The UK Prime Minister has pledged to end low skilled immigration by 2021. Why have exceptions have been made for the agricultural sector?
This is the fourth part of SPERI’s new series on Brexit, the Conservative Majority and the UK Political Economy.
The EU is a highly integrated trading bloc and holds the world’s largest free trading area within an economic union (otherwise known as the single market). The four freedoms of the single market include free movement of goods, capital, services and people. Free movement of people alongside the free movement of capital benefits workers, and there is evidence that labour mobility can lead to higher wages. Yet, freedom of movement has become one of the most contentious aspects of the UK’s membership of the EU; and anti-immigrant sentiment is widely believed to have shaped the outcome of the 2016 referendum on EU membership.
While many low-skill, labour intensive jobs have been offshored and outsourced to low cost locations, UK businesses have continued to retain high value adding activities (often within global value chains) that require a highly skilled workforce. Demand for such workers cannot be met internally, and so immigration has become a key feature of the UK labour market. Membership of the single market facilitated access to a highly skilled EU workforce through freedom of movement but Brexit will inevitably disrupt the flow of workers to UK businesses. Recognising this, Theresa May initially pledged to extend freedom of movement until 2023. This was recently scrapped by her successor Boris Johnson; with immigration controls to be introduced a full two years earlier than originally planned. However, the Prime Minister’s proposals for a point-based system are seen as too restrictive by those that depend most on migrant workers; with recent recommendations regarding minimum salaries still set too high according to businesses.
While the majority of media attention has been focused on the need to retain high skilled workers, it should be recognised that there is a structural dependency on low skill migrant workers in many labour-intensive and low paying jobs across the UK economy. This includes agriculture, hospitality, construction, domestic work and social care. When it comes to the question of low (rather than high) skilled migration, the political right has maintained a narrative of migrants ‘stealing’ local jobs in order to push for further border controls. Yet, many businesses recruiting low skill migrant workers speak of the impossibility of attracting British workers into these less ‘desirable’ professions.
It appears that the Government has firmly bought into this right-wing narrative and is proposing to ‘end’ low skill migration while continuing to support (limited) high skill migration. This is worrying news for those sectors who depend on low skill workers and as such they have requested exemptions to the points-based system. However, the Home secretary recently told the Cabinet that no such ‘carve outs’ would be made and that businesses must simply end their dependency on foreign workers altogether.
UK agriculture is highly dependent on low skill workers. The sector is estimated to depend on approximately 70,000 migrant workers each year; with the vast majority arriving from within the EU. The case of agriculture challenges Johnson’s claim of ending low skill migration because new migration worker schemes have been expanded under his leadership. While May’s government introduced a migrant worker programme allowing just 2500 non-EU workers to work on UK farms (for a six month duration), Johnson has since pledged to increase the number of workers within the programme to 10,000. The industry is continuing to push for this figure to be raised to 70,000 workers. At present, it appears that the agricultural sector is the only sector in which the government is making exceptions in order to continue low-skill immigration. But what explains it’s exceptional status? And why has the government explicitly ruled out similar exceptions for other sectors dependent on low skill migrant workers?
Firstly, the sector had already been at the forefront of state-led experiments to encourage UK workers into jobs historically filled by migrant workers. As unemployment increased following the financial crisis, two state departments (DEFRA and the DWP) sought to bring British workers into agricultural work. However, the programme was largely ineffective, with an average retention of just one week for a UK worker. The conditions of work, the lack of flexibility in the welfare system (to accommodate seasonal labour for example) and the isolating nature of farm work were all critical factors in preventing uptake. Here was concrete evidence that you cannot simply push local workers into sectors highly dependent on migrant labour; directly challenging the rhetoric that migrant workers are crowding out the low skill UK job market.
Secondly, the sector has experienced growing political significance due to rising import costs, climate change and food security. The weakening pound and uncertainty over the final trade agreement with the EU is compounding this further. Agriculture is also a significant input to the UK manufacturing industry. While agriculture itself only represents around 1% of UK GDP, the allied food processing industry (which sources extensively from UK agriculture) represents approximately 17% of gross value added within UK manufacturing. The above factors have arguably given lobby groups such as the National Farmers Union a more powerful voice to advocate for continued low skill immigration into the sector to support the competitiveness of the sector under changing trade and market conditions.
Thirdly, while some advocates of agricultural reform argue that raising wages and working conditions would allow the UK to rid itself of low skill migrant dependency, the sector is largely shaped by the powerful commercial dynamics of value chains. Retailers controlling these chains often have significant market share and are able to drive down prices. Suppliers are reluctant to raise wages over concerns they will be priced out of the market, and just-in-time production has seen significant increase in work intensification, with piece-rates now common in place of a wage. These factors all lead to an industry-wide preference for migrant workers because historically they have been more willing to accept the terms and conditions than their domestic counterparts.
Potential for progressive reform is hampered by the cut-throat nature of global competition and so continued labour shortages in the sector are most easily resolved by continued access to cheap labour. Serious concerns continue about the treatment of migrant workers in the sector, and my own research examines the impact of the new migrant worker programmes on working conditions and how these schemes may evolve under Brexit. If these schemes become politically unpalatable, there is also the danger that workfare style programmes may be introduced into the sector, or that flows of trafficked workers may increase. These workers will be particularly vulnerable to exploitation.
Part 5 of this series will examine the case of low skilled immigration into the construction industry and examine the implications for the sector and for workers under Brexit.
Read all of our posts in our blog series on Brexit, the Conservative Majority and the UK Political Economy.