European Union

European Union: MW 429

Britain’s departure from the EU

1. On 23rd June 2016, the UK held a referendum in which over half, 52%, of the electorate opted to leave the EU.

2. The Prime Minister formally signalled Britain’s intention to leave the EU on 29 March 2017. This triggered a two-year period, during which the terms of withdrawal and the future relationship are to be negotiated. Unless this two-year period of negotiation is extended by a unanimous vote, Britain will leave the EU on 29 March 2019.

See here to read a short history of the European Union.

Free movement of people between the EU and the UK

3. It is widely agreed that concern about the scale of immigration to the UK – from EU and non-EU countries – contributed significantly to the decision to leave the EU.

4. There are currently around 3.5 million EU nationals living in the UK (and one million British nationals living elsewhere in the UK). Many have been living in the UK for a very long period.

5. Between 1975 and 2003, net migration from the EU was only about 8,000 a year. However, since 2004, when the EU was expanded to include the eight East European nations, net migration from the EU has been about 125,000 a year. At the time the then Labour government decided not to impose transitional controls on new workers while most other countries did so (only Ireland and Sweden opened up their labour markets to the 70 million new citizens). This meant that the majority came to the UK during the seven year transitional period.

6. In 2007, Romania and Bulgaria (the EU2) joined the EU. Since transitional controls were lifted in 2014 an average of 50,000 net migrants have arrived from these two countries alone, the exact level predicted by Migration Watch UK. (See here for our 2013 estimate of future migration from Romania and Bulgaria.)

7. Meanwhile, the economic crisis which engulfed the Eurozone resulted in very high levels of unemployment across Southern Europe and significant additional movement to the UK.

Who are the UK’s EU residents?

8. Of the 3.5 million EU born people in the UK, 1.6 million are from the old Western European nations and the rest are mainly from East Europe. 2.4 million are in employment, with the remaining 900,000 being either students, retired or, perhaps, working in the home.

9. The economic profile of EU migrants varies according to whether they are from the EU14 or the EU10. Workers from the EU14 perform better than their UK born counterparts in terms of their employment rate, earnings and rate of benefit claim. Meanwhile the EU10 are more likely to be in work than the UK born but fare worse in terms of their earnings and their rate of benefit claims. (See here) The fiscal contribution of all EU migrants is estimated to be around zero, meaning that they pay about as much in tax as they take in benefits. (See here)

10. It is often claimed that between 2000 and 2011 recent migrants from the EEA contributed £20 billion to the Exchequer. This is based on a UCL paper published in 2013 which made very favourable assumptions. More realistic assumptions bring this contribution down to zero. (See this more detailed summary of the economics of EU migration here)

What will happen to EU migrants after Brexit?

11. The British government has guaranteed that EU migrants living in the UK, and who qualify for permanent residence, will be allowed to remain. However, there is at present an anomaly because EU nationals resident in the UK have the right to bring in relatives without restriction under EU law. British citizens have to meet an income requirement to bring in a spouse or fiancé(e). (For more on this see here) It would be unfair on British nationals and settled residents if EU nationals living in Britain were to continue to have the right to bring family members with no restrictions.

Future Migration from the EU

12. It is important to be clear that we are leaving the EU but we are not leaving Europe. It is therefore essential that we should retain and develop our personal, cultural and historical links with our partners and neighbours. We therefore believe that EU visitors, tourists and students should continue to have visa-free access to the UK (and vice versa).

13. As for EU workers, they are highly valued by their employers but that is not to say that continued net flows are required in the future. (For more on this see here). Some have expressed concern about an exodus of EU workers. This has not materialised. Indeed, 130,000 more EU migrants arrived in the year to March 2017 than left the country. It is important also to remember that the present stock of workers can be maintained with zero net migration, in effect “one in and one out”.

14. It is essential that free movement comes to an end when Britain leaves the EU in March 2019. If free movement was to continue we estimate that EU migration would continue at around 125,000 a year for the foreseeable future. (See here).

15. The majority of EU migrants have come to the UK for work so we propose that they should be brought into the existing work permit system which limits economic migration to those offered a highly skilled job. See here for our comprehensive proposal on future EU migration

16. In the longer term this could reduce EU migration by around 100,000 a year from recent levels. (See here)

17. In addition, we believe that young EU citizens should be allowed to come to the UK under an expanded Youth Mobility Scheme. The scheme currently allows those from a number of countries (such as Australia, Canada, South Korea etc.) to come to the UK for a maximum of two years. Under the scheme, young people can work in any job but there is no access to benefits and those with dependant children are not eligible. This scheme would not add to net migration in the long term because, after two years, those who arrive will be counterbalanced by those who leave. Nevertheless, these young people could be helpful to sectors such as hospitality.

18. There may be a case for reopening the Seasonal Agricultural Workers Scheme under which EU workers would be permitted to enter and work for a maximum of six months. Again this would not add to net migration. New Zealand runs an effective scheme (See our overview of the New Zealand Seasonal Employer Scheme here)

18 December, 2017

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