The challenges of decentralising immigration policy

June 2 2023, by Sergi Pardos-Prado

The Scottish Government’s proposals for a bespoke Scottish immigration policy to address issues of demographic decline and reduce skills shortages were a key topic under discussion at the RSE Scotland-Europe Initiative workshop on migration and freedom of movement in May. Sergi Pardos-Prado made several robust and critical interventions on this issue which he summarises here in this guest blog. Clearly, it’s not just UK Government opposition Scottish ministers and officials have to contend with.

Immigration policy is hardly ever decentralised in the Western world. And there might be good reasons for this. Policymakers need to address at least three difficult challenges when deciding on an optimal level of devolution.

The first one is an issue of complexity. In practice, devolving immigration regulatory powers means allowing employers to pay less to migrants in some nations compared to others. A question arises: what would happen, for instance, with firms operating across different regions within the UK?  Would an IT firm have to pay less to its technicians or customer support analysts in Edinburgh than in Manchester or Sheffield? Is it efficient for the firm and for the government to monitor and enforce the physical location of migrant employees? Can this generate incentives to strategically register migrant workplaces in one area even if workers provide services in different geographies?

The second challenge is an issue of fairness. Even if calculating salary thresholds and conditions depending on geographical residence were feasible and enforceable, would it be fair? Certain kinds of permissive approaches to immigration (i.e. deregulation of rights and low pay conditions) can paradoxically lead to exploitative practices and lack of immigrant integration. Lowering regional salary thresholds could mean that migrants are paid less in Northern Ireland than in London, for instance.

This can risk entrenching regional inequalities and artificially generating downward pressures on wages, at least migrant wages, precisely in those places where this should not happen. Not only is this difficult to reconcile with levelling-up agendas and certain notions of fairness. But this also might affect immigration incentives, as it would be unclear then why labour migrants would self-select into Northern Irish labour markets rather than reinforcing the dominance of an already highly London-centric immigration system. Institutionalising different regional salary thresholds can negatively affect low paid jobs the most, and would be at direct odds with the UK-wide minimum wage recommended by the Low Pay Comission.

The third challenge is how to pinpoint the right level of geographical analysis when calculating minimal salary thresholds and entry conditions for migrant workers. This is especially the case given that salary differences within regions are much sharper than across regions, as evidenced in the Points-Based System Report published by the Migration Advisory Committee (MAC) in 2020. In other words, should a Scottish salary threshold be calculated based on labour market conditions in Renfrewshire or in the central belt? Moreover, regional analyses in the 2022 Annual Report of the MAC provide very little evidence that Scottish employers are constrained by minimum salary requirements. If anything, Scottish wages seem to be very well aligned with the conditions of the immigration system.

In sum, the challenges to build a functional and fair decentralised immigration system are not easy to circumvent. Neither for Scotland, nor for most Western nations. A different question, of course, is political and cultural arguments to devolve immigration and this is for politicians with their electoral mandates to adjudicate. It is true that, surprisingly, Scotland is the nation using the Skilled Worker Route the least. However, MAC analyses suggest that this is not because current labour migration routes are poorly targeted to Scottish occupational and wage structures, employer sizes, or urban/rural divides. It rather seems that migrants simply and overwhelmingly self-select into London, presumably due to its global reputation and self-perpetuating migrant networks. And while devolving immigration policy is challenging and potentially purpose-defeating, there is plenty of room to articulate integration, labour market, and welfare policies to reinforce the global image of Scotland as an attractive place for migrants to move and settle in the long term.