MAC publishes interim report on EEA nationals in the UK labour market

In July 2017, the Government commissioned the Migration Advisory Committee (MAC) to advise on the economic and social impacts of the UK’s exit from the EU, and how the UK’s immigration system should be aligned with a modern industrial strategy.

A Call for Evidence was published in July 2017, and MAC have now produced an interim report summarising the 417 responses received, along with a briefing paper providing a summary of the roles played by EEA nationals in the UK labour market. The Tourism Alliance (of which UKinbound Chief Executive Deirdre Wells is Chair), submitted a response which can be read here. Although tourism is not discussed directly in the report, there is a sectoral analysis of the Accommodation and Hospitality sector, which can be viewed as a proxy for tourism.

In the report, MAC accepts that UK businesses, on the whole, do not deliberately seek to fill vacancies with migrant workers, rather seeking the best available candidate. However, they did find that EEA nationals report lower absenteeism rates than UK nationals, particularly in low-skilled occupations and are slightly more likely to work evenings or nights.

MAC also recognises that there are staff shortages in some jobs that would be classified as medium- or low- skilled, and that workers in these jobs may not be eligible for work permits if the current non-EEA Tier 2 system was extended to EEA nationals, prompting concerns among employers. However, MAC argues that resolving these staff shortages would not require long training periods, although they accept that this may require Government action as well as employer action. They believe that it is unlikely that a more restrictive migration policy would lead to large numbers of unfilled vacancies beyond the short-term.

The sectoral analysis found that the Accommodation and Hospitality sector is the third largest employer of EEA nationals behind Manufacture of Food and Beverages and Warehousing, with EEA nationals making up 13.2% of the workforce. Wages in this sector were the lowest of the 20 sectors that MAC presented, with the median wage at 63.5% of the economy average in 2016.

MAC does not agree that low wages are unrelated to the negative perception of jobs in the sector by UK nationals, and does not find credible the claim that employers would not be able to recruit more UK nationals by offering higher wages. MAC does however, accept that many businesses are operating on small margins, and rising cost pressures mean that higher wages are unaffordable.

The final report will be published in September 2018, which will also look at the impact of EEA migration on wages, productivity, and other fiscal impacts.

The interim report can be viewed here, and the Sectoral Analysis annex document here.