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North East Economic Partners provide joint response to government’s report on immigration

As Brexit talks continue between the UK and European Union, North East economic partners including the CBI, North East Chamber of Commerce, Federation of Small Businesses, Entrepreneurs Forum, TUC, North East LEP and North East Combined Authority, continue to work together to advise government on important issues for the North East economy implied by the decision to leave the European Union.

One of those areas is the future shape of the labour market, and in particular the availability of the skills we need to enable the delivery of the strategic economic plan.

Immigration, the economic and social impacts of Brexit and how the UK’s immigration system should be aligned with a modern industrial strategy, are key issues under consideration by the Government. In July, Home Secretary Amber Rudd commissioned the independent Migration Advisory Committee (MAC) to advise government on migration trends to and from the European Economic Area and the UK, their impact on current recruitment, training and skills practice in the UK and on the economic, social and fiscal impacts of EEA migration and the potential impacts of any changes in UK policy.

The North East Economic Partners – working on behalf of the wider business, education and industry sectors – have delivered a combined response reflecting the current and future labour supply in the area, the role of EEA migrants in the North East labour force and survey evidence and case studies of the experience and views of North East businesses.

The key findings and recommendations were:

It is important that the composition of immigration data in the North East is understood

Whilst numbers of migrants in the North East population are relatively small compared with other regions of the UK, there are a high number of students enrolled in our region’s four universities and these are included in the data. Immigration data from the EEA also includes large numbers of older UK citizens and forces personnel returning from parts of Europe.

The concentration of migration in specific places and roles and the skill levels of these posts

Within the North East, there is a high concentration of migrants in cities and urban centres, in particular around Newcastle. Migrants in the labour force have a relatively high skill profile; working in higher value industrial jobs and in professional, managerial and technical roles across the economy including universities and healthcare.

The important contribution migrants have made to overall population growth experienced in region

The North East has recently returned to population growth, but at the same time seen significant population ageing. Our labour market growth and balance across age groups has been supported by migration and the higher birth rates amongst migrant populations.

Looking forward, there will job opportunities from both new jobs, and significant ‘replacement demand’ as older workers leave the labour market. We will need to replace these valuable skills by ensuring that people in all parts of the region have the skills to fill the jobs in the North East economy and by attracting people to the region from other parts of the UK and internationally at all levels of the labour force.

Internationalisation of North East business

The North East has secured significant foreign direct investment over recent years with many investors regarding our region as an opportunity to access European markets and supply chains. Parts of the region have a significantly higher proportion of employment in foreign owned businesses compared with other parts of the UK. Whilst the number of businesses hosting high numbers of international workers is small, the common framework of regulation and employment policy and the opportunity to recruit has been an important factor in decision making. There is already concern about the tone of the discussion on migration.

Businesses and economic development agencies work hard to secure skills and invest in training

North East businesses and agencies work hard to secure the skills they need and have invested in training and apprenticeship schemes, as well as seeking skills overseas, especially for high level skills. There is more to do and the area of skills and labour market development is a key priority within the strategic economic plan.

A post-Brexit immigration policy needs to consider potential dynamic effects on the North East

North East based EEA migrants include a higher proportion of higher skilled staff than in other areas in occupations such as engineering, digital, education and healthcare. There is a concern that the overall numbers in these occupations are restricted. Areas with a ‘thicker’ jobs market, London for example, may draw EEA migrants away from the North East. North East partners encouraged the MAC to recognise the potential dynamic impact on the North East labour market of migration controls elsewhere in the UK.

Read the North East Economic Partners full response to the Migration Advisory Committee (MAC) here.