Here is an extract from the MAC report summarising what it says about the impact of EU migration on wages. It has lowered wages for the poorest (those in low percentiles), but increased them at the top. The overall effect, though, is slight, says the report (pdf).

These extracts are from pages 32 and 33.

The new updated results [of research conducted for the MAC] show the same pattern of effects across the UK-born wage distribution as in the original study, with negative impacts at the bottom of the distribution and positive impacts at the top. In terms of magnitude, the estimates for all immigrants are similar to those from the original paper. These suggest that for a 1 percentage point increase in the EU-born working age population ratio there is an associated 0.8 per cent decrease in UK-born wages at the 5th and 10th percentiles, a 0.4 per cent fall at the 25th percentile and a 0.6 per cent increase at the 90th percentile.

Given the 6.4 percentage point increase in the EU-born working age population ratio between 1997 and 2017 the implied total effect on UK-born wages of EU immigration is of the order of a 5 per cent reduction to the 5th and 10th percentiles, a 2.5 per cent reduction to the 25th percentile and a 3.5 per cent increase at the 90th percentile. As previously stated this type exercise should be interpreted with caution as the model only estimates the short-run response to migration. Economic theory, and evidence, suggests that any short-run impact is likely to dissipate overtime.

Again, it is useful to place these estimates in context. Over this whole period, hourly real wages for UK-born workers increased by 55 per cent and 49 per cent at the 5th and 10th percentile respectively, 39 per cent at the 25th percentile and 35 per cent at the 90th percentile. These estimates therefore suggest that EU immigration had a relatively small impact on overall wage growth ...

Taken altogether the existing evidence and the analysis we presented here suggests that immigration is not a major determinant of the wage growth experienced by existing residents. There is some suggestion that the impact on lower skilled groups may be more negative than for higher-skilled groups, but again these estimates are imprecise and subject to uncertainty.

The Federation of Small Businesses says the migration advisory committee recommendations are “deeply concerning” for the small business community. This is from its chairman, Mike Cherry.

The MAC’s report is deeply concerning for the small business community. 21 per cent of small businesses in the UK employ someone from the EU and yet they will be the ones hit the hardest by the huge added costs and administrative burdens of the proposals outlined in the MAC’s report.

Our research shows that ninety-five per cent of small employers had never made use of the UK’s points-based immigration system to meet their business’ labour and skills needs. This is because of the costs and complexity of the system. Simply expanding the tier 2 general route to include EEA citizens will hurt small businesses, the wider economy and productivity. The damage will be worse for those businesses that work in sectors like hospitality, retail and care that are already facing chronic skills shortages.

Small businesses will be pleased to see the suggestion that focus should be given to mid-skilled workers, but disappointed not to see a concerted action plan around them. While access to high-skilled labour is vital to the UK’s small businesses, even more important to them are those who are mid-skilled - such as mechanics, care workers, office administrators.

The MAC recommendations have been strongly criticised by the Freight Transport Association. It says Britain’s logistics sector would “grind to a halt” under the recommendation that post-Brexit immigration policy should favour high-skilled workers.

Sally Gilson, the FTA’s head of skills, said:

The MAC report totally fails to recognise, and actively diminishes, the role of lower-skilled migrants within the UK’s economy, which is hugely disappointing from a logistics point of view.

The job roles covered by these workers are often based in areas of low unemployment where competition for workers is already high, so Britain’s supply chain could easily be at risk if they are forced to return to their home countries.

Britain employs around 500,000 EU citizens in low-skilled jobs, according to a recent report.

The FTA says 113,000 are in warehouses and 22,000 are van drivers. Gilson said:

Without them, schools, shops, hospitals and retailers, as well as manufacturers and homeowners, will all find it harder to access the goods they need in order to conduct their daily lives.

My colleague Pippa Crerar has been following John McDonnell’s Mumsnet webchat. Here are some highlights she’s picked out.

• McDonnell, the shadow chancellor, condemns harassment of Jacob Rees-Mogg’s children.

• McDonnell defends employing Jeremy Corbyn’s son.

• McDonnell says option of “people’s vote” on Brexit should be “on the table” if MPs vote down Brexit deal.

• McDonnell says the woman he admires most was his mother. She advised him to always be kind.

• McDonnell says he is trying hard to understand rival views on trans/women’s rights.

• McDonnell says he hopes next Labour leader is a woman.

And here is some reaction to the MAC report from thinktanks and academics.

From Stephen Clarke, senior economic analyst at the Resolution Foundation, a thinktank specialising in the needs of low and middle-earners

The migration advisory committee’s recommendations would, if accepted by government, represent the biggest change to the UK labour market in a generation.

If enacted these proposals would effectively end low-skilled migration, while prioritising mid- and high- skill migration in areas where we have labour shortages. This would represent a huge shift for low-paying sectors like food manufacturing, hotels and domestic personnel, where over one in five workers are migrants.

While it will take some time for the government to respond to this report, it is time those sectors started to prepare more proactively for change, including by looking at the need to invest in new technology, and recruiting from harder to reach parts of the existing UK population.

From Sunder Katwala, director of British Future, a thinktank focusing on integration, migration and diversity.

The MAC is right to recommend that high-skilled and low-skilled migration are treated differently in future. Most of the public would agree. That should also mean the end of the one-size-fits-all net migration target.

The report also rightly notes that funding to manage the local impacts of immigration on public services needs to get to the areas that need it most. Expanding the Controlling Immigration Fund would be one way to do this. In our research across the UK we found that local impacts make a real difference to how people view immigration.

This report should now prompt politicians to step up and lead the debate about how Britain will approach immigration after Brexit – a debate that’s been ducked and delayed for the last two years, causing frustration and mistrust on all sides.

It is missing a vital element, however – the voice of the public. Neither the MAC nor the government has engaged the public in the choices we now face on immigration. That’s a serious oversight - the national conversation on immigration found an urgent need to rebuild public confidence and consent in our immigration system, and greater public engagement would help to do that.

From Ryan Shorthouse, director of Bright Blue, a liberal Conservative thinktank

The migration advisory committee has provided evidence that cuts through the exaggerations of both sides of a very divisive debate, showing that immigration generally has no or very modest positive economic and social impacts.

The migration advisory committee has offered some strong suggestions for reforming our immigration system: abolishing the cap on tier 2 (general) visas and extending the tier 5 youth mobility scheme, as Bright Blue has been campaigning for.

But this report was a missed opportunity to propose significant reforms to our post-Brexit immigration system to ensure it is more effective, popular and contributory-based.

From Prof Jonathan Portes, a senior fellow at The UK in a Changing Europe, an academic network, who wrote a paper that contributed to the MAC report

Today’s report is backed up by the most comprehensive evidence and research ever produced on the impact of immigration on the UK. Contrary to fears that immigration might reduce the incentive for businesses to boost productivity, my paper suggests the opposite: immigration has a substantial and positive impact on productivity. Areas that see inflows of immigrants see productivity rise. Other papers show that immigrants – especially those coming from the EU – who arrived during 2016 are expected to make a large contribution, more than £25bn, to the public finances over their entire time in the country [see 11.16am], taking account of the taxes they pay and the service they consume, and that immigration has a positive, albeit small, impact on subjective well-being – how happy people are – at a local level. In other words, much of the scaremongering we’ve heard over the past few years has little or no basis in fact.

What does that mean for policy? The MAC are too polite to say so, but this report shows beyond doubt that the government’s economically illiterate net migration target should finally be put out of its misery. After Brexit, we will need immigration – for growth, productivity, and not least to help the public finances – more than ever. Since 2010, many aspects of UK immigration policy have been based not on analysis and evidence but on unpleasant and damaging nativism. This report provides an opportunity for our politicians to reverse that, if they have the courage to take it.

From Richard Brown, research director at the Centre for London, a thinktank focusing on the needs of London

This report highlights the positive contribution that highly skilled EU workers bring to London’s economy. Yes we need bankers, lawyers, tech specialists, but we also need low skilled workers too.

Nearly 30 per cent of London’s construction workers are from the EU. A huge number of European workers keep the city’s cafes, restaurants and hotels running. London’s design, artistic and tech start-ups benefit from London’s ability to draw workers from across the continent.

Expanding the youth mobility scheme to EU workers would enable young Europeans to fill some of the gaps, and changes to the tier 2 visa system are steps in the right direction - though the process will still be daunting for many small businesses. But we need a flexible system - one which maintains the frictionless movement of people - to help London meet its needs.

And here is a response to the MAC report from the CBI’s UK policy director, Matthew Fell. Like other business groups (see 12.42pm), the CBI is worried that the recommendations could increase labour shortages.

This report provides useful insights but is not a roadmap for a new system.

The findings are clear about the immigration dividend. Productivity and innovation benefit from migration, and training for UK workers increases. It finds barely any negative effects for jobs or wages for UK citizens ...

The current non-EU visa system is highly bureaucratic and cannot be extended to EU workers without major reform, so the MAC is right to recommend scrapping the tier 2 cap. But these proposals don’t go far enough.

But retaining the £30,000 salary threshold would block many essential workers from coming to the UK. Similarly, plans outlined for low-skilled workers are inadequate, and risks damaging labour shortages.

The government should now build on this evidence to pursue an open and controlled system that shows the UK remains open to the world, and make Global Britain a reality.

Jeremy Hunt, the foreign secretary, is in Japan for talks with his opposite number. He said he was “cautiously optimistic” that the UK and the EU would reach a deal on Brexit. He said:

I don’t think it’s brinkmanship. If we can’t come to an agreement, then the default is that we will leave the EU on the 29th of March.

So that could happen. But I don’t think it’s in anyone’s interest for that to happen. So that’s why we are cautiously optimistic that we will get a deal but there is a lot of work to do to get there.

He also urged people not to write off Theresa May, saying:

British politics is littered with the graveyards of people who have predicted the demise of Theresa May and been proved wrong. So I think she will succeed. Of course, Boris Johnson doesn’t agree with some of the policy decisions that she’s taken, but Theresa May has to speak not just for the 52% who voted for Brexit, she has to speak for 100% of the country and she has to find a way that builds bridges and unifies the country and that’s what I’m confident she will do.

Sadiq Khan, the Labour mayor of London, says the government should not respond to the migration advisory committee report by reducing immigration after Brexit at the expense of growth.

UPDATE: And here is Khan’s statement on the report in full.

This report is a missed opportunity to protect jobs and economic growth that are at grave risk from Theresa May’s appallingly mishandled approach to Brexit, and from a government that is only motivated by its ideological and economically illiterate migration target – regardless of the cost to real people

London’s entrepreneurialism and economic growth is partly down to the flow of ideas and people from Europe and around the world. British businesses will pay a heavy price if the government fails to protect their access to a European workforce at all skill levels in the future. Of course more must be done to give local workforces the skills needed for the jobs of the future – but responsibility for this lies squarely with this government, who have consistently failed to invest enough in education, skills and training.

Any decision by this government to prioritise reducing immigration at the expense of economic growth will damage our country for years to come.

A no-deal Brexit will make it harder for police to protect UK citizens as forces fall back on “slower, more bureaucratic” systems, one of the country’s most senior officers has warned. As the Press Association reports, Sara Thornton, chairman of the National Police Chiefs’ Council, spoke as plans were unveiled for a new unit that will oversee how forces use alternative systems if the UK crashes out if the EU in the spring. She said:

The fallbacks we’re going to have to use will be slower, will be more bureaucratic and it will make it harder for us to protect UK citizens and make it harder to protect EU citizens.

There are 40 tools that UK law enforcement may lose access to, including the European Arrest Warrant and the Schengen Information System, which was accessed 539m times by British authorities last year alone, the Press Association reports.

This chart from the migration advisory committee report is very useful. It sets out its conclusions as to what impact EEA immigration (ie, EU immigration, plus Norway, Iceland and Liechtenstein) has had in a wide range of areas. The table is in the report (pdf) on pages 108 and 109.

Here are some key points from the foreword to the migration advisory committee’s report from its chairman, Prof Alan Manning.

• Manning says the impact of migration overall has been modest and that the fall in the value of the pound after the Brexit vote has had a bigger impact on living standards.

While we do think that EEA migration has had impacts, many of them seem to be small in magnitude when set against other changes. The fall in the value of the pound after the referendum vote to leave the EU probably raised prices by 1.7 per cent - this is almost certainly a larger impact than the effect on wages and employment opportunities of residents from all the EEA migration since 2004, although over a different time period.

The small overall impacts mean that EEA migration as a whole has had neither the large negative effects claimed by some nor the clear benefits claimed by others. There are ways in which migration policy could be changed to increase the benefits and reduce the costs and our policy recommendations focus on what we believe these changes should be.

• He says that, although free movement does not always cause problems, the MAC would not recommend it as policy for after Brexit.

If – and this is not a MAC recommendation – immigration is not to be part of the negotiations with the EU and the UK is deciding its future migration system in isolation, we recommend moving to a system in which all migration is managed with no preferential access to EU citizens.

This would mean ending free movement but that would not make the UK unusual – for example, Canada has an open, welcoming approach to migration but no free movement agreement with any other country. The problem with free movement is that it leaves migration to the UK solely up to migrants and UK residents have no control over the level and mix of migration. With free movement there can be no guarantee that migration is in the interests of UK residents. This does not mean that free movement is guaranteed to cause problems – that likely depends on the level and mix of the migration flows that result. Free movement was not a political issue prior to 2004 when EU migration was relatively low. The flows are now falling sharply and there are some reasons to think those falls will continue in the near future. The UK may find itself in the position of ending free movement just as public concern falls about the migration flows that result from it.

• He says offering concessions on immigration could be useful in the Brexit negotiations, but that the MAC is not recommending this.

We do not express a view on whether immigration should be part of the EU negotiations. The biggest gainers from migration are often the migrants themselves so preferential access to the UK labour market would be of benefit to EU citizens, potentially something of value to offer in the negotiations. We are not in a position to evaluate what might be on offer in return or to assess how absolute is the commitment of the EU to the principle of free movement.

• He says the MAC recommends a system that makes it easier for higher-skilled workers to come to the UK than lower-skilled workers, but that EU and non-EU workers should be treated the same. (The report refers to European Economic Area workers, not EU workers - ie, the EU, plus Norway, Iceland and Liechtenstein - but I am using EU here and elsewhere for clarity.)

If the UK is in a position where it is deciding the main features of its immigration policy our recommendation is that there should be a less restrictive regime for higher-skilled workers than for lower-skilled workers in a system where there is no preference for EEA over non-EEA workers. Higher-skilled workers tend to have higher earnings so make a more positive contribution to the public finances. The estimated labour market impacts, though small, also suggest that higher-skilled workers are of greater benefit as do any impacts on productivity and innovation. A shift towards higher skilled migration aligns with the Government’s industrial strategy published last year.

• He calls for the cap on the number of skilled workers admitted through the tier 2 system to be lifted.

We recommend that the cap is abolished – it creates uncertainty among employers and it makes little sense for a migrant to be perceived as of value one day and not the next which is what inevitably happens when the cap binds.

• He says work permits should not be issued to lower-skilled workers.

For lower-skilled workers, we do not see the need for a work-related scheme with the possible exception of a seasonal agricultural workers scheme; as that labour market is totally distinct from the labour market for resident workers. This does not mean there would be no supply of low-skilled migrant workers – most of the existing stock would remain and there would likely be a continued flow through family migration or the existing youth mobility scheme. We know that some sectors will lobby intensively against this proposal. If there is to be low-skilled work route we do not think it should be based around sectors: an extended youth mobility scheme would be preferable, as is suggested in the government white paper published in July.

• He says the MAC is “seriously concerned” about social care, but that this needs more than just a migration fix.

We are seriously concerned about social care but this sector needs a policy wider than just migration policy to fix its many problems. This is one illustration of a more general point, that the impacts of migration often depend on other government policies and should not be seen in isolation from the wider context.

Free movement from the European Union should end after Brexit and the UK should embrace a Canada-style system in which there is no preferential access to the British labour market for EU or the citizens of any other country, according to the government’s migration advisory committee (MAC).

The MAC report, which is intended to advise ministers on how to proceed after Brexit, concedes it may not be possible to achieve country-neutral system because the UK may not have an entirely free hand in determining migration policy after the UK leaves because the final policy will be subject to exit negotiations with the EU.

But it concludes that if “immigration is not to be part of the the negotiations with the EU and the UK is deciding its migration system in isolation, we recommend moving to a system in which all immigration is managed with no preferential access to EU citizens”.

It said the model would be akin to Canada which has “an open, welcoming approach to migration but no free movement agreement with any other country.”

The MAC was set up by Amber Rudd when she was home secretary to inform the UK’s migration policy after Brexit and is designed to inform a forthcoming white paper that has repeatedly been delayed but is due this autumn.

EU citizens have, until now, been able to enter the UK freely, seeking work on arrival, and concerns about the impact of free movement is considered to be one of the central reasons why the country voted for Brexit, but the report is likely to strengthen the hand of those who wanted to take a tough stance in Britain’s Brexit negotiations.

The MAC report says that there has a been small impact on wages and employment in the UK, arguing it has thad “neither the large negative affects claimed by some, nor the benefits claimed by others”.

But it also argues that because “the biggest gainers from migration are often the migrants themselves” British ministers should see preferential access to the UK labour market as “something of value to offer in the negotiations” with the EU over the UK’s exit.

Any future policy determined by the UK should favour higher skilled workers over lower skilled ones, the MAC advises, and says there should be no sector specific migration schemes except possibly for one to supply seasonal labour in agriculture.

Dominic Raab, the Brexit secretary, has given a joint interview to journalists from various European papers, including Germany’s Die Welt, France’s Le Monde and the Irish Times, ahead of the informal EU Salzburg summit starting tomorrow. In it, he said it was the EU’s turn to compromise. He said:

We’ve made the compromises and we showed the ambition and we do need to see that matched on the EU side. So Salzburg is an informal EU summit but it will be an important milestone, a stepping stone if you like, to show that we’ve actually got the contours of agreement on principles to continue the final weeks of these negotiations and hammer out the details.

In the interview Raab restated the government’s view that the EU plan for the Irish backstop (a last-resort plan to avoid a hard border in Ireland after Brexit, if other elements in the deal don’t achieve that) was unacceptable. But he said the UK would consider new ideas from the EU.

What I’m not going to do is to say that I would refuse to entertain any further proposals that the EU comes up with but they’ve got to be respecting the equities that we’ve set out.

He also said the government would not “facilitate” a referendum on the final Brexit deal and that, even if people wanted one, there was not enough time for it to happen.

Even if that’s what people want to do, it’s difficult to see how it could be done in time, and we wouldn’t facilitate it.

That meant, if the Commons were to reject the Brexit deal, the UK would be heading for a no deal Brexit, he said.

In reality, if we got to the situation where we had a deal and it was voted down ... you would risk tripping up into the no-deal scenario because there would be such a tight timeframe.

The Brexit talks are moving towards their climax (or their first climax - if, as seems possible, the UK leaves with a version of a “blind Brexit”, we’ve got another 21 months of negotiations to cover) and today’s Guardian splash has a headline, based on an EU briefing, that captures some of the drama.

Talking of climaxes, Sir Vince Cable, the Lib Dem leader, will use some fruity language to attack Brexiters when he delivers his keynote speech at the end of the Lib Dem conference this afternoon. He will says that Tory leavers are getting an “erotic spasm” from Brexit.

For the ‘true believers’ – the fundamentalists – the costs of Brexit have always been irrelevant.

Years of economic pain justified by the erotic spasm of leaving the European Union.

Economic pain felt – of course – not by them by those least able to afford it ...

The public don’t mind what these people dream about behind closed doors – so long as their dreams don’t become nightmares for the rest of us. It really beggars belief that the army and the police are now being asked to prepare for riots in the chaotic aftermath of a botched Brexit.

And billions – billions – of taxpayers’ money spent preparing for disaster.

When he drafted his text Cable may have had in mind, consciously or unconsciously, Aneurin Bevan’s famous speech to the Labour conference in 1957 denouncing support for unilateral nuclear disarmament as an “emotional spasm”. (You could get a half-decent essay question out of: Brexiters and Unilateralists - Compare and contrast.)

In other developments, this morning Donald Tusk, the president of the European council, has confirmed that an emergency summit is being planned for November to finalise the Brexit deal. In an open letter to EU leaders ahead of the informal summit in Salzburg starting tomorrow, he said:

We will meet over lunch at 27 with our chief Brexit negotiator, Michel Barnier. With only six months to go before the United Kingdom’s withdrawal from the EU, we are entering the final weeks of negotiations. Therefore, I want us to review progress in these talks and to discuss the way forward with three objectives in mind.

First, we should reach a common view on the nature and overall shape of the joint political declaration about our future partnership with the UK.

Second, we will discuss how to organise the final phase of the Brexit talks, including the possibility of calling another European council in November.

Third, we should reconfirm the need for a legally operational backstop on Ireland, so as to be sure that there will be no hard border in the future. Let me recall that limiting the damage caused by Brexit is our shared interest. Unfortunately, a no deal scenario is still quite possible. But if we all act responsibly, we can avoid a catastrophe.

Here is the agenda for the day.

10am: The migration advisory committee publishes its final report on EU migration to the UK. Prof Alan Manning, the MAC chair, will hold a press briefing.

11am: John McDonnell, the shadow chancellor, takes part in a Mumsnet webchat.

11am: Sara Thornton, chair of the National Police Chiefs Council, holds a briefing on policing and Brexit.

2.10pm: Sir Vince Cable, the Lib Dem leader, gives his keynote speech at the end of the Lib Dem conference in Brighton.

We’ve also got Labour’s national executive committee meeting today. As Jessica Elgot and Heather Stewart report, there is expected to be a row between Momentum and trade unions over future leadership rules, after last-minute proposals were tabled for radical party reforms.

As usual, I will also be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to post a summary at lunchtime and another when I wrap up, probably at around 5pm.

Here is the Politico Europe round-up of this morning’s political news. And here is the PoliticsHome list of today’s top 10 must-reads.

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