According to the ONS, the discrepancy between the immigration figures and the number of National Insurance numbers issued to EU nationals can be explained by short-term migration. The regularly reported ONS figures only counted people who were in the UK for a year or more. Those dropping in for a few months wouldn’t make it onto the official figures but still might apply for a NI number with the intention of doing some work.
Once the short-term migrants are added in, the total immigration figures look a lot closer to the NI numbers.
Neither Michael O’Connor, who first spotted the discrepancy, nor Jonathan Portes, who first raised it with the government, are entirely satisfied with the answer. No doubt this debate will rumble on but what the report has highlighted is the number of short-term EU migrants coming to Britain over the last few years.
There appears to be a churn of EU nationals coming to work for a few months. Some take short-term contracts, others come for seasonal work. A few probably just pop over to see what it’s like before committing themselves to longer-term work. The relatively short distances and cheap travel mean that it is far easier for EU migrants to stay for shorter periods than it is for those further away.
What this also means, though, is that UK employers have access to a vast pool of short-term workers. English is the most widely spoken second language in Europe, therefore it is much easier for British and Irish employers to find workers than it is for employers in any other country. With them being nearby, there will always be plenty available for short periods.
Many EU migrants are overqualified for the work they do. According to the ONS, 40 percent of EU10 and 30 percent of EU14 migrants have qualifications higher than the average for their jobs. It is no surprise, then, that the UK has one of the most highly educated workforces in Europe and also one of the highest rates of over qualification.
Yet, despite this, the UK’s productivity is in the doldrums and lagging behind most of the other G7 countries.
Constant price GDP per hour worked, actuals and projections, 1997 to 2015
Furthermore, last year’s Global Skills Index study by Hays and Oxford Economics found that the UK had one of the highest gaps between the skills that employers were looking for and those available in the labour market.
What have Britain’s companies done about this? Well they don’t seem think training is the answer because it has been in steady decline for the last decade or so.
So we have flatlining productivity, lagging behind that of most other major economies, and one of the highest skills gaps among the developed economies. Yet our employers have access to a huge pool of well qualified labour, larger, relative to the size of our workforce, than that available to most other countries. Furthermore, this labour is highly flexible, with people ready to travel across Europe for relatively short periods of work. Employers have workers available almost on tap.
Together with relatively light regulation, this ready supply of well-qualified labour must make the UK one of the most benign business environments in the world. Why, then, is our productivity so poor?
As the UK Commission for Employment and Skills commented last year
An important backdrop to productivity performance is that we have a workforce which has never been so well qualified. If we have a better-educated workforce, then we have to look at how their talents are being applied: the workplace must have played a role in that productivity slowdown.
Don’t Britain’s employers have some explaining to do?