In previous blogs, I’ve explored the possibility of a deal that combines Single Market access with some restrictions on free movement. Legally and technically, this still seems possible, and there are certainly precedents that could be built on. But it’s looking more and more remote in political terms – especially given the more hardline approach being articulated by Theresa May on free movement, and increasing anxiety among EU leaders about a Brexit ‘contagion’ effect.
So let’s assume the UK negotiates a deal involving withdrawing from provisions on free movement. What sort of immigration policy would be likely to follow? Perhaps somewhat counter-intuitively, I would suggest policies will seek to preserve current flows of EU immigration as far as possible.
First, we shouldn’t expect to see a substantial decrease in the volume of EU immigration. There will be strong pressures to protect immigration flows for businesses and service providers in those sectors heavily dependent on EU nationals. Where such dependency exists, it will be extremely difficult for the government to restrict flows. Indeed, this has been the clear lesson from the Conservative attempt to limit non-EU immigration since 2010. Despite introducing an array of measures to try to meet its net migration target, it has failed to reduce non-EU flows, largely because of the substantial costs that would accrue to business and higher education. If non-EU flows were so difficult to restrict, there’s no reason to think EU flows will be any easier to limit.
Indeed, many leading Brexiteers were keen to stress that leaving the EU was not about reducing immigration per se, but controlling which immigrants we admit. So we shouldn’t expect a huge change in the volume of flows, or the sectors and occupations in which EU immigrants work.
Neither should we expect a significant change in the composition of flows. There will be good reasons to sustain current EU flows. Businesses will have adapted to recruiting and employing workers from particular countries or places. They may rely on employees with particular linguistic skills, knowledge of local markets or contacts. And not least, the UK government may want to create channels for EU immigration as part of reciprocal agreements. So there may be a case for sustaining current patterns of inflow to ensure similar outflows of UK nationals to particular EU countries can continue.
This all implies that the UK will have a strong interest in creating new or expanded channels to recruit a good proportion of those EU immigrants who would previously have entered via free movement provisions. So what sorts of policies might best support these flows?
May’s government has shown little enthusiasm for the sort of points-based system previously advocated by Gove and Johnson. However, the government might want to consider introducing some other kind of human capital-based system for attracting high skilled EU workers. This could be something along the lines of the ‘fresh talent’ scheme for EU graduates. This scheme allowed graduates of Scottish universities to work for up to 2 years in Scotland, and then either leave or switch to another visa scheme. It would be a good way to ensure an ongoing supply of EU students to UK universities – which is likely to be a priority post-Brexit. And it would imply a continued flow of young, qualified graduates with good knowledge of UK life, but with a clear limit to the duration of the scheme.
Beyond targeting graduates or introducing a points-based system, there are two main options for sustaining high skilled EU immigration. The first is an expansion of the current 5-tier system. The government could expand Tier 2 to allow more skilled EU immigrants to be employed in the UK, including through intra-company transfers, and the occupational shortage list. However, it may be difficult to prioritise EU nationals under the existing scheme. Non-EU governments whose nationals are currently admitted under the Tier system may be concerned their nationals will be displaced, and such a two-track scheme may be complex to explain and cumbersome to administrate.
A second scenario, therefore, is a series of bespoke arrangements for EU nationals. For example, the government could introduce a more lax residency test for EU nationals, allowing employers to recruit them for jobs that can’t be filled by UK nationals (e.g. after advertising nationally for a set period). Or they could identify occupations, skills or sectors for which employers are permitted to recruit EU nationals (similar to the current occupational shortage list). A third alternative would be to allow those with qualifications in a relevant occupation or sector (e.g. ICT ) to enter the UK for a specified period to look for work (a model for this would be the German Green Card scheme). Such schemes would need to be relatively attractive in terms of length of stay and residency rights, to appeal to highly qualified immigrants.
What of low-skilled work? We know that a large proportion of EU immigrants fill jobs at the lower end of the skills spectrum, for example in hospitality and catering, health and social care, manufacturing and construction. An end to free movement will cause just as much disruption for this part of the labour market. Here, I suspect the government will be more circumspect about introducing new schemes for recruiting EU immigrants. While there appears to be public support for high-skilled migrants, public anxiety has tended to focus on workers filling lower-skilled jobs.
But eliminating demand for such labour would require radical restructuring in a number of sectors, and/or providing sufficient incentives for domestic workers to meet gaps in labour supply. In many cases, such as seasonal jobs or jobs in remote areas, it may be impossible to address shortages without relying on foreign labour. It is therefore likely that the government will need to introduce flexible schemes for sustaining labour supply for certain low-skilled occupations. One option would be to use the (as yet unused) Tier 3 of the current system. However, I suspect the government is more likely to opt for temporary or seasonal schemes where it can. Not only do such schemes allow more flexibility in recruitment, they also imply immigrants will only stay for a short period, thus reducing concerns about integration and impacts on public services. Where immigrants stay for under 12 months, it also means they won’t show up on the net migration statistics, and so will remain under the radar of the government’s net migration target. So for both practical and political reasons, lower-skilled jobs may be the object of temporary labour programmes, possibly administered via bilateral agreements with those EU countries that currently supply large numbers of workers.
In short, I think we can expect a post-Brexit immigration policy to largely replicate current inflows of EU nationals, in terms of both volume and composition. But it will do so in a way that is far more cumbersome and bureaucratically burdensome. And, especially for those employed in low-skilled and temporary work, it will imply a far less attractive bundle of entitlements and labour standards. This, in turn, may even contribute to a higher risk of EU workers undercutting UK nationals, through accepting lower salaries and more precarious conditions. This may be good news for businesses employing EU workers. But it’s hardly good news for EU nationals, and is surely not what was intended by ‘taking back control’.