Scotland's population needs and migration policy: discussion paper

Introduction

1. Scotland is a progressive outward looking nation. We recognise that migration strengthens our society and our nation benefits from the skills, the experience and the expertise of those individuals who have chosen to live, work and study in Scotland. Future migration systems should ensure that Scotland can welcome people within Europe and from elsewhere who want to study, live, work and raise their families here. This paper is intended to contribute to an open and positive discussion on how future migration to Scotland should be managed in a way that achieves that.

2. Scotland has a long history of both welcoming people who have come here, either through choice or need, but also of Scots being migrants themselves. In fact, the dominant feature of population change through Scotland's history has been out‑migration. This is in contrast to the rest of the UK. Throughout the 1950s and 1960s, when England and Wales saw strong in-migration, almost 6% of the population left Scotland in each decade. Scotland also experienced population decline throughout the 1970s, 1980s and 1990s whereas the UK as a whole saw almost constant growth in population over this period.

Figure i: Natural change and net migration, Scotland, 1951-2016

Source: Scotland's Population 2016 - The Registrar General's Annual Review of Demographic Trends, National Records of Scotland

3. One of the earliest policy challenges the Scottish Parliament concerned itself with after it was reconvened in 1999 was population decline, particularly rural depopulation, and the welcome fact that more of our population were living longer. The cross-party consensus that emerged in the Scottish Parliament and at Westminster of the different pressures that Scotland faces relative to the rest of the UK, led to an early example of UK policy in a reserved area responding positively within the devolution settlement

4. The previous Labour and Liberal Democrat coalition government in Scotland, working with the then UK Government, introduced Fresh Talent in 2005, a scheme administered by the Home Office that allowed international graduates of Scottish universities to remain in the country after the end of their course of study to live and work for up to two years. ^[2] This differentiation of migration policy for Scotland was intended to both support economic growth and mitigate demographic pressure. Fresh Talent recognised that different parts of the UK had different needs and expectations of migration.

5. The Fresh Talent scheme took place at much the same time as Scotland also benefited from the expansion of free movement of people within the European Union. From 2001, Scotland became a country of sustained net inward migration for the first time since records began, driven by the free movement of EEA nationals coming to Scotland to live, work and study. This was reinforced by the 2004 enlargement of the EU, which included eight new member states from central and eastern Europe.

6. Today, there are an estimated 219,000 EU citizens living in Scotland, alongside an estimated 135,000 other international migrants. These 355,000 non-British nationals living in Scotland represent 7% of Scotland's population. The majority of migrants in Scotland come here to work, to join family, or to study.

Figure ii: Population by non- UK nationality, Scotland, year ending June 2017

Source: Annual Population Survey, Office for National Statistics, July 2016 to June 2017

7. Migration, and particularly EU citizens moving to Scotland, has helped mitigate these long-term demographic challenges, but the challenges still remain. Projections from the National Records of Scotland ( NRS) and the Office of National Statistics ( ONS) show that natural change, the number of births minus the number of deaths, is projected to be negative in Scotland each year for the next 25 years. There are nearly 11,000 more deaths than births expected in 2041. All of the projected increase in Scotland's population over the next 25 years is due to migration. Any move that limits migration to Scotland therefore has the potential to seriously harm Scotland's economy.

8. The UK Government has stated its intention to leave the European Single Market and Customs Union upon leaving the EU and to end free movement of people. The Scottish Government believes that both Scotland and the UK's best interests are served by the UK remaining in the European Single Market and continuing to benefit from free movement of people.

9. Even with current free movement of people between Scotland and the rest of the EU, it is clear that UK policy on migration does not meet Scotland's needs. It is now appropriate to explore the devolution of powers on migration to ensure that Scotland can continue to attract migrants from Europe and around the world to live, work, study and invest here and make a long-term contribution to society as members of our communities.

10. The case for this is clear and there is already broad agreement within the Scottish Parliament and elsewhere on the need for a different approach. The Home Affairs Committee report on migration policy was open to regional approaches in different parts of the UK, the Economic Affairs Committee of the House of Lords saw merit in a differentiated system for Scotland, and the Scottish Affairs Committee concluded that a tailored approach was needed for Scotland.

11. The Scottish Government wants to see continued free movement of people from Europe, alongside a tailored approach for Scotland in relation to international migration. The case becomes more pressing and urgent if UK policy results in a hard Brexit that sees Scotland taken out of the European Single Market and Customs Union, and free movement of people ended or curtailed.

12. The Scottish Government's 2017-18 Programme for Government ^[3] included a commitment to publish a series of evidence-based discussion papers setting out the case for further extending the powers of the Scottish Parliament in a number of key areas including in relation to migration. This discussion paper will explore why it is vital to be able to attract migrants from across Europe and the world to settle in Scotland; why the current UK Government policy is so harmful to Scotland's interests; and how a tailored approach to migration with more powers for the Scottish Parliament could operate.

About this paper

13. Chapter one explores why it is important to economic growth and prosperity that Scotland is able to continue to grow the population and in particular the working age population. It highlights:

• demographic projections prepared by NRS and ONS;
• economic and fiscal forecasts by the Scottish Fiscal Commission;
• new modelling presented in this paper of the economic impact of migration; and
• the social benefit of migration to Scotland, including the positive contribution it makes in our rural communities.

14. Chapter two sets out why current UK policy on migration is having a detrimental impact in Scotland. It recommends that the UK Government should:

• abolish the net migration target, or at the very least migration to Scotland should not be counted in it;
• take a different approach to family migration, and improve the rights of people in Scotland to bring close family into the country with them;
• review the immigration skills charge, which is an unhelpful burden on employers;
• give the Scottish Ministers a formal role in deciding on the Scotland shortage occupation list; and
• reintroduce the post-study work visa as recommended by the Smith Commission.

15. Chapter three looks at options for future migration schemes in the UK. It concludes that:

• Scotland should continue to benefit from free movement of people from the EU by the UK remaining in the European Single Market and Customs Union after Brexit, as set out in Scotland's Place in Europe: People, Jobs and Investment;
• devolution of some aspects of the immigration system could allow the Scottish Government, accountable to the Scottish Parliament, to set criteria for a new international migration route to start to meet Scotland's most acute needs; and
• there is an opportunity to rethink the UK immigration system to design a new regional approach, with powers for the Scottish Parliament to meet Scotland's full range of needs, drawing on international examples where this works well.

16. Finally, the Technical Annex contains the details of new economic modelling which shows that reduced migration as a result of the UK leaving the EU could reduce Scotland's GDP by almost £5 billion per year by 2040 – but that there are potential economic gains if a different approach can sustain or increase migration to Scotland.

Note on terminology

17. This paper uses the term 'migrant'. When discussing the flow of migration, this refers to a person not currently resident in Scotland who moves to Scotland with the intention of remaining here for more than 12 months. When discussing the population of migrants in Scotland, it refers to the number of people who have come to Scotland in this way.

18. UK nationals can therefore be migrants to Scotland if they are resident elsewhere (in the UK or abroad) and move to Scotland, and would be counted in migration flows. When talking about the population of migrants in Scotland, we normally refer only to non- UK nationals, split between EU and other international migration.

19. Irish nationals have particular rights within the Common Travel Area to live and work in the UK that are separate from their right to free movement as EU citizens, and the UK Government has committed to maintain the Common Travel Area after the UK leaves the EU. As they are EU citizens, we refer to Irish nationals within the flow of migration from the EU and within the population of EU migrants in Scotland.

20. EU citizens, EEA nationals and Swiss nationals have rights under treaties and directives governing the European Single Market and free movement of people to live and work in other EU Member States, countries within the EEA and Switzerland. These are reciprocal rights that British nationals also currently enjoy. The current arrangements facilitate free movement across the Single Market for all EU and EEA citizens with an initial right of residence in a host State for up to three months. Beyond then an individual and their family members have rights to reside if they are a worker, self-employed, economically self-sufficient, a student with sufficient resources to support themselves, or a jobseeker who has a genuine chance of gaining employment.

21. The rights-based approach of free movement is different to the rules-based approach to immigration in the UK. EU citizens exercising these rights would therefore not normally be classed as migrants, but we describe them here in this way when it aids clarity. We normally refer to EU citizens and EU migration rather than EEA, unless greater clarity is required, as the number of EEA nationals and Swiss nationals in Scotland is low. We sometimes refer to groups of Member States who joined the EU at a particular point using terms such as EU15. These terms are explained in footnotes where they are first used.

22. International migrants from other countries do not generally have special rights to live and work in the UK, and their ability to do so is governed by the UK immigration rules. Most international migrants in Scotland are issued with a visa under one of the tiers of the UK points-based system. The other main route for international migrants is family migration. A small proportion of international migrants in Scotland entered by seeking asylum and there are particular humanitarian obligations in relation to refugees and asylum seekers.

23. The points-based system for international migration was first introduced in the UK in 2008 and consists of five tiers, each of which can contain multiple categories of visa. Tier 1 is for high value and exceptional talent, including entrepreneurs and investors. Tier 2 is for skilled workers sponsored by an employer. Tier 3 is for low‑skilled workers, but has never been implemented. Tier 4 is for students, and Tier 5 is for temporary workers.