Interim Population Policy: 2014 – 2015 (P.10/2014) – second amendment.

STATES OF JERSEY

INTERIM POPULATION POLICY: 2014 – 2015 (P.10/2014) – SECOND AMENDMENT

Lodged au Greffe on 26th March 2014 by Deputy R.G. Le Hérissier of St. Saviour

STATES GREFFE

2014   Price code: B  P.10 Amd.(2)

INTERIM POPULATION POLICY: 2014 – 2015 (P.10/2014) – SECOND AMENDMENT

PAGE 2 –

For the words "as outlined in the accompanying Report of the Council of Ministers dated 30th January 2014" substitute the words –

"and, in order to achieve the objective of limiting inward migration, to further request the Chief Minister -

1. to bring  forward  for  approval  appropriate  amendments  to legislation  to provide  that,  from  1st  January  2015,  the  current 5 year  period  required  to obtain  "entitled  to work"  status  is extended to 7 years;
2. to review the current  procedures and legislation  relating  to the issuing of registration cards to those with registered' status with a view to restricting, by 1st January 2015, the validity of the cards to one year and to provide that the grant of a registration card will restrict the holder to work only in a designated sector or sectors;
3. to review,  no  later  than  by  1st  January  2015,  all  licences  to businesses where 50% or more of employees are permitted to have registered' status with a view to restricting to a target agreed with each employer the number of registered' employees able to be employed."

DEPUTY R.G. LE HÉRISSIER OF ST. SAVIOUR

REPORT

Introduction

Immigration is undoubtedly the most serious and sensitive political issue which we face, largely because it spills over into all areas of Island life and policy.

It is notoriously hard to manage, in that some maintain that it is an essential part of economic growth and that to halt or seriously retard immigration is to impede such growth with serious economic consequences. There are others who maintain that to bring in economic migrants on the grounds that they have to finance the care of the elderly and redress the ageing bias in the population amounts to no more than a Ponzi scheme.  They  will  age  and  they  will  need  a  younger  group  to  provide  for  their retirement. All the while, there is never-ending pressure upon the infrastructure.

I would like to emphasize that my proposals do not seek an end to immigration. Rather, they seek to deal with the very porous system which we have at present. Furthermore, they are a compromise, given the absolute right of EU citizens to enter the Island and our inability to operate an immigration policy based upon citizenship or nationality criteria.

There is no doubt that the massive and unexpected population growth of the 2000s (by 10,700 from 2001 to 2011) convinced many that the States did not have the situation under control. There is a growing feeling that there are infrastructural limits in a small society, and that well-intentioned statements from people like the Minister for Housing (just give me more plots and I will be able to solve the housing crisis') are too much like re-arranging the deckchairs on the Titanic. I would assert that while immigration runs at a high rate and while there is an imbalance between housing demand and supply, that there will be never-ending pressure to increase the public housing stock with the well-rehearsed impacts such as using scarce land and high private sector rents which are alleviated by large government subsidies.

It is very difficult to point to data which explains the push-pull factors, and it is equally difficult to have mechanisms which can control immigration with precision. If one reads the proposed Interim Population Policy, one comes away with the feeling that, hitherto, our controls have often been ineffective.

We  are  told  that  with  better  data  collection,  available  under  the  new  Control  of Housing and Work Law, we will be in a better position to control matters.

I would argue that, at best, the current policies are porous, and that a system which purports to meet specific economic needs has morphed into an open immigration policy, certainly at the 5 year point. I have not sought to vary the numbers proposed under the cap, partly because I agree with the view, often expressed by the business community, that a single figure cannot be easily controlled. That is not an argument for removing controls; rather, it is an argument for examining whether the existing controls are working. In my view, they are not.

Furthermore, we are considering an Interim Policy and I have sought to strengthen areas where controls are loose or ambiguous, and where urgent action is required until a stronger policy is in place.

One of the aims of the new Control of Housing and Work legislation was that it would eliminate the farce whereby essential employees (the old "(j)"s) were often subject to enormous hurdles while immigration in the Registered category brought in hundreds of people who, at 5 years, move into the open labour market. Meanwhile, individual applications like that of the horse-trainer currently in the news, still struggle to get permission. I have no doubt that other one-off applications receive excessive attention while the legacy licence system for registered work sails on. Such a disparity also exists in respect of how non-EU citizens are vetted in comparison to EU citizens.

As the Proposition of the Council of Ministers discusses, there is also issue of why industries like  cleaning  and  hairdressing  still  need  imported labour.  Is  it  because importing people is the default solution to labour shortages, irrespective of the long- term implications?

What can we conclude about the nature of immigration in recent years?

Unless strong government policies are put in place, it rises in periods of economic growth.

Although difficult to verify, it appears that the ability to transfer from registered status at the 5 year point and become "entitled" encourages a lot of migrants to accept relatively low wages and, at times, poor accommodation for 5 years on the promise of open access to the full labour market at 5 years and to the crucial benefit of rental support. Furthermore, it allows for income top-up and leads to a situation where, sometimes, the States are subsiding low wages. It has been difficult to obtain precise data  Because  of  difficulties  in  analysing  data,  Social  Security  have  tentatively estimated that "where the claimant has recorded between 5 and 9 years of residence, there are approximately 65 claims in the 5 year bracket, rising to 110 claims in the 9 year bracket".

"Weekly IS costs for these claims show an increase from about £200 per claim at 5 years to about £250 per claim at 9 years." (Communication from Policy and Strategy Director).

The  3  most  identified  sectors  are  retail,  hospitality  and  miscellaneous  (such  as hairdressing). It appears that the numbers are not as large as publicly thought, but it is nevertheless an issue, and it could be argued that if below 5 year jobs are restricted, so these jobs could migrate to the open labour market.

We have allowed the development of a large low-paid labour force because we want to support hospitality, agriculture, retail and, to a lesser extent, construction.

We are told that, if they cannot import labour, the industries will collapse. However, there are some inconvenient truths associated with the acceptance of this argument. First, some employers, particularly in hospitality and retail, are much better than others at training and employing local people. It is clear, even from the general figures (see page 29 of P.10/2014) that some employers resist the policy of training-up local labour. The granting of group licences to employ registered persons is one of the main culprits leading to the immigration levels we currently experience. The granting of licences not linked to individuals, and which allows movement between sectors within the 5 years, has proved a totally porous "system" which is dysfunctional in that it relies on a continual stream of imported labour. It also exacerbates the unemployment

situation.  Unfortunately,  this  particular  situation  can  only  be  more  effectively controlled by a system of work permits. Although not entirely satisfactory, I am hoping the same end can be achieved by tighter monitoring and control of job licences, and by confining persons deemed as registered to the economic sector for which they were recruited. Unfortunately, the data presently available does not show movement between sectors in the registered labour market and, other than anecdotally, it is difficult  to  measure  the  extent  to  which  this  movement  exacerbates  immigration pressures.

Furthermore, the insistence that we can only keep certain industries alive through low wages means that government subsidies have to be provided and/or we rely on people accepting low salaries, on the implicit grounds that these exceed salaries in their home countries.

By generously granting such licences, we have built up a large group of permits where some employers continue to recruit outside of the Island. Because the public want an overall cap, it is difficult to shift to a much more selective policy. I would also maintain that it entrenches low wages and adds yet a further challenge to enticing local people into these industries. The supreme irony is that the States, at the 5 year point, ameliorates and further entrenches this situation by paying relatively generous income support top-ups and rental subsidies.

Unfortunately, if we are to retrieve this situation and bring back some semblance of control we have to impose further and more targeted controls.

Not only did we fail to control numbers in the 2000s, but the policies that were meant to provide for labour substitution have (e.g. training programmes) been ineffective. Importing low-wage labour was too often the easy route. There has often been a similar absence of training and succession planning at more senior levels, with the States being a major culprit.

I do not deny that we are going to require a major cultural change if we are to substitute local for imported labour, and it will not work in all cases. I believe my suggestions, coupled with long-term plans covering training, coupled with the cutting of the umbilical cord so that persons recruited for temporary purposes do not stay beyond those purposes, could gradually shift thinking and change the nature of the labour market. I am not naïve enough to think that all immigration can and should be stopped. Obviously, there is a need for specialised staff, we must if we are serious about diversification, make special provision for entrepreneurs and we must realise that industries like agriculture will never be sufficiently attractive to local people. However, the various Back to Work' programmes run by Social Security are starting to show good results, even if we can never totally remove the need for outside labour, and even though they are likely to be masking issues like graduate under-employment.

However, the most deleterious consequence of our present system is that it builds up large numbers who transfer at 5 years into the open labour market. At around the time of the last Census (March 2011) and assuming the trends for staying in the Island seen over  the  previous  few  continued,  at  the  time  of  the  2011 Census  approximately 800–900 workers were moving from "registered" to "entitled" status. For example, of the 1,010 and 1,140 non-qualified persons who respectively arrived in 2006 and 2007 (Source:  2011 Census)  around  1,000  of  these  were  around  at  the  5 year  point. Assuming  the  trends  seen  around  the  time  of  the  2011 Census,  approximately

800–900 non-qualified persons move to "entitled to work" status. Note that a number do not move into work, and that the figures do not include children aged under 15 years.

Obviously, there are intervening variables which affect a person's or household's decision as to whether or not to stay and, depending on these, the figures can go up or down (e.g. the state of the economy, the inducements available, such as better jobs). Furthermore, they remain approximations without detailed information on inward and outward immigration.

We must also realise that if we abandon the current "Ponzi" scheme used to justify the need to care for the elderly, we may be faced with a reduction in our standard of living. To take an obvious example, can we keep building to meet the needs of a growing population to the extent that we destroy the very environment which attracts people and is fundamental to our quality of life?

I believe the amendments I am moving must underpin the main proposition or (my preference given a choice of least worst' options!) the proposition as amended by P.10/2014 Amd. of Deputy G.P. Southern of St. Helier .

I hope they will slow up immigration materially and send clear signals out that the Island is moving to a new policy.

The proposals

Urgent review of job licences

I am told that it is not possible to review all outstanding licences but, assuming this aspect of the policy is approved by the States, it is vital that all employers holding licences and who employ 50% or over of registered employees have their licences reviewed, and that a review takes place urgently so that a new regime is in place by 1st January 2015.  It  has  to  be  made  clear  that  we  must,  where  possible,  cease "importing  unemployment",  and  that  companies  will  face  a  reduction  in  granted licences  and  will  need  to  provide  evidence  of  active  recruitment  and  training programmes. It would be unfair to require each employer to reduce by the same amount. However, clear targets should be set, and consequences made clear if they are not met. Industries like agriculture will struggle, and should be subject to, for example, short-term permits.

Annual renewal of Registration Cards

I envisage that the Registration Card be used as a de facto work permit.

Unless exempted as an essential employee or entering as an entrepreneur, the Card will  only  be  granted  to  a  maximum  of  one  year,  subject  to  renewal.  Indeed,  I understand permission in Guernsey is granted for specific periods which could well be under a year.

Given that the underlying assumption of immigration policy should be that a person is admitted for a specifically defined need, it is important that people are tracked and if, for example, the need expires, then the registered status is withdrawn. Parallel to this, there will continue the allocation of job licences for special needs, but it will be

expected  that  applicants  demonstrate  that  they  need  skills  unobtainable  from  the within the local labour force. There has been a degree of thinking that says – if a money-making industry like finance asks for more employees, then the licences must be  granted.  One  would  expect  rigorous  tests  to  be  applied  as  to  whether  the appropriate skills can be found on Island, perhaps after appropriate training.

I am aware this is official policy, but have to be convinced that it is rigorously applied. Granting of entitlement at the 7 year point

This is the most difficult, as we try to run 2 different immigration policies – one which essentially allows persons to enter specified, low-wage work and then morphs into open immigration, and one which focusses on high-value immigrants.

The first places considerable pressures upon the infrastructure and, in my view, is partly kept going by generous States subsidies and by the legitimate hope of the greater rewards that are available in the open labour market.

I am not a believer in restricting access to services once an immigrant arrives. I am also concerned that, for years, we have tolerated 2 accommodation sectors with an implicit  assumption  that  the  unqualified/registered  workers  sector  is  both  very expensive and sometimes poor. For this reason, I welcome the Minister for Housing's initiative to ensure standards are the same across the board.

I struggle with the question of whether income support and rent subsidies should be granted at the 5 or 7 year point. Unfortunately, I think that it would be confusing to grant  income/rental  support  at  a  different  point  and  therefore  ask  that  it  be synchronised at the 7 year point.

It will be much harder to move industries to the status of "reasonably paid", but we need to examine the ways in which this could be done, and we need to understand whether States subsidies are essentially acting as life support for businesses which would not otherwise survive or prosper.

Timing

If approved, I wish to see the implementation of these changes by the end of the year and  any  associated  legislative  changes/Regulations  approved  by  the  end  of  this Session.  While  I  am  impressed  by  the  discussion  of  immigration  issues  in  the Proposition, I am very concerned that, yet again, we will await further study before acting on crucial issues. This situation has drifted for far too long and led to a deep cynicism amongst the Public that, despite the Control of Housing and Work Law, we are unable and/or unwilling to act.

Conclusion

These proposals do not slam the door on immigration. However, they tighten up areas where we seem to have lost control, and they support the aim of the Council of Ministers to move to high-value immigration.

They are not a substitute for a full-blown immigration policy. That long-overdue debate  is  still  awaited.  Hopefully,  their  rigorous  implementation  will  provide  a

breathing  space  and  demonstrate  that  the  States  is,  at  long  last,  serious  about controlling immigration and implementing a policy which allows for more selective immigration and places clear responsibilities upon employers. These proposals are not intended to be an anti-immigration policy.

Financial and manpower implications

I do not anticipate any major additional expenditure or requirement for staff resources, as my proposals simply call for existing mechanisms to be applied more rigorously and, in the case of reducing the numbers of job licences, the process examining where the issues are is already well underway.

APPENDIX 1

Extract from P.10/2014 (page 19)

Analysis of migrant employment by sector and residential status (ordered by number of migrant workers employed) (as at 31st December 2012):

The above analysis is as at December to avoid seasonal distortion, but it is worth noting that in June employment rises by approximately 2,000 – 2,500, half of whom are registered workers.

APPENDIX 2

WRITTEN QUESTION TO THE CHIEF MINISTER BY DEPUTY R.G. LE HÉRISSIER OF ST. SAVIOUR ANSWER TABLED ON TUESDAY 5th NOVEMBER 2013

Question

Would the Chief Minister state the number of employment licences still in use, by economic sector, and clarify whether such licences can be withdrawn before their expiry date and, if not, can he identify what steps he is proposing to prevent such licences exacerbating the unemployment situation?

Answer

As at end December, 2012 (showing actual permanent "registered" staff employed by sector and permissions for registered staff in each sector):

The number of licences has reduced from just over 9,000 at the beginning of 2010.

Alongside this, requests for over 1,000 additional "registered" staff have been refused in the last 3½ years, with employers being directed to the "back to work" team instead.

Permissions  for  "registered"  staff  under  the  new  Control  of  Housing  and  Work (Jersey) Law 2012, can be withdrawn at any time, so long as a person is not employed against that permission, i.e. permission cannot be withdrawn if the effect is to make someone lose their employment.

In addition, conditions can be applied such that any new recruit be an "entitled" or "entitled for work" person.

The  "Interim  Population  Policy"  currently  under  development  will,  among  other things, outline in detail practical steps to promote the employment of "entitled" and "entitled for work" staff using the new Law. The "Interim Population Policy" is expected to be lodged in December.

APPENDIX 3

JERSEY EVENING POST – 8th July 2013

Page - 11

P.10/2014 Amd.(2)