Foreign labour in the United Kingdom: Patterns and trends

Foreign labour in the United Kingdom: Patterns and trends

Salt, John

Special feature

Using various sources this article describes recent trends in international labour migration into the UK and its effects on the labour market.

Key points

* All available sources on labour migration to the UK suggest that the inflow of foreign workers has been rising throughout the 1990s.

* Consistent net gains of non– British professional and managerial workers have offset consistent net losses of British professional and managerial workers.

* During the 1990s, the net flow of manual and clerical workers has generally been positive, with net gains of non-British compensating for net losses of British workers.

* In 2000 there were around 1.1 million foreign national workers (and around twice as many foreign-born workers), the number having grown by more than one-fifth since 1992.

* Foreign workers are generally more skilled than British workers although there are variations in the relative proportions among different citizenship groups.

* Two-thirds of all foreign workers are in the South East with nearly half in London.

* Over a quarter of all health professionals are foreign-born.

* Health, IT and management/ administrative occupations account for around 60 per cent of all work permits issued.

* There have recently been large increases in work permit issues to people from India and the Philippines.

Introduction

IN THE past few years there has been a growing move towards liberalisation of foreign labour recruitment in European and other advanced economies. For the most part, policy interest has focused on the highly skilled but it is also apparent that labour markets have an appetite for low-skilled foreign workers as well. Despite these trends it is by no means clear what the flows, stocks and characteristics of foreign workers are in most countries.

Recently, the UK Government has adopted a more liberal attitude towards foreign labour immigration. In a series of presentations, ministers have spoken and written of the benefits to the national economy of labour immigration to ease skill shortages which hold back innovation and economic growth. In effect, the UK has been positioning itself to compete in what has become a global migration market.

This article follows two earlier ones1 and presents the current situation for the UK. It is derived largely from a recent study completed for the Home Office, due to be published later this yearn and uses special tabulations from three main sources. It focuses first on the flows of employed migrants using data from the International Passenger Survey (IPS), before moving on to profile the scale and characteristics of foreign and foreign-born workers described in the Labour Force Survey (LFS). Finally, work permit statistics are used to indicate the occupational characteristics of non-European Economic Area (EEA)3 foreign workers. The article concludes with a summary table for 1999 indicating the numbers of foreign workers entering the UK coming through the main official routes and schemes. It should be noted that these are not the only groups that have rights to work in the UK, since students and family members will also have an impact on the labour market.

Comparison of labour

flows data

A range of statistical sources exist which shed light on stocks and flows of the migrant population in the UK and which, taken together, can help to paint a picture of the main patterns and trends in international migration and their significance for the labour market. However, all have limitations which need to be taken into account. These sources are discussed in the technical note.

One indication of the differences between sources is the variation in labour flows they record (see Table 1). These reflect the coverage of the two administration systems (work permits and National Insurance data from the former Department of Social Security (DSS)) and the two surveys (LFS and IPS). No data are available from the DSS after 1997. The narrowing gap between the total issues of work permits and the LFS estimate of incoming foreign national workers reflects the growing importance of non-EEA labour inflows relative to the total. The rapid increase in total foreign immigration recorded in the IPS in the last few years is reflected in the data on worker inflows. Overall, Table I makes it clear that the foreign worker inflow has been rising strongly during the 1990s.

Flows of employed

migrants

Unlike the other statistical sources, the IPS provides data on those who leave as well as those who enter the country, thus making it possible to calculate net flows. However, owing to the small sample size, there is only limited detail in the citizenship breakdown. IPS data record two occupational categories for those who were in employment before migrating: professional and managerial (administrators, managers and people with professional and technological qualifications) and manual and clerical for those in all other occupations. In the following analysis, it is important to remember that the regular occupation of migrants before they leave a country is not necessarily the occupation they take up at their destination.

Total flows

Between 1975 and 1999, an aggregate of 2.850 million employed (British and non-British) migrants came into the United Kingdom and 2.992 million left, with a net loss of 142,000. However, there was a substantial shift over the period in the balance of migration. The net loss, totalling 171,000 in 1975-79, had become a net gain of 163,000 during 1995-99.

Figure 1 shows the total net flows of employed migrants by citizenship for the period 1975 to 1999. Overall, the net flow of all citizenships can be divided into three periods: from the late 1970s to the early 1980s there were large net losses; throughout most of the 1980s there was fluctuation around zero with two periods of net gain and two of net loss; and finally in the 1990s there were generally large gains, especially after 1997.

The trends of the two citizenship groups are very different. The net flow of British employed migrants, despite its overall rising trend, remained in net loss for every year with the exception of 1994. The greatest losses were in the late 1970s and early 1980s, closely following the total net flow trend. The rest of the 1980s saw a fairly stable period of net loss at around 20,000 a year. In the 1990s there was a return to a fluctuating trend, with four of the past six years seeing losses of under 20,000.

Among the non-British, every year throughout the period saw a net gain and despite fluctuations, such as the sharp rises and falls between 1996 and 1999, the graph shows an overall steady increase with the last two years having the highest net gains of the period. Overall, there was a low correlation in the fluctuations of the two citizenship groups (r^sup 2^ = 0.43) indicating different patterns over the period.

Net flows of professional

and managerial workers by

citizenship

During the period 1975-99, there was an aggregate gross inflow of 1.727 million professional and managerial workers, 961,000 of whom were non– British and an outflow of 1.716 million, including 573,000 non-British. The combination of gross inflows and outflows produced very different net flows in respect of British and non– British citizens (see Figure 2). In the case of the British, there was a net loss of professional and managerial workers from the UK every year throughout the 25-year period, apart from 1994. Many of the annual net outflows were also relatively small – the highest was 28,000 in 1981.

The data on net flows of non-British professional and managerial workers present a dramatically different picture – there was a net gain to the UK every year throughout the 25 years, except in 1977. Many of the annual net inflows were fairly small, especially before 1990, but from 1994 the annual net gain of professional and managerial workers who were non-British citizens was consistently above 25,000, peaking at 46,000 in 1998.

It is very clear from the above analysis that the professional and managerial section of the UK labour force would have been seriously depleted through migration over the past 25 years if there had been no immigration of non– British citizens. A net outflow of over 376,000 British professional and managerial workers took place during this time, with a net loss of nearly 65,000 in the past five years. The net inflow of over 387,000 non-British professional and managerial workers, nearly 174,000 during the past five years, has more than offset the British outflow in terms of aggregate numbers.

Net flows of manual and

clerical workers by

citizenship

During the period 1975-99, there was an aggregate gross inflow of 1.123 million manual and clerical workers, 603,000 of whom were non-British and an outflow of 1.276 million, including 385,000 non-British. There was a net loss of manual and clerical workers who were British citizens every year throughout the 25-year period apart from 1994 and 1998, but the size of the annual net outflows at the end of the period was much smaller than those in the late 1970s and early 1980s (see Figure 3). The aggregate net outflow 1995-99 was just over 11,000, compared with over 120,000 in both of the two periods 1975-79 and 1980-84.

In contrast, there was a net gain every year of manual and clerical workers who were non-British citizens. Broadly speaking, there were small annual gains at the beginning and end of the 25-year period and larger ones in the middle, but the two highest net inflows were in 1996 and 1998 — nearly 18,000 and over 25,000.

The net outflow of British manual and clerical workers has not been offset by the net inflow of non-British citizens over the full 25-year period, but this situation has changed during the 1990s. A net loss of over 371,000 British workers took place from 1975 to 1999 compared with a net gain of 218,000 non-British. However, the net inflow of non-British manuals and clericals exceeded the net outflow of the British in 1990-94 and in 1995-99. During this last five-year period, the net loss of British workers was over 11,000, but the net gain of the non– British was nearly 64,000.

Summary

Flows of professional and managerial workers and of manual and clerical workers over the 25-year period showed considerable fluctuation, but there were also some consistent patterns and trends. It appears that, for professional and managerial workers, over the 25-year period emigrant British citizens have been completely replaced by immigrant non– British citizens in the labour force but this is not the case for manual and clerical workers. However, for the 1990s, total replacement seems to have occurred for both occupational groups.

Of course, these aggregate figures do not tell us the specific occupations of those who entered and left the country, nor how many of those coming in actually took up employment in the UK. However, the net inflows of non– British citizens in 1995-99 were so much greater than the net outflows of British citizens in respect of both occupational groups, it seems likely that the numbers of incomers who entered the labour market exceeded those who left it.

Foreign nationals at work

During the period for which the LFS provides data, from 1984 onwards, there has been a steady upward drift in the numbers of foreign workers, although their relative importance has changed comparatively little until the past few years. Foreign nationals (rather than the foreign-born)4 working in the UK accounted for 3.1-3.4 per cent of the total workforce during the 1980s and 3.3-3.6 per cent during much of the 1990s. However, after 1997 their importance rose to reach 4 per cent in 2000. There are around twice as many foreign-born workers as foreign nationals working in the UK.

Between 1992 and 2000 the number of foreign nationals working in the UK rose from about 902,000 to around 1.107 million, an increase of 23 per cent (see Table 2). Growth among EU/European Free Trade Association (EFTA)5 nationals has been much slower, resulting in a fall in the share of this group to 42 per cent in 2000. Among non-EU/EFTA nationals, numbers of those from less advanced economies (this group excludes European and such other highly industrialised countries as the USA, Japan and Singapore) have grown faster. This would suggest that, although globalisation has increased movement among the more economically developed countries, it has also speeded up migration from elsewhere.

Foreign workers by

nationality and socio

economic group

Using LFS data, about 25 per cent of the working population as a whole may be classified as professionals, employers and managers, 35 per cent as other non-manual and 40 per cent as manual (see Figure 4). This distribution across socio-economic groups has shown very little variation during the 1990s. Not surprisingly, these proportions reflect the socio-economic structure of the UK.

The foreign national working population has a broadly similar structure to that of the overall population, but differs in a number of ways. It is generally more skilled, with a higher proportion (31 per cent) than the UK population being professionals and managers, and smaller proportions in the other two groups. Unlike earlier years, in 2000 this was less the case for non-EU foreigners, 30 per cent of whom were professionals and managers. The situation for EU nationals is affected by the inclusion of the Irish who, in the past, have contained about the same proportion of the highest skilled as the total labour force, but considerably less than the rest of the EU.

In general, it would appear that the tendency for foreign nationals to be more skilled than their UK counterparts has been fairly constant. In 1992 the respective proportions of professionals and managers were 25 and 23 per cent, and in 2000, 31 and 25 per cent.

Unfortunately sample size allows only limited analysis for nationalities and national groups. Where data are available, they do not show a uniform picture, indicating that different foreign groups have different roles in the UK labour market. Those from northern EU (including France and Germany) are more highly skilled and contain lower proportions of manual workers; a similar situation prevails for North Americans, Australians and New Zealanders. In contrast, workers from the southern tier of EU countries (Spain, Portugal, Italy, Greece) are over-represented in manual employment, having the highest proportion among those listed in this category. More emphasis on manual workers and less on professional and managerial is also to be found among Africans, those from the Indian subcontinent and from the Caribbean/West Indies. The situation of Irish nationals is particularly important. Compared with foreigners as a whole, a higher proportion of them is also to be found among manual groups (37 per cent in 2000), but this is now less than previously (44 per cent in 1998). In recent years there has been a trend for more Irish migrants to be highly skilled, bringing them closer into line with the rest of the EU.

Nationality and region of

residence

The regional distribution of foreign workers is very uneven (see Table 3). As ever, the figures clearly show the importance of the capital in the international labour mobility machine. Greater London had 520,000 foreign nationals living and working there in 2000, 47 per cent of the total number of foreign nationals and 36,000 up on the previous year. The rest of the south-east accounted for another 218,000 foreign workers, about 20 per cent of the total and continuing the modest rising trend of the past few years. Hence, around two-thirds of foreign workers were in south-east England, the capital being the dominant focus. In comparison, only 11 per cent of UK nationals worked in Greater London and only 31 per cent in the south-east as a whole. The pattern seems overall to be very stable. Although there have been fluctuations in the 1990s, no clear trend towards greater or lesser concentration has emerged.

The concentration of foreign workers in Greater London applies to all national groups identified. Non-EU nationals are more likely than EU nationals to be in London. In part, this is due to the relative under-representation of Irish workers in the capital, 35 per cent in 2000, compared with 45 per cent of other EU nationals and 47 per cent of foreign nationals as a whole.

For most non-EU groups, concentration in London is common: about twothirds of Africans, around half of those from Australia and New Zealand, from Asia (excluding the Indian subcontinent) and from the Caribbean/West Indies were there. In the other regions listed, the importance of the different nationalities varies. Outside London, almost without exception, foreign nationals were proportionately less well represented among those living and working than the UK population as a whole. Generally speaking, there were differences between northern (including France and Germany) and southern EU states, with the former being relatively more prominent in the rest of the south-east, the latter in London. Of the major groups only the Irish had a strong presence in the northern and western parts of the country.

Foreign-born workers

by occupation

In view of the salience of the occupational structure of foreign immigrants, the analysis here is based on country of birth rather than citizenship as this increases the size of the LFS sample considerably. The larger, foreign-born sample can be expected to have a different profile to the foreign nationals group. In 1992 the number of foreign-nationality workers was 902,000 while that of the foreign-born was 1,929 million; the equivalent figures for 2000 were 1,107 million and 2,190 million.

The skilled nature of the foreign– born as a whole is clear from Table 4. In 2000 just over a million of them (47 per cent) came into three categories: managers and administrators; professionals; and associate professionals. In 1992 the three accounted for 804,000, 42 per cent of the total. Thus, recent years have seen both rising numbers of foreign-born and a greater proportion of them in the more skilled occupational categories.

Comparison of the proportions of foreign-born and UK-born in each category allows us to identify where the former are relatively over-represented. In 2000 this was among managers and administrators (18 and 16 per cent respectively), professionals (15 and 11 per cent), associate professional and technical occupations (13 and 10 per cent) and personal and protective service occupations (12 and 11 per cent). This indicates a relative concentration of the foreign-born in occupations at the high-skill (the first three of these categories) and lower-skill ends of the spectrum.

Table 5 identifies the top 12 occupational sub-groups ranked according to their foreign-born proportion of total employment in each sub-group in 2000. Health professionals topped the list, over a quarter of all employed being foreign-born. The other 11 occupational groups had over 10 per cent. Although this set was dominated by highly skilled occupations, there were lower-skilled ones, including catering, textile and garment trades and metal working operatives.

Work permits

Numbers of work permit

applications and approvals

The entry of most non-EEA citizens primarily for work purposes is governed by the work permit system. Table 6 shows that over the past five years the number of applications for a work permit has increased dramatically. In 1995 there were 38,617 applications, rising to 93,552 by 2000, a 142 per cent increase.

The trend in the numbers of work permit approvals between 1995 and 2000 has also been upward. In 1995, 87 per cent of all applications (excluding withdrawals and transfers) were approved and 24,161 work permits (including first permission and Training and Work Experience Scheme (TWES) permits but not extensions and changes of employment) were issued. In 2000, 64,741 of the 93,552 total applications were approved for work permits, with the overall approval rate further increasing to 94 per cent. Total numbers of work permit refusals increased between 1995 (4,811) and 1999 (5,215) but in 2000 dropped slightly to 5,075. The proportion of applications that are refused has also fallen. Work permits and first

permissions: occupational

breakdown

Issues of work permits and first permissions for 2000 are classified here in the same way as the occupational breakdown in the LFS. Three categories were dominant (see Table 7): associate professionals (52 per cent), professionals (24 per cent) and managers and administrators (21 per cent). Three others, craft and related, sales, and plant and machine operatives, recorded no issues.

Among the associate professionals, those in health occupations were the largest group (22 per cent of all issues) and among them 11,897 (18 per cent) were nurses and a further 56 were midwives. Computer analysts and programmers were 16 per cent of issues. Amalgamating them with the 2,736 software and computer engineers recorded in the professional occupations category gives a total of 13,206 IT work permits, 21 per cent of all issues. Business and finance associated professionals were another large group with around 6 per cent of issues. Most of the large category of managers and administrators were recorded as unspecified managers and administrators, although nearly a thousand issues were to `specialist managers’.

The third major category was professional occupations, within which several specialisms may be identified. The largest group is that of engineers and technologists who accounted for 6,626 issues, 10 per cent of the total. Teaching professionals accounted for 7 per cent (4,368) of all permits. Among them the largest group was researchers (2,060) with school and college teachers numbering 998. The health professionals group received 1,049 permits, 2 per cent of the total; of these only 322 (1 per cent) were for medical practitioners, a group outnumbered by pharmacists (373 permits). Numbers of work permits going to the health sector as a whole, i.e. health professionals and associated professionals, totalled 15,526, 24 per cent of all issues. Business and financial and legal professionals each had over a thousand permits.

Outside these three categories the only other occupations with a substantial number of permits were in catering, 3 per cent of the total.

Work permits and first

permissions by country of

origin

Figure 5 summarises the breakdown of work permits and first permissions issued by country of origin for 1995 and 2000 for selected countries. Some noticeable shifts have occurred. The USA still tops the list of work permit issues in 2000 but its proportion of the total has fallen. The proportion of permits issued to Japanese citizens fell from 10 to 4 per cent while numbers were almost static. The `old Commonwealth’ group had mixed experiences. Canadian numbers grew at a slower rate than average over the period as a whole in contrast to those from Australasia and South Africa.

The biggest change has been in the numbers of Indians granted permits, up from 1,997 in 1995 to 12,292 in 2000, an increase of over 500 per cent. Proportionately the biggest shift has been the increase (over 1,000 per cent) in the number of permits going to citizens of the Philippines, including a tripling in one year (1999-2000) making them the third largest national group.

What these figures suggest is that the work permit system has resulted in employers recruiting particular nationalities for specific occupational skills and that this has resulted in a major shift in its geography. It is not clear how far this change is permanent or sustainable but it marks a significant departure from the origin pattern of recent decades.

Conclusion

Both the stocks and flows of foreign workers in the UK have risen considerably in the 1990s, especially in the past few years. It is not easy to produce a comprehensive figure for the number of foreign workers coming into the UK during any one year because of the diversity of `routes of entry’. Table 8 lists the numbers entering through the various recorded routes in 1999. Work permit holders constituted the largest group, around 30 per cent of the total. A further 16 per cent were employed immigrants from the EU. This means that over half of the foreign workers entered under various other schemes. Of these, working holidaymakers were a quarter of the total. Domestic employees (domestic servants in the employ of other immigrants) and au pairs each accounted for 8 per cent. Foreigners with UK grandparent ancestry, entering specifically to work, accounted for 7 per cent, seasonal agricultural workers 5 per cent, and ministers of religion the smallest group at 1 per cent.

Overall, they sum up to around 183,500 labour immigrants in one form or another. This figure makes no allowance for whether those involved work full or part-time, nor the length of time spent in the country and working. Some will work continuously, others seasonally, others intermittently. A further unknown is the number working illegally.

Notes

1 Salt, J. `Foreign workers in the United Kingdom: evidence from the Labour Force Survey’, pp11 – 19, Employment Gazette, January 1995; Salt, J. and Clarke, J. ‘Flows and stocks of foreign labour in the UK’, pp371-85, Labour Market Trends, July 1998.

2 Dobson, J., Koser, K., McLaughlan, G. and Salt, J. International Migration and the United Kingdom: Patterns and Trends. Final report to the Home Office, 2001

3 The European Economic Area comprises all 15 EU countries plus Iceland, Liechtenstein and Norway.

4 This is a diverse group of people born outside the UK, who thus, by definition, have been immigrants at some point. It includes people with foreign citizenship, those who have been naturalised, British citizens born abroad and Commonwealth citizens who have taken up British citizenship.

5 The European Free Trade Association comprises Iceland, Liechtenstein, Norway and Switzerland

Further information

For further information, please contact:

James Clarke,

Migration Research Unit,

Department of Geography,

University College London,

26 Bedford Way,

London WCIH 0AP,

e-mail jclarke@geog.ucl.ac.uk,

tel. 020 7679 5509.

Copyright The Controller of Her Majesty’s Stationery Office Oct 2001

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