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Accession (Immigration and Worker Registration) (Revocation, Savings and Consequential Provisions) Regulations 2011

My Lords, I thank the two noble Lords who have spoken. Let me try to explain why the Government limited themselves in the Explanatory Memorandum to the points that it made. It was not out of a desire to deny Parliament legitimate information. It had much more to do with the inherent difficulty of getting reliable figures into the public domain. I will try to explain why we were cautious. There are two aspects to this. The first is what the future pattern of migration to this country is likely to be and the second is the consequences for the benefits budget. My first point is about migration. Noble Lords will know from experience that making predictions about levels of migration from new member states is a fairly precarious activity. The Benches opposite are abundantly aware that previous efforts to put numbers on expected arrivals after May 2004 were not entirely successful. Indeed, they subsequently chose not to estimate arrivals from Bulgaria and Romania when they joined the EU on 1 January. I have sympathy with that because of the previous experience. We all recall that it was estimated that 13,000 A8 nationals would migrate to the UK in 2004. There is genuine difficulty in this. However, there are some points that can usefully be made. First, there is the position of A8 nationals who are already here. One effect of the worker registration scheme has been that those entering the UK labour market have generally been prevented from having immediate access to out-of-work benefits if they are seeking work or become unemployed. It is also reasonable to assume that a substantial proportion of those who have arrived since 2004 were already no longer subject to the restrictions because once they have worked here legally for more than 12 months they are no longer subject to the WRS. The number of A8 workers who have registered under the WRS since May 2004 is approximately 1.1 million. The WRS does not record how many of those who have registered have subsequently left the UK, but statistics from the Labour Force Survey suggest that the number of A8 nationals in employment in the UK in the three months to the end of 2010 was 615,000. It can be assumed that a fraction of that number, but we do not know how many, are A8 workers who have already worked legally and continuously in the UK for more than 12 months and so are not subject to the WRS and therefore the termination makes no difference to their status. What is more difficult to predict is the extent to which we may experience more or less migration from A8 countries after 30 April 2011. While the Labour Force Survey provides us with some information on the stock of A8 migrants to the UK, it does not tell us about flows over time. The general trend indicated by the International Passenger Survey estimate of long-term migration from A8 countries, which was published by the Office for National Statistics last year, is that immigration levels steadily fell during 2008 and 2009 and then levelled off while numbers of A8 nationals emigrating from the UK rose sharply in 2008 before exits fell off. The result is that net migration from A8 countries appears to have been positive, but not particularly strongly, over the past year. What is likely to be the position in the future? The position after 30 April may reinforce the trend, but we simply do not know. There are a number of reasons for that. We do not know about perceptions abroad of job prospects in the UK, and we do know that, as has been demonstrated by authorities such as the World Bank, on the whole migrants come here for employment, not for benefits. We do not know about job prospects in the UK or, more importantly, the effect of other countries now having to lift their very restrictive provisions relating to A8 migrants. As we know, they all have to lift them, and some of the countries that had the greatest restrictions are geographically pretty close to A8 countries. I would particularly name Germany. Germany will no longer be able to maintain its restrictions on labour market access, and A8 migrants who might otherwise come to the UK may now chose to go there. That is a material consideration. The changed position may also influence the emigration decisions of those already here. The relative availability of work could be a factor, as could relative exchange rates. If you think through the implications of those things, employment in the German market probably looks quite attractive. There will be some who have no intention of seeking work, and they may indeed, and this is one of the worries, try to exploit the changed position in terms of access to benefits. It is not on the whole the analysis of why people come here, but it is a danger. That is why we have rules in place to prevent the abuse of the benefits system and to prevent benefits tourism. We are committed to maintaining the security and integrity of the benefits system to ensure that tax payers’ money is spent appropriately. Claimants can access income-related benefits only if they have a right to reside here and are habitually resident. How far the lifting of the worker registration scheme will affect the benefits system is a complex question. I want to spell out why it is. This is unashamedly complex so I beg your Lordships’ indulgence in listening carefully. It is difficult to arrive at a reliable estimate. We are unwilling to mislead by supplying estimates that are falsified by outcomes. In order to produce a reliable forecast for the cost to the benefit system after 1 May 2011, the Government would need to have forecasts of migration on which they can rely. I have just pointed out why there are some real difficulties with that. As to actual costs—this is where it gets complex—the DWP does not generally record the nationality of those to whom benefits are paid. Indeed, there is a data protection limitation on so doing, which arose when HMRC was recording nationality and a number of welfare groups protested about the irrelevance of that criterion for access to benefits. HMRC and DWP accepted that position and nationality is no longer recorded. However, we are not entirely without information about nationality because the way that claims are assessed means that note is taken at the point of application—for clerical purposes only, not for administration and therefore not subsequently recorded—in order to get the claims into the right channel. That channel goes to the office in Wick, which deals with the claims from A8 and A2 countries. It is also partly for the purposes of ensuring that these claims are proper ones. As a result of the numbers being collected in that way, it is possible to have some information regarding nationality. Figures have also been published by the Home Office in its quarterly Control of Immigration statistics. My noble friend asked whether we could rely on the figure of 11,000 plus. That is a factual figure. It is not an estimate. Let me say straight away that the figure of 100,000 is one we do not recognise and do not know where it has come from. It seems to have been conjured out of the air. We do not believe that it represents anything like the likely outcome, but we have been very cautious about making statements which are going to be falsified about what the future trend is likely to be. From the number of claims disallowed in the past year, it might be argued that it is possible to produce an estimate of the cost to the benefit system of closing the WRS. If you take that estimate, the additional cost would have been about £30 million, which represents about 0.1 per cent of total expenditure on the benefits concerned. The reason that we are very reluctant to use that figure is that it is a figure that relates to the past. It is a retrospective figure. For the reasons I have tried to set out, relating to our ignorance about the likely flow of migrants and our inability to know exactly how many of those would be claimants, we are very reluctant to base any projection on those figures. It is for those reasons—and not for any unwillingness to inform either House of the likely outcome—that the DWP was so cautious and why the Home Office thought that it was right to be cautious. My final point is that EEA nationals who are neither in work nor seeking work are generally not entitled to income-related benefits. They have to be self-sufficient while they remain in the UK, and they must have sufficient resources to support themselves and their family members to avoid being a burden on the state. That is another reason why, on the whole, we do not believe that the impact will be all that great. In short, the picture is complex, which means that any assessment of the impact of A8 migration after 30 April is likely to be speculative and could well be unhelpful. In the light of my explanations, particularly of the difficulty in attempting to quantify uncertain migrant flows and demand for benefits and thus the Government’s unwillingness to mislead the House with information that could appear to be helpful but that could turn out to have a spurious solidity, I hope that the noble Lord will not press the Motion.