Shortage occupation list 2018: call for evidence - our response

1. Introduction

Our position

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. Inward migration, including from across the European Union (EU), has made an overwhelmingly positive contribution to Scotland’s economy and society. Migrants play a vital part in ensuring that we remain a diverse and outward-looking country that is open to the world. We welcome those who come to Scotland and make a positive contribution to our communities, our economy and our public services.

2. The UK Government has publicly committed to ending freedom of movement. Yet inward migration has helped to turn Scotland from a nation of emigration with a declining population into a culturally diverse, outward looking nation with a growing population. It has also brought benefits and opportunities for people born in Scotland. The Scottish Government is clear that maintaining free movement of persons is in the best interests of the UK as a whole and of Scotland.

3. The Scottish Government published detailed evidence in October 2017^[1] showing that EU migration:

• is essential for ensuring sustainable population growth in Scotland, which is the single biggest driver of our economic growth;
• supports Scotland’s economy, ensuring the availability of a pool of labour, both now and in the future, to meet the needs of employers and businesses right across the Scottish economy and across all sectors, including those as diverse as agriculture and fisheries, tourism and culture, healthcare and education;
• supports rural communities and jobs, bringing essential labour to rural industries and supporting public services including healthcare and schools.

4. The evidence that we set out in that report remains relevant and sets out the reliance of key sectors of our economy on EU citizens.

5. It is clear that current UK policy on migration does not meet Scotland’s needs. In February 2018 the Scottish Government published a discussion paper Scotland’s Population Needs and Migration Policy^[2] setting out options for a future migration system tailored to Scotland’s needs. This paper recommended that the UK Government should:

• Abolish the net migration target, or at 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 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.

6. Since the publication of that discussion paper the UK Government published its Immigration White Paper on 19 December 2018^[3]. The White Paper does not address any of the Scottish Government’s recommendations for changes and indeed proposes a future migration system which does not reflect the needs of key sectors of the Scottish economy. Figures detailed in the White Paper itself estimate that if all of the recommendations in the White Paper were implemented (notably the retention of the £30,000 salary threshold for Tier 2) then this could result in an 85% reduction in inflows of long-term workers from EU and European Economic Area (EEA) countries to Scotland. 

7. The Scottish Fiscal Commission published their Economic and Fiscal Forecasts in December 2018^[4]. These forecasts inform the Scottish Budget and set their economy, tax, and social security forecasts for the next five years. In their 2018 publication, as in the 2017 publication, the Commission again judged that the 50% less future EU migration variant of the population projections was appropriate for Scottish circumstances. In that scenario the working age population would decline by almost 1%, rather than the current prediction of growing by 1.1%, and the proportion of children would decline by just over 4%. 

8. Migration is crucial to growing Scotland’s population and specifically the working age population. It is crucial to our economy and to economic growth. Changes to migration policy have a greater impact in Scotland than in the UK as a whole, as evidenced in the figures published in the UK Government White Paper, given the greater significance of migration to Scotland’s population growth. The economic modelling that we set out in our 2017 evidence to the MAC and in our February discussion paper showed that real GDP in Scotland will be 4.5% lower by 2040 as a result of lower migration whereas the comparative figure for the UK is 3.7% lower. 

About this paper

9. This paper sets out the Scottish Government’s response to the call for evidence launched by the UK Migration Advisory Committee (MAC) on the Shortage Occupation List (SOL).

10. In responding to this call for evidence the Scottish Government and businesses across Scotland, particularly those in the tourism and hospitality sectors, have found the MAC’s deadline significantly challenging. The deadline of 6 January, although extended at the last minute, has given very limited time for the appropriate analysis of shortages. The placement of this consultation in an already busy period, with organisations focused on mitigating the challenges of Brexit, would be pushing organisations’ capacity even without the time pressure of a 2 month consultation. Given the importance of this issue we would encourage the UK Government to extend the commission given to the MAC in line with their 12 month programme of engagement on immigration to ensure appropriate consideration of all shortages and a truly evidence based approach.

11. In compiling this evidence we have been mindful that this consultation is taking place in a shifting context. The MAC published their report on EEA migration in September 2018^[5] and the UK Government published their Immigration White Paper in December 2018 setting out their proposals for a future immigration system. It has therefore been challenging to respond to a consultation about the SOL where there is such uncertainty about the future role of the SOL itself. Two of the most significant advantages linked to the SOL are that it removes the need for a Resident Labour Market Test (RLMT) and gives preference if the Tier 2 cap is met. Currently the main high skilled route (Tier 2 – general) is capped at 20,700 places a year. However, the UK Government has proposed, in their White Paper, abolishing the need for a resident labour market test and the cap. These two proposals will change the nature of the SOL significantly.

12. Given the UK Government’s stated commitment to a 12 month programme of engagement on the immigration proposals as set out in the White Paper it is regrettable that the consultation on the SOL is being viewed separately and to a different, significantly constrained timetable. A number of key sectoral interests have therefore indicated to us that they are finding it difficult to respond to the consultation within the time-frame. We would therefore call on the MAC to facilitate further engagement with stakeholders between this deadline and Spring 2019 to capture as much of this missing evidence as possible.

13. Some areas of the Scottish Government have produced separate analysis highlighting specific shortages faced by their sector, these will be submitted alongside this response: 

• Health and Social Care
• Food Standards Scotland

14. Despite these constraints and caveats, this paper provides evidence as set out below:

• Section one focuses specifically on the Shortage Occupation List for Scotland and details proposals to make that List more flexible and responsive to the needs of the Scottish economy whilst also providing a specific role for the Scottish Government in commissioning and determining what occupations are in shortage in Scotland.
• Section two provides evidence on the recruitment, training and skills needs across the Scottish economy, highlighting key sectors including tourism and hospitality, culture and creative industries, manufacturing and construction, financial services, the third sector, agriculture, diary, seafood, environment and forestry, nuclear decommissioning and public services, notably education.
• Section three provides detail of how a system which reflects the needs of Scotland could operate.