Arguably the major stumbling block in Brexit negotiations concerns the relationship between membership of the Single Market, and the acceptance of EU provisions on the free movement of workers. A number of commentators have already analysed the options, and weighed up their feasibility. See for example the blog by Jonathan Portes on this, and a recent FT article. Here’s my take on the question. I pay particular attention to the question of political feasibility – both in terms of the EU’s potential to accept one of these deals, and its marketability to Leave voters concerned about immigration.
As one of the ‘four freedoms’, the movement of workers is generally viewed as a core condition of participation in the Single Market. A number of Member States and the Commission have recently restated their position that the commitment to free movement of workers is a non-negotiable part of Single Market access. This may reflect immediate political concerns, as much as a commitment to the fundamental principles of the EU: namely, the need to send an unequivocal signal to Euro-sceptic countries or political parties that a country leaving the EU can cherry-pick provisions.
In principle, one could imagine at least three models for securing some concession on free movement of workers:
- More stringent limitations on access to welfare or other rights.
In February 2016, David Cameron’s government negotiated a number of concessions on free movement. While other Member States resisted any provision that would enable the UK to limit the free movement of workers (though see below for a qualification of this), they were more favourable to conditions limiting access of workers to welfare benefits, which was seen as consistent with the rationale underpinning this freedom. It has been suggested that these terms could be extended, for example through only admitting EU immigrants who already have a job offer (though it is very difficult to see how this could be enforced, given that EU nationals are entitled to enter the UK without a visa). Another alternative would be to limit the rights of EU nationals to stay in the UK beyond 3 months, unless they had found work (although it may be difficult to justify this requirement if they could demonstrate they were self-supporting). In effect this would be a more stringent enforcement of existing provisions.
However, this route does not look promising. Cameron’s February deal was interpreted by the UK media and Euro-sceptics (and indeed by this blog) as largely symbolic, and failed to reassure voters that it would mitigate any welfare costs associated with immigration (which in any case are widely considered to be minimal). Since then the debate on EU mobility has been framed very clearly around numbers of immigrants, and their more general impact on public services and jobs, rather than welfare costs. So it is unlikely that further concessions in this area would allay concerns about control of EU immigration.
- A quota or cap on EU nationals.
This might be similar to the cap unilaterally announced by the Swiss government after its 2014 referendum. Switzerland has set a cap on annual immigration flows, which it is planning to apply to EU nationals from 2017 onwards. This has encountered serious opposition – and retaliatory measures – from the EU, which does not consider this consistent with Single Market access. A similar idea for a cap was informally mooted by Theresa May in December 2013, in a document suggesting there could be an annual cap of 75,000.
However, it is difficult to see how such a cap would be acceptable to the EU, especially given its clear rejection of this approach in relation to the Swiss. The EU has recently been discussing options for a safeguard mechanism whereby the Swiss could introduce a cap in sectors or regions where it was accepted by the EU that unemployment was well above the national average. It is possible that, were such arrangements to be agreed, they could be seen as a model for UK restrictions. It is difficult to see how the UK could justify restrictions based on regions (given that it does not collect systematic data on regional immigration, or indeed set regional quotas as the Swiss do). The sectoral or occupational approach may be more promising, e.g. with limitations imposed in those sectors facing highest unemployment (though this would require some system for monitoring the employment of EU nationals – see below).
- An ‘emergency stop’, involving a temporary halt to EU immigration based on exceptional circumstances.
This appears to be the most promising option. There are three precedents to build on here. The first is the EEA agreement, which includes ‘Safeguard Measures’ permitting parties unilaterally to limit EU immigration if serious economic, societal or environmental difficulties of a sectoral or regional nature arise and are liable to persist. This has been invoked by Liechtenstein, which currently has separate arrangements enabling a cap on levels of EU immigration – so similar to the sort of annual cap arrangement discussed under 2. (although under far more acute pressure in terms of per capita immigration flows than is the case for the UK. Here’s an excellent legal briefing on the EEA mechanism and Liechtenstein’s special deal).
The second precedent is the transitional provisions on free movement available to Member States in the event of the accession of new countries. These provisions allow states to limit free movement for up to 7 years. Interestingly, after the first 5 years transitional provisions for a further 2 years must be justified based on ‘serious disturbances on the labour market, or the threat thereof’. A state that has lifted transitional provisions may also request to re-instate them (within the 7 year period), again based on similar grounds. In a 2004 briefing on these arrangements, the Commission (DG Employment) notes: ‘These “safeguard” clauses have always featured in accession Treaties, but have never been invoked. Therefore the Commission has no practical experience in their operation. However, it is clear that the Commission would expect a Member State to put forward convincing proof of a high level of disturbance on the labour market, in order to justify seeking to re-impose a restriction on free movement of workers, one of the four fundamental freedoms under the EC Treaty.’ So here we find another example of how one might justify an exemption to free movement of workers.
The third precedent is the emergency stop limiting welfare access mentioned above. The so-called ‘alert and safeguard mechanism’ agreed in the European Council declaration of February foresaw setting up provisions to respond ‘to situations of inflow of workers from other Member States of an exceptional magnitude over an extended period of time, including as a result of past policies following previous EU enlargements.’ Such inflow would need to be ‘on a scale that affects essential aspects of its social security system, including the primary purpose of its in-work benefits system, or which leads to difficulties which are serious and liable to persist in its employment market or are putting an excessive pressure on the proper functioning of its public services.’ It was assumed that the UK would be deemed to meet these criteria.
While these provisions were intended to justify imposing restrictions on access to in-work benefits, the agreement suggests that there would be a way of formulating criteria justifying an emergency stop in a way that the UK would qualify. It is also interesting to note that the justification of these measures referred to the restriction of free movement, rather than (just) limiting access to welfare benefits: the declaration states that ‘if overriding reasons of public interest make it necessary, free movement of workers may be restricted by measures proportionate to the legitimate aim pursued’; so the restrictions on welfare are clearly designed to limit inflows, rather than (just) reduce its fiscal burden.
So there are plenty of precedents to build on in designing a stop. Of course, there are various practical challenges in implementing such a provision. It assumes that the UK government would be able to keep an accurate record of those who had entered/worked in the UK prior to the introduction of the emergency stop (for example by monitoring who had already been granted a NI number). An emergency stop based on an annual cap (rather than an outright stop) would also require the government keeping track of the number of those who had entered – for example through reinstating the Worker Registration Scheme, introduced in 2004 for A-8 nationals, as a condition of employment; or through NI registrations.
Note that the EU 2004 Citizens Directive allows that:‘For periods of residence of longer than three months, Member States should have the possibility to require Union citizens to register with the competent authorities in the place of residence, attested by a registration certificate issued to that effect.’ And it further assumes that the government would need to enforce such a registration scheme rigorously (or other forms of internal controls) to avoid EU nationals entering the UK and working on an irregular basis (without registering with the WRS or NI system. Such registration would be especially important given that – as in the case of post-accession transitional arrangements – EU nationals would presumably still be entitled to enter and stay in the UK (but just not to access the labour market).
A second issue relates to the selection of EU immigrants: concerns over EU immigration tend to revolve around those taking up low-skilled jobs, rather than those moving into high-skilled occupations, or those filling acute shortages. In the event of imposing such an emergency stop, it is possible that the UK could continue to recruit selected EU immigrants based on existing schemes for non-EU nationals (Tier 1 or Tier 2), or through a new points-based system (although arguably Tier 1 already offers a model for such a system, so talk of a ‘new points-based system’ is arguably redundant). Alternatively, the government could set up a separate scheme specifically targeted at EU nationals, but with additional requirements linked to skills/ qualifications, income, job offer or occupation.
The other problem with this approach is its necessarily limited duration. Such a stop would most likely be no longer than 7 years duration (similar to the post-accession transition provisions). 7 seems to be the magic number for such mechanisms. This may not be a sufficiently substantial concession to win over pro-Leave supporters who based their decision on concerns about immigration control.
That said, the dynamics of EU immigration suggest that such a stop might have a longer-term impact on mobility. Immigration flows – especially of low skilled migrants – tend to be heavily influenced by ‘migrant networks’: once immigration from a particular region is initiated, communication flows and support mechanisms between sending and destination regions reinforce such flows, creating a self-perpetuating effect. Curtailing such movement over a period of several years may result in suppressing these dynamic effects, thus having a longer-term dampening effect on flows. It should also be noted that immigration flows from A-8 countries appear already to be declining. Inflows from Mediterranean countries affected by economic crisis may have improved within the 12 or so years it might take for such an transitional phase to come to an end (assuming 5 years of negotiation plus 7 years emergency stop).
Finally, it is possible that such a compromise could emerge as more palatable to EU member states where (a) the UK accepts an EEA-type status, so that the concession is granted as part of a deal for non-EU countries (and building on the precedent of existing EEA terms, see above); (b) more generally, the UK is seen as being sufficiently ‘punished’ for Brexit, e.g. through the demotion to EEA-type status under which it foregoes many of the benefits of EU membership while assuming what it considers to be many of its ‘burdens’.
In sum, a combination of Single Market access – as an EU member, or with an EEA-type status – and an emergency stop to free movement could offer a promising approach to retaining Single Market access whilst at least partially allaying public concerns about immigration control. A robust and compelling case would have to be made domestically to convince Leave voters that such a measure would imply regaining ‘control’ over immigration.