crafts construction needs in Wales. employed from Wales in the and skills (bricklaying, roofing, same period. 10 Source: Aerospace Wales – www.aerospacewalesforum.com/welsh-aerospace-industry 11 Source: ADS, UK Aerospace Outlook 2017 12 From The Independent, 24th January 2017 – www.independent.co.uk/news/business/news/brexit-latest-news-airbus-boss-tom-williams-aircraft- manufacturer-dangerous-phase-free-movement-a7543946.html 13 Source: Annual Population Survey, as outlined in Annex C to this paper. A CITB Observatory paper which provides data based on ONS, CSN, Experian counts 110,740 for total workforce but does not break down by nationality. 14 Source: UK Commission for Employment and Skills: Employer Skills Survey 2015 15 Source: CITB, 2013 www.citb.co.uk/news-events/uk-construction-skills-time-bomb/ 16 www.citb.co.uk/research/construction-skills-network/wales/

Brexit and Fair Movement of People | 43 • For all manufacture in Wales Welsh jobs in the food and of ‘just in time’ production the percentage of people in farming sector have been subject techniques for foodstuffs with employment born in the EU is to lower wages when compared a short shelf life is therefore much lower at around 7% of with the UK and any policy to set likely to make the food supply the total. a threshold of wage or salary chain particularly vulnerable • However there is a similar as part of future immigration to any changes to border growth, between 2011- policy should be mindful of the arrangements and the free 19 2015, in the number of difference . movement of people. those employed in the total As noted above, there is also manufacturing sector from no easy distinction to be made Veterinary Sector the EU at 57% (as the total between skilled and unskilled The veterinary sector in the also includes Food and drink labour. For instance, in the red manufacturing)17. UK faces particular problems meat industry, butchers and with recruiting skilled and Anecdotal evidence from food meat packers are highly skilled experienced staff. A 2015 and drinks manufacturers at sector specific tasks but are survey by the British Veterinary suggests that they have found relatively low-paid, and will be Association found that two thirds it difficult to recruit local labour recorded in official statistics as of vet practices took over three to undertake production line unskilled. Continued access to months to fill a vacancy; of these jobs and migrant workers have labour will therefore need to be 10% took over 6 months and 7% plugged a gap in labour supply. based on an assessment of the were forced to withdraw the role needs of industry rather than because of a lack of suitable In the UK the majority of EU this binary distinction. candidates21. According to 2015 migrants who work in agriculture data from the Royal College of tend to work in the horticulture Some universities in Wales have Veterinary Surgeons (RCVS)22, sub-sector, which is highly reported that they have struggled 44% of newly registered labour-intensive and reliant to recruit students to study for veterinary surgeons in the UK on a seasonal workforce. advanced qualifications leading qualified from EU veterinary However, horticulture makes to quality roles in food such as schools and 22% of staff at up a relatively small part of technicians or food technology. UK veterinary schools are from the Welsh agricultural sector This has resulted in some of the EU. – livestock farming is far more these highly-skilled and well- significant18 – which means paid jobs being filled by migrant Some parts of the veterinary that Wales has fewer seasonal workers. sector are particularly reliant workers than the UK as a whole. Although direct employment in on EU workers, for example, Work in meat processing is not the food production sector is a according to the Veterinary seasonal as workers tend to major concern, it is not the only Policy Research Foundation be employed all year round on one. For example, according (VPRF) 90% of meat inspection a permanent basis. Thus the to the Freight Transport occupational vets are non-UK reintroduction of a seasonal Association20, it is estimated EU citizens23. These positions workers scheme would not be that only 12% of trucks that utilise specific skills which do not sufficient to preserve access come across the Dover straight transfer directly to other clinical to labour in these industries. are registered in Britain. The use veterinary professions.

17 Source: Welsh Government analysis of Annual Population Survey (Jan-Dec), Office for National Statistics – www.gov.wales/statistics-and-research/ad-hoc-statistical-requests/?lang=en 18 Wales has a 2% share of the land area in the UK dedicated to horticulture and crops, but a far greater share of UK livestock (e.g. 29% share of sheep). Source: Welsh Government statistics, ‘Farming Facts and Figures, Wales 2017’ – www.gov.wales/docs/statistics/2017/170620-farming-facts-figures-2017-en.pdf 19 Source: Welsh Government Priority Sector Statistics 2016: www.gov.wales/statistics-and-research/priority-sector-statistics/?lang=en 20 Source: Freight Transport Association Logistics Report 2016: www.fta.co.uk/export/sites/fta/_galleries/downloads/logistics_report/lr16-web-030616.pdf 21 Source: BVA Voice of the Veterinary Profession Survey, www.bva.co.uk/News-campaigns-and-policy/Newsroom/News-releases/Struggling-to-recruit-- you-are-not-alone/ www.bva.co.uk/News-campaigns-and-policy/Newsroom/News-releases/Struggling-to-recruit--you-are-not-alone/ 22 Source: RCVS Facts 2015, www.rcvs.org.uk/publications/rcvs-facts-2015/?destination=%2Fpublications%2F%3Ffilter-keyword%3Dfacts%26filter- type%3D%26filter-month%3D%26filter-year%3D%26filter.x%3D0%26filter.y%3D0 23 Source: VPRF Brexit – Veterinary Fact File Oct 2016, www.vprf.files.wordpress.com/2016/10/brexit-impacts-for-website.pdf

44 | Brexit and Fair Movement of People In June 2017, the RCVS In addition to the need, referred and have made some sectors published the outcome of to earlier, for the Wylfa Newydd particularly dependent on the a survey24 of EU veterinary project to access skilled skills of migrants from the EU, surgeons (VS) in the UK, construction workers, Horizon particularly food production and conducted by the Institute for Nuclear Power (who will build tourism (we have seen earlier Employment Studies. It found and operate Wylfa Newydd) the importance of migrant that, although there is evidence will need to access skilled workers to both these sectors). that many European VS have nuclear industry operators The potential negative effects of settled in the UK (the majority to commission, operate and future restrictions to migration has family ties here), many eventually decommission Wylfa are likely therefore to be respondents believe strongly that Newydd. Horizon are likely to magnified in some rural areas, Brexit could have a significant need to seek such specialist and this needs to be taken impact on the veterinary staff on the world market as into account. profession if European VS well as within the EEA and and veterinary nurses can no Switzerland. Although the longer work in the UK, and that numbers needed are likely to Public Services European veterinary workers be small compared with other NHS workforce would be less likely to come to industrial areas they will be The NHS across the UK has the UK. crucial to the success of this recently seen a trend of major project. increasingly difficult staffing Other economic Businesses in the creative pressures, rising demand for sectors sector also currently attract services, changing work patterns international talent to Wales. and an ageing workforce. Restrictions to freedom of Film and TV in particular, rely Each region and professional movement would also impact on heavily on mobile, freelance area is facing unique and the ability of businesses in other crew to staff productions and varying pressures, for example sectors in Wales to attract talent any barriers to the movement of in November 2016, 25% of from the EU. people across European borders General Practitioners (GP) had Welsh based life science would therefore impact on this reached retirement age, which is companies and universities rely sector. A shortage in digital already creating pressures on to an extent on the availability skills across the UK means that service delivery26. of skilled labour, academics and businesses in this sector are The NHS in Wales is reliant on scientists moving across from also reliant to some extent on EU workers at every level. In the EU. Although there are no the ability to recruit from the EU. September 2016, 1,313 EU firm figures for the number of Nationals were directly employed EU workers in the life sciences by the NHS in Wales. At this sector in Wales, restrictions Implications for time the electronic staff record to freedom of movement Rural Areas showed that the percentage of could make it more difficult for Employment opportunities doctors working in Wales who businesses to recruit and retain for EU migrants in rural- were recorded as being from talent from the EU, impacting linked sectors have led to the EU was 7% (compared to more broadly on their ability to the concentration of migrant 10% in England)27. These are manufacture and develop new workers in a number of relatively substantial numbers considering products for export. 25 small rural communities the tight margins in which NHS

24 Source: RCVS ‘European Veterinary Surgeons working in the UK: The Impact of Brexit’, June 2017 – www.rcvs.org.uk/document-library/european-veterinary-surgeons-working-in-the-uk-the-impact-of/?preview=true 25 For example, 9.6% of all EU migrants in Wales are living in Carmarthenshire local authority area. See ‘Securing Wales’ Future’ pg 53, Table 3. Source: StatsWales (June 2016) based on data from Labour Force and Annual Population Surveys. 26 www.nhsconfed.org/resources/2016/11/welsh-nhs-confederation-and-nhs-wales-employers-response-to-inquiry-into-medical-recruitment 27 www.nhsconfed.org/resources/2017/03/welsh-nhs-confederation-briefing-on-workforce-challenges-and-solutions

Brexit and Fair Movement of People | 45 recruitment works and the cost physiotherapists provide a more comparable with Wales, of using locum and agency quick and reliable system for around 3% of local authority staff to fill any long term gaps. ensuring correct registration, and independent sector jobs Another point to consider is minimum standards of training were held by people with an EU that, whilst the Welsh NHS is and knowledge of languages. nationality, and a further 5% comparatively less dependent on Alongside this operate important were held by people with a non- overseas staff than in England, EU-wide warning systems which EU nationality29. restrictions to migration at a require regulatory bodies to alert UK level create a risk of staff each other within three calendar There could be some short term displacement from Wales days about any professional impacts if individuals from the to England. who has been banned from EEA and Switzerland decide practising, even temporarily. to leave Wales or not to come Substantial work is underway and work here at all. We could in the Welsh NHS to ensure Social Care see an increase in recruitment staff training, recruitment and and retention pressures across retention can be bolstered. As with the rest of the UK, social care and in particular in However, work force planning, the social care sector in Wales relation to: recruitment and education is facing a range of challenges schemes only provide solutions which relate to its ability to • Nurses in care homes – for the long term and require recruit and retain workers, particularly in specialty areas planning many years ahead. whether from the UK, EU or where there are already Shortages and changes in rest of the world. These factors recruitment challenges, demand can develop in a include attracting people to such as provision for the fraction of that time; it is in these certain occupations within the Elderly Mentally Infirm circumstances that overseas sector, staff turnover, and terms • Social Care worker recruitment recruitment becomes an and conditions which may be and retention in care homes important tool to meet demand. unfavourable such as zero hours and domiciliary care in entry contracts (the Welsh Government level and management level The current pressures make has recently launched a jobs, where there are already the health and social care consultation on social care recruitment challenges. sector even more of a priority workforce matters, including the for overseas recruitment than it use of zero-hours contracts28). In the longer term, were normally would be. It is important The implications of changes to migration controls to impact the NHS in Wales remains the migration system resulting adversely upon the ability of capable of attracting the staff it from the UK’s exit from the EU individuals from the EEA and needs to fill essential posts while are a concern to the sector, Switzerland to work in Wales, workforce planning adjusts to but not the primary one. we could see an increase in the meet the demand domestically. already extant recruitment and The social care workforce retention pressures across social The systems in place around includes significant numbers care described above. the recruitment of staff are of workers from across the EU. also important. While the There is a potential for the supply An article by the Kings Fund30 mutual recognition of of such workers to be affected by highlights another scenario of qualifications is not unique to Brexit and changes to migration increased pressure on services the EU, systems such as the policy in the future. Data for resulting from the return of European Professional Card for Wales is not currently available UK citizens who have retired professions such as general but figures from England elsewhere in the EU and return care nurses, pharmacists and show that in areas generally to the UK.

28 www.consultations.gov.wales/consultations/phase-2-implementation-regulation-and-inspection-social-care-wales-act-2016-workforce 29 Source: National Minimum Data Set for Social Care, March 2017: www.nmds-sc-online.org.uk/Get.aspx?id=/Research/Briefings/Briefing%2028-%20Nationality%20-%20final.pdf 30 The Kings Fund, ‘Five big issues for health and social care after the Brexit vote’, June 2016 – www.kingsfund.org.uk/publications/articles/brexit-and-nhs

46 | Brexit and Fair Movement of People Teachers Higher Education citizens in the EU. However, The Education Workforce Council there remains a large number (EWC) provided evidence to the Staff of questions about the details Migration Advisory Committee31 Higher Education is an behind the UK Government’s in respect of shortage internationally competitive proposals in particular and, even occupations. Nationality of market, and staff from overseas if these details become clearer, teachers is not recorded, but are an important part of full certainty over rights and as a potential indicator of the ensuring the research and status won’t be possible until the number of teachers from an teaching quality offered in Wales’ conclusion of negotiations over the overseas background, the EWC higher education institutions UK’s withdrawal from the EU. highlights 1.1% of teachers in (HEIs). 12% (2,365) of HE staff Wales would class their national are non-UK born (7% or 1,425 Overseas Students identity as ‘other’ (as opposed to are from the EU)32. International Around 17%34 of the students in British, Irish, English, Scottish or collaborations are vital to Welsh HE institutions are either Welsh). In that evidence they research projects within higher from the EEA and Switzerland highlight that, in general, Wales education and the Institute of or the rest of the world. does not have the same level Welsh Affairs report ‘The Single The percentage of post-graduate of problems relating to teacher Market of the Mind’ includes four students in Wales who come from recruitment as in England, personal profiles which illustrate outside the EEA and Switzerland is although it is recognised that the important contributions higher than the UK average35, with there are challenges in Wales made by academic staff from particularly significant implications relating to the recruitment other EU countries to research for certain institutions and of head teachers, and in and academia in Wales33. courses. certain subjects (e.g. Science, Discussions involving various Technology, Engineering and The HE sector in Wales stakeholders have highlighted the Mathematics); the increasing has raised concerns about following principal issues linked demand for Welsh Language uncertainty regarding the to migration following EU exit and ability also makes it more position of EU staff and how this may impact on student challenging to recruit teachers the potential impact on numbers: who are from other parts of the recruitment and retention – with a consequent risk to UK or from overseas. • The UK Government’s proposed international collaborations, limit on overall migration Another factor to consider is quality of provision, and the numbers and whether students that, as Wales has completely sector’s international reputation. are included in this limit; permeable borders with Scotland An overarching issue is about and England, depending on how any impact on universities’ • The operation of the Tier 4 the extent to which immigration ability to recruit and retain immigration system for overseas changes might affect recruitment EU and international staff students and the risk of the and retention in England, will affect their international way it is operated contributing this could have the effect of competitiveness and their ability to a narrative about the UK not more competitive recruitment for to attract students. being open and welcoming to teachers, resulting in teachers overseas students; Both the European Commission moving away from Wales to • Currently EEA and Swiss and the UK Government have vacant posts in England. students have the same rights published proposals in respect as home students in relation of the rights and status of to the tuition fees charged EU citizens in the UK and UK by institutions, the support

31 Education Workforce Council, Migration Advisory Committee Call for Evidence, June 2016 – www.ewc.wales/site/index.php/en/documents/research-and-statistics/research-reports/published-research/455-migration-advisory-committee- mac-call-for-evidence-partial-review-shortage-occupation-list-teachers 32 Source: Higher Education Statistics Agency Staff Record, 1st December 2015 33 IWA ‘Single Market of the Mind’: www.iwa.wales/news/2017/03/single-market-mind/ 34 Source: Higher Education Student Record, Higher Education Statistics Agency, February 2017 – www.statswales.gov.wales/Catalogue/Education- and-Skills/Post-16-Education-and-Training/Higher-Education/Students/Enrolments-at-Welsh-HEIs/highereducationenrolments-by-domicile-level-mode 35 IWA ‘Single Market of the Mind’. Page 33 figure 24 shows 35% in Wales compared to 29% UK average. www.iwa.wales/news/2017/03/single-market-mind/

Brexit and Fair Movement of People | 47 provided by government, and Issues around migration need The UK Government’s proposed their ability to study in the UK; to be considered alongside approach to eligibility for “home as do Welsh students studying a range of other EU exit fee status”36 for EU students in the EEA and Switzerland. issues for HEIs, including EU falls short of our stated position, Removing those rights from funding for research, ability to in that it will not be available EEA and Switzerland students undertake international research to EU students beyond the will make the UK a less collaborations, access to UK’s departure from the EU attractive study destination Structural Funds, and the future unless they had already arrived than universities in other EEA of student mobility programmes, in the UK before the (yet to countries or Switzerland; such as Erasmus+. In ‘Securing be determined) ‘specified • Those courses or institutions Wales’ Future’ the Welsh date’ at some point between with a higher number or Government stated that it wishes March 2017 and the date of proportion of overseas to see reciprocal arrangements the UK’s withdrawal from the EU students risk being particularly regarding student tuition fees (March 2019). affected by any detrimental so that Welsh students studying changes resulting from in the EEA and Switzerland pay changes to the immigration local student fee levels and EEA system, although it is and Swiss students studying anticipated that all universities in Wales are treated as UK will be affected by reducing students for the purpose of fees student numbers. and the costs of study.

36 UK Government policy document: “Safeguarding the Position of EU Citizens Living in the UK and UK nationals Living in the EU” – paras 50-54 www.gov.uk/government/publications/safeguarding-the-position-of-eu-citizens-in-the-uk-and-uk-nationals-in-the-eu

48 | Brexit and Fair Movement of People 10 Annex C – Immigration Policy after Brexit

Prepared by Public Policy Institute for Wales (PPIW) for the Welsh Government , May 2017

• The Brexit process will be • Key issues relating to a post- (ii) The continuation of free complex and multi-levelled, Brexit immigration system are movement for a defined with the Article 50 discussions whether it will retain ‘European period after Brexit. covering EEA nationals preference’; whether it resident in UK, and domestic includes sectoral and (iii) Carefully phased policy development and regional elements; and how it implementation and legislation required for a new addresses needs for ‘medium- enforcement of the new post-Brexit immigration system. skilled’ workers. immigration system. • It is unclear whether • Wales is less dependent than (iv) Avoiding the widespread use negotiations on a new ‘deep the UK as a whole on migrant of sector-based schemes, and comprehensive free trade workers, but vulnerable caps and quotas, although agreement’ between the UK sectors potentially include there is a case for special and the EU will cover migration manufacturing, hotels and arrangements in the health issues. catering, health and social and education sectors. care, and higher education. • There is little doubt that (v) Making the case for any currently resident EEA • Risks to the Welsh economy regional scheme by reference nationals (of which there and labour market (as well to Wales’ longer-term are about 80,000 in Wales) as to EEA nationals currently demographics and skills will be granted permanent resident in Wales) would be needs; and residence; but there are minimised by: (vi) Greater openness to non-EU numerous complex legal (i) A simple, streamlined system nationals. and administrative issues to establish permanent to resolve. residence status for EEA nationals.

Brexit and Fair Movement of People | 49 Introduction

The First Minister asked PPIW This paper builds on the PPIW’s In what follows, we set out where to provide advice and support previous report to the EAG matters stand after Article 50 to the European Advisory (PPIW, 2016). It sets out the notification and the implications Group (EAG). In particular, to current state of play on future of the UK Government’s current explore migration patterns immigration policy for the UK, the position on each of these, and in Wales (particularly of EEA potential impacts on Wales, and we assess the potential impacts citizens), and the implications possible policy options for the on the Welsh economy and of likely changes to freedom Welsh Government. labour market. of movement and immigration policy after Brexit. Note that we There are three key issues: The Article 50 notification signals refer to EEA nationals throughout 1) the future status of EEA the beginning of a complex, this report, on the assumption nationals currently resident multi-level process, and there is that, as now, EU nationals and in the UK and UK nationals uncertainty about the timetable, nationals of other non-EU EEA resident elsewhere in the process and outcomes in Member States (Norway, Iceland, EEA; relation to immigration policy, and Liechtenstein) and Swiss although significant change 2) the shape of a new, post- nationals are treated essentially is inevitable. We discuss the Brexit UK immigration identically. The overwhelming interaction between the Article system; and majority of EEA nationals in 50 negotiations, negotiations on the future EU-UK trading Wales are EU nationals, and the 3) the transition to such a relationship, and domestic policy numerical analysis reported here system. generally relates to EU nationals. development. We discuss, more speculatively, the likely outcomes and key risks of this process; and finally, and the implications for the Welsh Government’s policy approach.

50 | Brexit and Fair Movement of People The status of EEA and UK citizens currently living elsewhere

The three most important issues ‘But we can and we should • Eligibility. What will the ‘cut- for the Article 50 negotiations, agree, as soon as possible, off date’ be for entitlement to covering the terms of the UK’s on the principles of continuity, permanent residency? While separation from the EU, are reciprocity and non- there were some indications the UK’s ‘divorce bill’, issues discrimination so as not to leave that the UK Government relating to the relationship these citizens in a situation of intended to propose that the between Northern Ireland and uncertainty.’ Article 50 date should be the the Republic of Ireland, and the cut-off date, there have been status of EEA citizens in the UK The EU’s negotiation no official statements on this. and UK citizens elsewhere in the guidelines elaborate (European Meanwhile, EU policymakers EEA. At present, as citizens of Commission, 2017a): have suggested that any one Member State resident in ‘The right for every EU citizen, cut-off date should be the another, they have most if not all and of his or her family date of Brexit (that is, March of the rights of UK citizens; that members, to live, to work or to 2019). The qualifying period will change after Brexit. study in any EU Member State for permanent residence is a fundamental aspect of the (currently five years) may On the face of it, this issue also be problematic. If it were should clearly be the easiest European Union. […] Agreeing reciprocal guarantees to settle enforced immediately, then a of the three. Both sides have large number of people who made it clear that this is the the status and situations at the date of withdrawal of EU and came to the UK in good faith first priority for the negotiations; before Brexit could in principle and their positions appear to be UK citizens, and their families, affected by the United Kingdom’s be forced to leave; equally, broadly consistent. In its recent simply offering the eventual White Paper, the UK Government withdrawal from the Union will be the first priority for the prospect of permanent (Department for Exiting the residence to anyone who European Union, 2017) said: negotiations. Such guarantees must be enforceable and non- comes even a week before ‘Securing the status of, and discriminatory’ the date seems unlikely. providing certainty to, EU Some intermediate position nationals already in the UK and It would therefore appear to seems likely. be relatively straightforward to to UK nationals in the EU is • Continuity. Beyond simply conclude a political agreement one of this Government’s early qualifying for residency, there incorporating the above priorities for the forthcoming are difficult questions as to principles. This would have some negotiations.’ the meaning of M. Barnier’s significant advantages: it would principle of ‘continuity’. UK Ministers have repeatedly reassure people currently in Reports suggest that the UK given assurances that they this position (and their families Government has accepted wish to provide some form of and employers) that there was that EU nationals resident permanent residence for people a shared desire to secure their in the UK will be able to in this position. The EU’s lead residence rights on an ongoing continue to claim benefits negotiator, Michel Barnier basis, as well as generating under the current rules, has used similar, and equally goodwill that might have positive including child benefit for positive, language (European spillovers for other aspects children living elsewhere Commission, 2017b): of the negotiations, including in the EU (Sunday Times, discussions on a future system. March 26, 2017). If this were However, such a declaration in not agreed, the risk is that principle would leave a number UK nationals abroad might of questions unanswered: lose access to healthcare and

Brexit and Fair Movement of People | 51 other services. So, ironically, not workers (for example M. Barnier’s basic principles some EU nationals in the UK students or stay-at-home should not be achievable. might actually be better off parents) are required to have Early progress on this would financially as a result of Brexit had comprehensive sickness provide considerable comfort – since if we had voted to insurance during the period of to those affected, even if Remain then David Cameron’s qualifying residence; since few uncertainty on many of the renegotiation would have have, a number of applicants details will take a lot longer to allowed the UK to phase out who have been resident in the resolve. some of their entitlements. UK for well over the five year This is only one of the many period have been rejected. EU citizens in Wales thorny legal issues that will For a new system to both There are currently approximately have to be resolved. Family to be acceptable to the EU about 80,000 EEA citizens rights, in particular, are (which does not accept the residing in Wales. Classifying likely to be an issue; at the validity of the Home Office’s them by time of arrival in the UK, moment there are almost no interpretation) and to be about 30,000 arrived less than restrictions on the rights of EU workable in practice, the 5 years ago (see Table 1). This is nationals resident in the UK requirements will have to be broadly consistent with the data to be joined by their spouse eased and simplified. from the International Passenger (indeed, in some respects The negotiations are also likely Survey, which estimates that they have more rights than to be complicated by the very annual migration flows to Wales UK nationals do). M. Barnier’s different interests of the other from the EU are currently running comments suggest that the 27 EU member states. Some – at about 7,000 (ONS, 2016)1. EU is likely to argue that EU most obviously Poland – will be nationals should continue to under strong domestic political have the right to be joined by pressure to preserve their family members from their nationals’ existing rights. Others, home countries. This obviously from Latvia to France, might presents problems for the secretly not be too unhappy UK Government’s desire for if some of their young, skilled complete domestic control of diaspora were to decide that the future migration policy. UK is a less attractive place to • Administrative issues. live and were to return home. Whatever criteria are chosen, And others, most obviously there will be significant Spain, may not wish to give administrative issues, given indefinite guarantees to treating the UK’s lack of a population UK citizens as generously as they register (Portes, 2016a). do now. A new, more efficient and lighter touch system will be Nevertheless, the optimistic required to allow individuals perspective is that no-one has to demonstrate residency. an interest in publicly blocking At present, for example, the an agreement on this issue; Home Office’s interpretation and there are no obvious is that residents who are reasons why a broad deal that all countries will respect

1 This estimate has, proportionally, a very large margin of error. However, the fact that there are about 30,000 EEA citizens in Wales who arrived in the last 5 years – that is about 6,000 a year – suggests it is probably reasonably accurate.

52 | Brexit and Fair Movement of People Table 1: Estimated number of non‑UK residents by date of arrival in UK EU Non-EU Total

0 to 5 years ago 30,300 21,400 51,700

5 to 10 years ago 18,000 10,800 28,800

More than 10 years ago 23,300 11,000 34,200

Unknown 7,700 4,300 12,000

Total 79,300 47,400 126,800

Source: Welsh Government Analysis of the Annual Population Survey, December 2016

Notes: Figures are rounded to the nearest hundred and so there may be some apparent slight discrepancies between the sum of constituent items and the totals as shown. The analysis in this and subsequent tables related to country of nationality not country of birth.

Table 2: Estimated number of non‑UK residents by household status UK EU Non-EU Total

Household status

Single: 716,000 10,700 7,900 734,700 with dependent cildren 219,200 3,200 - 226,700 Couple: 1,984,300 45,500 31,200 2,061,000 with dependent children 917,400 27,000 21,800 966,200 More than one family unit: 121,800 5,600 8,200 135,600 with dependent children 39,400 1,700 - 41,500

Total 2,822,100 61,800 47,400 2,931,300

Source: Welsh Government Analysis of the Annual Population Survey household dataset 2015

Notes: 1) Figures are rounded to the nearest hundred and so there may be some apparent slight discrepancies between the sum of constituent items and the totals as shown. 2) The year and coverage of this table differs slightly from Table 1. 3) Because nationality is no longer imputed into the household data set, nationality is unknown for a larger number of people in this dataset compared with the person level dataset. Therefore, totals will differ to those obtained from the person level dataset.

- The data item is either zero, potentially disclosive or is not sufficiently robust for publication due to being based on less than 10 survey responses.

Brexit and Fair Movement of People | 53 This suggests that while many, At the same time as the the interaction between domestic perhaps most, resident EU Article 50 negotiations are in policy development and these citizens will be entitled to progress, the UK Government negotiations is discussed below. permanent residence under the will also be taking steps towards current rules, a large proportion introducing a new immigration The key overriding issue, as has will not. Further examination system. The timeline appears to been the case for immigration of the data also suggests that be the following: policy for much of the past decade, – in contrast to the general will be the tension between the perception that EU migrants • The UK Government has economic need for a relatively are mostly young and single – published a White Paper flexible and liberal immigration the vast majority of EU citizens (Department for Exiting the system; and the political desire are part of a family unit, and European Union, 2017) to be seen to be both controlling many have children. Indeed, setting out its proposals for and reducing immigration. There EU nationals are just as likely the ‘Great Repeal Bill’, which appears to be an increasing as UK-born residents to have will incorporate EU legislation realisation in UK Government that children. It is estimated that into UK law, so that there is, the introduction of a new system there are more than 20,000 as far as possible, no step will have significant economic children (of all nationalities) change on the date of Brexit; costs and will impose a substantial resident in Welsh households • The Bill will allow the UK administrative burden on both where at least one member is Government to make some the Home Office and employers. an EEA national; this represents changes through secondary Looking at the raw immigration 4% of all Wales-resident children legislation. However, crucially, statistics would suggest that EU (Welsh Government analysis, on immigration, the White migration and non-EU migration not shown in table). Paper commits the UK are roughly equal in magnitude Government to implement – annual gross inflows of about This has a number of any new system through a 260,000 (ONS, 2017). So it might implications: separate Immigration Bill: appear that extending the current • in human terms, it is obviously system would double the volumes- itself quite a challenge for a Home more problematic to deny ‘Similarly, we will introduce Office already struggling with permanent residence to an immigration bill so nothing significant resource pressures. families than to single people; will change for any EU citizen, • people with children whether already resident in However, this is misleading – it (particularly mothers) are the UK or moving from the EU, omits short-term flows, and covers less likely to be able to without Parliament’s approval.’ all (long-term) immigrants. If we demonstrate permanent look instead at National Insurance • The UK Government had residence under the current Number (NINo) registrations – a committed to publishing a rules; and better measure of people moving White Paper on immigration in here to work – then the number of • those with children will also the summer of 2017, although EU nationals registering is more have legitimate concerns not the recent announcement of than 600,000 annually, more just about their right to remain a general election makes this than three times the number of but access to public services unlikely. Regardless, the timing non-EU nationals (Department and other complex issues. of any subsequent legislation, for Work and Pensions, 2017). As set out above, this is likely and its implementation, Not surprising then that multiple to be an early priority in the remain unclear, and at least sectors (including, but not limited negotiations between the UK and in part may depend on the to, agriculture, higher education, EU. In the short term, highlighting outcome of negotiations health, finance and construction) to the UK government the (see below). have been warning government of importance of resolving this Note that there is no explicit the impact of cutting off the supply issue quickly and efficiently statement that the new of EU migrant workers; and that should be a key priority for the system will be part of the senior Whitehall officials do not Welsh Government. negotiations with the EU-27; think the Home Office is remotely ready to cope with the potential additional burden.

54 | Brexit and Fair Movement of People A post-Brexit system

What might we expect operationalized? The latter of industries, and the possible the UK Government’s is the position advocated interaction with the negotiations consultation to say? before the referendum by with the EU-27 (see below) It appears likely that, at least Vote Leave, and by some – the UK Government has in part, we will move to some elements of the ongoing not ruled out maintaining form of ‘work permit’ system, Leave Campaign (‘Leave a degree of European similar to that currently operating Means Leave’). Both argue preference. The Immigration for non-EEA migration for work that after leaving the EU, the Minister’s recent testimony purposes2. The main route for UK should adopt a ‘non- to the Lords Economic Affairs non-EEA migrants at present is discriminatory’ system, under Committee strongly hinted at known as ‘Tier 2’; this is open which non-UK nationals this (Lords Economics Affairs those who have a job offer seeking to migrate to the UK Committee, 2017): would be treated the same, and fulfil various other criteria ‘The negotiations will need to (relating to skills, occupations, regardless of their country of origin. take into account people who salaries, etc.). There is a cap on may wish to travel and work here overall numbers (currently set The argument in favour of this is and British people who may at 20,700 per year). The other simply that the UK Government want to work there. […] I hope main route is the ‘intra-company has stated clearly that we will that the negotiations will result transfer’ route, for those no longer be part of the Single in a bespoke system between being transferred to the UK Market, since free movement ourselves and the European by their employer – this has a is one of the ‘four freedoms’. Union. I think that that is unlikely higher salary threshold, but is The broader economic and to be identical to any of the significantly less restrictive in political rationale – from both other systems that we have with other respects, and there is the UK and the EU perspective countries around the world.’ no numerical limit. The basic – for very different immigration structure of this system could, arrangements for EU and non- ii) Individual versus sector in principle, be extended to EU migrants to the UK (and UK based system. The current EEA migrants. However, this migrants to the rest of the EU) system for non-EU workers still leaves a number of key will therefore disappear, at least is primarily based on questions on which the UK in part. Given this, the principle individual and job-related Government has not yet taken of the original Vote Leave characteristics (salary, a firm view, and which are position – that we should have qualifications, skill level for therefore likely to be raised a system that selects migrants the job in question) although during the consultation. These according skills, qualifications, there are a number of include: family ties, etc. – seems ‘shortage occupations’ which compelling. are largely sector-specific. i) European preference. However, there has been Will the new system give However, given the practicalities considerable speculation a considerable degree set out above – in particular the that the UK Government is of preference to EEA dependence of the UK economy considering schemes for citizens, even if not full free on EU workers, the existence individual sectors, such movement, compared to of business links and as agriculture (which used those outside the EEA, or will recruitment links built up over to have such a scheme it treat all non-UK citizens the last decade by a number for seasonal workers from equally3; and how will this be

2 The two main alternatives that the UK Government could have pursued, but appears to have rejected are: some form of points-based system (as used in Australia); or a modified free movement system, which introduced, for example, an ‘emergency brake’ on overall numbers, or restricted access to benefits. More detail on these issues is set out in Portes, 2016b. 3 With the possible exception of Irish citizens, not discussed here, who have a special status in the UK which predates the UK’s membership of the EU.

Brexit and Fair Movement of People | 55 outside the EEA). Sector- are designed to be consistent acceptable as proof of specific schemes, while with an overall migration target) entitlement to work. This they may appear attractive and a bottom-up one (setting would not preclude other to Ministers faced with caps that reflect the labour changes to the rights of EEA lobbying from industry or market needs of individual nationals (for example as trade groups, are likely sectors). The UK Government regards access to benefits to be significantly more has signalled that it would like to and public services). difficult to implement and extend the role of the Migration The second would be a enforce in sectors which are Advisory Committee (MAC), system analogous to a considerably more diverse which provides the Government sector-based scheme, but (geographically and in terms with independent advice on restricted by region rather of the number and nature immigration policy issues, than sector, presumably of businesses operating in particularly as they relate to subject to a cap, with the in them) than agriculture, work-related migration and the cap to be determined and which is a well-defined sector economic impacts of migration. administered by central where peak demand is highly However, it seems unlikely it government, but with input seasonal. It is not obvious would be willing to abdicate from and consultation with how a sectoral scheme control over the migration the nation or region in would work in catering system to the extent that would question. This would be more and hospitality, where the be required; equally, the MAC difficult administratively, definition of the sector is members are themselves likely as differential, looser, much less clear, and where to be sceptical about their eligibility conditions for the labour demand is continuous ability to ‘manage’ the UK labour relevant geographies (by rather than seasonal; the market in this way. skill level or salary) would potential for complexity and have to be determined and abuse would be substantial. iv) Regionalisation There has administered, although Nevertheless, they may have been considerable interest this would arguably be less a role to play. from London and Scotland complex than an array of in the possibility of some sectoral schemes. The Home iii) Targets, quotas and caps. degree of regionalization Office has always been very Currently, although the of the immigration system. resistant to any devolution UK Government has an This would not, of course, of immigration policy, and overall immigration target involve any regionalisation Ministers have maintained of reducing net migration of border controls, either this line, but it has not been to the tens of thousands, external or internal, but entirely ruled out: it remains most immigration categories rather would relate to the open as to whether this will have no actual overall limits conditions required for a be included in the White (caps), except for Tier 2 migrant worker to obtain a Paper. skilled workers (the main work permit, which would work permit route for non-EU be differentiated by the v) Administrative and migrants). If the objective of geographical location of enforcement aspects. a new system is to take the the workplace. Two broad It does not seem likely or opportunity of Brexit to exert approaches are possible. feasible that we would greater control over numbers, One would be simply to retain restrict EEA nationals’ right will it incorporate more such free movement of workers, to enter the UK without a caps, in particular for any in something more or less visa, given that we do not do sector-specific schemes? like its current form, in some so for most other developed If so, how will they be set? nations or regions. In other countries4. A fully-fledged words, employers in some visa regime for EEA nationals Any cap will create an inevitable regions could continue to would be hugely disruptive tension between a top-down hire EEA nationals as now, to trade, travel and tourism, approach (setting caps that with an EEA passport being even leaving aside the

4 Although it is possible that some sort of electronic pre-entry system, like ESTA in the US, will eventually be introduced for movements to and from the remaining EU. This does not, however, constitute a visa system.

56 | Brexit and Fair Movement of People obvious point that this the overarching objective still would mean UK nationals being to hit the target, set out would require visas to travel in the Conservative manifestos to continental Europe. of 2010 and 2015, to reduce Moreover, it would mean that net migration to the tens of they were treated materially thousands? Early indications worse than, for example, from the UK Government were Americans or Australians, that the latter would very who do not need a visa to much be the priority. However, enter the UK. a measure of (economic) realism appears to have crept in (as This does not in itself directly a result of advice from civil affect immigration policy. servants, and lobbying from Americans or Australians have no business, on the consequences automatic right to work or settle of an overly restrictive policy) and in the UK, nor to claim benefits or the current tone is somewhat access public services. However, more balanced. it does mean that control over how many and which EEA Implications for Wales nationals are allowed to work in the UK will not, in practice, Any new immigration system be applied at the border in the would only apply to new entrants vast majority of cases. As with (as set out above, from the other non-visa nationals, like date of Brexit or later). Here we Americans, it will be applied in explore what the key issues the workplace. Employers will would be for Wales. have to verify that EEA nationals are entitled to work in the UK, Overall Impacts just as they currently do for An indicative sense of the non-EEA nationals (similarly, relative impact of reductions in landlords and administrators immigration on labour market of public services will have to flows (as opposed to stocks) can perform similar checks). This will be gained by comparing annual no longer be simply a matter of National Insurance Number showing a passport. Depending (NINo) registrations by overseas on the system, the right to work nationals with the size of the would likely to be limited to a current labour force. This is the specific employer and occupation best available proxy measure and be time-limited. Experience of new migrant entrants to the with non-EEA nationals suggests labour market, and hence of the that such a system is far from impact of migration on labour straightforward. market flows. However, it will not record migrants who have Beyond all these specific registered in previous years, questions, perhaps the most either in Wales or elsewhere important issue from a broad in the UK, and only moved or economic perspective is the returned to Wales in the current overall objective. Will the new year; equally not all those system be relatively liberal, registering for NINos will take accepting perhaps an increase up employment. Nevertheless, in skilled migration from outside it gives a reasonable sense of the EEA at the same time the scale of the importance of as reducing EU migration? new migrants to the Welsh labour Or will it be restrictive, with market.

Brexit and Fair Movement of People | 57 Table 3: Englnd, National Insurance N.Ireland Registrations as % of United and Population in employment Kingdom Scotland Wales

Central Estimate 30,299,400 28,940,800 1,358,600

In Employment (16-64) (95% C. I.) (162,900) (167,200) (22,500)

EU 622,845 603,238 11,040 Annual NINo Registrations non-EU 198,850 192,940 4,371 Total 821,696 796,178 15,411 EU Annual NINo Registrations as % of employed 2.11% 2.08% 0.81% non-EU 0.67% 0.67% 0.32% (16-64) Total 2.79% 2.75% 1.13% Sources: Authors’ elaboration of Stat-Xplore and Nomis data. Nomis figures of people in employment are based on the Annual Population Survey, December 2016. The total for Wales differs slightly from Tables 4 and 5 as the latter are based on Male 16-64 and Female 16-59 population.

Notes: Figures are rounded to the nearest hundred and so there may be some apparent slight discrepancies between the sum of constituent items and the totals as shown.

This suggests that as well every year – this suggests that, of demographic change, with as having lower numbers of overall, the degree of disruption an ageing population. However, migrants currently in the labour to the Welsh labour market the challenges are significantly force, Wales is considerably less resulting from reductions to more acute in Wales than dependent on EU migration for migration will be smaller than elsewhere, with slower growth labour market flows than the for the UK as a whole. This does in the overall population but UK average (although London is not, however, exclude significant faster growth in the over- of course an outlier here). New disruption in some occupations 65s; meanwhile, the 16-64 NINo registrations from the EU or sectors, as set out below. population is projected to shrink are running at an annual rate by 5% by 2039 (ONS, 2015). of only about 0.8% of the Welsh Likely impacts on the Welsh Lower than projected migration labour force. Since turnover (job labour market overall (and will exacerbate these impacts, moves) in the UK is generally indeed economy and society as figure 1 shows. about 15-20% – implying that more broadly) are therefore more there are 300-400,000 job long-term. Wales, like the rest entries or job moves in Wales of the UK, faces the challenge

58 | Brexit and Fair Movement of People Figure 1: Components of projected population change

100

80 Natural Change (births-deaths)

% UK Migration 40

20 International Migration

0 2014 2020 2026

Source: Welsh Government analysis of national population projections

Sectoral impacts context, it seems unlikely that same is likely to be the case for Overall, EU migrants in Wales in many migrants entering under social care, although the data are the private sector are particularly such schemes would come to less reliable. Wales and the Welsh concentrated in manufacturing Wales. Manufacturing – where government would benefit from (Table 4 ), although the highest it is not obvious that a sectoral preferences for these sectors. absolute number work in hotels, scheme would be workable – might be at particular risk. An important point is that any distribution and catering. This widespread use of caps or quotas is also true of the rest of the Looking at the broader public in the new system on a national UK, however, elsewhere in sector, higher education (HE) or sectoral basis (as opposed to the UK there are also high and health appear particularly a regional basis) would be likely concentrations in agriculture vulnerable5. In both, EU to damage Wales. Wales is not and finance (especially in nationals make up a relatively overall a priority destination for London). This has some low proportion of the workforce migrants, either from the EU or important implications for overall, but a high proportion of outside, relative to other parts Wales; it suggests that sectoral skilled professional staff – more of the UK. If there are caps on schemes, which would be likely than 1 in 10 in HE, and 5% various categories of migrants, to focus on sectors with high of health professionals (Welsh limiting the total number, but dependence on migrants at the Government analysis of Higher without any regional element to the national level, would be likely Education staffing statistics; new system, it seems likely Wales to disadvantage Wales. If, for Table 5). These numbers have would have difficult in attracting example, there are sectoral risen significantly in recent years, a proportionate share, since it schemes for agriculture and suggesting that they are likely to appears that other parts of the UK financial services, both of which represent a significantly greater (in particular London) are more have been mentioned in this fraction of new recruits. The attractive at present.

5 Higher education is technically classified to the private sector, but for these purposes it is convenient to group higher education and health, which face broadly similar challenges.

Brexit and Fair Movement of People | 59 Table 4: Welsh Residents in Employment by industry sector, section and nationality

Industry by Sector, Section and Nationality, 2016, estimated number1,2 UK EU Non-EU Total

A - Agriculture, forestry and fishing 30,900 - - 31,600

A: Agriculture, forestry and fishing 30,900 - - 31,600

B,D,E - Energy and water 26,500 - - 27,700

B: Mining and quarrying 3,100 - - 3,100

D: Electricity, gas, steam and air conditioning supply 10,700 - - 11,300

E: Water supply, sewerage, waste management and remediation activities 12,600 - - 13,200

C -Manufacturing 144,200 9,800 1,800 155,800

C: Manufacturing 144,200 9,800 1,800 155,800

F - Construction 100,800 1,900 - 103,400

F: Construction 100,800 1,900 - 103,400

G,I -Distribution, hotels and restaurants 262,300 11,500 5,400 279,100

G: Wholesale and retail trade; repair of motor vehicles and motorcycles 179,400 6,800 1,700 188,000

I: Accommodation and food service activities 82,900 4,600 3,700 91,100

H,J -Transport and communication 80,900 3,900 - 85,500

H: Transportation and storage 50,800 2,000 - 52,900

J: Information and communication 30,100 1,900 - 32,600

K,L,M,N - Banking and finance 172,100 7,300 2,200 181,700

K: Financial and insurance activities 36,000 - - 37,500

L: Real estate activities 11,100 - - 11,400

M: Professional, scientific and technical activities 68,400 3,300 - 72,600

60 | Brexit and Fair Movement of People UK EU Non-EU Total

N: Administrative and support service activities 56,600 2,800 - 60,200

O,P,Q - Public admin, education and health 449,800 9,100 7,800 466,800

O: Public administration and defence 105,700 - - 107,500

P: Education 139,700 3,600 2,200 145,500

Q: Human health and social work activities 204,500 4,600 4,700 213,800

R,S,T,U - Other services 72,900 1,000 - 74,800

R: Arts, entertainment and recreation 33,000 - - 33,700

S: Other service activities 37,600 - - 38,700

T: Activities of households as employers - - - 1,200

U: Activities of extraterritorial organisations and bodies - - - 1,200

Unknown 12,100 - - 12,500

Total 1,352,600 46,800 19,400 1,418,800

Source: Welsh Government Analysis of the Annual Population Survey, December 2016

1. Figures are rounded to the nearest hundred and so there may be some apparent slight discrepancies between the sum of constituent items and the totals as shown. -- The data item is either zero, potentially disclosive or is not sufficiently robust for publication due to being based on less than 10 survey responses.

Brexit and Fair Movement of People | 61 Table 5: Welsh residents in employment by occupation and nationality

Occupation by Major, Submajor Groups and Nationality, 2016, estimated number1,2 UK EU Non-EU Total

Administrative And Secretarial Occupations 141,400 2,000 1,300 144,700

administrative occupations 114,800 1,700 - 117,100

secretarial and related occupations 26,600 - - 27,500

Associate Professional And Technical Occupations 166,600 3,500 1,900 172,000

business and public service associate professionals 79,700 2,700 - 83,500

culture, media and sports occupations 24,200 - - 24,400

health and social care associate professionals 24,600 - - 24,900

protective service occupations 15,400 - - 15,700

science, engineering and technology associate professionals 22,700 - - 23,400

Caring, Leisure And Other Service Occupations 142,500 3,000 2,900 148,500

caring personal service occupations 116,700 2,300 2,600 121,600

leisure, travel and related personal service occupations 25,800 - - 26,900

Elementary Occupations 143,600 10,600 2,500 156,700

elementary administration and service occupations 116,900 7,900 2,400 127,100

elementary trades and related occupations 26,700 2,800 - 29,600

Managers, Directors And Senior Officials 132,800 1,800 2,000 136,600

corporate managers and directors 89,600 1,100 1,200 91,900

other managers and proprietors 43,100 - - 44,600

62 | Brexit and Fair Movement of People UK EU Non-EU Total

Process, Plant And Machine Operatives 93,400 8,100 - 102,200

process, plant and machine operatives 44,000 6,000 - 50,500

transport and mobile machine drivers and operatives 49,500 2,100 - 51,700

Professional Occupations 244,400 9,800 4,600 258,900

business, media and public service professionals 56,200 1,800 - 58,700

health professionals 69,100 3,600 2,200 74,900

science, research, engineering and technology professionals 55,200 2,100 - 57,800

teaching and educational professionals 64,000 2,400 1,200 67,600

Sales And Customer Service Occupations 110,500 2,200 1,900 114,600

customer service occupations 26,400 - - 27,300

sales occupations 84,100 2,000 - 87,200

Skilled Trades Occupations 170,900 5,300 1,700 177,900

skilled agricultural and related trades 26,700 - - 26,800

skilled construction and building trades 50,000 - - 51,200

skilled metal, electrical and electronic trades 64,100 1,100 - 65,900

textiles, printing and other skilled trades 30,100 3,200 - 34,100

Unknown - - - 6,800

Total 1,352,600 46,800 19,400 1,418,800

Source: Welsh Government Analysis of the Annual Population Survey, December 2016

1. Figures are rounded to the nearest hundred and so there may be some apparent slight discrepancies between the sum of constituent items and the totals as shown. 2. Number includes those aged 16+ who are in employment. - The data item is either zero, potentially disclosive or is not sufficiently robust for publication due to being based on less than 10 survey responses.

Brexit and Fair Movement of People | 63 Figure 2: % of workers in each skill level by nationality and region

High 0% 20% 40% 60% 80% 100% Upper Middle 26.96 27.95 34.33 10.76 Lower Middle Total Low UK 27.24 28.44 34.6 9.72 United Kingdom EU 19.74 24.38 31.81 24.07

31.15 21.99 31.64 15.21 Non-EU

23.16 28.32 37.04 11.49 Total

23.12 28.73 10.9 UK 37.25 Wales 18.67 18.5 35.57 27.26 EU

34.42 20.08 25.47 20.04 Non-EU

Source: Authors’ elaboration of Nomis data based on Annual Population Survey, December 2016. Skill classifications are taken from Office of National Statistics and are follows (see Table 5). High skilled: professional and managerial occupations. Upper middle: associate professionals, skilled trades. Lower middle: administrative, secretarial, caring and leisure, sales, process and plant, transport. Lower: elementary occupations.

64 | Brexit and Fair Movement of People Skills mix (but this is speculative) reflect non-EU nationals working in As in the rest of the UK, the the health sector, further and most important point here is that higher education, and perhaps the majority of EU migrants in some intra-company transferees Wales – like the majority of the working for multinational UK born – work neither in ‘low- companies. It does however skilled’ or ‘high-skilled’ jobs, but suggest that, despite relatively in middle skill jobs. This matters low overall levels of migration, in particular because migrants Wales can attract skilled entering the UK to do such jobs migrants; the Welsh labour would not be eligible for work market and economy could permits under the current system benefit from higher skilled for non-EEA nationals, which is migration from outside the EU intended only for relatively highly in future. skilled jobs. There are some, but not Geographical spread dramatic, differences between As elsewhere in the UK, EU the UK and Wales in terms of migrants to Wales are more the skill composition of migrants. concentrated in urban areas, The most notable difference is in particular Cardiff, Swansea perhaps in respect of non-EU and Wrexham; it is employers in migrants in Wales (although these areas that are likely to be the numbers are relatively most impacted6. small, compared both to the overall population and to non- EU migration elsewhere in the UK), where non-EU migrants are disproportionately likely to be working in high-skill jobs. Indeed, while overall the Welsh workforce is somewhat less likely to be in skilled jobs – 23% of UK born workers in Wales, compared to 27% in the rest of the UK – the opposite is true for the non-EU born, who are more likely to be in high skilled jobs than their counterparts in the rest of the UK (34% as compared to 31%). With the data available, it is difficult to say why that is the case; it may

6 2002-2016 Cumulative National Insurance Registrations, by constituency. Source: Authors’ elaboration of Stat-Explore data

Brexit and Fair Movement of People | 65 Negotiations on the future relationship between the UK and Europe

How will the decisions on the What is far less clear is whether, – is not likely to be under post-Brexit system interact with and when, there will be any discussion. Nor is it necessarily negotiations with the EU-27? substantive discussion about in the interests of the EU-27 for As noted above, the Article the UK’s post-Brexit immigration us, once outside the EU, to give 50 negotiations will cover only policy. A Free Trade Agreement preferential access to skilled issues relating to the UK’s (FTA) – even a comprehensive European workers, even if the separation from the EU, including one – does not in itself, require arrangements were reciprocal. the status of EU citizens currently special immigration rules for EU We would be saying that we’d resident; it will not cover nationals; the EU already has be happy to take their skilled immigration and free movement comprehensive FTAs with other workers, but not lower skilled issues after Brexit. countries (South Korea, Ukraine, ones; this will not necessarily Canada) that contain little or be attractive, particularly to The EU has stated that after nothing in terms of immigration. those countries that have ‘sufficient progress’ has However, the UK government seen significant flows of young, been made in the Article 50 has stated that it wants a skilled workers to the UK in negotiations, discussions could significantly deeper FTA than any recent years. begin on the ‘framework for the of these, in particular covering future relationship’ (European non-tariff barriers and the UK’s Perhaps most importantly, Commission, 2017a): major service sectors. Some it appears increasingly likely provisions on migration flows – that the negotiations will be ‘an overall understanding on extremely complex and politically the framework for the future particularly with respect to intra- company transfers, students, fraught, and working to an relationship should be identified extremely demanding (some say during a second phase of the extended business visits and so on – would probably have impossible) deadline. Introducing negotiations under Article 50 major elements of migration TEU. We stand ready to engage to be incorporated in any such agreement. policy into this process seems in preliminary and preparatory unlikely to make the task an discussions to this end in the However, this would not easier; so it is at least possible context of negotiations under necessarily impinge on the that both sides will decide that Article 50 TEU, as soon as main elements of post-Brexit immigration should largely be the European Council decides immigration policy set out above. excluded from the substantive that sufficient progress has Moreover, from the point of discussions. If the negotiations been made in the first phase view of the EU-27, it is not clear proceed constructively, with rapid towards reaching a satisfactory that they will wish to negotiate progress towards a relatively agreement on the arrangements over immigration. While free comprehensive agreement, it is for an orderly withdrawal.’ movement within the Single possible that migration policies The UK Government has said Market is a clear EU principle, will be an important component, that it wants ‘a new strategic governed by EU law and but it would be unwise and partnership with the EU, Directives, immigration policy premature to assume that this including an ambitious and between Member States and is likely. comprehensive Free Trade third countries (other than EEA/ Agreement.’ (Department for Switzerland) is largely a national Exiting the EU, 2017). It is competence. If we are, as the generally assumed that these UK government has stated, discussions would focus on clearly excluding ourselves the future trading relationship from the Single Market and the – broadly defined, so including jurisdiction of the ECJ, then free non-tariff barriers, regulatory movement – or even a modified issues, and so on. version of free movement

66 | Brexit and Fair Movement of People Transitional issues

However, one area where However, there is deep There are therefore several domestic policy development scepticism among almost all options for the transitional and the UK’s negotiations external experts as to whether period: with the EU-27 are likely to agreement is feasible within the • simply continuing free overlap is in the nature of any Article 50 period. If there is no movement, more or less as ‘transitional arrangements’ or such clear blueprint for the new now, for a defined period (this ‘implementation phase’. This relationship, then it is unclear would, however, raise the issue is likely to be extremely what an ‘implementation phase’ question of the ongoing rights complex. would look like, since it would of those who arrived during be unclear what was being the ‘transitional’ period). From The UK Government’s stated implemented. policy is that it wants the nature both a legal and negotiating of the UK’s trading relationship The EU-27 has also made point of view, this would with the EU to be agreed before clear that there could be no obviously be the simplest Brexit; any ‘implementation ‘cherry-picking’ during any such approach, representing as it phase’ would then be a matter phase; in other words, the UK would the status quo; of implementing this new would likely have to accept • some sort of ‘free movement relationship. In an interview with continued ECJ jurisdiction and minus’ period (where a work Andrew Neil on March 29, the free movement if it wished to permit might not be required, Prime Minister stated (Sunday continue membership of the but some other conditions Times, 2017): customs union and Single – a job offer, restrictions on Market during this phase. benefits or access to public ‘We want to make sure that we services – were imposed), are ending the jurisdiction of The issue is further complicated and there would be few or no the European court of justice by the administrative issues ongoing rights (for example, to and that we are able to control relating to the new system permanent residence after the movement of people coming discussed above. Even leaving transitional period). from the EU. We want to have the the negotiations aside, it is agreements done in two years. implausible that the legislative • phased implementation of a There may then be a period timetable described above would new immigration system (as in which we are implementing allow the introduction of a new was the case with the current those arrangements. If there immigration system by Brexit day. ‘tiered’ system). This would are different visa arrangements represent a clear break with that need to be put in place, free movement, but would be the government here and the administratively complex. government elsewhere will have to have their systems working so that it can operate. So there may be a period where we have got to implement the decisions that have been taken.’

Brexit and Fair Movement of People | 67 Scenarios and implications

As this discussion above some aspects of the new on the future relationship or the suggests, Brexit and the post-Brexit system would be ‘implementation phase’, the transition to a new system raise phased in. relationship with the EU would a large number of complex • At the end of the default to that of a third country issues, as well as a tricky implementation phase the new (‘WTO rules’ for trade). interaction between UK domestic system would be introduced, • In this case, the UK would be policy and the negotiations with or without any element of free to set its own immigration between the UK and the EU-27. ‘European preference’. rules; it could if it wished Government policy on a number • Such an outcome, which maintain a version of free of these issues has yet to be broadly appears to be movement in order to avoid formulated, and in any case the objective of the UK disruption, particularly since will depend on future events. government, would represent a by then the Great Repeal However, it is possible to identify relatively benign outcome from Bill should in theory have some possible scenarios and key the perspective of immigration incorporated free movement risks. policy. However, there are a fully into UK law, to the extent it Under the most benign likely number of significant risks: is not already. However, given scenario (in process terms), the the political constraints, it • Breakdown in the Article would be very difficult for the UK sequence of events would be the 50 negotiations, leading to following: government to sustain a policy continued uncertainty about of free movement with the EU • The UK and EU would quickly the status of resident EU at the same time as trade and reach an agreement on the nationals. This would lead customs barriers had been status of EU nationals in to considerable hardship for reintroduced. There would be the UK and UK nationals individuals and families, and considerably political pressure elsewhere in the EU; this might result in some current to reintroduce immigration would give sufficient clarity to residents returning to their controls. However, given the allow national governments, home countries. In the worst administrative constraints including the UK, to design case, if no agreement on described above, there is a and implement administrative the terms of withdrawal is serious risk UK Government systems to grant permanent reached within two years, the would not be in a position to do residence. UK would leave the EU without so efficiently or effectively. • An agreement on this and a clear legal framework, and the status of those in • More broadly, there are a whole other issues (the ‘divorce bill’) series of risks relating to the would allow negotiations to question would become highly uncertain (although other administration, implementation, proceed on the future UK- and enforcement of any new EU relationship; meanwhile, issues, such as customs controls, air transport, and system, particularly if it is the UK government would obliged to operate to a timetable devise and legislate (but not nuclear safety might well raise more immediate concerns). driven by wider political or implement) a new, post-Brexit negotiating considerations. immigration system. • Even if there is reasonable Employers would have to • Sufficient progress would progress on the Article implement controls on EEA be made on the longer-term 50 negotiations, there workers, and distinguish relationship to allow for an may be slow progress on between EEA workers with ‘implementation phase’ of 2 negotiating the terms of the different resident statuses; to 3 years post-Brexit; during future relationship. Even if similarly, those administering this period free movement these negotiations do not public services might have would continue largely as break down, they may not to introduce new systems to now, possibly with some be sufficiently advanced to distinguish between those with modifications, particularly in formulate an ‘implementation entitlement to access services respect of benefit entitlement; phase’. If the UK were to leave and those without. without an agreement either 68 | Brexit and Fair Movement of People Implications and risks for Wales

Based on the above analysis, (ii) Irrespective of the progress Migration to Wales is well what are the implications for or outcome of negotiations on below the UK average, and Wales and the Welsh labour the future trading relationship any quantitative restrictions market? In particular, what are between the UK and EU, might mean that an even the risks (and opportunities) disruption will be minimised greater proportion of a raised by the UK Government’s if the UK Government make smaller total number of approach to negotiations with clear that free movement migrants went to destinations the EU-27, and in response to will continue for a defined such as London. However, as the Immigration White Paper? period after Brexit, either as elsewhere in the UK, there At this early stage, with a wide part of the ‘implementation is a strong case for special range of possible outcomes, phase’ or as a unilateral arrangements in the health it is difficult to be precise. Nor move by the UK. This would and education sectors, where will we reiterate here at length not necessarily mean that a sudden halt or reversal of the obvious considerations that those arriving after Brexit day EU migration could cause apply to the UK just as much would have all the current significant disruption. as for Wales (for example, the privileges attached to free need for a smooth transition movement (for example (v) It would be difficult to make to any new system, the need access to benefits and the case for a regional to avoid imposing burdensome public services) but it would migration system on the requirements on employers, mean that there would be basis of the short-term etc.). However, the following no question of a work permit impact on the overall Welsh would appear to be of central system being introduced labour market, which is importance: immediately. not overly dependent on migration flows. However, (i) Negative impacts on (iii) It will be important that some specific sectors and/ both the labour market the implementation and or localities may experience and households will enforcement of a new some disruption, for example be minimised if the UK immigration system is the health and education Government devises and carefully phased, perhaps sector. The case for any implements a simple, beginning with larger broader regional scheme, streamlined system to employers and/or sectors and the potential benefits establish permanent that are already accustomed for Wales, would therefore residence status for EEA to interacting with the have to be made (as it nationals currently resident. immigration system. has been in Scotland) by This system should have a reference to Wales’ longer- cut-off date at some point in (iv) The widespread use of term demographics and the future (perhaps Brexit sector-based schemes in skills needs, where there is date) and a relatively short any post-Brexit immigration a strong case. qualifying period (perhaps system would pose two years); it should significant risks for Wales. (vi) A regional scheme would drop the requirement for Given the different sectoral almost certainly be comprehensive medical distribution of migrants in preferable for Wales to a insurance with particular Wales compared to the UK national scheme with a focus on couples/families; as a whole, it is likely that sector-based approach. and the Welsh Government the widespread use of such In particular, assuming the and local authorities should schemes would disadvantage Welsh government had a be fully involved in the design Wales. Similarly, any significant input into both any and implementation of such widespread use of caps overall cap or quota, and the a system. or quotas would be likely targeting and administration to disadvantage Wales. of a regional scheme, it would

Brexit and Fair Movement of People | 69 be possible to tailor any sectors of concern to Wales; nationals, Wales might such scheme more closely and would not necessarily benefit from a system that to Wales’ economic, labour result in migrants in those was more open to non- market and demographic sectors coming to Wales. EU nationals. As well as needs; it would also potentially filling the gap make it easier to ‘market’ (vii) Under almost any plausible left by any reduction in EU Wales to new migrants. By scenario, there will be some migration, non-EU migrants contrast, as noted above, additional restrictions on to Wales (a significant a national scheme based EU migration to Wales after proportion of whom wholly or largely on a sector- Brexit. Over the longer term, work in relatively skilled based approach would not therefore, in addition to the occupations) could help necessarily target all the considerations discussed meet Wales’ longer-term here with respect to EU economic and demographic challenges.

70 | Brexit and Fair Movement of People References

Department for Exiting the EU Portes, J. (2016b). Immigration (2017). The United Kingdom’s after Brexit. National Institute Exit from, and new partnership Economic Review. Vol. 238, with, the European Union. Issue 1, pp. R13-R21. Retrieved from: Public Policy Institute for Wales https://goo.gl/EYJGwS (2016). Evidence Summary on Department for Work and EU migration. Retrieved from: Pensions (2017). National https://goo.gl/1Im2La Insurance Number registrations Sunday Times (2017). to overseas nationals. EU migrants keep benefits after European Commission (2017a). Brexit. Retrieved from: European Council (Art. 50) https://goo.gl/GUSRQm guidelines following the United Welsh Government (2015). Kingdom’s notification under National Population Projections. Article 50 TEU. Retrieved from: Retrieved from: http://www.consilium. https://goo.gl/uXhacS europa.eu/en/press/press- releases/2017/04/29-euco- brexit-guidelines/ European Commission (2017b). Speech by Michel Barnier. Retrieved from: https://goo.gl/U70kLn House of Lords (2017). Select Committee on Economic Affairs, Oral Evidence. Retrieved from: https://goo.gl/duxtYb Office of National Statistics (2016). International Passenger Survey 3.14, citizenship by area of destination or origin within the UK. Retrieved from: https://goo.gl/qaGDR9 Office of National Statistics (2017). Migration Statistics Quarterly Report. Retrieved from: https://goo.gl/2Sdq8X Portes, J. (2016a). Let them stay? If it only were that easy. Retrieved from: https://goo.gl/DZvFVd

Brexit and Fair Movement of People | 71 The Public Policy Institute for Wales

The Public Policy Institute for Author Details Wales improves policy making and delivery by commissioning Jonathan Portes is Director and promoting the use of of Aubergine Analysis, and independent expert analysis Professor of Economics and and advice. The Institute is Public Policy at King’s College independent of government but London. works closely with policy makers Giuseppe Forte is Research to help develop fresh thinking Assistant at King’s College about how to address strategic London. challenges and complex policy issues. It: The contents of this paper and any opinions expressed therein • works directly with Welsh are the responsibility of the Ministers to identify the authors alone and not those of evidence they need; King’s College London. • signposts relevant research and commissions policy This report and the information experts to provide additional contained within it are the analysis and advice where copyright of the Queen’s Printer there are evidence gaps; and Controller of HMSO, and are licensed under the terms of • provides a strong link between the Open Government Licence What Works Centres and policy http://www.nationalarchives. makers in Wales; and gov.uk/doc/open-government- • leads a programme of licence/version/3. The views research on What Works in expressed are the author’s and Tackling Poverty. do not necessarily reflect those For further information: of members of the Institute’s www.ppiw.org.uk Executive Group or Board of Governors. Dan Bristow Public Policy Institute for Wales Tel: 029 2087 5345 Email: [email protected]

72 | Brexit and Fair Movement of People 11 Annex D – Migration and Demographic Change – the Welsh Context Prepared by Chief Economist, Welsh Government, May 2017 This Annex is intended to provide projections are routinely produced. The Welsh total fertility rate has for an overview of the longer run a long time been below that needed Welsh demographic context within At the present time, particular to replace the population - see which the role of migration can be difficulties are of course associated Figure 13. Should this persist (and considered. A number of issues with projecting international there seems at present no reason are raised, but the approach migration levels since these levels to assume otherwise) then over the is introductory and exploratory are subject to negotiations in the longer run future, Welsh population – much further work would be context of the decision to leave the would experience continuous required to fully analyse the EU. trend decline – unless there was issues and to develop possible At the Welsh level, assumptions a continuing inflow of people from policy responses. about UK internal migration outside Wales. levels are crucial to forecasting Increasing longevity can only partially Demographic change, future Welsh population size offset this decline - and of course is population ageing and and structure, and are also very simultaneously reflected in an ageing migration difficult to predict. One reason of the population for this is the interdependence A key feature of demographic of international and internal While all the elements needed to change in Wales and the UK is migration. For example, if there forecast population are subject of course that the population is are high levels of international to uncertainty, fertility below ageing, with increasing numbers in-migration to parts of England, replacement appears a very well 1 of both old and very old people. this will have consequences for established phenomenon and is This story is well known and not land and property prices, which almost universal across developed 2 rehearsed here . would in turn be expected to have countries (albeit to a varying extent). The social and economic consequential effects on internal migration between England and The components of Welsh population implications of increasing change over recent years are shown longevity also depend critically other parts of the UK (including Wales). in Figure 2. Natural population on the other factors driving change is positive despite fertility population change, particularly In recent years, internal migration below replacement. This reflects a the fertility rate and patterns of within the UK has played a major cohort effect (a temporarily large migration, since these factors role in the demography of Wales cohort of women of child bearing are co-determinants of overall and the Welsh social context. age) and is thus not reflective of population size and structure. For example, at the time of the the longer-run trend. The overall Forecasting population size and 2011 Census, over one-fifth of net flow is positive – this shows structure is extremely challenging the Welsh population had been the combined effects of all the – indeed, official figures are born in England (and of course of other flows, and implies that total explicitly described as projections, the remaining adults, a significant population has been increasing. not forecasts, and variant proportion will be married to someone born in England). 1 ONS defines the ‘very old’ as those aged 90 plus. 2 Perhaps less well known are the facts that, on current projections, in Wales the number of expected deaths each year is not anticipated to increase markedly and that the proportion of the population that is in the last few years of life (however defined) is actually expected to decrease. This is also a reflection of increasing longevity, and means that the social and economic effects of ageing are particularly challenging to assess. These effects will depend on how, in future, the impacts of illness and disability are felt over the life course, and particularly on which impacts are most associated with the latter years of life (whenever they occur) rather than with age in itself. Quite different views of the extent of old age dependency can be formed depending on the assumptions made about such factors and, in particular, about the progress made in preventing or treating major disabling illnesses such as dementia. 3 The increase in fertility seen over the first decade of the new millennium was in part a cohort effect.

Brexit and Fair Movement of People | 73 Figure 1: Total Fertility Rate

3.5

3.0

2.5

Replacement rate

2.0

1.5

1.0

1940 1950 1960 1970 1980 1990 2000 2010 2015

England & Wales Wales Source: ONS

Figure 2: Components of Population Change, Wales Annual average 2010-15

60,000

50,000

40,000

30,000

20,000

10,000

0 Natural Internal Internal Net internal Internatioanal Internatioanal Net Net change inflow outflow flow flow outflow Internatioanal flow flow Source: StatsWales Note: Due to data limitations, average gross flow figures are for period 2010-15.

74 | Brexit and Fair Movement of People The influence of such factors Figure 4 compares the A continuing decline in the size is also reflected in the official projections for Welsh population of the working age population population projections for Wales. size and structure under both would have a range of potentially Figure 3 shows the contribution the principal and ‘zero migration’ important economic and social of the various components assumptions. The latter implications for Wales. These of future population change projection is based on the are not considered in detail in under the ‘principal projection’. assumption of no migration, this introductory note. However, This projection is, in broad terms, either international or internal a sustained decline in the size based on the assumption of a to the UK. This projection is of the working age population continuation of recent trends as intended to illustrate the impact is likely to be reflected in an experienced prior to the vote to of migration on population size economic performance that is leave the European Union4. and structure, rather than to relatively weak and in a reducing present a plausible forecast. tax base. Over the medium term, natural change (that is, births minus The cohort effects described deaths) is projected to account above, and population ageing, for around 40% of population together mean that, even in change in Wales, international the ‘zero’ projection, total migration 40%, and UK migration population rises before the 20%. Over the longer term, trend decline sets in. But under international migration projected both projections, the working to be the biggest driver of age population declines population change. continuously, with the absence of net population inflows to Wales accelerating this reduction.

Figure 3: Components of future population change

100

80 Natural Change (births-deaths)

% UK Migration 40

20 International Migration

0 2014 2020 2026 2032

Source: Welsh Government

4 ONS has yet to produce population projections that reflect the consequences of the referendum result. The implications of the referendum result formigration will depend on future migration policy which is as yet unclear.

Brexit and Fair Movement of People | 75 This results, first, because This is a consequence both of This in turn reflects similar the size of the working age the lower levels of saving (and proportionate reductions in the population directly impacts on thus lower levels of investment) population aged 65 plus and economic output. Despite some associated with a higher the population aged under16 trend growth in people working proportion of older people in the (not shown). past retirement age the vast population, and of the potential majority of economic activity for new skills to be introduced to These similar proportionate is undertaken by people of the workforce at a slower rate as changes across age groups working age. Second, there is a result of lower inflows of young reflect recent trends and are an indication from international people. unsurprising given the age profile studies that the ageing of the of the population flowing across population, which accompanies Figure 4 indicates that moving the Welsh border. For example, the decline in the working age from the ‘principal’ to the ‘zero’ over recent years net inflows population, is itself likely to be projection (i.e. removing both have been concentrated in associated with lower growth5. internal and external population the under 15 and 40-69 age inflows and outflows) has a groups (many of whom of course broadly similar proportionate, subsequently move into older negative, impact on both total age groups). and working age populations.

Figure 4: Population Projections, Wales

108

106

104

102

100

90 2014 2019 2024 2029 2034 2039

All age - principal All age - zero Age 16-64 principal Age 16-64 zero Source: ONS

5 For example: http://www.nber.org/papers/w16705

76 | Brexit and Fair Movement of People There are no official population Government purely for illustrative The available evidence suggests projections which examine the purposes indicates that, on that on the basis of the principal impact on Wales of reducing such a scenario, over the long projections, Wales faces a more international migration to term (after around 2035), marked decline in the working zero while retaining internal the decline in the Welsh working age population than many other migration within the UK (and, age population would be even parts of the UK. Table 1 shows as noted above, there are greater than were both external some near term population interdependencies between and internal migration to cease. projections on this basis. international and internal This reflects the preponderance migration). However, analysis of older age groups in internal carried out by the Welsh migration, with younger age groups being more represented in international migration6.

Table 1: Percentage change in population, mid-2015 to mid‑2025, by broad age group Age

City Regions 0-15 16-44 45-64 65+ All ages

Bristol 12.8 6.1 3.8 18.4 8.9

West Midlands 9.4 5.5 5.0 13.5 7.5

Greater Manchester 6.8 2.4 3.5 17.6 5.9

Edinburgh 9.6 3.4 0.8 23.1 7.3

West Yorkshire 5.7 1.5 2.8 19.1 5.5

Sheffield 4.8 2.6 -0.4 17.0 4.8

Cardiff city region 4.0 -0.1 -1.8 18.5 3.6

North East 3.8 0.4 -5.0 19.9 3.3

Liverpool 6.2 -0.8 -4.9 17.9 2.8

Glasgow 3.9 -2.1 -4.0 20.4 2.2

Wales 2.2 -0.6 -3.6 17.5 2.2

UK 7.3 1.9 3.4 20.7 6.7

Source: ONS

6 The projection assumes that the age-structure of internal migration remains similar to that which has been observed in the recent past

Brexit and Fair Movement of People | 77 It follows from the projections in For example, in a recent study7, Over the medium term, Wales Figure 4 that migration is not a Portes and Forte note that it (like the rest of the UK) is panacea for a declining working is well established that EU experiencing an ageing of the age population or an ageing immigrants are more educated, population and a decline in the population as, even if migration younger, more likely to be in work numbers of working age people. increases the numbers of those and less likely to claim benefits The latter decline is projected to of working age, it may leave than the UK-born8. Portes and be sharper in Wales than in many the share relatively unaffected. Forte conclude that, in their other parts of the UK and may The age structure of the migrant central scenario, the impact raise particular social, economic population is therefore crucial of Brexit-induced reductions and fiscal issues. This decline to assessing its demographic migration could be to reduce in the working age population is impact. annual GDP per capita would likely to be reinforced by potential by between about 0.22% and reduced population inflows as In summary, if addressing 0.78%. On their more extreme resulted of lower international the issues associated with a scenario, the ‘hit’ to GDP per in-migration to the UK following declining working age population capita would be up to 1.16%. Brexit. is a policy goal an age-targeted migration policy would seem to In-migration is not a panacea for be most appropriate. Conclusion an aging population, but a policy In the absence of population that effectively targeted younger Wider economic effects inflows, a fertility rate below the and more educated in-migrants of migration replacement rate, as appears could have some role to play in well-established in Wales, ameliorating adverse trends. Aside from the direct effects eventually implies continuing on the economy from the scale population decline – reversing of the working age population, only if, and when, the fertility the wider evidence suggests rate recovers. It is self-evident that in-migration can have that this could have the most beneficial effects for average profound social, economic productivity levels - and hence political implications over the for GDP per head and for income longer term. These implications per head of the pre-existing would include the progressive resident population. This reflects loss of viability for a range of in part the higher education services in smaller centres level of typical migrants, (including health and educational but also potentially other facilities), with - eventually - characteristics such as attitudes whole settlements ceasing to to entrepreneurship. These be viable. Such consequences characteristics are associated would however emerge with ‘spill-over’ impacts on the progressively, so might not attract productivity of others. the attention they deserve.

7 http://www.niesr.ac.uk/sites/default/files/publications/The%20Economic%20Impact%20of%20Brexit-induced%20Reductions%20in%20 Migration%20-%20Dec%2016.pdf 8 For example, according to Portes and Forte, about 44% have some form of higher education compared with only 23% of the UK-born

78 | Brexit and Fair Movement of People 12 Annex E – Tackling Exploitation in Low-waged Work: Labour Standards Regulation for Wales

Prepared by Public Policy Institute for Wales (PPIW) for the Welsh Government, August 2017

Summary exploitation can be ‘normalised’ a post-Brexit framework of in communities and across employment law that accords Worker exploitation happens industries. In all its forms, with the international treaties because of shoddy employment exploitation undermines the and human rights conventions practice, non-compliance with Welsh goal of ‘decent work’ that establish minimum labour employment law, breaches as per section 4 of the standards globally. In several of human rights and criminal ‘Well-being of Future Generations key areas, including labour behaviour. Migrant workers are Act (Wales) 2015’. standards inspections and trade by no means the only workers union freedoms, UK provisions who are at risk of exploitation The enforcement of employment currently fall short. and neither are all migrant law in the UK is heavily workers at such a risk. dependent on the lodging of This report makes four policy Non-enforcement of minimum individual claims at employment observations: labour standards puts migrants tribunals. In the face of worker A. The need for new research and non-migrant workers at risk exploitation and wide-spread which compares the of exploitation and this risk is employment rights violations, experiences of both migrant enhanced where workers have it is ineffective. A step-change and non-migrant workers few alternative employment in labour standards compliance in Wales. There is a strong options and are unclear about is required, as well as action on evidence-base about poverty their rights or are practically enforcement which specifically in Wales but less is known unable to enforce them. addresses the needs of workers about labour standards in Exploitation is the product of a in Wales. For example, in low-waged work from the wide spectrum of abusive labour Wales the higher rate National perspective of workers. practice. At one end are extreme Living Wage (NLW) is especially Future research could usefully violations of human rights such important and there is a need elucidate and compare the as forced labour and slavery. for future UK-wide compliance employment options, coping At the other end of the spectrum, strategies to be suitably strategies and experiences of workers are denied the benefits resourced and focused in Wales. both migrant and non-migrant of effective employment rights. Legal responsibility for workers in Wales. Exploitation is associated with ‘employment rights and duties’ B. The need to widen trade serious criminality but that is not lies with the UK Government union access to workplaces, the whole picture. Exploitation and it is of critical importance support strategic litigation also flows from injustices which that Brexit does not entail a and fund advice and are experienced as everyday watering down of employment advocacy for minimum labour wrongs (such as being paid less rights. Equality and human standards claims to be than minimum wage or being rights law makes an increasingly adjudicated in Wales. Working bullied to work excessive hours, vital contribution to the positively with trade unions, even though these abuses may protection of rights at work the Welsh Government themselves attract criminal and is an integral part of the could explore ways to sanctions). Without effective fight against exploitation. widen trade union access labour standards enforcement, Achieving the well-being goal of to all workplaces in Wales the conditions which give rise to decent work in Wales requires (building on section 9.4

Brexit and Fair Movement of People | 79 of its ‘Code of Practice on D. The opportunity to address Ethical Employment in Supply exploitation via equality law. Chains’). It could look to The ‘Wales Act 2017’ gives increase the capacity of trade Welsh Ministers new powers unions to raise awareness to bring into force the socio- of employment rights and economic duty set out at promote good practice s.1 ‘Equality Act 2010’. The across Wales. Workers’ Welsh Government could access to justice would be investigate how to galvanise enhanced by support for action on minimum labour strategic litigation initiatives standards compliance and targeted additional through harnessing new resources for advice and duties on devolved Welsh advocacy organisations to authorities to give due support individuals bringing regard to the desirability of Welsh claims about minimum reducing socio-economic standards so that minimum disadvantage. It would be labour standards disputes useful to build a detailed, are advanced through up-to-date picture of the day- employment tribunals to-day interactions between in Wales. Welsh authorities and private C. The need to develop expertise sector employers in Wales. about how UK employment This would help to identify law aligns with standards scope to build regard for set out in international socio-economic disadvantage treaties and human rights into their functions in ways conventions. The Welsh that focus attention on Government could pursue minimum labour standards legal improvements and compliance. consolidation of employment rights in the UK based on legal instruments that the UK has already ratified.

80 | Brexit and Fair Movement of People Introduction

The field of UK employment Accordingly, enforcement gaps This report is structured by law and labour standards expose workers to the risk of those questions. Section one enforcement is fast-moving and exploitation and undermine discusses the meaning of the the impact of recent legislation terms and conditions for workers term ‘exploitation’. The second such as the ‘Wales Act 2017’ in good quality jobs. Workers in section sets in a Welsh context and the ‘Immigration Act 2016’ low-wage employment have few information about risks and is yet to be fully understood. In options of alternative work and indicators of exploitation. Wales, there are new initiatives this puts them at particular risk In section three, a discussion introduced by Welsh Government of exploitation where minimum of employment rights focuses on such as the ‘Fair Work Board’ labour standards are not in low-waged workers and provides and the ‘Code of Practice on force. Tackling exploitation an overview of enforcement Ethical Employment in Supply through stronger enforcement agencies and activities. Chains’. This report provides an of the minimum protections Section four considers ways overview of UK minimum labour set out in employment and in which existing legislation standards compliance and is equality law is a strategy which and the policy framework could set in the context of concerns also respects industry norms be more effective. Four policy about exploitation in low-waged of good employment practice observations are summarised work in Wales and the Welsh and the integrity of trade in conclusion. Government’s work on European union negotiated agreements. Transition as set out in ‘Securing In commissioning this report, Wales’ Future’. That policy paper Welsh Government had four sets out a vision for Wales in main questions: which there is: 1. What is meant by the term A strong culture of enforcement ‘exploitation’ in relation to of legislation to prevent the low-waged work? exploitation of workers by 2. What is known about unscrupulous employers exploitation in Wales? seeking to undercut locally 3. What are the rights of established wage rates and workers in low-waged work appropriate industry regulation. which protect them against All workers in Wales and the exploitation and how are UK, whatever their country of these enforced? origin, must be treated equally and fairly according to law. 4. What needs to be done (2017:17). for existing legislative approaches to be more successful and what are the other policy options which could be considered?

Brexit and Fair Movement of People | 81 Understanding ‘Exploitation’

There is no single definition Exploitation is prevalent in security and human dignity of labour exploitation unacceptable forms of work. (ILO, 1999). Forms of work in international law. These are denoted by conditions that are profoundly adrift from The International Labour which deny fundamental rights understandings of decent work Organisation regards at work, put lives at risk, pose a are centrally experienced by ‘exploitation’ as a purpose which threat to health, violate human groups already at an increased is pursued by various means. freedom and dignity, threaten risk of social and economic For example, a crucial element personal security and keep disadvantage – particularly in the legal identification of households in conditions of women, migrants, ethnic trafficking is its purpose, namely poverty (ILO, 2013: para 49). minorities and young people. exploitation, which includes Unacceptable working forced labour, slavery and relationships are those which Exploitation can be mapped servitude (International Labour do not respect work-related onto a spectrum that spans a Office, 2009:7). There are rights, exclude workers from conceptual (and legal) space estimated to be 13,000 social protections such as between ‘unacceptable forms slaves in the UK and slavery sick pay and do not offer of work’ and ‘decent work’ practices are known to have opportunities for workers to be (see Figure 1). At various infiltrated supply chains in retail, represented by trade unions points on the spectrum are construction, care homes, hotels (Fudge and McCann, 2015:5). minor and major employment and hospitality. The term ‘labour law violations and breaches abuse’ has wide meaning and By way of contrast, ‘decent work’ of human rights. Where such is used to identify breaches is the guiding contemporary abuses go unchecked and of national or international image of an acceptable working unresolved the labour market employment law. There is life and embodies a commitment develops in ways that make evidence of strong causal links to ‘promote opportunities for severe exploitation more likely. between labour abuse and women and men to obtain By locating breaches of labour the purposes of exploitation decent and productive work, in standards within a spectrum of (France, 2016; FLEX, 2015). conditions of freedom, equality, exploitation the experiences of

Figure 1: A spectrum of exploitation

Action on exploitation is of relevance to large numbers of workers where more prevalent breaches of labour standards are recognised as abusive labour practices in a spectrum of exploitation which separates decent from unacceptable forms of work.

Decent work

Forced Extreme Breaches of labour insecurity labour standards

Unacceptable forms of work

82 | Brexit and Fair Movement of People large numbers of workers are Exploitation is not synonymous in ways which negatively impact recognised as unacceptable. with poverty. Poverty is both their physical and mental A study by Pollert and Charlwood frequently analysed at the health (Wood 2016). Several (2008) found half of workers level of households, meaning studies have correlated low pay had experienced problems at that research identifies the and insecurity with increased work in the previous three years factors and circumstances incidence of suicide and another, by Casebourne et which contribute to people (McKee et al 2017). al for the Department of Trade living in households in poverty. and Industry (2006) found 42% Exploitation is collective in the Low-wages are not only a had at least one problem in the sense that it is a workplace consequence of low hourly previous 5 years. We do not phenomenon, yet it is pay, they are also a feature of know the proportion of these experienced at an individual level low-hours jobs. Studies define workers who were experiencing and it should not be reduced to a ‘low-hours job’ as being one problems with minimum labour issues of low-pay. Exploitation that does not provide enough standards violations. However, might also be experienced as hours for a sustainable income labour abuses such as the non- ‘unfair treatment’, for example (O’Sullivan.M et al, 2015). payment of national minimum allegations of bullying frequently Indeed, increased risk of wage, denial of paid holiday accompany some workers’ exploitation can be indicated by entitlements, withholding of recollections of exploitative a combination of variable hours, sick pay and unauthorised employment on a zero hours low-hours and low pay. deductions from wages appear contract. In these instances, Across the UK labour market, to be increasingly prevalent it is not the contract itself which employment insecurity has (Beels, 2017). is regarded as unfair but the become more commonplace resultant insecurity of income From an industrial relations since the global financial crisis and hours which make the of 2008 (Gregg and Gardiner, perspective, the term ‘labour worker vulnerable. Furthermore, exploitation’ defines situations 2015) but the prevalence of harms of exploitation can insecure employment in the that involve one or more of the manifest in poor mental health. following kinds of practice: Low UK labour market is hard to or no pay, long hours, insufficient Knowledge gained via establish. According to research breaks, broken promises, enforcement activity reveals that recently commissioned by the bullying or contravention of workers are more easily exploited GMB trade union, up to a third labour rights (for example if they regard poor treatment of workers in the UK are variously Smith and Dwyer, 2015). as being no more than they on short or zero-hours contracts, This is exploitation as it is often ‘deserve’ and mental health is temporary contracts, are experienced: embedded within a key factor here (Beels, 2017; underemployed or at risk of false a complex mix of social and GLAA, 2017). Nevertheless, self-employment (Butler, 2017). political inequality, uncertainties low pay is a major cause of This estimate considerably of legal status, the regulation of stress and research in the retail exceeds the 1 in 5 workers migration, hierarchies of gender sector has found that, when (4.5 million people) estimated by and economic pressures (see combined with insecure hours the Citizens’ Advice Bureau to be also box 1). of work, workers experience precariously employed (Citizens’ pressure which borders on Advice Bureau, 2016a). coercion and they are exploited

Brexit and Fair Movement of People | 83 Box 1: Labour abuse and exploitative practice in social care (Hayes, 2017) • Deductions of wages as a ‘fine’ for being absent from work due to sickness. • Demand for payment from employers for uniform or equipment that is a requirement of the job. • Lengthy periods of unpaid on-the-job training prior to an offer of employment being made. • Lack of notice of being required to work. • Wide fluctuation in hours of work offered from one week to the next without a reasonable explanation. • Refusals to offer work in future if workers decline to accept work at very short notice. • Effective instant dismissal by a starving of work without explanation.

The risks & indicators of exploitation that matter for Wales

Reforms to out-of-work and in- One important legal effect employment respectively) was work welfare benefits, as well of the ‘Wales Act 2017’ is to within the Assembly’s legislative as structural changes to the identify ‘employment rights competence. The ‘Wales economy following the financial and duties’ as a reserved Act 2017’ now provides that crisis of 2008, have increased matter. This means that the ‘employment rights and duties’ the number of people taking UK government has reserved are expressly reserved and up paid employment in the UK. powers in respect of employment this essentially means that However, there is evidence that rights and duties and in the Assembly cannot pass this employment is too often respect of the functions of the legislation whose sole purpose constructed in the form of poor UK-wide enforcement agencies relates only to employment quality jobs (Gregg and Gardiner, that are responsible for labour rights and duties such as, for 2015). Employment concerns standards compliance. Under the example, the minimum wage. found political expression in ‘Government of Wales Act 2006’ However, it was made clear the results of the UK’s 2016 employment was a subject about by the UK Government during referendum on continued EU which the Act was silent; it was the Parliamentary process that membership. While much has neither a conferred subject, the purpose of an Assembly been said about the propensity nor an exception to a conferred Bill provision (which could for older people to vote ‘Leave’ subject. be an employment-related and younger people to vote provision) must be assessed ‘Remain’, the largest ratio by However, as a consequence by considering how the provision demographic was based on skill. of two rulings by the Supreme has been drafted, what it People in low-skilled jobs voted Court, it has been judicially actually does and its wider 70% ‘Leave’, 30% ‘Remain’ and confirmed that the Assembly can legislative context. So, whilst an this points to a polarisation in in fact legislate on employment Assembly Bill will not be within workplace experience and vastly issues in certain circumstances. competence if it is solely about different understandings of the The unanimous judgment in employment rights and duties, benefits of legal rights which the ‘Agricultural Sector (Wales) it could fall within competence stem from EU membership, Bill’ case was that Welsh law if its employment provisions were including those of free movement which ‘fairly and realistically’ an essential part of a Bill whose and protection in employment related to both a devolved overall purpose is devolved. (O’Reilly, 2016). subject and a silent subject (in that case agriculture and

84 | Brexit and Fair Movement of People The Welsh Government is abusive employment practices, social care, food processing, acutely aware of public concerns is characterised by a lack of hand car-washing, nail-bars, in Wales about poor quality workplace monitoring, focuses on restaurants and take-aways employment in low-waged jobs enforcement as the responsibility (Beels, 2017; Anderson, 2010; and s.4 ‘Well-being of Future of individual workers and EHRC, 2014). These are also Generations (Wales) Act 2015’ offers few opportunities for sectors where the risk of slavery sets out a statutory duty to independent representation of and forced labour is highest. maximise its contribution to workers’ interests through trade achieving the well-being goal, unions (Weatherburn and Toft, The Welsh Government is seeking ‘a prosperous Wales’ 2016; Hayes and Novitz, 2014; regarded by non-governmental which allows people to take Ewing et al, 2016). However, organisations as being advantage of wealth generated other key issues include: particularly proactive in the fight through securing ‘decent against modern slavery. It is alone in the devolved nations work’. The Bevan Foundation Isolation has observed that a lack of in having an anti-slavery co- decent work ‘remains by far Working alone is a common ordinator who has been in post the most important factor in experience for workers such since 2011 and has recently Wales’ relatively high levels as cleaners, security guards launched a Code of Practice of poverty’ (‘National Assembly and homecare workers and to help corporations prevent for Wales, 2015’) and Oxfam their limited contact with other modern slavery and other Cymru regards that in Wales, workers or employers means employment abuses through ‘the fundamental problem is they have few opportunities to ethical commissioning in public the chronic lack of decent jobs’ complain or raise queries and sector supply chains (Welsh (National Assembly for Wales, may feel vulnerable to abuse in Government, 2017a). 2015a). one-to-one situations with line managers (Weatherburn and Undocumented workers One way of tackling worker Toft, 2016; France, 2016). exploitation is to seek decent Fear of the immigration work for all. The Welsh Connections between isolation authorities is a major barrier that Government has additionally and the risk of exploitation are prevents both undocumented established a ‘Code of Practice also present where people work and documented migrant on Ethical Employment in anti-social hours and their daily workers from reporting abuse. Supply Chains’ and issued routines are disconnected from The threat of reporting to police guidance to limit the use of those of other people. Cases is routinely used by unscrupulous zero-hours contracts in Welsh of harassment are common employers to hold workers in public services. These initiatives and abuse can appear to be abusive situations (Bales, 2017). are positive and welcome invisible. Lack of public visibility Even if the threat does not developments which, when of workers who labour in fields, come directly from the employer, combined with heightened factories and on building sites undocumented workers often awareness of the need to is another example of how will not report abuse as they are continually guard against modern isolation increases the risks of afraid of coming to the attention slavery, go some way to reduce exploitation (Beels, 2017). of authorities and being the risks of exploitation in Wales. deported. Harmful sectoral norms Nevertheless, the risk of Similarly, where workers In some forms of work there exploitation increases where are claiming out-of-work is a particularly high risk of circumstances or status make benefits yet also engaging exploitation because poor it harder for workers to assert sporadically in paid work they employment practice and labour or enforce their rights. The most are unlikely to report abuse for abuse are prevalent across pertinent risk factor for workers fear of prosecution. Indeed, the industries in which they in Wales is that labour standards in circumstances where workers are located. These industries enforcement in the UK carries are knowingly engaged on the include: cleaning, agriculture, a low risk of prosecution for basis of an illegal contract, any construction, fishing, hospitality,

Brexit and Fair Movement of People | 85 claim they may make in relation Migrant workers Subcontracting and to employment rights is likely to self-employment be barred by the common law A useful snapshot of the integrity doctrine of illegality (see Allen v of labour standards can be taken Subcontracting models which Hounga [2014] UKSC 47 [24]). by considering the position of create long employment chains migrant workers in low-waged are a key driver of exploitation work. Migrant workers are at Hope, fear and in certain sectors, particularly particular risk of exploitation construction and cleaning. personal debt where they have little choice As many workers do not know Exploitation is often fuelled by of alternative available the identity of the organisation a combination of ‘hope’ that employment, if they are unclear by whom they are ultimately things will get better and ‘fear’ about their rights or are unaware employed they are unsure of of dismissal (Beels, 2017). of how to enforce them, if they where they can complain if there When people are employed on have difficulties in understanding are problems (France 2016). insecure contracts and lack written or spoken English, if they Lack of accountability within formal employment protection, are isolated from family and subcontracting models is a fear of losing work (even if the social networks and if they live major issue; primary contractors income it provides is meagre) in inadequate housing or suffer are able to deny knowledge is a major deterrent to reporting poor health (France, 2016). of, or responsibility for, abuse, abuse. Many workers are willing and often do not know who is Yet migrant workers are by no to endure labour abuses and working for them. means the only workers who even exploitation because they are at risk of exploitation since are highly dependent on their The Law Society has proposed exploitation is a consequence employer yet continue to hope employment law reform such of shoddy employment for improvements. When they that all individuals would be practice, non-compliance with lack alternative sources of work, entitled to information about the employment law, breaches the lower their wages, the more identity of their employer (2017). of human rights and criminal dependent they become on a Section 54 of the ‘Modern behaviour by employers. Non- subsistence standard of living. Slavery Act 2015’ applies to enforcement of minimum labour Employers take advantage of organisations with an annual standards puts both migrants this, knowing that workers are turnover of £36 million or more and non-migrant workers at risk. reliant upon them to survive. who are incorporated in the UK Nevertheless, it is important to or carry on business in the UK. Insecurity of income also note that racism and prejudice It requires companies to set increases the risk that workers puts ethnic minority workers in out the steps they have taken will need to borrow money to a position of greater vulnerability each year to ensure slavery and tide them over in periods when to exploitation (Wills, 2012; human trafficking are not present paid work is in short supply. Healy et al, 2004). within their supply chains. However, the insecurity of their Where migrant workers are income also restricts their However, the most common form employed in unregulated or choice of credit and increases of exploitation is the failure to under-regulated workplaces, the attractiveness of payday pay in line with minimum wage especially where they are loans or other exploitative law and business-size also employed via agencies or by forms of credit, including those matters in this regard because subcontractors in complex associated with aggressive micro-businesses are three contracting chains, there is an debt collection tactics (Citizens’ times more likely to offend increased risk that exploitation Advice Bureau, 2016c; Taylor, (Beels, 2017). and abuse will take hold. 2017). This intensifies their Many migrant workers who do Women comprise a majority vulnerability within a cycle of not know their rights may expect of those who are both living in hope and fear that increases the poorer pay and conditions or poverty and working in a job with risk of exploitation taking hold in perceive their situation, however an employer. Men comprise a their working lives. exploitative, to be better than majority of those who are living they would have had in their in poverty and work on a self- country of origin (Beels, 2017). employed basis. Since 2010,

86 | Brexit and Fair Movement of People 32% of all new jobs across the engaging in contracts which flexibility to collect children from UK have been self-employed jobs speculatively construct them as school, care for elderly relatives, but in Wales the proportion is self-employed (Citizens’ Advice study or undertake other work] far lower, at 20% and this profile Bureau, 2016b). Frequently, Hermes couriers sacrifice a has remained static since 2015 the hourly wage advertised is number of employment rights’ (Office of National Statistics, significantly higher than the (Hermes, 2017). However, 2017). However, there are level of the NLW and thus the this ‘sacrifice’ is not a legally considerable variations between work appears at first glance recognised exchange, there are Welsh regions. For example, with to offer the potential of a no such provisions in law by its heavy reliance on small-scale ‘better than basic’ income. which employment rights are farming and rural businesses However, in order to make an optional and can be ‘traded’. more than 1 in 4 workers in informed choice, workers must Powys identify as self-employed know in advance (and be able The evidence from Hermes is while in Rhondda Cynon Taf, to accurately calculate) the illustrative of social an historical home for heavy deductions from the hourly rate understandings that employment industry in Wales, the ratio is which are necessary to cover protection is somehow less than 1 in 13. the costs of taking holiday, discretionary. It also reveals how periods of sickness, personal known responsibilities for the There are 4.5 million self- insurance, motoring costs, care of others can impact upon employed workers in the UK and work clothes, other tools and the quality of available terms of it is estimated that half a million equipment (in addition to tax, employment and can be used as of these workers are in ‘false’ national insurance and pension a justification for the removal, or self-employment; meaning that contributions). non-applicability, of employment their relationship with a ‘client’ rights. The effect of false self- is in fact a relationship with When employers defend employment is that workers an employer (Citizens’ Advice the commissioning of large exchange protection from Bureau, 2016b). People who are proportions of their workforce on exploitation for the opportunity to falsely self-employed lose out a self-employed basis they often engage in paid work (see box 2). on rights to paid holiday leave do so on the basis that workers This trade-off indicates a severe (worth an average of £1,288 per require, and enjoy, freedom of imbalance of power within the person per annum), sick pay and choice within the employment employment relationship which the right to be paid a minimum relationship. For example, a large put workers at an increased risk wage. logistics operator has submitted of exploitation. evidence to a Parliamentary There is some evidence that inquiry arguing that, ‘in return for workers find it difficult to assess this flexibility [which they list as a the true cost or benefit of

Box 2: Labour abuses and exploitative practice in Logistics Evidence of exploitation in the logistics sector was presented to the UK Parliament’s Business Energy and Industrial Strategy Committee. It focused on an assessment of the disproportionate balance of economic risk between workers and employers. For example, drivers were charged for all damage to vehicles and cargo irrespective of whether the damage was caused by them and they were also fined for failure to attend work due to sickness. There was evidence that contracts stating workers were self-employed also gave the employer a high degree of control over the worker, their working time and earnings which was inconsistent with self-employed status. The suggestion was that such contracts were not only intended to thwart labour standards but also to subvert the potential of securing trade union recognition (written evidence by Helen Goodman MP WOW0105).

Brexit and Fair Movement of People | 87 Poverty and a opportunities as well as labour standards compliance lack of alternative considerable hurdles for people and enforcement are especially in accessing and sustaining relevant to contemporary political employment options employment. debates in which ‘work’ is People in poverty are much more claimed to be ‘the best route out In Wales, 23% of the population likely to be at risk of exploitation of poverty’ (Newman, 2011). lives in relative income poverty. than people who have sufficient This is higher than the overall Of the 690,000 people in income for a decent quality of life UK average of 21%. In relation relative income poverty in Wales, (Weatherburn and Toft, 2016). to the English regions, relative 26% are people with disabilities. This is especially relevant in the poverty rates are higher only This is higher than the 23% context of developments in the in London (27%) and the West for the UK as a whole (Tinson UK labour market over the past Midlands (24%). Across the UK, et al, 2016:35) and suggests decade because the number of 60% of people in relative income that a number of people have people who are in work yet living poverty were in households in particular difficulties in accessing in poverty has increased by over which at least one adult is in employment due to high levels a million. paid work and this is historically of caring responsibilities in Average wages have fallen from the highest recorded figure households of working age in 2010 to 2015 and while the fall (Hick and Lanau, 2017). It is Wales. in Wales is quantitively smaller increasingly important that It is important to note that the than in Northern Ireland and public policy initiatives in the higher rate NLW which came several English regions, the field of poverty reduction do into force from April 2016 falls average weekly income in Wales not overlook the extent to which below that of a ‘true’ living wage is £370 and is the lowest of the quality of employment i.e. it is set at a rate which does the countries of the UK (Tinson relationships shapes the not provide for an acceptable et al, 2016:32). Since 2011, economic circumstances and standard of living (see box 3). there has been a considerable well-being of working people. The Living Wage Foundation fall in out-of-work benefit claims As is well documented, the study calculates a ‘true’ living wage across the UK but Wales and the of household poverty is not rate of £8.45 an hour in Wales North East of England continue the same as the study of low and elsewhere outside of to be the places with the highest pay since studies of poverty London. Once we recognise proportion of the working age foreground questions about that the law fails to provide for population who claim out-of-work the extent to which households pay rates which are adequate benefits (Tinson et al, 2016:95). rely upon the earnings of one or more low-waged workers to sustain acceptable living Relative to the rest of the (Bennett, 2014). Poor quality standards, the seriousness UK, Wales’ high poverty, low employment and inadequate of unlawfully low wages in employment and low-waged terms and conditions of work exploitation debates is brought profile creates propensities for are increasingly significant into clear focus. worker exploitation. It suggests factors in the lives of people a lack of choice in employment in poverty. Questions about

Box 3: Minimum hourly wage rates by age group 2017

£3.50 Apprentices rate £4.05 Under 18s rate £5.60 Minimum wage for 18–20 year olds £7.05 Minimum wage for 21-24 year olds £7.50 National Living Wage for workers aged 25 and over. £8.45 True Living Wage rate (has no legal status)

88 | Brexit and Fair Movement of People Social infrastructure and 18% of their clients working enable employers to make part-time were similarly unaware minute-by-minute adjustments In addition to the impact of of any right to paid holiday in to the size of their workforce in employment rights and their their employment. Nevertheless, order to match micro-peaks and enforcement, a wide range rights which are set out in the micro-troughs in demand (Wood, of public and private sector ‘Working Time Regulations 1998’ 2016). This reduces labour costs functions shape the labour provide all workers with a basic (although it may also reduce market. Governments can entitlement to 5.6 weeks pro-rata productivity) and it additionally influence the prevalence of paid holiday leave each year, increases the risk that workers exploitation through attention which can include bank holidays engage in unpaid work because to the availability of social (therefore, persons working their labour is compressed into infrastructure such as public five days a week have a right to intermittent periods of paid work transport, childcare, domiciliary 28 days of statutory holiday). (Moore and Hayes, 2017). care, training opportunities and credit unions. Low-level English language The numbers of men and women skills are a key driver of worker in full-time work in Wales has Stronger social infrastructure vulnerability, as workers who do increased steadily over the past reduces workers’ dependence not speak English are less able three years. There has been on poor quality employment to access information about a 10% increase in the numbers by creating circumstances their rights and face difficulties of men in part-time work and in which a greater choice of complaining to their employers while the number of women in work is possible. For example, about abuse or reporting part-time work has remained an absence of accessible, exploitation to police or other constant, the proportion of affordable childcare is a agencies. Workers with low levels women in temporary work has significant factor in limiting of literacy and numeracy are also increased by 7% since 2015 workers’ choice of employment at greater risk. (Office of National Statistics, opportunities (O’Sullivan et al, 2017). The gendered nature 2015). This exposes workers to a Many of the people who have of this increase in temporary higher risk of insecure contracts suffered labour abuses or work many be explained in and, with a limited choice exploitation do not know their part by Welsh Government between a range of poor quality labour rights or what they should commissioned research which jobs, puts them at an increased expect of their employers (France concluded that non-guaranteed risk of exploitation. Education 2016). This may mean that they hours contracting across and training infrastructure is accept low-level abuse, which devolved public services had also key to enabling community can develop into more severe increased in recent years and resilience because people with exploitation. It also means that was ‘fairly wide-spread’ in Wales low-skill levels are at a higher even if they suspect something (Burrowes 2015:53). risk of exploitation than others is wrong, they are ill-equipped (Weatherburn and Toft 2016). to challenge it. Some exploited Employment in public services workers may not be aware that is predominantly undertaken by Lack of rights they are victims of a crime or women and the research found awareness and unlawful treatment (Beels 2017). that much of the increase had communication happened in the health and education sectors and could barriers Insecure or unclear contracts be accounted for as the use Lack of employment rights of ‘bank arrangements’. awareness is a general problem Employment rates across the Although trade unions across the UK. Research UK labour market are at a record recognised that permanent by Citizens’ Advice Bureau high. Yet the paradox is that the employment was preferable, (2016c) found that 50% of their reform of welfare benefit regimes the arrangements were not clients employed on zero-hours serves to pressure people to considered to be exploitative contracts thought they were not accept insecure work, low hours and represented a ‘cost effective entitled to any paid holiday at all, or non-guaranteed hours jobs way for organisations to cope 40% of those in temporary work (Deakin and Adams, 2014). Forms of insecure contracting with fluctuations in staffing

Brexit and Fair Movement of People | 89 needs’ (Burrowes 2015:22). ‘additional resources to be made contracts with regularised hours This serves as an important available’ because people with (Ravalier et al 2017). reminder that employment on an insecure supply of work are a zero-hours contract should ‘unlikely to seek to enforce their Insecure contracts shift financial not be assumed as uniformly own rights’ (2015:54). These risks away from employers and undesirable (Pennycook et observations illustrate that onto the shoulder of workers al 2013). However, while the prevention of exploitation and this makes it much harder guarding against assumptions, requires attention both to the for workers to speak out about it should be noted that neither quality of employment contracts abuse. There is evidence that the study by Pennycook nor as well as to sufficiency of fear of speaking out increases Burrowes directly sampled the income (see box 4). the risk of abuses against views of workers employed on children and vulnerable insecure hours contracts, and Contracts which are unclear adults remaining hidden and Burrowes acknowledged that her create stress and financial unchallenged (Levett-Jones consideration of devolved public pressure (Citizens’ Advice Bureau 2008). The Welsh Government’s service delivery ‘did not allow 2016c). For example, workers on consultation on regulating for detailed dialogue to take place’ zero-hours contracts report being guaranteed-hours employment with contractor organisations ‘sent home’ mid-way through contracts in social care reflects (2015:55). a shift, receiving insufficient the seriousness of its desire to notice of the availability of work, address the issue of insecurity Since the contracting out of feeling bullied into working at work (Welsh Government, service provision is tightly excessive hours and running 2017b). connected to cost-saving into difficulties with benefit objectives it would be in payments due to fluctuating Examples of the impact of these areas that less ethical employment income. These are precarious work on workers’ employment practices would indicators of exploitation which experience suggest that be more likely to arise on are far less likely to arise where exploitation is more likely where account of a lack of trade workers have the security of a the risks of being in business are union representation, exclusion permanent, guaranteed hours transferred from the employer to from public sector collective contract. the worker at the same time as bargaining arrangements and the ‘rewards’ typically associated pay pressures. However, there Welsh Government with paid work are removed are two particularly important commissioned research has ie: the legal protections and points to be drawn. Firstly, suggested that zero hours assurance of earnings which that attempts to ‘ban’ zero contracts increase anxiety are sufficient to sustain a decent hours contracts are unlikely amongst staff (Atkinson et al quality of life. to achieve their intended aims. 2016). There is also emerging Secondly, that ‘regulation needs evidence of workers being more enforcement’ and requires likely to experience negative general mental health if they are employed on zero-hours arrangements rather than on

Box 4: Minimum wage abuse and zero-hours contracting In 2014 the UK’s Parliamentary Public Accounts Committee acknowledged with ‘astonishment’ that over 220,000 homecare workers were being paid so little that their wages fell short of the legal minimum. HMRC is responsible for minimum wage enforcement and it acknowledged, on the basis of its own research, that half of employers in the homecare sector did not comply with minimum wage law (HMRC, 2013). One of the key reasons for this is that contracts of employment common to the homecare industry do not provide pay for much of the work performed and homecare workers are typically paid only for time that they spend inside service-users’ homes. The paid element of each working day is so small that when wages are averaged across the hours in a working day, they fall below the hourly rate which the law requires as a minimum.

90 | Brexit and Fair Movement of People Minimum labour standards and their enforcement

The robustness of any system The potential of effective trade tribunal fees regime unlawful, of labour standards regulation union organisation to protect and has confirmed fervent criticism depends on the ability of the enhance terms and conditions of of fees as a powerful barrier system to respond to the labour work has been severely curtailed to justice in violation of domestic market and to shape it. This by 40 years of restrictive trade and international norms requires effective systems of union laws (Wedderburn, 2007; (Adams and Prassal, 2017). enforcement and the effective Ford and Novitz, 2016). In When viewed in the context of enforcement of minimum labour place of collective bargaining, a the UK’s notoriously restrictive standards is key to ensuring complex and expanding range trade union law (Ewing and workers, both migrant and of statutory employment rights Hendy, 2013), it is apparent non-migrant, are protected from has offered (in principle at least) that tools which had previously exploitation. a form of protection against offered working people the ability exploitation as successive to exert (at least some) influence The UK’s system places governments have sought to over their living standards have heavy reliance on individual shape a flexible and responsive become increasingly ineffective. enforcement by workers seeking UK labour market. redress through formal legal “When there is a dispute, our avenues. This approach puts Since the 1990s, academic law relies on individuals taking vulnerable workers at risk of commentators on employment their employer to courts to get exploitation and also places a law have observed a shift from their rights recognised – a task resource intensive regulatory the ‘regulation of employment that is beyond most people” burden on enforcement agencies relations in the interest (Law Society, 2017) (since rights fall to be enforced of correcting inequality of and examined on an individual bargaining power, to labour Enforcement problems basis). As Linda Dickens has market regulation in the interest in an individualised argued: of competitive flexibility’ system (Davies and Freedland, “Britain’s enforcement The UK’s floor of statutory labour 2007:204). approach is flawed in that too standards offers protection much reliance is placed on However, in the context of which should kick in when the individuals having to assert considerable reductions by terms and conditions of work and pursue their statutory UK government in the funding set by the market falls below employment rights, which of agencies responsible for a politically acceptable level generally require only passive enforcement, the employment (Davidov, 2007). In 2014, compliance from employers tribunal fees regime1, and the the Home Office’s Migration and too little weight is placed withdrawal of legal aid from Advisory Committee identified on State agency inspection, employment cases, there the general lack of enforcement monitoring and enforcement, has been much concern that action as a key factor leading and on other levers which the UK is at a point where to the exploitation of low-skilled would require or encourage the enforcement of statutory migrant workers. It concluded proactive employer action to employment protections is that the UK labour market deliver fairer workplaces by effectively out of reach for many is amongst the most flexible addressing structural, systemic working people (Rose and Busby, in the world and this fact and organisational issues going 2017). Indeed, the decision of consequently requires UK beyond individual cases of the Supreme Court in July 2017, governments to commit greater rights infringement.” to declare the employment (2012: 203)

1 Declared unlawful by the Supreme Court in judgment handed down on 26th July 2017 in R (UNISON) v Lord Chancellor [2017] UKSC 51.

Brexit and Fair Movement of People | 91 resources and attention to Furthermore, it stressed that all employers must not be able the enforcement of minimum workers must have access to to undercut the majority by labour standards (Migration the minimum floor of protection relying on unlawful employment Advisory Committee, 2014). (see box 5) and that bad practices.

Box 5: What are minimum labour standards? Minimum labour standards protection is comprised of those employment rights which are available to all workers and all employees from the first day of work. These include: • Right to a minimum wage (National Minimum Wage Act 1998) • Paid holiday (Working Time Regulations 1998) • Rest breaks between shifts and right to a maximum working week (Working Time Regulations 1998) • Protection from unlawful deduction from wages (Employment Rights Act 1996, s13) • Equal Pay (Equality Act 2010) • Protection from dismissal for whistleblowers (Public Interest Disclosure Act 1998) • Parity with a relevant full-time comparator (Part-time workers (Prevention of Less Favourable Treatment) Regulations 2000) • Protection from discrimination because of race, sex, disability, marriage or civil partnership, religion, sexual orientation, gender reassignment, age, pregnancy and maternity (Equality Act 2010).

Box 6: The relevance of EU law Lord Reed in R (UNISON) v Lord Chancellor [2017] UKSC 51 “Relationships between employers and employees are generally characterised by an imbalance of economic power. Recognising the vulnerability of employees to exploitation, discrimination, and other undesirable practices, and the social problems which can result, Parliament has long intervened in those relationships so as to confer statutory rights on employees, rather than leaving their rights to be determined by freedom of contract. In more recent times, further measures have also been adopted under legislation giving effect to EU law. In order for the rights conferred on employees to be effective, and to achieve the social benefits which Parliament intended, they must be enforceable in practice”. EU sources of UK employment law: Pregnant workers and working mothers Directive Working Time Directive 2003/88/EC 92/85/EEC Transfer of Undertakings Directive 2001/23/EC Protection of Young People at Work Directive Temporary Agency Workers’ Directive 94/33/EC 2008/104/EC Part-time Work Directive 97/81/EC Self-employment (equal treatment) directive Fixed-term work Directive 1999/70/EC 86/613/EEC European Works Council Directive 94/45/EC Parental Leave Directive 96/34/EC Collective Redundancies Directive 98/59/EC Race (equal treatment) Directive 2000/43/EC Consultation Directive 2002/14/EC Framework (equal treatment) in employment Protection of Employees in the event of Directive 2000/78/EC insolvency Directive 2008/94/EC Recast Equal Treatment Directive 2006/54/EC (includes Equal Pay)

92 | Brexit and Fair Movement of People Nevertheless, it is apparent that It is hardly surprising that The introduction of employment in recent years, government knowledge of employment rights tribunal fees across the UK in July attention has turned away from among the general public is 2013 was met with wide-spread providing support for general low and that employment law disapproval by employment compliance and towards a specialists continue to argue for rights scholars for being highly particular focus on exploitation legal simplification (Law Society, detrimental to the prospect of in relation to migrant workers 2017). Indeed, the Institute of labour standards compliance and allied concerns about Employment Rights has recently within workplaces. The unanimous illegality, illegal working and recommended fundamental verdict of the Supreme Court in immigration control (France, reform of these categories and a R (UNISON) v Lord Chancellor 2016). This is problematic clear framework of rights that are classified the fees regime as because it fails to address the available to everyone from their unlawful and the Government has imbalances of economic power first day in paid work regardless accordingly committed to take between workers and employers of contractual status (Ewing et al, “immediate steps to stop charging and it leaves unresolved many 2016:35-36). fees in employment tribunals of the complexities of the UK’s and put in place arrangements to highly legalised and individuated Some businesses seize upon refund those who have paid” (Rt approach to the provision and legal complexity and public Hon Dominic Raab MP as quoted enforcement of rights at work. confusion as an opportunity to in the Guardian newspaper minimise regulatory burdens and 26/07/17). Employment rights are not hence large numbers of people universally available across work in environments where In his submissions to an earlier the UK labour market. Instead, they are denied the benefits government-led review, the Chair the availability of rights depends of the minimum standards of the Employment Tribunals upon a legal determination of the set by Parliament, including Service, Judge Brian Doyle had type of contractual relationship access to a minimum wage. argued that fees had a “damaging in which a potential claimant The government commissioned effect on access to justice” is engaged and is often tied to ‘Taylor Review’ of modern and represented “a very clear length of service qualification working practices reported in disincentive to bringing claims periods. This means, for July 2017 and recommended that are not obviously weak example, that the right to receive that the three-tier system or unmeritorious” (Ministry of a written statement setting out of employment protection Justice, 2017). Nevertheless, the why you have been dismissed should continue, albeit with Government had maintained its is only available to workers in a an adaptation which would defence of the scheme despite qualifying form of employment see ‘worker’ status renamed acknowledging that fees had led relationship who also have at as ‘dependent contractor’ to a very large reduction in the least two years of continuous status based on a re-balancing number of tribunal claims across service (Employment Rights Act of two key legal tests of England and Wales (approximate 1996 s.92). contractual determination. 70% fewer). What is problematic is that this There are three key categories of recommendation embraced and Evidence presented to the employment status: employee, reflected the ‘more casualised Supreme Court in the UNISON worker and an independent employment relationships that case revealed that Wales and the contractor (commonly are on the increase today’ North East of England were the understood by the phrase ‘self- and did not seek to reverse geographic areas with the greatest employed’) yet the law does not casualisation trends nor fall in the number of tribunal provide a simple formula nor a substantially improve workers’ claims. Having to pay £390 to fixed definition through which security of income (2017:36). proceed to a tribunal hearing in an individual’s status can be Indeed, Taylor’s proposals a case concerning (for example) classified. Rights and obligations also appear to weaken the unpaid wages, lack of notice pay have developed through a universality of national minimum or redundancy entitlements was combination of statutory wage law by introducing new a considerable investment for provisions and decisions taken in avenues for opt-outs. workers of average means. UK and EU courts (see box 6).

Brexit and Fair Movement of People | 93 More complex cases such as section 2 of the ‘Deregulation right unless workers have made discrimination claims and unfair Act 2015’ removes the power a prior individual request for dismissal cases attracted a of tribunals to make ‘wider their minimum rest entitlements fee of £1,200. It is difficult to recommendations’ (a power to be honoured (see Carter v imagine how workers who were which had been set out in s124 Prestige Nursing Care [2012] being exploited would have of the ‘Equality Act 2010’). UKEAT/0014/12/ZT). been able find the financial and Thus tribunals, in determining emotional resources necessary cases brought under the The growing to sustain a course of action Equality Act 2010 may make importance of labour (despite a formal process of fees a recommendation as to the standards inspection remission). rights of the individual parties to a dispute and may award The introduction of the NLW The Supreme Court found the individual compensation. higher rate of Minimum Wage fees regime to be unlawful on for workers aged 25 and over three grounds; firstly, that they They may no longer make a in 2016 was accompanied by breached the constitutional right ‘wider recommendation’ that in-work benefit reductions in of access to justice; secondly employers take steps to obviate the value and availability of that statutory rights created or reduce the adverse effect of tax credits and child benefit. by Parliament must not be cut discrimination to all members The rationale provided by the down by subordinate legislation of a particular group in the UK government was to shift passed according to powers employer’s workforce. It is also responsibility for workers’ contained in a different Act of problematic that tribunals incomes away from the state and Parliament; thirdly, that the have no power to recover the towards employers. higher rate fees were indirectly compensation they award in discriminatory against women successful claims. Non-payment While this has some of the and other people with protected by employers has risen steadily appearances of an anti-poverty characteristics. Of the rights and in almost 40% of awards strategy, it reduces the value which may be enforced in the compensation is not paid of the state safety-net for low- employment tribunals, 24 have (Busby et al, 2014; see also waged workers and therefore their source in EU laws and Taylor, 2017). This means enhances the risk of exploitative include the right to equal pay, that even where claims are consequences if workers who the right to paid holiday and successful, very many claimants do not, in practice, benefit from rights to equal treatment. must pursue additional individual the uplift in their minimum wage action in the ordinary courts entitlements. Large employers It is important to recall that prior for the recovery of monies owed. in the retail sector such as to the fees issue, scholars were Argos and Debenhams have concerned that UK industrial Furthermore, the qualifying recently been held to account by relations relied more heavily period for protection from labour standards inspectors for on individual claims-making unfair dismissal has doubled breaches of minimum wage law than was healthy for promoting to two years continuous service (Butler and Booth 2017; Butler compliance (Dickens, 2012). (Employment Rights (increase 2017). Although the Supreme Court’s of limits) Order 2011) and this decision on tribunal fees is deepens the extent to which These examples illustrate welcome, the deep-rooted individuals are vulnerable that exploitation, in the form problems of the individualised to arbitrary expressions of of underpayment of wages, nature and fragmented managerial power. is commonplace. They also impact of minimum standards illustrate the importance of enforcement in the UK are not In respect of minimum rest the work of labour standards resolved by the removal of fees. periods, the Employment Appeal inspection bodies. If a worker Tribunal has found that where from Argos or Debenhams had The emphasis on individual an employer does not routinely sought to bring an individual responsibility in the UK’s system provide workers with the periods claim at a tribunal they would of labour standards enforcement of rest to which they are legally have had to pay £390 in order has arguably strengthened entitled it does not constitute to access to hearing. Yet as in recent years. For example, an unlawful ‘refusal’ to grant the

94 | Brexit and Fair Movement of People this report has evidenced, even individual claims and are one of the weakest employment without the barrier of tribunal highly dependent on state-led law enforcement structures in fees, low-waged workers enforcement. It is therefore Europe (see Figure 2). are highly unlikely to pursue problematic that the UK has

Figure 2: Comparative lack of labour standards inspection in UK workplaces (FLEX, 2015:3) Number of labour inspectors per 100,000

20 Excluding Health & Safety Inspectors 18 Including Health & Safety Inspectors 16 14 12 10 8 6 4 2 0 France Belgium Netherlands Ireland UK

There are 4 key labour and the newly formed GLAA, The Director’s role is to gather inspectorates responsible alongside diminished funding of information from each of these for examining and enforcing the Health and Safety Executive authorities to form a coherent compliance with employment and EASI. view of the nature and extent of laws in the UK: exploitation and non-compliance The net effect is a considerable • HMRC National Minimum in the labour market. The funding reduction across the Director is responsible then for Wage (NMWCU) compliance four agencies. While the policy unit; formulating an enforcement messages are positive and point strategy for each of the three • Health and Safety Executive towards a greater emphasis on authorities and presenting this • Employment Agency Standards minimum wage enforcement in for Ministerial approval (i.e. the Inspectorate (EASI); particular, the underlying trend strategy proposal is independent continues to undervalue trade • Gangmasters and Labour but getting the strategy approved union representation, reduce Abuse Authority (GLAA) is a political process). potential for worker voice and which recently superseded deprioritise financial recompense ‘The Immigration Act 2016’, the Gangmasters’ Licensing for workers who have been at section 14, gives powers to Authority (GLA). subjected to breaches of their issue an ‘improvement notice’ As a consequence of the rights and entitlements. to Labour Market Enforcement austerity programmes of UK Officers from the GLAA, EASI or governments since 2010 there Exploitation and the the NMWCU where they believe have been significant cuts to Immigration Act 2016 that a firm or individual has the resources and scope of committed an offence according these bodies and their capacity Section 8 of the ‘Immigration to the ‘Employment Agencies for pro-active inspection and Act 2016’ established a new Act 1973’, the ‘National enforcement activities was position of The Director of Minimum Wage Act 1998’ or accordingly curtailed. However, Labour Market Enforcement to the ‘Gangmasters Licensing there is recent evidence of an have oversight of three of the Act 2004’ (or another offence expansion in funding and staffing four enforcement authorities: specified in regulations by capacities in relation to National NMWCU, the EASI, and the the Secretary of State). This Minimum Wage enforcement GLAA. improvement notice must include

Brexit and Fair Movement of People | 95 details of the trigger offence and Labour Market Enforcement As has been noted by Davies invite the firm or individual to give Officers may apply to the Court (see box 7), “we now have a the authority a ‘labour market for a Labour Market Enforcement labour law of two extremes: enforcement undertaking’ where Order which hinges on the civil individual litigation for the well is it is considered necessary rather than criminal standard of off and public protection for the to prevent or reduce the risk of proof. If the firm or individual fails vulnerable. The enforcement further or continued offending. to comply with the order they options for people in between The undertaking may be for commit a criminal offence with those two extremes remain very up to two years. If the firm the potential of imprisonment limited” (2016:442). or individual fails to give the for 2 years. requested undertaking or gives it and subsequently fails to comply,

Box 7: Why the Immigration Act 2016 matters for the enforcement of minimum labour standards (see Davies, 2016) Measures in the Immigration Act present a significant shift from the reliance on individual litigation that has characterised UK employment law enforcement and compliance. Firstly, workers do not gain individual benefit in the sense that there is no redress or compensation to them for the harm they have suffered and the violation of their rights. Secondly, it suggests that the government has defined a handful of ‘core rights’ in the UK’s suite of employment law by establishing institutional enforcement backed by criminal sanctions: • the right not to be subject to slavery, servitude or forced labour • the right to be paid no less than a national minimum wage • the right not to be engaged by an unlicenced agent (as per the Gangmasters’ Licencing Act 2004) or by an agent that is subject to a prohibition order (as per the Employment Agencies Act 1973). When this ‘core’ of protection is set alongside that provided for in the International Labour Organisation Declaration of Fundamental Rights at Work 1998, it is apparent that the new UK regime is missing the ILO’s emphasis on a right to equal treatment, the prohibition of child labour, and the right to freedom of association and collective bargaining. This raises important questions about the place of equality and trade unions in the UK Government’s vision for labour standards enforcement.

96 | Brexit and Fair Movement of People National Minimum If the NMWCU finds employers The NMWCU has increasingly Wage Compliance Unit have underpaid the national adopted a strategic approach minimum wage it will issue a and focused enforcement activity (NMWCU) notice of underpayment which at high risk sectors such as Purpose and structure: The shows the arrears the employer hospitality, childcare, retail and NLW rate of £7.50 an hour must pay to the workers and especially social care (Low Pay from 1st April 2017 applies the penalty that must be paid Commission, 2016). to workers aged 25 years and to HMRC. The NMWCU responds over. Claims for non-payment of to complaints made about Resources and impact: National Minimum Wage can be employers suspected of not An impact of the introduction brought before an employment paying the minimum wage, and of the higher rate NLW from tribunal. However, in recognition visits a sample of employers April 2016 is to bring a much that workers who are paid about whom no complaints higher proportion of the UK unlawfully low-wages may be have been made. There is a workforce under the auspices unable to assert their rights Freephone helpline, run by of statutory pay protection without state support, the HMRC the Advisory, Conciliation and (see Figure 3). The NLW is has responsibility for enforcing Arbitration Service (ACAS), particularly significant for Wales. minimum wage law (and it through which workers can It is in Wales that the Low Pay also provides an enforcement report their individual concerns. Commission believes that the function in relation to Statutory They may do so anonymously NLW rate will have greatest Sick Pay see Taylor 2017:57). and this might trigger a impact as a proportion of the workplace inspection. workforce (see Figure 4).

Figure 3: Coverage of the Adult Rate of the National Minimum Wage/ National Living Wage for Workers Aged 25 and over, UK, 1999-2020 (Low Pay Commission, 2016) Number of workers aged 25 and over in minimum wage jobs (millions)

3.5 Forecast NLW 3.0 coverage

2.5

2.0

1.5

1.0

0.5

0 1999 2004 2004 2006 2006 2011 2011 2015 2016 2020

ASHE excluding ASHE including ASHE 2011 ASHE 2007 supplementary supplementary methodology methodology information information

Source: LPC estimates of earnings using: ASHE, low-pay weights, including those not on adult rates of pay, UK, 1999-2015: and OBR average hourly earnings growth forecasts, November 2015. Note: Data include apprentices fro all years. It is not possible to identify apprentices prior to 2013.

Brexit and Fair Movement of People | 97 Figure 4: Proportion of workers aged 16 and over in minimum wage jobs by region (Low Pay Commission, 2016)

Proportion of workers aged 16 and over in minimum wage jobs (per cent)

Total London South East Scotland England Eastern South West West Midlands North West and Merseyside Yorkshire and the Humber North East Northern Ireland East Midlands Wales

0 2 4 6 8 10 12 14 16 18

2015 2016 2020

Source: LPC estimates of earnings using: ASHE 2010 methodology, April 2015, low-pay weights, including those not on adult rates of pay, UK: and OBR average hourly earnings growth forecasts, November 2015. Note: Data exclude Year One Apprentices.

Consequently, this means Deb 21/09/15; BIS, 2015). complaints (an average of that a larger proportion of The government announced it 82 days) (National Audit Office, the workforce in Wales than would spend £25.3 million on 2016: R14). elsewhere in the UK are at risk minimum wage enforcement of non-compliance with minimum in 2017/18 and it seems that In its Autumn 2016 report, the wage law. about £20 million of this is Low Pay Commission found the dedicated to the NMWCU where largest rates of minimum wage Non-enforcement of minimum staff numbers have risen from non-compliance in hairdressing, labour standards becomes 237 in 2015/16 to 291 in hospitality, childcare and a greater risk as the value of 2016/17 (Hansard, HC Deb cleaning, with considerable pay protection increases and 09/01/17, Jane Ellison MP). increases also in social care demands on NMWCU are likely to and transport (2016a:81). increase considerably in coming With increased resources, there It therefore has recommended months (Low Pay Commission have been broad improvements further investigation by 2016a). It is in this context that in performance reported by Government in relation to HMRC have been permitted HMRC (BEIS, 2016). The number barriers to effective enforcement. to invest more resources in of investigations rose more minimum wage enforcement. than 20 per cent year on year Criminal prosecutions via In 2014-15 the budget was but the HMRC annual report NMWCU for the most serious increased from £9 million acknowledges lengthy delays cases of breach of minimum – £12 million (Hansard, HC in the time taken to investigate wage law depend upon the

98 | Brexit and Fair Movement of People Crown Prosecution Service taking ‘The Health and Safety at Work Resources and impact: a decision that prosecution is Act 1974’ is the central plank The Health and Safety Executive both in the public interest and of Health and Safety law in has 1047 staff of which 972 has a reasonable chance of the UK and the HSE reports are frontline inspectors. The success. It must be borne in to Ministers in the Department Board of the Health and Safety mind that criminal prosecution for Work and Pensions as its Executive is a tripartite body, represents a slower route to sponsoring department. HSE has with representatives from both recovering arrears than civil enforcement powers, along with employers’ and employees’ routes. certain local authorities and associations. There is, therefore, the Office of Rail Regulation and an opportunity for trade According to a Parliamentary these institutions share similar unions to provide input on the answer in December 2016 powers and responsibilities formulation of national policy for from Jane Ellison MP, Financial to enforce health and safety health and safety. At workplace Secretary to the Treasury, legislation in the different sectors level, recognised trade unions HMRC does not record statistics of the economy to which they are have the right to appoint health about the countries or regions assigned. and safety representatives to of the UK to which the number act on the employees’ behalf in of complaints received and the Responsibility for enforcement consultations with the employer outcomes of its investigations at certain premises may be about health and safety matters. relate. Subsequently, Ellison transferred between HSE and confirmed to the House that local authorities by agreement The business plan of the Health there are no recorded statistics and there is a memorandum of and Safety Executive (HSE) for on the number of complaints understanding between the HSE 16/17 shows projected funding or investigations in Wales. This and the Healthcare Inspectorate from central government is maybe something about which Wales. £100 million less in 2019/20 the Welsh Government wishes than it was a decade prior to seek clarification. However, The enforcement of working and that a drop from a Ellison could confirm that there time regulations is split central government budget have been no prosecutions between different authorities. of £231 million in 2009/10 in Wales for non-payment of Working time limits (and health to £141 million in 16/17 Minimum Wage since 2010 assessments for night workers) represents a 46% reduction in (Hansard, HC Deb 05/12/16). are enforced by the HSE (in the funding over seven years. case of factories, building sites, mines, farms, fairgrounds, There are plans to further reduce Health and Safety at quarries, chemical plants, the business costs associated Work including aspects nuclear installations, schools with compliance through actively of Working Time and hospitals), local authorities pursuing a ‘deregulatory agenda’ Regulation (in the case of retailing, offices, which promotes the simplification hotels and catering, sports, of health and safety law (much of Purpose and structure: leisure and consumer services), which emanates from the EU), The UK’s Health and Safety the Civil Aviation Authority (CAA) takes activities out of the scope Executive (HSE) is a non- (for aviation),the Vehicle and of health and safety law (for departmental public body that Operator Services Agency (VOSA) example the Deregulation Act has a degree of independence (for road transport), the Maritime 2015 exempts self-employed in how it regulates health and and Coastguard Agency (MCA) persons from the scope of safety (including working time) (for seafarers) and the ORR (for ‘The Health and Safety at across a range of labour sectors rail transport). Work Act 1974’ unless they through inspection, advice, conduct ‘an undertaking of a support, awareness-raising Entitlements to rest and prescribed description’) and and enforcement. Although it leave (paid holidays) must be reduces inspection frequency enforces parts of the ‘Working enforced via individual claims to (HSE 2016). Time Regulations 1998’ it does employment tribunals. not have responsibility for other labour issues.

Brexit and Fair Movement of People | 99 Employment Agency three sectors and concerned abuse’ (including tax evasion, Standards Inspectorate with the operation of a licensing human trafficking, health & safety scheme for agencies supplying negligence). Purpose and structure: workers in these sectors. The Employment Agency The GLAA has a labour-market- The government has provided Standards Inspectorate (EASI) wide mandate and from spring the GLAA with an additional carries out routine inspections 2017 began work to address £2 million in 2017-18 to extend of agencies and investigates the prevalence of extreme the prevention, detection complaints about agency exploitation in labour supply and investigations of worker conduct. EASI’s mission arrangements across all or any exploitation across the entire statement is to work with industrial sector. economy (GLAA 2017). agencies and employers to raise Aside from questions about standards within the industry Its predecessor, the adequacy of its budget, and to ensure compliance with the Gangmasters Licensing there is a risk that the impact employment rights, particularly Authority (GLA), had 69 staff and of the GLAA in relation to for vulnerable agency workers. was a non-departmental public labour standards enforcement Where an agency worker is body sponsored by the Home across the labour market will involved in a serious accident, Office. The GLA licensed and be undermined by conflicting HSE will notify EASI to ensure regulated gangmasters in the policy priorities. For example, that there is an opportunity agriculture, forestry, horticulture, the government response to for coordinated investigation. food processing/packaging consultation on transforming EASI has 9 frontline staff, 1 and shellfish sectors. Its eight the GLA suggested on the one administrative officer and is part licensing standards addressed hand that the new GLAA would of the Department for Business, indicators of forced labour aim to enforce minimum labour Energy and Industrial Strategy. (including the right to join a trade union and the right to equal standards while on the other it Resources and impact: treatment) and it worked with the would be focused on ‘organised The EASI enforces the police and immigration services crime’ and ‘the modern-day slave ‘Employment Agencies Act to identify, disrupt and dismantle trade’ (Department for Business 1973’ and the ‘Conduct of serious and organised crime. Innovation and Skills 2016:4). Employment Agencies and This tension appears to reflect Employment Businesses GLA inspections of licence the shift in focus previously Regulations 2003’. Between holders upheld expectations made by the GLA and is well 2011 and 2017 its budget has of continuous compliance and encapsulated in the following been approximately halved from took enforcement action against statement: £932,000 to £500,000. The those who operated illegally. “Where employers are number of referrals of complaints In addition, the GLA oversaw four exploiting their workers by non- to EASI rose by a fifth between specific criminal offences: compliance with employment 2011-2016 but its inspections • Operating as an unlicensed law, the Government steps in reduced by 50% and EASI did not gangmaster to enforce legislation in some bring forward any prosecutions • Entering into arrangements circumstances, for example or employer prohibitions in 2016 with an unlicensed where it is believed that there (Grierson, 2016). gangmaster is a higher risk of exploitation or vulnerability” (Department for Gangmasters and • Obstructing GLA officers Business Innovation and Skills Labour Abuse Authority • Having false documentation. 2016:5). Purpose and structure: Resources and impact: It appears that the government’s ‘The Immigration Act 2016’, The GLA sustained a 17% commitment to enforce minimum at section 10, created the new reduction in funding from UK labour standards is skewed Gangmasters’ and Labour government between 2010/11– away from general compliance Abuse Authority (GLAA) from the 2014/15 to £4.5 million and concerns and conflates the Gangmasters Licencing Authority this necessitated a reduction enforcement of rights at work (GLA). The GLA was focused on in staffing and a narrowing of with a desire to tackle the its activities to focus on ‘gross problem of illegal working.

100 | Brexit and Fair Movement of People In April 2017, a new Joint Slavery with the newly appointed Director A special class of officers of Trafficking Analysis Centre was of Labour Market Enforcement. the GLAA are given statutory launched as a dedicated unit recognition via s.12 Immigration designed to gather intelligence Schedule 2 of the ‘Immigration Act 2016 as ‘Labour Abuse and combine the expertise of Act 2016’ gives the GLAA the Prevention Officers’ and they analysts from the National Crime power to enforce the provisions have investigatory powers which Agency, Police, Border Force, of the ‘Employment Agencies include powers of arrest, entry, Immigration Enforcement, HMRC Act 1973’; the ‘National search and seizure (as per the and the GLAA. Minimum Wage Act 1998’ and Police and Criminal Evidence sections 1 and 2 of the ‘Modern Act 1984). These officers also There is currently no clarity Slavery Act 2015’ which deal have the power to request about whether the GLAA will with slavery, servitude and assistance from police and extend to the wider labour forced labour and trafficking immigration officers, a power market the regulatory system where there is a connection to which suggests migrant workers of licensing which defined the the labour market. and others may be suspicious of GLA. Responsibility for advising the credibility of their intentions. Ministers on this decision rests

Opportunities to strengthen existing approaches and improve the policy framework

Wage transparency Trade union UNISON has With greater wage transparency, expressed concern to the United workers would be far better One of the key ways in which Nations Committee on Economic informed about their pay and workers lose out on the Social and Cultural Rights in a much stronger position to opportunity to establish whether that the UK’s minimum wage challenge inconsistencies or their minimum wage rights have regime is insufficient to meet its underpayment. been breached is through a lack convention obligations. of information about working time and lack of control over In addition, UNISON has Working time access to that information. submitted draft regulations The extent to which people work to the Low Pay Commission is a growing source of inequality The Institute of Employment as ‘The National Minimum in the labour market. Some Rights is calling for an Wage (Prescribed Information) people feel forced to work many amendment to the ‘National Regulations’. These regulations, more hours than they would Minimum Wage Act 1998’ which if adopted, would require otherwise choose while other would require employers to employers to provide workers people are deprived of working provide workers with sufficient with a national minimum wage hours. It is also a feature of information about working time statement which includes the working to a zero hours contract at the point of payment so that gross and net sums of their pay, that some people experience workers are able to verify they the number of hours that the insecurity of hours due to have been paid correctly and worker has worked, total hours periods of overwork followed by have also been paid at least as spent training and travelling, insufficient hours. much as that to which they are an itemised account of any minimally entitled (Ewing et al deductions from pay made by the Income insecurity is key 2016). employer and a confirmation that signifier of a higher risk of the employer is remunerating the abusive practices at work. This worker at a rate which is at least is because income insecurity equal to the national minimum makes workers vulnerable to wage or living wage. being bullied, coerced and silenced. Brexit and Fair Movement of People | 101 Workers employed for a low imposed by fear, coercion or There are draft Welsh regulations number of working hours each poverty. under consultation which week are either contracted on would require employers a part-time fixed hours basis, The solution proposed in a in the social care sector to on an ‘as and when’ casualised study commissioned by the Irish provide care workers on non- basis, or on a hybrid basis with government was to introduce guaranteed hours contracts a few guaranteed hours and an regulation which would make with a choice of alternative understanding that additional insecure contracts much less contractual arrangements hours are available on an ‘as attractive to employers and (Welsh Government 2017b). and when’ basis. thereby disincentivise their use (O’Sullivan 2015). There is also a potential role The introduction of s153 of the for mobile phone technology to ‘Small Business, Enterprise and Recommendations included the be developed which would help Employment Act 2015’ has done introduction of statutory duties: workers to keep track of their little to halt exploitative zero • For employers to provide a movements and working hours. hours contracts. This measure written statement of terms This would assist them to have prohibits the inclusion of and conditions on the first day a greater understanding of the exclusivity clauses in zero of commencing employment value of their right to a minimum hours contracts, that is, it stops for people on guaranteed wage, to paid holiday, rest employers from preventing hours and non-guaranteed breaks and the regularity of their workers on zero hours contracts hours contracts. income. from working for anyone else. • For employers to provide a written statement of working This approach reinforces the Action on hours to be a true reflection (often false) perception that Commissioning: Code of hours required, including workers on zero hours contracts of Practice on Ethical non-guaranteed hours. have alternative and additional Employment employment opportunities from • That the average hours The ‘Welsh Government’s which to choose. worked in the previous 6 months (non-continuous or Code of Practice on Ethical There has been a public debate continuous) would be taken Employment in Supply Chains’ about whether and how zero- as the minimum number of was launched in March 2017. hours contracts should be hours stipulated in a contract It is the product of partnership ‘banned’. One of the evident and that these arrangements working between the Wales difficulties in such an approach would be subject to periodic Anti-Slavery Leadership Group, lies in defining zero-hours review to reflect change. the National Procurement contracts to prevent or restrict Director and Value Wales team, • A recognition that where their use, another is the risk the Gangmasters and Labour employees were required by of unintended consequences Abuse Authority, UNICEF UK and their contracts to be available since not all zero-hours contracts Every Child Protected Against for additional hours, over are problematic. This is not Trafficking (ECPAT UK). and above their guaranteed an insurmountable hurdle, minimum hours, that they The Code aims for supply for example in Ireland the should be compensated at chains in the delivery of public legal definition of a zero-hours an hourly rate of 25% of their services in Wales to be more contract is one which explicitly standard hourly pay or a fixed ethical and sets standards for requires an employee to be payment of 15 hours a week, contracting in the Welsh public on stand-by and available for whichever is the smaller. sector and by third sector work during periods in which organisations in receipt of the employer has not offered • A 72 hours minimum notice public funds. While the reporting paid work. However, what is period or 150% of hourly requirements of s.54 ‘Modern problematic about this definition wages for workers on non- Slavery Act 2015’ apply to large for low-waged workers is that the guaranteed hours contracts commercial organisations, this requirement to be on stand-by as well as 72 hours’ notice Code embraces the activities of is often not a contractual one, of cancellation. organisations of all sizes and in in practice it is a requirement all sectors.

102 | Brexit and Fair Movement of People The Code is voluntary and its and promoting decent work at home and can do so without ambitions are broader than in Wales. being overheard (Citizens’ Advice the abolition of modern-day Bureau 2016d:19). slavery. Welsh Universities Advocacy and advice are classified as commercial Funding from Welsh Government organisations for the purposes of Research undertaken by the supports frontline advice the ‘Modern Slavery Act 2015’ Legal Action Group has identified in relation to benefit, debt, and are therefore bound by its an important shift in public housing and discrimination requirements but they have opinion: support for free access advice (Citizens’ Advice Bureau additionally agreed to sign up to legal advice in respect of 2016d:16). The specialist to the Code in the summer of employment law by a majority Employment and Equalities team 2017. of the public across all social at Newport CAB report that their classes (2012). The findings work has become harder since The Welsh Government itself has reflect rising anxiety about the introduction of employment signed up to the Code and has employment rights abuse in tribunal fees because this has a developed an action plan with the context of the economic ‘reduced [clients’] ability to take timescales and regular progress slowdown which has followed the the necessary action’ (Citizens’ reports. It is expected that all financial crisis of 2008. Advice Bureau Cymru 2014:8). 22 of Wales’ Local Authorities will commit to the Code by However, the ‘Legal Aid and It appears that support has Autumn 2017. In one example, Punishing of Offenders Act 2012’ been limited to cases in which Cardiff Council is at an advanced removed employment cases from employment issues such as stage of consultation and has the scope of legal aid except in unfair dismissal are conjoined identified a Cabinet Member in relation to discrimination claims with allegations of discrimination their new administration to take and this came into effect as of and that resource limitations responsibility for developments, April 2013. The legal aid service have constrained the ability they have been a ‘Living Wage in relation to discrimination of CAB personnel to represent employer’ for some time, and are claims is restricted to the clients in person at tribunal. provision of telephone- now working through the Code’s Although the abolition of tribunal other commitments, including based advice from provider organisations and this takes the fees is very welcome, legal aid those aimed at tackling modern cuts in the field of employment slavery. form of initial instructions and advice followed up by a written have not been reversed and It will take some time before briefing note (Wiggin and Fowler the funding of advocacy and the impact of the Code can 2013). Clients are not entitled advice services is an essential be assessed but the initiative to face-to-face advice unless a component in the fight against aims to make a meaningful provider determines they cannot exploitation. contribution to the wellbeing be otherwise advised. of people living and working in Trade unions, Wales as well as those involved Approximately a quarter of representation and in supply chains reaching across visits to the Citizens’ Advice strategic litigation the world. Bureau website sought advice about employment rights in It is undoubtedly the case Of particular relevance to the 2015/2016 and employment that the most effective way to discussions contained within this issues now fall within the top strengthen protection of statutory report is the Code’s expectation five problem types that Citizen’s rights is to improve and support set out at section 9.4 that Advice Bureaus are dealing with trade union representation at suppliers will ‘ensure that trade in face-to-face appointments. the level of individual workplaces union representatives can Citizens’ Advice in Caerphilly and through collective bargaining access members and contracted and Blaenau Gwent reports across sectors (Ewing et al workers’. There may be potential that a new webchat service has 2016; Hayes and Novitz 2014). for this expectation to play an been particularly valuable in In the context of an enforcement important role in enhancing dealing with employment issues environment that has been the ability of trade unions to since people are able to access marred by tribunal fees, contribute to tackling exploitation support while they are at work or

Brexit and Fair Movement of People | 103 individualisation and the removal hearing, unions gain positive relationships shaped by contracts of legal aid, there is an emergent press coverage and are able which impose bogus or forced shift in trade union activity. In to demonstrate quantifiable self-employment and therefore partnership with specialist legal benefits from trade union lie outside of the scope of key firms, unions approach potential membership. protective measures laid down breaches of statutory labour in the agency workers regulations, standards as opportunities Their litigation strategies often statutory sick pay provisions, to organise workers into focus on contractual status working time regulations and membership and invite them claims because a successful minimum pension payments. to join a litigation pool. This challenge can lever entitlement reflects unions’ awareness that to a host of employment rights Here, the focus is wider than just they have a strong role to play in protections (see box 8). One an assertion of minimum wage relation to minimum standards example is in the social care entitlements because it takes enforcement. It also suggests sector where Unison have been account of the perceived injustice contemporary demand for trade pursuing a strategy of bringing of ‘undercutting’ which is often a unions to fill the administrative minimum wage claims on behalf feature in workplaces that draw on justice void. of homecare and residential care agency workers but do not provide home workers. them with comparable pay to the While this is a resource intensive established workforce. activity which can take months, Another lies in the logistic even years, of preparation and courier sectors which are before claims reach a first characterised by employment

Box 8: Litigation as a trade union challenge to false self-employment Trade union Unite has announced action against the Agency Drivers’ Network which provides drivers to third party contractors and appears to require them to set up their own personal limited companies in order to gain work assignments (Jahsan, 2017). The effect is that wage rates for the ADR drivers undercut the wages of directly employed drivers by £3 an hour. If Unite are successful this will potentially open the way for a subsequent Agency Workers’ Equal Pay claim for parity with directly employed drivers.

Socio-economic a potential route with which the non-compliance with minimum disadvantage: new Welsh Government may be able labour standards have the greatest to promote the enforcement detrimental impact on people who potential in the Wales of minimum labour standards are likely to face socio-economic Act 2017 through the functioning of disadvantage and indeed serve to Section 1 of the ‘Equality Act devolved Welsh authorities. perpetuate that disadvantage. 2010’ places duties on public The socio-economic duty set out The implication of measures authorities with respect of at s1 Equality Act 2010 requires: contained within the ‘Wales Act socio-economic inequality but 2017’ which bring the ‘St David’s it has not been implemented by An authority to which this Day Agreement 2015’ commitments UK Government and indeed has section applies must, when into law is that there is potential been vehemently opposed by making decisions of a strategic for devolved Welsh authorities, the Conservative administration nature about how to exercise perhaps working under the (Burton 2014). its functions, have due regard to the desirability of exercising guidance of the independent However, in the ‘St David’s them in a way that is designed Equalities Commissioner or the Day Agreement 2015’, UK to reduce the inequalities of Future Generations Commissioner, government agreed to grant outcome which result from to develop strategies designed to Welsh Ministers the power to socio-economic disadvantage. galvanise action on minimum labour commence s1 of the ‘Equality Act standards compliance in relation to 2010’ in Wales. This provides As this report has illustrated, employment rights and duties. issues of non-enforcement and

104 | Brexit and Fair Movement of People Conclusion: Policy observations

In legal abstract, the existence inherent within a system of the attention of UK enforcement of statutory minimum labour employment rights enforcement agencies on the harms of illegal standards is insufficient to tackle in which there is a lack of working and the vulnerability exploitation. What matters is workplace monitoring, a low of undocumented workers the integrity of those labour risk of prosecution and no (see Figure 5). standards and how they are independent representation of understood as they take effect in workers’ interests through trade A step-change in labour workers’ day-to-day experiences. unions (Weatherburn and Toft, standards compliance is 2016). required, as well as action on This report has identified enforcement which specifically many risks and indicators of This report has presented addresses the needs of workers exploitation and discussed their a picture of legislation and in Wales. For example, in Wales relevance in a Welsh context. enforcement in which UK the higher rate NLW is especially It has also drawn attention to Government policy and new important and there is a need the most pertinent risk factor statutory measures aim to for future UK-wide compliance for workers in Wales, the risk address exploitation by focusing strategies to be suitably resourced and focused in Wales.

Figure 5: Locating enforcement and compliance activity across a spectrum of exploitation

Tackling exploitation: legislation and enforcement spectrum

Risk-led enforcement activity Individual workers are by government agencies responsible for enforcement

Forced Extreme Breaches of labour insecurity labour standards

Brexit and Fair Movement of People | 105 Observation A. If the social problem of encourages an environment in The need for new exploitation is predominantly which exploitation can thrive understood as a ‘migrant worker (TUC, 2016; France, 2016). research which problem’ there is a risk of further compares the pathologising migration, of giving Socio-legal accounts of experiences of both the mistaken impression that the labour rights enforcement migrant and non- attention of public authorities are an emerging field of study is disproportionately focused but the knowledge base is migrant workers in currently underdeveloped Wales. on migrant workers and of overlooking the extent to which (see McDermont et al 2016, Consider the commissioning of exploitation is also experienced Rose and Busby 2017, Barnard research to compare the by non-migrant workers. and Ludlow 2016, Ludlow 2016, day-to-day experience of Hayes 2017, Barmes, 2016). migrant and non-migrant The TUC and the Citizens’ There is a strong evidence- workers in relation to labour Advice Bureau, in concert with base about poverty in Wales standards and job quality in organisations representing but less is known about worker low-waged work in Wales’. exploited migrant workers (FLEX experience in low-waged work. 2015), argue that to effectively Future research could usefully The Welsh Government might tackle exploitation there must elucidate the employment wish to consider how tightly to be concerted action to prevent experiences of both migrant link concerns about exploitation, and respond to all breaches and non-migrant workers to concerns about immigration, of minimum labour standards. in Wales. and may decide to strike a Allowing low level breaches to different balance to that of the routinely happen undermines UK Government. standards of decent work and

Observation B. The Welsh Government has capacity of trade unions to The need to widen evidenced its positive working raise workers’ awareness of relationships with trade unions employment rights and promote trade union access to through the passing of the ‘Trade good practice across Wales. workplaces, support Unions (Wales) Act 2017’. The strategic litigation commitment to partnership To ensure that minimum labour and fund advice working between government standards disputes and the voices of workers in Wales are and advocacy for and trade unions could provide useful opportunities to explore heard in employment tribunals, minimum labour the Welsh Government could standards claims to be how trade union access to all workplaces in Wales might be support the work of trade adjudicated in Wales. widened. unions in advancing strategic litigation initiatives and also Explore how to widen trade The commitment expressed provide advice and advocacy union access to workplaces in at section 9.4 of the ‘Code organisations with additional Wales and promote workers’ of Practice on Ethical resources to specifically support access to justice by supporting Employment in Supply Chains’ individuals so that claims about strategic litigation initiatives (Welsh Government 2017a) minimum labour standards and targeting additional would provide a valuable starting violations are brought to the resources at advice and point. The Welsh Government attention of the tribunals in advocacy organisations bringing also could look to increase the Wales. Welsh claims about minimum labour standards violations to the attention of the tribunals.

106 | Brexit and Fair Movement of People Observation C. The Welsh Government’s paper the alignment of UK employment The need to develop ‘Securing Wales’ Future’ sets out law with international treaties a Welsh agenda on European and human rights conventions. expertise in Wales Transition, one aspect of which is This would develop expertise about the alignment of that leaving the EU should not be with which Wales could seek UK employment law accompanied by a diminution of to build support for legal with standards set out employment rights. improvements and consolidation in international treaties based on legal instruments that While is it right for Wales to the UK has already ratified. and human rights seek assurances that Brexit conventions. will not entail a watering down Achieving the well-being goal of Enhance European of employment rights, the First decent work in Wales requires Transition initiatives by Minister’s call for awareness a post-Brexit framework of developing expertise about of the opportunities to ‘think employment law that accords how UK employment law aligns afresh’ about policies and with the international treaties with the international treaties programmes is also critically and human rights conventions and human rights conventions important. In the field of that establish minimum labour which the UK has already employment law and labour standards globally. ratified. rights this endeavour might usefully begin by investigating

Observation D. another significant milestone in With the objective of tackling The opportunity to Wales’ journey towards becoming exploitation firmly in mind, a society in which equality and the Welsh Government could address exploitation human rights are fully realised. usefully investigate the via equality law and desirability of harnessing the harness new Welsh Using the legal lens of action on functioning of Welsh authorities duties regarding socio-economic disadvantage, so as to galvanise action on Welsh authorities should give minimum labour standards socio-economic due regard to the desirability disadvantage. compliance in pursuit of reducing of exercising their functions in inequalities of outcome which Seek to understand exploitation ways that are designed to reduce result from socio-economic as an equalities issue and inequalities of outcome which disadvantage. look to new powers for Welsh result from socio-economic authorities to address socio- disadvantage. A practical contribution to this economic disadvantage as aim could be made by a research As the new ‘Code of Practice on an opportunity to galvanise project which built a detailed, Ethical Employment in Supply action on labour standards up-to-date picture of the day-to- Chains’ recognises, Welsh enforcement. day interactions between Welsh authorities have considerable authorities and private sector Finally, the report has identified influence in the Welsh economy. employers in Wales. This would numerous ways in which This influence is also felt where help to identify the scope to exploitation arises in the context their functions bring them into build regard for socio-economic of social, political and economic contact with private sector disadvantage into their functions inequality. The ‘Wales Act 2017’ organisations, for example for in ways that focus attention on gives Welsh Ministers powers the purposes of inspection, labour standards compliance. to bring into force s.1 Equality monitoring or business support/ Act 2010 on socio-economic economic development activities. disadvantage. This will be

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Brexit and Fair Movement of People | 111 The Public Policy Institute for Wales

The Public Policy Institute for Author Details This report and the information Wales improves policy making contained within it are the and delivery by commissioning Dr LJB Hayes is a lecturer in law copyright of the Queen’s and promoting the use of at Cardiff University and author Printer and Controller of independent expert analysis of Stories of Care: A Labour of HMSO, and are licensed and advice. The Institute is Law. Gender and class at work under the terms of the Open independent of government but (Palgrave, 2017). She held Government Licence http:// works closely with policy makers the Journal of Law and Society www.nationalarchives.gov. to help develop fresh thinking Research Fellowship 2013- uk/doc/opengovernment-” about how to address strategic 2016 and has published on www.nationalarchives.gov. challenges and complex policy migration issues, the national uk/doc/opengovernment- issues. It: minimum wage, equal pay, licence/version/3. The views the regulation of working time, expressed are the author’s • works directly with Welsh labour vulnerability, and the and do not necessarily reflect Ministers to identify the right to organise and bargaining those of members of the evidence they need; collectively, covert surveillance Institute’s Executive Group or • signposts relevant research in care work, caring labour and Board of Governors. and commissions policy austerity. Dr Hayes directs the experts to provide additional Lawlab research centre at Cardiff analysis and advice where School of Law and Politics. there are evidence gaps; Lawlab explores the relationship between law, regulation and • provides a strong link between the living social environment What Works Centres and policy to produce robust policymakers in Wales; and orientated work attained through • leads a programme of collaboration with end-users, research on What Works in intermediaries, and across Tackling Poverty. disciplines. For further information: For more information: www.ppiw.org.uk www.stories-of-care.com and Dan Bristow www.sites.cardiff.ac.uk/law-lab/ Public Policy Institute for Wales Tel: 029 2087 5345 Email: [email protected]

112 | Brexit and Fair Movement of People