Romanian Workers in the UK Dr Simon Roberts FreSsco Bucharest, 5 June 2014
Introduction Talk looks at: Romanian workers in the UK labour market Entitlement to social security benefits in UK
Enlargement 2007 Romania (and Bulgaria) joined EU in 2007 Transitional controls were imposed by some member states including UK on nationals of the two countries These controls were twice reviewed and extended by the UK on grounds of the prevailing economic situation Consequently, Romanians rights to work and claim benefits were limited for their first seven years of EU membership Controls ended 1 st January 2014
Contrasts with Enlargement 2004 United Kingdom (Ireland and Sweden) granted immediate access to labour markets to accession country workers "We are enabling people to come to the UK and work legally, paying taxes and contributing, rather than allowing people to work in the shadow economy where they are often exploited. Many citizens of the new Member States already contribute significantly to the social and economic life of the UK. They will help to fill half a million job vacancies and we will benefit from this, whether they are plumbers, plasterers or paediatricians. David Blunkett, Home Secretary, 25 March 2004
Changed economic and political context 2004 UK economy expanding Demand for labour 2007 Global financial crisis High unemployment
Romanians opportunities to work in the UK Until 1 st January 2014 Romanians opportunities to work in the UK have been limited to: Two schemes for highly skilled and skilled workers Two quota-based schemes for low-skilled work in the agricultural and food processing sectors Romanian nationals required to obtain a worker authorisation document prior to starting employment Fines and prosecution for non-compliance Exempt from the work authorisation requirement after employed legally continuously 12 months As EEA nationals, citizens of Romania can enter and live in the UK if can support themselves and their families without 'becoming an unreasonable burden on public funds'
UK not a main destination country Levels of migration from Romania to the UK are currently low compared to: EU8 citizens in the UK Romanian nationals elsewhere in Europe in particular Spain and Italy
Profile Majority of migrants from Romania in UK aged between 18 and 34 Slightly more men than women Mainly living in London and South East England Skill levels higher than those of EU8 migrants and UK nationals Concentrated in four sectors: Hospitality Cleaning services Construction Trade Levels of self employment relatively high Do not need UK Border Agency permission to work in a selfemployed capacity
Restrictions lifted Restrictions on Romanian people working in the UK lifted on 1 st January 2014 According to the latest official figures, the number employed in the UK fellbetween January and March 2014 Down 4,000 to 140,000 compared to final three months of 2013
National Insurance National Insurance number (NINo) registrations to adult overseas nationals increased by 7% to 603,000 in the year ending March 2014 from the previous year The highest number of registrations continues to be for Polish citizens (102,000) The largest increases in NINo registrations in the year ending March 2014 were for citizens of Romania (up 29,000 to 47,000) Poland (up 11,000 to 102,000) Italy (up 9,000 to 42,000) Bulgaria (up 7,000 to 18,000) from the previous year http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterlyreport/may-2014/msqr-may-2014.html
Employment Rights Some argued to lift transitional restrictions before 2014 made Romanian workers vulnerable to abuse and exploitation failed to prevent the undercutting of resident workers wages UCATT, a construction workers trade union, highlighted the prevalence of accession state workers in the construction industry being falsely treated as self-employed Self employed workers not affected by transitional restrictions But not covered by employment protection or minimum wage legislation
Exploitation Romanian Embassy argued that removing labour market restrictions would not increase the number of Romanian nationals seeking employment in the UK, but was important because it would protect Romanian nationals currently resident Representatives of the Romanian communities in the UK argued that removing the labour market restrictions would help to protect those migrants already resident in UK because this would offer them alternatives to self-employment and deny UK employers the option of hiring Romanian nationals at a lower cost
Experience of A8 workers However, experience of A8 workers suggests exploitation may continue after restrictions lifted 70 per cent of A8 workers who applied to work between April 2007 and March 2008 stated that their rate of earnings was just 4.50-5.99 per hour Compares to an average hourly wage of 11-50 for UK-born workers in 2006 around twice that for A8 workers, even though UK-born workers less educated and skilled
Enforcement of Standards 1 HM Revenue and Customs declared that it would target employers most at risk of not complying with the minimum wage for investigation by their compliance officers which it suggested would help to protect both workers and tax payers from unscrupulous employers
Enforcement of Standards 2 Evidence that the measures put in place to prevent employers exploiting migrant workers by employing them illegally at wages below the legal minimum not always successful Trade unions and the Church voiced concerns about the abuse of A8 workers by employers, in particular in the field of wages and health and safety
Social security The rights of Romanian migrants to social security and welfare benefits were very limited prior to 1 January 2014 Those who were authorised to work in the UK could claim housing benefit to help pay their rent while working, and also may have access to tax credits and child benefit Romanian national workers who became unemployed only acquired the same rights to non-contributory benefits, such as income-based Jobseeker s Allowance, as other EEA nationals if they have been continuously employed in accordance with the Home Office Worker Authorisation Scheme for 12 months or more Romanian self employed people and those employed in accordance with the Home Office Worker Authorisation scheme are entitled to claim housing benefit and council tax benefit while they are in work but no unemployment benefits
Moral Panic Social security Eastern European migrantsare much less likely to claim benefits than British nationals EU10 migrants who claim benefits, the majority claim child benefits i.e. not out of work benefits Not surprising as migrate to work not to claim benefits Housing Majority of migrants find accommodation in the private rented sector and are not generally eligible for social housing
Claims for Benefits Claims for benefits have been extremely low since accession in 2004 Between 1 May 2004 to 31 March 2008 just under 875,000 National Insurance Number applications from A8 nationals Of these the vast majority (97.6%) were allocated for employment purposes, 1.6 per cent for tax credit purposes and only a very small number (0.8%) for benefit purposes (Home Office, 2008)
Changes to social security Nevertheless, following an article by the Prime Minister s in the Financial Times on 27 November 2013 in which he said he shared concerns about the impact of lifting transitional restrictions on the right of Romanian and Bulgarian to work in the UK from 1 January 2014, the Government has introduced a raft of measures to further restrict social security
Restrictions to benefits December 2013, a stronger, more robust Habitual Residence Test for those claiming means-tested benefits 1 January 2014, people coming to the UK must have been living in the UK for three months before they can claim income-based Jobseeker s Allowance EEA jobseekers or former workers will have to show that they have a genuine prospect of finding work to continue to get JSA after six months (and if applicable, Housing Benefit, Child Benefit and Child Tax Credit) 1 March 2014, a new minimum earnings threshold to help determine whether an EEA national is or was in genuine and effective work, and so has a right to reside as a worker or self-employed person (and with it, entitlement to benefits) House of Commons Library, 15 May 2014
Restrictions to benefits 1 April 2014 new EEA jobseekers have been prevented from accessing Housing Benefits even if they are in receipt of JSA 9 April 2014 routine use of interpretation services for most new JSA claimants ended 28 April 2014 JSA claimants whose spoken English was found to be a barrier to work would be expected to undertake training to improve their language skills 1 July 2014, new jobseekers arriving in the UK will need to live in the country for three months in order to claim Child Benefit and Child Tax Credit House of Commons Library, 15 May 2014
The Economics of Migration In announcing the intention to further restrict benefit entitlement the Prime Minister said his intention is: to tighten up our EEA migration rules to ensure our welfare system is not taken advantage of However the evidence suggests that it is not the migrant workers who come to exploit generous welfare benefits but employers and the State that exploit the benefits of cheap labour while avoiding the costs including the costs of involuntary unemployment
Directive to improve enforcement of workers' rights The Directive requires Member States to ensure: one or more bodies at national level will provide support and legal assistance to EU migrant workers with the enforcement of their rights effective legal protection of rights (including for example protection from victimisation for EU migrant workers who seek to enforce their rights) and easily accessible information in more than one EU language on the rights enjoyed by EU migrant workers and jobseekers http://europa.eu/