Brexit on Migration: Mad Dash Imminent?

Brexit has stimulated much debate as to the impact it would have on the global economy.

The magnitude of the economic costs and benefits of Brexit cannot be known with certainty before the event.

Key Statistics:

In the year ending March 2015:

  1. Immigration = 636,000 (up 84,000)
  2. Emigration = 307,000 (down 9,000)
  3. Net migration = +330,000 (up 94,000):
  • EU citizens = 183,000 (up 53,000)
  • Non-EU citizens = 196,000 (up 39,000)
  1. Immigration for work = 290,000 (up 65,000):
  • EU citizens = 162,000 (up 28,000)
  • Non-EU citizens = 64,000 (up 16,000)
  • EU2 citizens (Romania and Bulgaria) = 53,000

migration

Note:

  1. Immigration to the UK
  2. Emigration from the UK
  3. Net migration is the difference between immigration and emigration
  • Positive value = more people entering the country
  • Negative value = more people leaving the country

Brief:

The UK has benefited greatly from being in the EU as most migration has traditionally come from outside Europe. Currently, EU migration makes up almost half of the non-British immigration. Over the past couple of years, there have been policies designed to reduce immigration from the hundreds of thousands to the tens of thousands. This has been evidently unsuccessful as net migration has stood at an average of 200,000 since the year 2014.

Immigration from the EU has boosted the workforce in the UK by around 0.5% a year and this has helped support the economy’s ability to grow without impacting wage growth and inflation while keeping interest rates relatively low.

Likely immigration impact:

1. Membership – to – Association:

With Brexit, the question is to the impact to the workforce that has greatly benefited from being in the EU. If the UK wants to retain access to the single market, then it may have to keep the free movement of labour agreement between the single market and itself. This means that its membership to the EU may be replaced by an association of some kind so as to have free movement of labour.

Countries such as Norway – through the European Economic Area (EEA) – and Switzerland – through its agreement to be part of the single market – have both implemented free movement of labour as part of their economic cooperation agreements with the EU. This means that their nationals have the same rights to live and work in the UK as other EEA nationals. Relationships will therefore be key at this point.

Note:

The European Union (EU) is an economic and political union of 28 countries. It operates an internal (or single) market which allows free movement of goods, capital, services and people between member states.

EU countries

The EU countries are:

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.

The European Economic Area (EEA)

The EEA includes EU countries and also Iceland, Liechtenstein and Norway. It allows them to be part of the EU’s single market.

Switzerland is neither an EU nor EEA member but is part of the single market – this means Swiss nationals have the same rights to live and work in the UK as other EEA nationals.

2. Introduction of admission requirements

This could mean that EU citizens would face the same rules as non-EU citizens while migrating to the UK. This essentially means that that EU citizens would have to qualify for work or family unification with temporary migration e.g. applying for a student visa is the most likely initial route thereafter having to qualify for work or family visas in order to stay on after their studies.

Most recently, it has been estimated that 66% of EU citizens moving to the UK for more than 1 year stated work as being the main reason for migration while 19% stated study and 10% reported family. This signals that the most important visa under consideration would be the work visa whose rules will be crucial in determining whether EU citizens will still be able to migrate to the UK.

Commentary note:

“Work visa rules would therefore be crucial in determining which EU citizens were still able to come to the UK. Under current immigration rules, non-EU citizen workers must usually be sponsored by an employer for a skilled job. Until recently, the skilled job had to pay at least £20,800 per year, but for various technical reasons related to the cap on skilled work visas (which means that the minimum salary varies depending on the number of applications) that level has fluctuated between £24,000 and £46,000 since June 2015.” Source: ukandeu.ac.uk

Since the labour force migrating to the UK mostly comprises of low-skilled laborers it means that these requirements would be difficult for many of them to meet. There is the possibility of a policy change that will favour highly skilled workers compared to the low skilled labour. This will be more in line with UK’s migrant requirements.

Overall impact:

Since it may be much harder for EU citizens to migrate to the UK due to skills and earnings requirements, then it is safe to state that there may be an increased pressure on illegal migration and employment. This is because many UK employers have enjoyed a good supply of EU workers in low-wage jobs.

There is also a possibility that there will be a surge in migration to the UK as EU citizens seize the opportunity to move before the rules change.