How Changes in Migration Policy Could Boost Scotland’s Economy

Research for the Scottish Government’s independent Expert Advisory Group, on the implications of allowing people seeking asylum the right to work, has found that it might add some £30m to the Scottish economy. NIESR’s Head of External Affairs, Neil Lakeland, speaks with Senior Social Researcher, Ekaterina Aleynikova and Senior Economist Max Mosley about the implications of their findings.

Post Date
18 December, 2023
Reading Time
3 min read

What are the current asylum rules in Scotland?

Asylum policy, including whether people are allowed to work while their claims are being processed and any restrictions on the types of jobs for which they can apply for, is reserved to the UK Parliament and is the responsibility of the Home Office.

Under the current rules, people applying for asylum in the UK are not allowed to work, and doing so can jeopardise their applications. The UK imposes right-to-work restrictions on asylum seekers for at least 12 months of waiting for the outcomes of their applications (a longer period than most European nations such as Germany or France which prohibit the right to work for around six months), after which they can apply for permission to work. If granted such permission, they can only take up the jobs listed on the Government’s Shortage Occupations List (SOL).

In contrast to this, the Scottish Government has stated ambitions for a less restrictive approach if granted further devolved powers or in an independent Scotland. For example, the Scottish Government’s Building a New Scotland paper on migration to Scotland outlines proposals for granting the right to work to asylum seekers, to reduce risks of destitution and support integration of refugees from the point of their arrival.

What has brought you to study this question?

Earlier this year we studied the question of what would happen to the UK economy and people seeking asylum if they were granted the right to work. We were influenced by the fact that there is little to no evidence to suggest that the UK’s restrictive approach influences the demand for asylum. On the other hand, the right-to-work restrictions have been shown to impact negatively on individuals seeking asylum, by increasing the likelihood of experiencing destitution, damaging their wellbeing, and increasing risks of exploitation.

Given the restriction arguably does not work in the way the government intends it to while costing billions per year, we studied what would happen if the restriction were lifted. We found that such policy change would increase UK’s GDP by £1.6 billion, increase tax revenue by £1.3 billion and reduce Government expenditure by £6.7 billion. This is because we estimated that around six thousand people would join the labour force based on typical employment patterns and specific skills profiles of people claiming asylum.

Following publication of our work, the Scottish Government approached NIESR to provide this analysis for Scotland specifically, as part of their Expert Advisory Group on Migration and Population’s wider report into how to enable asylum seekers to gain employment, improve wellbeing and reduce the risk of exploitation.

What did you find with this new research?

Our new research found that allowing people to work while they wait for outcomes of their asylum applications could add £30 million to Scotland’s economy annually by allowing some eight thousand people to work.

We found the benefit to the Scottish economy would be through helping to fill gaps in the Scottish workforce, which in turn increases future council tax paid directly to the local authorities that host asylum seekers. we found no substantive downward pressure was likely to be generated on the wages of existing Scottish workers. One reason for this is simply the scale, migrant flow (especially in the case of Scotland – just a few thousand asylum seekers) is markedly small compared to the size of the existing workforce.

The Scottish Government have stated that the full report will underpin the development of proposals for a Scottish Asylum Right to Work pilot which is due to be submitted to the Home Office in 2024.