Asylum seekers - extending the right to work: evaluation, analysis, and policy options

Executive Summary

Since 2002, UK policy regarding asylum seekers’ right to work has been highly restrictive in the conditions for eligibility it places on both asylum seekers (12-month delay, not their fault) and jobs (Shortage Occupation List (SOL) only) and is increasingly out of line with the policy choices of other countries. However, this has not always been the case. Before mid-2002 asylum seekers in the UK were allowed to work after a waiting period of 6 months from submission of their asylum claim.

The Scottish Government has stated its vision of Scotland as an internationally responsible, welcoming, and compassionate country. This is supported by cross-party consensus within the Scottish Parliament, across local authorities and civic organisations, as well as broader public opinion: in 2021, 77% of Scots surveyed in polling for the Scottish Refugee Council agreed that asylum seekers should have the right to work to support themselves and their family.^[1]

This report sets out to evaluate the consequences of policies determining the right to work for asylum seekers. It seeks to assess what the outcomes may be, were the current policy conditions to change, granting asylum seekers in Scotland the right to work at an earlier stage in their process of applying for leave to remain and with fewer restrictions on the jobs for which they can apply. It evaluates a range of limitations which may require mitigation, were such a policy change to be pursued.

The report reviews the current UK position and discusses existing evidence on the impacts of restrictive versus more expansive policies in other countries. It draws on evidence from 8 international case studies, selected to cover a range of approaches both to restrictions and to the provision of support for asylum seekers (see Appendix), as well as available evidence from academic and third sector studies^[2] in the UK. It presents research commissioned directly from the National Institute of Economic and Social Research (NIESR) on the impact that granting the right to work to asylum seekers could have on Scotland’s economy, including the impact on employment, GDP, tax revenue and government expenditure.

Key Findings

Evidence from both UK studies and international cases indicate that exclusion from the labour market has strong negative impacts on asylum seekers’ material and emotional well-being, and on integration outcomes in both the longer and more immediate term.

Our review of policy developments and decisions in other countries indicates that these have often included consideration of the contribution working asylum seekers might make to national economic, workforce-related, and demographic challenges, particularly where they are subsequently granted leave to remain.

The analysis by NIESR suggests that granting the right to work to people seeking asylum in Scotland would add £30 million per year on average to the Scottish economy if granted immediately on arrival, or £16 million per year if granted after a six-month waiting period. These figures are based on a calculation of increased revenues and reduced costs. Increased revenues from income tax and national insurance would have a direct impact on the UK economy leading to indirect positive consequences for the Scottish economy, whilst increased council tax would be paid directly to those Scottish local authorities hosting working asylum seekers. Reduced costs would come from working asylum seekers no longer requiring support through the National Asylum Support Service (NASS). The calculations have had to be made using a range of assumptions due to the lack of accurate data on skills profiles of asylum seekers or reliable quantitative evidence regarding their likely labour force participation rates. Calculations are therefore based on an assumption that asylum seekers would enter the labour market with the same range of salaries and the same success in finding work as other UK residents moving from benefits to employment. This modelling includes asylum seekers who enter the labour market and no longer need support via S4/95/98, and the continuation of the status quo for other asylum seekers not entering the labour market, even if they have the right to work. However, it has not been possible in the scope of this report to quantify the likely costs of the various employability services and additional safety nets proposed below, which we deem important to the success of a change in policy. These would necessarily offset some of the fiscal gains.

The consequences of restricting the right to work policy to only shortage occupations (as is the current UK Government policy), also requires consideration. There is no evidence from the countries examined in the appendix to support such an approach. The only country to have tried this approach with regard to asylum seekers is Australia, where it has proven ill-conceived with no clear benefits to either the sectors involved or the asylum seekers themselves. The policy has since been scrapped by the Australian government.

Taken together these findings suggest a case for reconsidering current restrictions.

Our findings also offer substantial evidence that granting the right to work is not a straightforward solution. There are considerable challenges and barriers to successful employment and integration which persist for asylum seekers even where less restrictive policies are in place. Learning from the 8 international case studies demonstrates clearly that the full benefits of a right to work policy may only be realised if it is supported by a wider infrastructure of adequate reception, settlement and integration services, including housing, the timely processing of asylum claims, and adequate welfare support to protect against poverty and destitution.

Given the uncertainties and insecurities surrounding asylum seekers’ status, their financial vulnerability and minimal access to wider support, their needs for language learning and employability support, as well as the extent of structural barriers and discrimination they are likely to face on entering the labour force, careful consideration and deliberate remedy is required. Without this, a lifting of restrictions would likely result in minimal change for the majority of asylum seekers who would not anyway be able to gain employment and expose those who do to high risks of exploitation and continued poverty.

Key learning points

Identify where the powers, capacity and experience lie to support a proposed change

Immigration, asylum, and border controls remain areas of reserved policymaking over which the Scottish Government has no direct jurisdiction. While the UK Government retains the power to grant asylum seekers permission to work and determine the jobs they can occupy, the Scottish Government has devolved powers over employability, skills and training, some areas of welfare and equalities. This offers significant levers to influence the implementation of a right to work pilot.

Scotland’s local authorities, third and public sector service providers, employers and communities have gained considerable experience in recent years, providing employability services and English language classes for both refugees and people arriving through resettlement schemes and complementary visa pathways. This could provide a foundation for the development of a distinctive approach to employability support in the context of an extended right to work. Careful thought would need to be given to how existing policy levers could be used to best effect and what balance of integration into mainstream services versus development of specialist and tailored support would be required and feasible if a pilot scheme to allow asylum seekers to work were to be proposed.

Create a clear and simplified system with guidance for employers and employees

The often-prolonged uncertainty of asylum seekers’ status, and the risks for both employers and employees associated with non-compliance (deliberate or accidental) with complex rules surrounding restricted working can act as disincentives to well-intentioned employers, as well as increase asylum seekers’ vulnerability to exploitation. A regionally differentiated system could introduce a further layer of complexity and potential confusion for both employers and asylum seekers. A Scottish pilot scheme would need to lay out very precisely the geographical boundaries on which it would operate. Would there be a requirement for example that the asylum seeker’s place of residence, the registered employer, and the job itself all be located (solely) in Scotland?

The structure of Scotland’s business landscape with its higher percentage of small and medium sized employers should also be considered. Administrative burdens and risks associated with uncertainty can be more difficult for smaller employers to absorb and tailored support and information for employers may be necessary if a pilot is to succeed.

Alongside this, checks and support systems would need to be in place to prevent exploitation and support working asylum seekers to understand their rights as employees. Involving trade unions as strategic partners in conversations around the development of a pilot scheme would be beneficial in this regard.

Ensure increased employability for asylum seekers is supported through tailored services, integration into mainstream support and by tackling structural barriers, inequalities and discrimination.

In addition to the development of services to support asylum seekers into work, wider impediments including existing inequalities within the labour force, structural barriers and discrimination by employers and employment agencies would need to be tackled. This is especially important as focusing exclusively on individual capacity building and training for employability can simply raise expectations and increase frustrations. Moreover, asylum seekers would be especially vulnerable to exploitation if structural barriers remain unchallenged.^[3] Potential interventions which may reduce these risks could include working with employers and policymakers to challenge discriminatory or other poor practices, raising awareness of asylum seekers’ rights and potential to contribute, and addressing structural barriers in the labour market.

Prevent in-work poverty, homelessness and loss of access to financial support/housing.

A pilot offering the right to work to asylum seekers in Scotland would need to consider the potential vulnerabilities and insecurities that the loss of accommodation and other support might bring, particularly where asylum seekers might find employment in low-paid and/or insecure work. Consideration would need to be given to how people would be supported through any gaps in employment and what safety nets would be in place to support asylum seekers to access appropriate housing and reduce the risk of them falling into rent arrears or other financial difficulties due to low wages.

Evidence from international case studies shows that wider support measures, including subsistence payments and access to employment and training not only facilitate asylum seekers’ entry to the labour market but can also support them during a transition period where they are looking for employment or establishing themselves as financially independent on a more stable basis. A Scottish pilot might draw on the experiences of other countries which offer an allowable earned income before support is withdrawn to consider what kinds of support would be available, or whether some form of staggered or top-up payment could boost the incomes of low-paid workers and ease the transition into work. Such measures already feature to some extent in the UK benefits system, either in the form of allowable income before tax and before benefit reductions, or tax credits for low income households. Consideration might be given to extending these to asylum seekers who are particularly vulnerable to low pay and poverty.

The gendered nature of the asylum process results in a higher proportion of women being designated dependants rather than primary applicants in family asylum claims. To avoid a further gendered inequality consideration could be given to extending the right to work to family members, as is the case in Canada. This would have further benefits of increasing potential incomes to asylum seeker households and reducing women’s vulnerability to sexual exploitation and gender-based violence.

Include the appropriate range of stakeholders in designing policy, learn from existing experience and ensure that responsibilities for implementation are properly resourced.

Local authorities and third sector partners already play a central role in supporting asylum seekers, refugees and people who have arrived through resettlement schemes and complementary visa routes. Many have gathered considerable experience of providing support, including employability and language learning services, as well as access to housing and crisis support. This could form a starting point for developing place-based approaches to support asylum seekers into work, flexible enough to take account of the diversity of Scotland’s local labour market conditions and the uneven spread of existing services and third sector specialist organisations.

The challenges of supporting effective and coherent approaches and the considerable burden placed on local authorities at a time of budget constraints and high demand for services from other parts of the population should not be underestimated. Experience from the US, Canada, Belgium, Germany and the Netherlands all illustrate how easily already-overstretched public services can fail to meet the increased need that comes with greater numbers of asylum seekers. Local authorities would need additional capacity (financial, human resource and expertise) if support for asylum seekers to enter the labour market is to be added to their responsibilities. This would need to include financial resources from Scottish Government or the Home Office to expand existing services and support programmes and a framework to facilitate shared learning between places.

Partnership working with third sector providers, volunteers and community-based groups who can offer support for language learning, self-confidence, buddying and other employability support would also be important. This has been evidenced in experiences of welcoming and supporting the integration (including labour market integration) of people who have arrived in the UK through resettlement programmes and complementary visa routes, as well as in the German example presented in the appendix.

Asylum seekers are likely to face considerable challenges even if they are able to secure employment and employers themselves would have to overcome (or accept) a variety of barriers and risks to employing people with inherently insecure status. At the same time, employers have a crucial role to play in ensuring that asylum seekers with the right to work receive appropriate training and support to enter, thrive in and progress through the workplace. It would be essential therefore to involve employers directly as stakeholders in discussions surrounding the design of any proposed pilot scheme extending asylum seekers’ right to work.

Right to work should provide pathways to settlement and mitigate the risks around temporary status

The recent rise in global displacement and the arrival of greater numbers of asylum seekers in some countries has tested the limits of their reception and integration policies and infrastructure (USA, Canda, Belgium, and the Netherlands, for example). As a result, there has been a tendency across many countries in recent years to replace pathways to permanent settlement (residency, citizenship, more secure work status) with greater conditionality and/or more temporary work visas.

However, evidence from nearly all the countries examined in the appendix shows that long periods of uncertainty around asylum status, arising either from backlogs, the issuing and renewing of temporary work visas, or other restrictive conditions, yield poor outcomes for all, not least asylum seekers themselves. The cautionary lesson from Australia is that the move towards ‘permanently temporary migration’ has caused harm, created second-class citizens of many asylum seekers, and weakened social cohesion.^[4]

The New Scots Refugee Integration Strategy has a stated vision to support all refugees and asylum seekers regardless of their route to arrival ‘to rebuild their lives from the day they arrive’.^[5] Making this a reality for asylum seekers could involve extending the support, rights and entitlements that are currently on offer to refugees to asylum seekers in order to speed up their integration. This would be in line with the International Monetary Fund (IMF) recommendation to lower barriers and ease restrictions to work eligibility during the asylum processing phase,^[6] as Germany did with notable success after the arrival of asylum seekers in 2015/16, implementing a series of early interventions to speed up their integration. With particularly long waiting times for the processing of asylum claims in the UK at present – an issue over which Scotland has little control - providing such support during this period would help put asylum seekers on a clearer pathway to integration and settlement.

Arguably, there is a trade-off between what the evidence shows (that early interventions facilitate the quicker integration of asylum seekers), and the reluctance of many governments and regional authorities to invest in asylum seekers who may eventually have their claim refused, or who may wish to invest in supporting asylum seekers but face competing investment priorities.

However, the international evidence serves as a reminder that not facilitating access to work and wider settlement in the community still ‘costs’ governments, not just in terms of economic inactivity, but also in terms of wasted human capital, the wellbeing of asylum seekers themselves, and the additional costs of supporting these individuals while their status is waiting to be resolved. Countries like Sweden, the US and Canada, grant comparatively quicker access to work for asylum seekers while claims are being processed precisely because they want to utilize their skills and labour while also helping them become ‘self-sufficient.’