Scotland's population needs and migration policy: discussion paper

Chapter Three: How a tailored migration system for Scotland could operate

74. This paper has set out the benefits to Scotland's economy that migration brings, and the requirement to maintain and increase net migration in order to sustain that economic contribution. It also addresses the different demographic challenge Scotland faces, which is more acute than other parts of the UK, and touches on the benefits to society of being an open, welcoming multicultural European nation, including the particular benefit that migrants bring to sustaining rural communities.

75. This builds on the Scottish Government response to the MAC call for evidence on the impact of migration on the UK labour market, published in November 2017.

76. The MAC will advise the Home Secretary of its findings and recommendations in a report by September 2018. The MAC stated their intention to look at regional systems of immigration in their call for evidence. We support this work to examine how devolution or differentiation can secure migration patterns of the sort that Scotland particularly needs and that are distinct from the rest of the UK: working-age people coming to the country to take up permanent work, and raise families here through long-term settlement in their communities.

77. Other groups including devolved administrations, Parliamentary committees, academics and think-tanks have signalled support for regional approaches to migration in the UK. Some of these perspectives are summarized in Box 5.

Box 5: Summary of other UK perspectives

The Home Affairs Committee at Westminster published a report in January 2018 entitled ' Immigration policy: basis for building consensus' that sought to identify principles for future migration policy. It noted the MAC commission to consider regional approaches to migration.

The Institute for Public Policy Research Commission on Economic Justice published 'An immigration strategy for the UK: Six proposals to manage migration for economic success' in December 2017. The paper called for a comprehensive rethink to meets the need of the economy, and concluded that geographical flexibility should be built into the migration system.

Common Weal's report on 'A Scottish approach to immigration post-Brexit', published November 2017, highlights that the economic imperative for more inward migration to address demographic challenges, which is common to the whole of the UK, is particularly stark in Scotland.

The Welsh Government paper 'Brexit and Fair Movement of People', published September 2017, set out that reform of UK migration policy is required to recognise the distinct needs of Wales, where the Welsh Government has a stronger role in determining how future migration to Wales would be managed.

The Westminster All-Party Parliamentary Group on Social Integration said in their report 'Integration not Demonisation', published August 2017, that responsibility for migration should be devolved and the UK Government should look at introducing a regionally-led migration system with region-specific visas.

The House of Lord Economic Affairs Committee recommended in their report on 'Brexit and the Labour Market', published in July 2017, that the UK Government develop a new migration policy for post-Brexit and saw merit in a regional migration system for Scotland and London.

The Scottish Affairs Committee at Westminster published a report in November 2016, 'Demography of Scotland and Implications for Devolution', which underlined the need for tailored migration policies.

The PWC report 'Regional Visas: A unique immigration solution?', published in October 2016, found that a regional approach to migration in the UK could boost the economy overall and increase the integration of migrants within their local community. The report explores the possibility of creating a regional visa system.

78. A degree of consensus exists already on the long-term challenge of population growth and the benefit to Scotland of differentiation in the immigration system. The discussion that needs to happen now should build on this and recognise the risks to Scotland of reduced immigration through leaving the EU and ending free movement and through further restrictions within the UK immigration system.

79. This chapter will discuss options for future migration and explores the following key scenarios:

• How Scotland can continue to benefit from EU migration.
• How devolution of some aspects of migration could start to meet Scotland's most acute needs.
• How a regional migration system for the UK, to meet our full range of needs, could operate.

Free Movement of People

80. Short of full EU membership, the position of the Scottish Government is that Scotland and the UK's interests are best served by continued membership of the European Single Market and Customs Union, allowing them to continue to benefit from free movement of people. This was explored in Scotland's Place in Europe, published in December 2016, which also set out how free movement of people could continue in Scotland even if the UK were to leave the Single Market. This policy was reinforced in Scotland's Place in Europe: People, Jobs and Investment.

81. Free movement of people does not mean the unrestricted movement of people. Scotland's Place in Europe: People, Jobs and Investment also examined the rules that govern free movement and the measures that Member States can take to protect their social assistance systems from undue burdens, limiting access to certain benefits, and to refuse rights and even remove EU citizens in cases of abuse, criminality and threats to public policy, public security and public health. Under the accession treaties Member States can also limit the numbers of workers they admit to their territory from the new Member State, for a period of time.

Box 6: Scotland's Place in Europe: People, Jobs and Investment

The Scottish Government published new analysis in January 2018 of the implications for Scotland's economy if the UK exits the European Union. The paper, Scotland's Place in Europe: People, Jobs and Investment, demonstrates the benefits Single Market membership has delivered and could deliver in future, and also sets out in detail the adverse economic consequences of a hard Brexit, which will undermine Scotland's economic prospects.

To minimize the adverse impact of Brexit on growth and jobs, the UK Government must prioritise our continued membership of the European Single Market and Customs Union as it embarks on what will be the most crucial set of international negotiations of recent years.

Inward migration is key to growing Scotland's population, particularly the working age population and in turn our economic performance. We know that EU citizens in Scotland have a younger age profile than the Scottish population as whole. 61% of EU citizens living in Scotland are under 35 years of age compared to 42% for Scotland as a whole. EU citizens are helping to grow our economy and address skills shortages within key sectors. We know that 77% of EU citizens are in employment compared with an overall rate for Scotland of 73% and EU citizens account for over 5% of all employment in Scotland. Rural areas are also more reliant on EEA workers. Free movement has been essential, with skilled and unskilled labour fulfilling diverse needs across our economy.

Economic modelling in Scotland's Place in Europe: People, Jobs and Investment found that on average each additional EU citizen working in Scotland contributes a further £34,400 in GDP, and £10,400 in government revenue. These results are likely to understate the full positive impact of EU citizens in the Scottish economy. EU citizens make a vital contribution to the public sector in Scotland, including in NHS Scotland where they fill skilled vacancies in hard-to recruit specialisms and geographical regions. Many EU citizens work in social care, in roles that may be low-skilled or relatively low paid and so would likely fall below the thresholds in the non-immigration system.

However, EU citizens should not be seen as just workers. Their contribution to the communities in which they live, and to wider Scottish society and culture is significant and must also be recognised. EU citizens are not just colleagues and co-workers they are also friends and in many cases family - people who have chosen to build a future in Scotland and to bring their families up here and become part of the communities within which they live and work.

Freedom of movement within the EU enriches Scotland's culture. Artists from around the EU are able to bring their work to Scotland and EU citizens can travel freely to Scotland to experience our unique culture and world-leading festivals. Creative industries have been the fastest growing sector of the UK economy over the last two decades and it is important that Scotland's cultural and creative industries companies are able to recruit the talent and skills that they need from as wide a pool as possible. This allows our home grown talent to seize opportunities and gain new skills and perspectives from working across the EU.

Despite Scotland and the UK's best interests being served by continuing to benefit from freedom of movement, the UK Government has set out its intention to end free movement of people in the spring of 2019. As part of any transition to a new system the UK Government will need to clarify the status of the 219,000 EU citizens who are currently resident in Scotland (and many more elsewhere in the UK), as well as the rights of EU citizens who may be looking to work, live and study here after the spring of 2019.

82. The Scottish Government will, through discussion with the UK Government on EU exit negotiations, press the case that this is the 'least-bad option' and should be the outcome the UK seeks in leaving the EU.

83. If the UK Government, in leaving the EU, takes Scotland out of the European Single Market and Customs Union, the Scottish Government will want to maintain as many of the benefits of free movement of people as possible. The UK Government has already recognized it would not be appropriate for future migration from the EU to be subject to the current UK immigration rules. It is expected to publish an Immigration White Paper setting out proposals for the transition period after the UK leaves the EU, and possibly further information on plans for EU migration after 2021. The future migration regime for EU citizens should replicate as far as possible the current system of free movement. Sector-specific schemes and caps would also be an inappropriate solution to what is a whole-workforce, whole-economy issue: such a policy solution would not be sufficiently responsive to future needs and emerging sectors.

84. If the future EU migration scheme for the whole of the UK does not replicate the benefits of free movement of people, the Scottish Government would seek to have new powers on migration devolved to the Scottish Parliament to ensure that, for future EU citizens coming to Scotland, their experience is the same as free movement within Europe and they are able to continue to live and work in Scotland as they do currently.

85. Free movement of people is more than just a migration system, however, and Scotland's Place in Europe established how we would seek to maintain the reciprocal rights that UK nationals enjoy through their EU citizenship if the UK were to leave the single market.

Figure 3.1: Infographic on the contribution of EU citizens to Scotland

Devolution within the UK Framework

86. We present this approach to encourage discussion within Scotland, and with the UK Government, about how to respond now to the clear and growing need for a different solution for Scotland. It would not address all of the issues the evidence identifies, nor would it give effect to a fully regionally differentiated migration system. But it would give Scottish Ministers some ability to address the most acute issues Scotland faces and would represent a milestone towards more comprehensive devolution by building institutional capacity and capability in the Scottish public sector.

87. The UK Government and the Scottish Government could, through bilateral negotiation, reach agreement on limited devolution within the current UK immigration system. This section explores how devolution within the existing framework of the UK points-based system, in a way that restricts migrants to living in Scotland and enables Scottish Ministers to determine criteria and thresholds, could start to meet Scotland's needs. It also addresses how the Scottish Government would work in partnership with the UK Government and agencies on control and enforcement of migration.

88. There are a number of legal mechanisms to give effect to such limited devolution, including Section 30 or Section 63 Orders under the Scotland Act 1998, or primary legislation at Westminster with the consent of the Scottish Parliament as necessary.

89. The Scottish Government believes that the Scottish Ministers, accountable to the Scottish Parliament, should have the power to control migration to ensure that it plays an appropriate part in ensuring Scotland's demographic sustainability and economic growth. Therefore, as previously stated, Scotland should not be constrained by the UK net migration target. Equally it would not be appropriate for Scotland to be allocated a quota under the UK system, or a cap on the number of visas it could issue, driven by the UK net migration target. Box 7 explores why this would be problematic.

Box 7: Immigration Caps

As well as the overall net migration target, current UK policy sets limits within visa categories. Under Tier 2, employers generally require a certificate for each skilled migrant they wish to recruit from outside Europe, and there are 20,700 available each year issued in monthly allocations. If a monthly cap is reached, applications are scored and prioritised based on salary, qualification level and shortage occupation status. In practice this means that employers who pay the highest salaries, whatever the job they are recruiting for, are able to access the international talent they need.

For much of 2017, applications were within the monthly caps. In December 2017, the cap was reached, resulting in the salary threshold for a certificate jumping from £20,800 to £55,000. This meant that, without warning, many Scottish employers were unable to recruit from overseas, despite otherwise complying with all the rules. For example, the starting salary for a teacher is £27,438 while the top of the main grade teaching scale is £36,480.

Such caps are part of efforts by the UK Government to limit immigration. Restricting migration arbitrarily in this way, which takes no account of the need for skilled migrants in particular locations and occupations, creates uncertainty for applicants and employers, increases costs and ultimately may deter new investment. This demonstrates why the Scottish Government would not want caps or quotas imposed by the UK Government on new systems to support migration to Scotland.

90. There are a range of possible outcomes where negotiation with the UK Government could arrive at a mutually-agreeable solution. In the short term, the priority for the Scottish Government is a mechanism to attract high value migrants who can contribute to Scotland. This could operate under the UK immigration system with powers devolved to Scottish Ministers, accountable to the Scottish Parliament, to determine and vary criteria and thresholds according to Scotland's needs. This might include, for instance salary, assets, education, skills, age, language level or affinity with Scotland in order to ensure that the characteristics and volume of migrants entering the country under this route would be in keeping with defined economic and demographic requirements. This could take similar form to the previous points-based system 'General Migration' visas which are no longer issued by the UK Government.

91. Recognising the importance of family life in the migration system is also a priority, through visa routes that enable both migrants and UK nationals to be able to live in Scotland with their family. The Scottish Government believes that international migrants who are able to bring their family with them are more likely to integrate into communities, and contribute to the long-term demographic change that Scotland needs. Therefore, to support any Scottish visa within the point-based system, Scottish Ministers would also seek control over policy on being accompanied or joined by family members within Scotland.

92. UK policy is more restrictive than Scottish Ministers consider necessary on entry of non- EEA spouses and family members of UK nationals, as previously observed. If an individual is entitled to live and work in Scotland – whether through UK or Irish citizenship or having leave to remain in the UK – they should be able to bring close family to also live and work here, subject to proportionate measures to ensure abuse, fraud or other criminal behavior is not being perpetrated.

93. To further support employers, it may also be appropriate for decision-making on which professional groupings feature on the Scotland Shortage Occupation List to be reconsidered, with responsibility to decide what sits on the Scottish list resting with Scottish Ministers. In reviewing that list, the Scottish Government could consider advice either from the MAC, or, if appropriate, from a new independent migration adviser for Scotland.

94. If a Scotland-specific visa were to be created within the UK immigration system, prospective migrants and sponsoring employers would still have a choice about which route through the immigration system to pursue. Individuals who meet the requirements of any of the other visas within the UK points-based system who wish to live or work in Scotland would be free to do so, while retaining the flexibility to resettle elsewhere within the UK. No barriers to movement between Scotland and the rest of the UK would be created for UK nationals or for those who are resident in the UK under the UK immigration rules. The Scottish approach would be an option open to migrants and employers that may meet individual needs by offering different eligibility criteria in one aspect, with different restrictions in another.

95. Scottish Ministers under this scenario would therefore exercise concurrent competence with UK Ministers on immigration matters. Scottish and UK Ministers currently share competence on issues such as economic support and there are other areas, including international development, where Scottish Ministers have the ability to pursue independent objectivesact through agreement with the UK Government in an otherwise reserved area of policy.

Residence

96. Scotland wants to attract people from the UK, Europe and the rest of the world who will live and work here for the long term, and who will raise families to grow the future working age population that will pay taxes to fund the essential public services that society – and especially an increasingly aging society – demands.

97. The demographic pressures in the rest of the UK are less pronounced, and many communities, particularly in England, have larger migrant populations than are typically found in Scotland, or have experienced more rapid growth in migrant populations than typically experienced in Scotland. That has led to different requirements for and perspectives towards migration across the UK.

98. It is possible therefore that some communities in other parts of the UK, and their respective elected representatives and governments, would seek assurance that the devolution of migration powers to Scotland aimed at increasing net migration in Scotland, would not then lead to migrants entering Scotland with the intention of relocating and settling elsewhere in the UK.

99. In short, Scotland wants migrants to live in Scotland, with the ability to visit the rest of the UK within the Common Travel Area; and the rest of the UK might also expect those migrants to stay in Scotland. Therefore, whatever the nature of devolution or differentiation, a central feature of Scottish migration policy would be to restrict migrants to living in Scotland as a condition of entry for the duration of the time they are under immigration control. How a residence restriction is defined and enforced would need to be agreed with the UK Government, but there are existing frameworks (for example, the arrangements that govern eligibility for higher education support) that could prove instructive and demonstrate the feasibility of such an approach.

100. The definition and application of residence restrictions as a visa condition would require further discussion. Similarly, restrictions on employment, including the balance between the importance for businesses of wider labour mobility against the demands of the labour market beyond Scotland would need further exploration.

Control & Enforcement

101. The Scottish Government would accept, under this approach, that border control and enforcement remain the responsibility of the UK Government, through Border Force and Home Office Immigration Enforcement, with the involvement and engagement of relevant Scottish and UK law enforcement and intelligence agencies. Scottish Ministers also accept there is a reasonable requirement for a common standard across the UK on questions of good character, criminality and related matters in the migration system. They would therefore exercise their devolved decisions on migration under the UK framework of general grounds for refusal, subject to the necessary engagement between the Scottish and UK Governments on determining those grounds.

102. Procedures that the UK Government has put in place already require employers and public services to check the immigration status of employees and service users. Such mechanisms would help ensure that migrants entering the UK through this route are compliant with the conditions of their visa, including restricting residence to Scotland.

103. Any migration system has the potential to be targeted for abuse, but partnership working between governments and agencies to ensure proper enforcement of immigration rules and conditions of entry can manage and limit that potential. This is what we propose by establishing a Scottish system either within or parallel to the UK system.

104. Partnership working in this way already exists within the Common Travel Area. Both the UK and Ireland operate their own migration systems in which UK visa holders are able only to live and work in the UK, and Irish visa holders are able only to live and work in Ireland. This does not compromise the principle of free movement within the Common Travel Area. The UK Government has already committed to maintaining the Common Travel Area after the UK leave the EU.

Administration

105. In many areas of recent devolution, we have delivered new services in partnership with departments and agencies of the UK Government. For instance, HM Revenue and Customs collects Scottish income tax, and the Department for Work and Pensions has been closely involved in work to devolve social security benefits. There are areas in relation to migration where such partnership working should continue, including in the role of Border Force on control and enforcement at ports of entry. However, there are areas where Scottish Ministers would seek changes from the UK approach or would seek to have a Scottish public body with a lead role in delivery.

106. We would explore through discussion with the UK Government arrangements for receiving, processing and issuing visas with the Scottish residence restriction. It would be possible for Civil Servants in the Home Office or UK Visas and Immigration to process and make decisions on applications under a Scottish scheme where Scottish Ministers have set policy and immigration rules. However, it might be difficult for UK immigration staff to service both UK and Scottish Government policies in the longer term, especially when policy aims are likely to diverge significantly.

107. The Scottish Government will therefore consider further whether a Scottish public body should be identified to receive, process and make decisions on behalf of Scottish Ministers under any devolved Scottish migration system. This body would also assume collection of fit-for-purpose data from the system to support dedicated monitoring and evaluation of the characteristics, flows and impacts of migrants to Scotland that will support policy decisions and help better inform public debate. This body would set fees and charges for that service on the principle of full cost recovery rather than seeking to raise revenue.

Devolved Immigration Systems

108. The previous section tested how relatively limited devolution of powers to the Scottish Parliament could operate. This would not represent a fully devolved or regionally differentiated approach to migration, but it could form the core of wider subsequent devolution. Scottish Ministers, accountable to the Scottish Parliament, could take further control over migration to Scotland allowing the Scottish Parliament to design and implement a new system for all categories of migration. A points-based migration system is one that many territories, including the UK, have adopted. While the Scottish Government remains open to considering other approaches, a variation of a points-based system is likely to be the most effective at ensuring migration policy meets Scotland's needs.

109. Differentiated or regional approaches to migration are neither novel nor unusual in the international context. Both Canada and Australia operate devolved regional control, to address specific economic and demographic circumstances, within a national framework.

110. Both countries operate points-based systems that have a focus on permanently growing their populations through inward migration. However, the federal governments of both recognized that the limited dispersal patterns of new migrants were contributing to increased inequality between regions. In order to widen the benefits of migration, both Canada and Australia have encouraged and enabled regional governments to devise special programmes to attract migrants to areas beyond their primary urban centres. This process is supported by strong and well-established relationships and dialogue on migration between federal and province or state governments.

111. Canada operates a points-based migration system with a strong regional element to account for the differences in population and economic structure of Canada's provinces. All ten provinces of Canada (and two of its three territories) have bilateral agreements on migration with the federal government which take into account specific provincial requirements. Most of these include agreements on Provincial and Territorial Nominee Programmes, which were established in the 1990s to counter the historical tendency of migrants to settle in the bigger cities.

112. Under the Canada-Quebec Accord, the province of Quebec has more control than the other provinces over migration, with sole responsibility for the selection of migrants who apply for permanent residence in Quebec. The federal government remains responsible for their admission. In addition, Quebec's consent is required for the admission of temporary migrants into the province, for example international students, temporary workers and visitors entering Quebec to receive medical treatment.

113. Quebec offers various routes for different types of migrants that broadly mirror federal programmes. However, Quebec essentially operates a separate points system, with different weighting that places more emphasis on factors that are seen to facilitate integration into Quebecois society, such as knowledge of the French language.

114. Australia also seeks to grow its population in more remote areas through regional flexibilities in its points based system. The Australian Government works with state and territory governments to offer a range of State Specific and Regional Migration initiatives which include varying criteria that recognise the specific needs of rural and regional areas and are designed inter alia to address regional skill shortages, and to ensure that the intake of skilled migrants into Australia is spread across the country. These initiatives are designed to encourage migrants to settle in regions of low population density or economic growth.

115. There is some commonality with Scotland's situation in relation to the rest of the UK. We need people to settle in Scotland, to make their homes here, to bring their families and to contribute to our long term future prosperity. UK Ministers have suggested that they want future migration to be short term with individuals returning to their country of origin. These are fundamentally different priorities and it is difficult for one approach to meet both needs.

116. The Scottish Government is also sensitive to the potential impact that retaining international skills in Scotland could have on development within an individual's own country of origin. Not all migrants will wish to settle in Scotland permanently; many will return to their home country to put into practice the experience they have gained from living and working in Scotland, just as individuals born in Scotland should have the opportunity to build and develop their skills by studying, working or living overseas.

117. The UK is making plans for a migration system to replace free movement of people after leaving the EU. That is not as desirable as maintaining free movement of people through continued membership of the European Single Market and Customs Union. The upcoming Immigration Bill therefore presents an opportunity to fundamentally rethink the whole UK system, in a way that recognises the different requirements and aspirations of different parts of the UK, through an approach that includes regionalization of migration policy at the earliest design stages.

118. The Scottish Government has advanced proposals, and will enter into a discussion with interested parties across Scotland, on what is right for Scotland's particular future migration requirements. The Scottish Government is not alone in recognising that the one-size-fits-all approach of the UK immigration system does not meet the needs of many parts of the country. Our proposals for greater devolution to allow for a separate Scottish approach present an opportunity to engage and work in partnerships beyond Scotland, and to advocate for regional differentiation to the UK immigration system as a whole.

Box 8: Asylum

Scotland has a long history of welcoming asylum seekers and refugees, from all over the world. We maintain that they should be integrated from day one, and not just when leave to remain has been granted; and that the overall experience for asylum seekers coming to Scotland is more humane and in line with our values and the importance we place on human rights and equality. We want Scotland to be recognised as a good global citizen – able to welcome those seeking sanctuary, to support those in need and to deal effectively and humanely with those who do not have a case to stay.

Scotland's refugee integration strategy, New Scots, has provided a clear framework for all those working towards refugee integration. It assists in co-ordinating the work of the Scottish Government and its partner organisations and others in the public, private and third sectors. A refresh of New Scots was launched in January 2018, shortly after Scotland celebrated resettling 2,000 Syrian refugees since October 2015. This milestone, reached ahead of schedule, is part a commitment to take a fair and proportionate share of the total number of Syrian refugees that come to the UK.

We have special obligations to those seeking asylum, and the number of asylum seekers relative to economic or family migrants in Scotland is low. We have therefore not addressed future policy changes to the asylum system in this paper.