1. The general salary threshold of £30,000 for skilled work visas is justified and should be retained. Salary thresholds have previously been endorsed by the Migration Advisory Committee (MAC) and OECD as, respectively, a fair measure of an employee’s economic value and as a suitable proxy for skills. In the context of our immigration system, salary thresholds:
   1. curb the large fiscal cost of immigration
   2. place upward pressure on wages
   3. curtail undercutting of UK jobs
   4. act as a control on numbers (in line with the views of most Brits).
   Exceptions to the main threshold should be largely phased out; additional variations should not be introduced. See Annex A for our findings on the number of jobs that would be potentially affected if the previous White Paper proposals are implemented and the salary threshold is lowered. See Annex B for arguments for keeping the general £30,000 salary threshold in place.
2. Immigration reforms should strongly encourage employers and government to boost the skills of UK people, while improving wages, conditions and productivity growth. Ensuring effective control of skilled immigration and lessening employers’ propensity to turn overseas for labour, will help to tackle undercutting / displacement of UK applicants. It will also aid in the necessity of respecting the majority public view that skilled migration levels should not increase (YouGov, Ipsos), and that overall levels of immigration (particularly non-EU immigration) should decrease. Improvements should incorporate key components of the Australian (and other) immigration system(s), including:
   1. An overall cap on skilled work permits, set by Ministers, to ensure a transparent, responsive and democratic control on immigration.
   2. Applicants to the PBS should be qualified in an occupation that is listed on a designated skills list (as in Australia) and have a job offer that meets a minimum salary threshold. Entry should only be allowed when it genuinely benefits the UK; not only when it satisfies narrow employer interest.
   3. labour market testing should be retained (as in Australia, Canada, Austria and New Zealand) to protect UK recruits and to prevent a race to the bottom.
3. Government should take measures to ensure that, going forward, the majority of permanent migration derives in future from the skilled work route. Currently the family stream is the largest non-EU route leading to permanent residency in the UK.^[1] However, immigration into skilled and well-remunerated employment is more likely to boost the economy. As in Australia (and other countries), it should account for most migration leading to permanent settlement.
4. The system should be as streamlined and user-friendly as possible. As well as simplifying the immigration rules in line with eventual recommendations by the Law Commission^[2], post-Brexit immigration reforms should significantly reduce the time and cost required to complete visa applications.
5. Annual net migration (par. 5)
6. The resident workforce (par.10)
7. Migrant workers and the supply of labour (par. 19)
8. Public finances (par. 21)
9. The effect on the economy (par. 29)
10. Potential regional variation in salary thresholds (par. 30)
11. Potential exceptions to salary thresholds including for jobs on the Shortage Occupation List (par. 33)
12. How to deal with jobs of high public value but not high wages (par. 38)
13. What allowance to make for benefits and allowances and equity should be taken into account (par. 39)
14. What allowance, if any, to make for part-time workers (par. 40).
15. The cessation of previous inflows of EEA nationals to job below RQF3 or to higher-ranked jobs not meeting the salary threshold(s).
16. The increase in inflows of non-EEA nationals to jobs at RQF6 (or RQF4 where presently allowed) resulting from the removal of the cap.
17. The increase in inflows of non-EEA nationals resulting from the significant increase in the number of jobs open to them if the qualification level were reduced from RQF3.
18. Consequential changes in the number of dependants accompanying entrants for work.
19. An Australian-style cap on work visas is essential for ensuring real control going forward. Without this, employers would be free to engage without constraint on a global bonanza of hiring cheaper labour, from a huge potential pool of jobseekers from much larger and much poorer countries (at the expense of UK workers) without restraint. Numbers could spiral out of control.
20. Points-based calculations can be added along with other components:
    1. a job offer earning no less than £30,000 per year should be a pre-requisite.
    2. Overseas recruitment should be limited to those qualified for roles that are on a designated skills list, as in Australia.
    3. Language skills should be prioritised or should be a pre-requisite (as in Canada and New Zealand).
    4. Applicants should be able to gain and trade additional points on the following criteria: a) UK or global work experience b) qualifications c) partner’s skills / experience / language ability.
21. Labour market testing should be retained, in line with global best practice
22. Skilled work migration should account for most permanent immigration in future
23. Regional schemes in various countries have had limited success. It would be best not to deploy them in the UK.
24. planning ahead
25. investing in training and development
26. competing for labour on wages and terms and conditions
27. deciding on the location of new jobs in the UK based on where labour is available or encouraging mobility within the UK
28. Can additional flexibility be added to the operation of salary thresholds through the awarding of “points” to prospective migrants for the attributes that they possess?
29. Should points in one area should be “tradeable” to make up for a lack of points in another?
30. Which migrant characteristics should be prioritised within the immigration system in order to produce the most beneficial outcomes for the UK?
31. UK or global work experience
32. Educational qualifications
33. Partner’s (a) work experience (b) qualifications (c) language ability.
34. A pay threshold set at this level and applied to workers from the EEA as well as non-EEA countries should curb fiscal costs arising from immigration to low-paid jobs. As the MAC noted in September 2018, £30,000 is the average level of household income at which taxes exceed benefits for EEA migrants. All other things being equal, a threshold may be set at a level that is likely to ensure a net fiscal contribution. The government have in fact noted that they ‘agree with the MAC’s view that the salary thresholds [are] making a positive contribution to public finances’.
35. Retaining this threshold would help to place upward pressure on wages (as the MAC has made clear). The MAC argued, when recommending the £30,000 level in January 2016: ‘This is part of the point of increasing the thresholds – that there should be upward pressure on wages for the UK workforce’ (p.74). The MAC said in its September 2018 report on EEA migration (p.5) that a salary threshold set at this level would ‘place greater upward pressure on earnings’ in medium-skilled jobs.
36. This threshold should also help to constrain undercutting of jobs whose wage level is below the threshold. The MAC found that migrant nurses were paid less than the average salary for UK nurses of a similar age: “Migrants should be paid at least the comparable rate to UK workers in order to ensure that they are not used by employers as a cheaper source of labour.”
37. A better way of tackling skills shortages is to make jobs more attractive, including by raising wages and improving terms and conditions. In the MAC’s words: “Individual employers would almost always be able to recruit resident workers if they paid wages sufficiently above the going rate. This applies even if there are skills shortages at the national level – an individual employer should always be able to fill the job if a sufficiently high wage is offered.” ‘EEA-workers in the UK labour market: Interim Update’ (Par. 25, page 10).
38. Other European states have similar or higher pay thresholds for skilled workers from outside the EU– indeed, £30,000 is equivalent to or below thresholds required as part of similar schemes in EU member states e.g. the Republic of Ireland’s Critical Skills Permit. the Netherlands’ Kennismigrant permit; Austria’s Red-White-Red ‘Other Key Workers’ permit.
39. Given that nearly five million workers are low-paid (Resolution Foundation), the CBI should encourage employers to raise wages rather than lobbying for easy access to cheap labour. Despite this, the CBI has cited ‘wage inflation’ as one of the reasons for its opposition to restrictions on lower-skilled migration (p.11, CBI written evidence to MAC). We agree with MAC chairman Professor Alan Manning who said in early 2019 in evidence to Parliament that ‘employers should ‘be paying above the going rate for wages.’
40. Indeed, employers have already had three years since the Brexit vote to prepare for the end of free movement. Some businesses are setting a laudable example.
41. There are already exemptions to the primary threshold. “If you look at certificates of sponsorship used in the last fiscal year, including extensions, just under 20% of people had salaries of less than £30,000” (Migration Observatory). We believe case-by-case exemptions should be closed (and no more added). However, if they are retained, they should allow employers to fill vacancies while the UK retains a salary threshold that puts upward pressure on wages and ensures that immigration makes a fiscal contribution.
42. MAC review of shortage occupation list, May 2019, p. 15, URL: https://assets.publishing.service.gov.uk/government/uploads/syste… ll_Review_SOL_Final_Report_1159.pdf
43. Law Commission, ‘Consultation on simplifying the immigration rules’, URL: https://www.lawcom.gov.uk/project/simplifying-the-immigration-rules/
44. Migration Watch UK, ‘Estimate of post-Brexit migration levels under the White Paper proposals’, April 2019. URL: https://migrationwatchuk.org/briefing-paper/461/estimate-of-p… els-under-the-white-paper-proposals
45. MAC, ‘Analysis of the Impacts of Migration’, January 2012, URL: https://assets.publishing.service.gov.uk/government/uploads/syste… /257235/analysis-of-the-impacts.pdf
46. Home Office, Impact assessment of proposed measures to tackle sham marriage. September 2013. P.14. URL: https://assets.publishing.service.gov.uk/government/uploads/syste… sham_marriage_impact_assessment.pdf
47. MAC, ‘Migrants in low-skilled work ‘, July 2014. URL: https://assets.publishing.service.gov.uk/government/uploads/syste… -skilled_work__Full_report_2014.pdf
48. Migration Watch UK, ‘The likely scale of underemployment in the UK’, May 2018, URL: https://migrationwatchuk.org/briefing-paper/446/the-likely-scale-of-underemployment-in-the-uk–
49. Migration Watch UK, ‘Immigration and productivity in the UK’, May 2019, URL: https://migrationwatchuk.org/briefing-paper/462/immigration-and-productivity-in-the-uk
50. Migration Watch UK, ‘The Fiscal Effects of Immigration to the UK 2014/15’, May 2016, URL: https://migrationwatchuk.org/briefing-paper/381/the-fiscal-ef… cts-of-immigration-to-the-uk-201415
51. Migration Watch UK, ‘Economic characteristics of migrants in the UK in 2014’, July 2015, URL: https://migrationwatchuk.org/briefing-paper/367/economic-char… stics-of-migrants-in-the-uk-in-2014
52. For the evidential basis of this figure, see Migration Watch UK, August 2019. URL: https://migrationwatchuk.org/briefing-paper/464/evidential-basis-for-mwuks-30-million-claim
53. ‘Work permits in Austria are subject to annual quota regulations (although only holders of some residence titles are in need of a work permit): the total number of work permits is capped (Federal State quotas) to the extent that the number of employed and unemployed foreigners does not exceed 7% of the total dependent labour supply (260,579 for 2013). In some special cases, work permits can be granted beyond this quota up to a limit of 9% of the labour supply’. European Commission document, ‘The application of quotas in EU Member States as a measure for managing labour migration from third countries’, URL: http://emn.lt/wp-content/uploads/2013/06/13.EMN-Inform_Applicatio… as-in-EU-Member-States_2013-Sep.pdf
54. UK in a Changing Europe, July 2019. URL: https://ukandeu.ac.uk/explainers/the-australian-points-based-syst… what-would-its-impact-be-in-the-uk/
55. Ibid.
56. Home Secretary, Oral statement to Parliament, November 2010, URL: https://www.gov.uk/government/speeches/immigration-limit-changes-oral-statement-by-theresa-may
57. Migration Policy Institute, May 2019. URL: https://www.migrationpolicy.org/article/merit-based-immigration-trump-proposal-immigrant-selection
58. New Zealand Cabinet Paper, ‘A New Approach To Employer-Assisted Work Visas And Regional Workforce Planning’, October 2019, URL: https://www.mbie.govt.nz/dmsdocument/7010-a-new-approach-to-emplo… te-of-decision-proactiverelease-pdf
59. MWUK paper on under-employment, May 2018.
60. Written evidence of House of Commons Public Bill Committee, February 2019, URL: https://publications.parliament.uk/pa/cm201719/cmpublic/Immigration/memo/ISSB29.htm
61. Home Secretary statement to Parliament, November 2010: https://www.gov.uk/government/speeches/immigration-limit-changes-oral-statement-by-theresa-may

1. Under the free movement rules of the European Union, EU citizens possess the right to enter and reside in the UK without the need to obtain a visa (and British citizens currently have the right to move to other EU states in a similar manner). EU citizens do not need to show proof of the right to legally reside here in order to apply for jobs or use the NHS.

Free movement of people between the EU and the UK

2. There are currently more than 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 long period.

3. Between 1975 and 2003, net migration from the EU was only about 8,000 per year. However, since 2004, when the EU was expanded to include eight East European nations, EU net migration has averaged about 136,000 per year.

4. The Labour government of the time decided not to impose transitional controls on new workers while most other countries did so (only Ireland and Sweden opened up their labour markets as the UK did).

5. A significant rise in the number of arrivals from newer EU member states of Eastern Europe after 2004 meant net migration from the EU8 countries reached a high of 137,000 in 2007. Net EU8 migration has declined to -7,000 in the year to March 2019 (Figures adjusted to reflect the undercount in EU8 migration during 2004-8 that was identified by the 2011 Census).

6. In 2007, Romania and Bulgaria (the EU2) joined the EU. Since transitional controls on movement to the UK were lifted in 2014, an average of 46,000 net migrants have arrived from these two countries alone each year, about the level predicted by Migration Watch UK. (See here for our 2013 estimate of future migration from Romania and Bulgaria.) However, net migration from the EU2 in the year to March 2019 was 32,000.

7. Meanwhile, the financial crisis which engulfed the Eurozone in 2008 resulted in very high levels of unemployment across Southern Europe and significant additional movement to the UK from countries such as Greece, Spain, Italy and France.

8. This helped lead to a rise in the level of net migration from the EU14, which hit 84,000 in the year to June 2016. The level has since declined to 32,000 in the year to March 2019.

Britain’s impending departure from the EU

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

10. The previous Prime Minister, Theresa May, 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 were to be negotiated.

11. However, in April 2019 the Article 50 period was extended until 31 October 2019. In early September 2019, Parliament passed a law which requires the government to formally request another extension on October 19 if a new deal has not been agreed by that point. In such a circumstance, the Brexit deadline would be extended until 31 January 2020.

Who are the UK’s EU residents?

12. Of the UK’s 3.6 million EU born residents, 1.7 million are from Western European nations plus Greece, and the rest are mainly from East Europe. 2.4 million are in employment, while the remaining million or so are either students, retired or, perhaps, working in the home.

13. The large majority of EU migrants have come to the UK for work and, of those who arrived in the ten years since 2006, about 80% have gone into lower-skilled jobs (for more, read our paper: ‘A limit on work permits for skilled EU migrants after Brexit’).

14. The economic profile of EU migrants varies depending on their area of origin. Workers from largely Western European nations plus Greece (the EU14) perform better than their UK born counterparts in terms of their employment rate, earnings and theirs rates of benefit claim.

15. Meanwhile those from the new accession countries of Eastern Europe (including Poland, Hungary and the Czech Republic) 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 MW 367 – Economic characteristics of migrants in the UK in 2014).

16. Using methodology similar to University College London in 2016, Migration Watch UK found the fiscal impact of recent EEA migrants to be broadly neutral in 2014/15.

Has there been a ‘Brexodus’?

17. Some businesses and industries have raised alarm about what they allege to be an ‘exodus’ of EU workers. Such claims have been exaggerated. Indeed, the number of EU-born people in the UK labour market has increased by more than 100,000 since the Referendum, from 2.3 million in Spring 2016 to 2.4 million in Spring 2019 (see the latest ONS statistics on employment by country of birth). Net migration from the EU is still running at about 60,000 per year.

What will happen to EU citizens residing in the UK after Brexit?

18. As of 15 August, more than one million people had already been granted settled or pre-settled status under the EU Settlement Scheme. As of the end of June, not a single person had been refused (see Home Office factsheet). Those eligible have until at least 31 December 2020 to apply. See official guidance on application process here.

19. For those who haven’t applied when free movement ends, they will still have the same entitlements to work, benefits and services and will be able to prove these in the same way as they do now.

20. EU nationals who live in the UK currently have the right to bring in relatives without restriction under EU law while British citizens have to meet an income requirement to bring in a spouse or fiancé(e).

21. After Brexit, however, these arrangements will change. EU citizens granted the right to stay would be able to be joined in the UK by current, close family members (spouses, siblings, parents) as well as future children who are currently living in other countries.

22. On the face of statements and documents published by both the UK and the EU, settled and pre-settled EU citizens would not have the right to be joined by future grandchildren or by extended family (siblings, aunts, uncles, nieces and nephews). Rights in relation to future family members would also fall away.

23. The latest information suggests that, in a no deal situation, the right of EU citizens in the UK to be joined by the above classes of family members would be subject to a cut-off date of March 2022. After March 2022, those concerned would be required to observe UK immigration rules.

24. Arrangements for family members as part of any new withdrawal deal would depend on the specific terms of that agreement.

Post-Brexit travel

25. In November 2018 the EU announced that it would grant visa-free status to UK nationals in the event of a no deal Brexit on the condition that the British government would do for visitors from the EU. The UK government had already said it would do this. Therefore, British travellers to the Schengen area after Brexit will not be required to obtain a Schengen visitor visa.

26. However, British visitors to the Schengen area will, from 2021, have to seek advance permission to travel there. This is likely to cost £6 and be valid for three years. Additionally, from 2020, instead of stamping passports, the EU will also take a fingerprint or photograph from all visitors.

EU citizens moving to the UK immediately after Brexit

27. The government confirmed in September 2019 that free movement as it currently stands under EU law will end on 31 October 2019 (in the event that Brexit goes ahead on that date).

28. However, Parliament has provided that much of the free movement framework will remain in place under the EU (Withdrawal) Act 2018 until Parliament passes primary legislation to repeal it. This means that, for the time being, border crossing arrangements will remain unchanged, and EU citizens will be able to enter using their passport or identity card. Some specific changes will come into effect immediately however. The government says it will:

• ‘Keep out and deport more EU citizens who commit crimes by applying tougher UK criminality thresholds at the border and also when crimes are committed in the UK’
• ‘Remove the blue EU customs channel, requiring all travellers to make a customs declaration by choosing either the green or red channel’
• ‘Remove the rights for post-exit arrivals to acquire permanent residence under retained EU law, and the rights for UK nationals who move to the EU after exit to return with their family members without meeting UK family immigration rules’
• ‘Introduce blue UK passports starting from the end of the year as a symbol of our new, sovereign identity’

29. For a transitional period after Brexit on 31 October 2019 until 31 December 2020, law abiding EU citizens and their family members will be able to move to the UK and live, study, work and access benefits and services as they do now.

30. EU citizens and their close family members who move to the UK after Brexit and wish to stay beyond 2020 will need to apply for a UK immigration status – European Temporary Leave to Remain (European TLR). Successful applicants will be granted a period of 36 months’ leave to remain in the UK, running from the date the leave is granted. For example, this would allow EU nationals who arrive before the end of 2020 to stay until December 2023.

31. EU citizens may choose to use the evidence of this European TLR – which the government says will take the form of a ‘secure digital status’ – to establish entitlement to work and rent property during the transitional period until 31 December 2020.

32. The Home Office’s digital status checking service ‘will enable them to share their digital status securely with an employer or other third party who needs to see it’. However, during this period, they will also be able to evidence those rights using their passport or national identity card. This means that employers and landlords will not have to distinguish between previous residents and new arrivals in checking right to work or rent for a transition period after Brexit.

33. EU citizens who move to the UK after 31 October 2019 may be accompanied by their non-EU citizen family members including direct family members (such as a spouse, civil partner or child), and extended family members (durable partners and dependent relatives), as now.

34. According to the government, ‘they will need to be in possession of a valid national passport and an EEA family permit and will be able to stay in the UK until the end of 2020’.

35. Close family members (spouses/partners and dependent children under 18) may apply for European TLR once their EU citizen sponsor has applied under the scheme.

British citizens moving to the EU after Brexit

36. Meanwhile, the right of British nationals to travel to EU countries under free movement rules would end immediately after Brexit in a no deal scenario. British nationals wishing to enter EU countries would be subject to the immigration rules of the respective country.

37. Those wishing to work in Germany or a few other EU countries would be able to apply for an EU Blue Card while those wishing to work in other countries would need to apply for work permits under the rules of that particular country (for more see paper: ‘Arrangements for skilled Britons seeking to work in the European Union after Brexit’).

Longer-term UK immigration arrangements for EU citizens

38. The UK’s departure from the EU will allow the government exercise a greater degree of sovereignty over UK immigration law than it currently can as a member of the EU.

39. The previous government set out detailed proposals for longer-term post-Brexit immigration arrangements in their December 2018 White Paper. These are not envisaged to come fully into effect until early 2021.

40. The new Home Secretary, Priti Patel, has indicated that she would like the White Paper to form the basis of post-Brexit arrangements (although she has askedthe Migration Advisory Committee to look into what aspects of the Australian Points-Based System might be usefully applied to the UK).

41. We summarise below a number of the White Paper proposals as they relate to EU citizens:

For workers

42. As well as being eligible for a less-stringent Tier 2 visa, the government suggests in the White Paper that EU nationals wishing to come to the UK after Brexit are likely to be able to apply for entry under the following arrangements:

a) Temporary, transitional workers route – Workers from the EU of any skill level will be able to apply for a new visa that lasts up to 12 months in order to come to the UK to look for work. These workers will not need sponsorship from employers. This route is to be reviewed by 2025 (see p. 16 of White Paper). Since workers would be here for a year or less, they would not be counted in the long-term net migration statistics.

b) Mobility framework – As part of what it calls a proposed ‘Mobility Framework’, the government previously said that it expects to negotiate arrangements (similar to ‘Mode 4’ commitments that form part of standard bilateral free trade agreements) providing for admission of self-employed professionals where they are coming to supply a service to a UK client under a contract. Entry is limited to six months. Such commitments are limited to specific sectors (for more, see p. 60 of White Paper).

c) Youth mobility scheme – Another component of the planned ‘Mobility Framework’ is the planned extension of the current Youth Mobility Scheme. This scheme, which is currently capped at 30,000 a year and only involves nationals of eight non-EU countries, would be extended on a reciprocal basis to EU nationals between the ages of 18 and 30. The stated aim is ‘to ensure that young people can continue to enjoy the social, cultural and educational benefits of living in the EU and the UK’. Those concerned would be free to work at any skill level. There is no mention of a future cap. It is noteworthy that most arrivals from the EU over the past decade have been aged under 30 (pp. 54-55 of the White Paper).

For study

43. EU students are to be subject to the same arrangements as students from the rest of the world, meaning that they will be required to apply for a Tier 4 (Student) visa in order to remain in the UK for the purpose of study (see p. 62 of White Paper).

For family reasons

44. Family members of EU nationals who do not fall within the prescribed categories (see above) would need to abide by the current rules on non-EEA family migration after December 2020, including the spousal visa threshold and language requirements.

Criticisms

45. We have been strongly critical of some of the proposals in the White Paper, including plans to…

• Remove the current limit on the number of Tier 2 (skilled) work permits for overseas recruits that can be issued annually.
• Dilute the current skills threshold requiring migrant workers to have a graduate-level qualification.
• Abolish the ‘Resident Labour Market Test’ which requires businesses to check that there is no British recruit available for a job before hiring a migrant worker. (For a summary of the government’s skilled worker proposals, see p. 127 of White Paper).

46. For more on this, see our papers, ‘Assessment of the White Paper on Immigration after Brexit’ and ‘Estimate of post-Brexit migration levels under the White Paper proposals’.

1. Should the UK remain subject to free movement rules after Brexit as a member of the European Economic Area (EEA), we can expect net EU migration to continue at about 125,000 a year into the medium term. The mitigating effect of uncertainty surrounding Brexit, the risk of further devaluation of sterling and the possibility of a period of slower UK economic growth are likely to be offset by the continuation of strong incentives for immigration from the EU. These include a much higher minimum wage in the UK relative to the countries of Eastern Europe, continuing high youth unemployment in southern Europe and the pull effect of more than three million people from other parts of the EU who are already in the UK.

Introduction

2. With the second round of talks on the UK’s departure from the EU set to take place this week, a significant body of opinion continues to argue that negotiators should seek a ‘soft’ Brexit in which the UK joins the EEA and remains subject to the free movement of people. This paper examines the prospects for EU migration in the medium term should this occur.

Trends in EU migration, labour force composition and National Insurance number registrations

3. Figure 1 below shows that net migration from the EU rose from 18,000 in 1997 to 133,000 in 2016. The solid part of the line reflects the official ONS data on EU migration and the dotted part of the line reflects data that we have adjusted to account for the fact that migration from some parts of the EU (the Eastern European – EU8 – countries which joined the bloc in 2004) was undercounted during the years 2004-2008 by 50,000 a year. The undercount was revealed by the decennial Census in 2011.

Figure 1: EU and Non-EU Net Migration since 1997, ONS.^[1]ThousandsFigure 1 EU and non-EU net migration since 1997ONSNon-EUEU199719981999200020012002200320042005200620072008200920102011201220132014201520160501001502002503002003●

 Non-EU: 224● EU: 15

4. Figure 2 below breaks down recent EU migration by region. Net migration from the EU14 remained below 50,000 a year until 2012 after which it rose sharply in the wake of the Eurozone debt crisis. It peaked at 84,000 in both the years ending June 2015 and June 2016.

5. Official figures show that net migration from the EU8 rose sharply following the accession of those states in 2004 and peaked at 87,000 in 2007. However, as already noted, the 2011 Census identified a significant undercount in the Long-Term International Migration (LTIM) figures which the ONS attributed to EU8 during the period 2004-2008. The undercount assigned by the ONS to EU8 migration amounted to 250,000, meaning that EU8 migration was in fact 50,000 a year higher over this period than recorded in the LTIM data. Therefore actual net migration from the EU8 was 137,000 at its peak in 2007. Figure 2 below shows net migration from the EU8 with the adjusted figures (to reflect the undercount) shown by a dotted line.^[2]

6. The rise in net migration from Eastern Europe has likely been driven in large part by the fact that wages available in the UK are considerably higher than in countries of origin. For example the minimum wage in the UK, between 2010 and 2015, was over three times higher than in Poland.^[3] However, although net migration from the EU8 averaged around 43,000 a year between 2010 and 2015, it fell to 5,000 in 2016.

7. Net migration from Romania and Bulgaria (the so-called EU2 states which joined the EU in 2007) increased sharply from 2013 onwards, more than doubling from 21,000 that year to 54,000 in 2016. This increase was likely augmented by the ending of UK transitional controls on migration from those countries in January 2014.

Figure 2: Net migration from the EU by region, 1997-2016, ONS.^[4]Figure 2 Net migration from the EU by region 1997-2016ONSEU14EU8EU2199719981999200020012002200320042005200620072008200920102011201220132014201520160501001502009●

 EU14: 29● EU8: 16● EU2: 11

8. According to the Labour Force Survey, the workforce of EU nationals in the UK now numbers 2.32 million and increased by 171,000 over the course of the most recent year (Quarter 1 2016-Quarter 1 2017). Looking at it from the standpoint of country of birth, the number of EU-born people working in the UK increased by 148,000 to 2.36 million in the same period.

Figure 3: Change in UK workforce by EU region 2007 and 2017, ONS.ThousandsFigure 3 Change in EU-born workforce by region 2007-2017ONSEU14EU8EU2Series 4Series 5Jan to Mar 2007Apr to Jun 2007Jul to Sep 2007Oct to Dec 2007Jan to Mar 2008Apr to Jun 2008Jul to Sep 2008Oct to Dec 2008Jan to Mar 2009Apr to Jun 2009Jul to Sep 2009Oct to Dec 2009Jan to Mar 2010Apr to Jun 2010Jul to Sep 2010Oct to Dec 2010Jan to Mar 2011Apr to Jun 2011Jul to Sep 2011Oct to Dec 2011Jan to Mar 2012Apr to Jun 2012Jul to Sep 2012Oct to Dec 2012Jan to Mar 2013Apr to Jun 2013Jul to Sep 2013Oct to Dec 2013Jan to Mar 2014Apr to Jun 2014Jul to Sep 2014Oct to Dec 2014Jan to Mar 2015Apr to Jun 2015Jul to Sep 2015Oct to Dec 2015Jan to Mar 2016Apr to Jun 2016Jul to Sep 2016Oct to Dec 2016Jan to Mar 201705001,0001,500Apr to Jun 2013●

 EU14: 800● EU8: 687● EU2: 145

9. This contrasts with Department of Work and Pensions data on National Insurance Number (NINo) registrations by nationals of different EU regions. Figure 4 below shows that annual registrations by EU14 and EU2 nationals have overtaken those by EU8 nationals.

Figure 4: NINo registrations to adult overseas nationals by EU region, DWP.Figure 4 NINo registrations to adult overseas nationals by EU regionDWPEU14EU8EU22007/82008/92009/102010/112011/122012/132013/142014/152015/162016/170100,000200,000300,0002013/14●

 EU14: 190,404● EU8: 181,816● EU2: 64,926

10. Figure 5 below shows that the bulk in the rise in NINo registrations by EU14 nationals has been accounted for by those from Italy, Spain, Portugal and (to a lesser extent) France. The rise since 2009/10 has likely largely been driven by recent high unemployment, and in particular, by high youth unemployment in those countries. Particularly notable has been the rise in NINos granted to Italian nationals since 2013/14, at a time when grants to all other EU14 nationalities (apart from registrations by Greek nationals) witnessed a decline.

Figure 5: NINo registrations to adult overseas nationals from selected countries, DWP.Figure 5 NINo registrations to adult overseas nationals from selected countriesDWPItalySpainPortugalFranceGreeceIrelandGermanyNetherlands2006/072007/082008/092009/102010/112011/122012/132013/142014/152015/162016/17020,00040,00060,00080,0002008/09●

 Italy: 18,625● Spain: 13,774● Portugal: 14,513● France: 24,000● Greece: 3,149● Ireland: 11,465● Germany: 15,407● Netherlands: 6,955

11. Figure 6 below shows that NINo registrations by Polish nationals have declined to levels similar to those seen in 2009/10.

Figure 6: NINo registrations to adult overseas nationals from selected countries, DWP.Figure 6 NINo registrations to adult overseas nationals from selected countriesDWPPolandLithuaniaLatviaSlovakiaEstoniaSlovenia2006/072007/082008/092009/102010/112011/122012/132013/142014/152015/162016/17050,000100,000150,000200,000250,0002013/14●

 Poland: 102,020● Lithuania: 22,461● Latvia: 11,312● Slovakia: 11,783● Estonia: 1,508● Slovenia: 425

12. In contrast, Figure 7 below shows that the rise in NINo registrations by EU2 nationals has been largely accounted for by an increase in registrations by Romanian nationals – from 4,000 in 2006/7 to 182,000 in 2016/17.

Figure 7: NINo registrations to adult overseas nationals from selected countries, DWP.Figure 7 NINo registrations to adult overseas nationals from selected countriesDWPRomaniaBulgaria2006/72007/82008/92009/102010/112011/122012/132013/142014/152015/162016/17050,000100,000150,000200,0002013/14●

 Romania: 47,116● Bulgaria: 17,807

Outlook for EU migration for the medium to long-term

13. High projected levels of youth unemployment in southern Europe and ongoing disparities between UK wages and those in Eastern Europe suggest that net migration from the EU is likely to continue at high levels into the medium term. We analyse the various factors that could affect flows below.

UK factors

a) Brexit uncertainty

14. Some commentators have attributed the recent fall in EU immigration, and especially the reduction in net flows from the EU8, to political, economic and social uncertainty in the wake of the EU referendum. However, the government’s offer of ‘settled status’ for the vast majority of EU migrants already in the UK, along with the greater clarity that is likely to emerge as the Brexit negotiations progress, should help to reduce any understandable uncertainty. However, as the Migration Observatory has noted, despite the fall in EU8 net migration, inflows from the EU14 and EU2 have not significantly declined. Indeed, the ongoing high level of NINO registrations to EU nationals (as indicated in Figure 4 above) suggests that the UK has not become notably less attractive for EU migrants from both Western and Eastern Europe.

b) Devaluation of sterling

15. The OECD has said the pound’s drop since the Brexit vote had pushed up inflation, denting household income growth and household spending. Oxford University’s Migration Observatory has argued that the devaluation of sterling could make the UK less attractive to foreign-born workers who send remittances to associates in other countries. However, it adds that devaluation might also influence some foreign-born workers to decide to stay longer in the UK to accumulate higher savings.^[5]

c) Possible slump in UK economic growth

16. The OBR have forecast UK economic growth of 2% in 2017, falling to 1.6-1.9% in the period 2018-2020 and then rising again to 2% in 2021.^[6] This contrasts with the World Bank, OECD, the United Nations and European Commission which have all predicted lower growth over the next three or four years.^[7] For example, in its global economic outlook released in June 2017, the OECD said predicted a slowdown in GDP growth to 1.6% in 2017 and to just 1% in 2018.^[8] In contrast, the IMF projects that UK GDP growth will only fall slightly to just over 1.9% by 2022.

d) Low unemployment

17. The UK unemployment rate for the period from March to May 2017 of 4.5% (or 1.49 million people) was the lowest since 1975.^[9] The OBR expects UK unemployment to rise slightly to 5.1% by 2021. The OBR notes that: “The 0.7 million rise in employment over the forecast is therefore attributable to additional population growth.”^[10] High levels of net migration from the EU are the probable result of a continued large number of job opportunities.

e) Much higher minimum wage in the UK

18. The ONS recently reported that in the period May to March 2017 average weekly earnings for employees in Great Britain in nominal terms grew by around 2%, which is lower than nominal pay growth prior to the economic crisis. However, continuing large differences between wages in Eastern Europe and those in the UK are expected to ensure that there remain strong incentives for migrants to move to the UK, even in the face of the recent devaluation of sterling. The UK’s 2017 minimum wage (1,397 Euros) remains three times the level of Poland’s (453 Euros), while Romania’s (275 Euros) remains a fifth that of the UK’s.^[11] Figure 8 below shows wage differences in 2017. The planned increase in the National Living Wage to £9 per hour by 2020 is only likely increase the attraction of the UK to potential migrants. Moreover, the fact that lower rates will apply to those under the age of 25 may make the prospect of hiring younger people from abroad even more attractive to UK employers than it is at present.

Figure 8: Minimum wage in 2017 (Euros per month) in selected states, Eurostat.Figure 8 Minimum wage in 2017 in selected statesEurostatMinimum wage in January 2017BulgariaRomaniaLatviaCzech RepublicHungarySlovakiaPolandPortugalGreeceSpainUnited KingdomFranceGermanyBelgiumNetherlandsIrelandLuxembourg01,0002,0003,000Hungary●

 Minimum wage in January 2017: 412

19. As figure 9 below shows, the OECD forecasts that there will be no convergence of GDP per capita in the UK and Poland before 2035. The OECD have also projected that there will be no convergence of UK and East European wages in the next 20 years.

Figure 9: Projections for UK and Polish GDP per capita (dollars), OECD.Figure 9 Projections for UK and Polish GDP per capita until 2037OECDUnited KingdomPoland20172018201920202021202220232024202520262027202820292030203120322033203420352036203710,00020,00030,00040,00050,00060,0002031●

 United Kingdom: 48,399● Poland: 28,201

f) Large diaspora of EU migrants already in the UK

20. The pull factor resulting from kinship and growing existing communities of EU nationals in the UK may act as a draw for immigration. The EU-born population has already grown from just under 1.8 million to more than in 3 million by 2015. The 2015 figure includes 1.5 million people who were born in the EU14, 1.3 million who were born in the EU8 and around 290,000 who were born in the EU2. As figure 10 below shows, the most notable rise has been in the Polish-born population, which has tripled in size over the decade from 265,000 to 831,000. Also notable is the rise in the Romanian-born community over the period – it increased nearly 13-fold from 17,000 to 220,000 over the period. Note that the German-born population in the UK is inflated by the number of UK citizens born in Germany, often to parents stationed there on military duty.

Figure 10: EU-born population in the UK by selected country, ONS.Figure 10 EU-born population in the UK by selected country 2006 to 2015ONSPolishIrishGermanRomanianItalian200620072008200920102011201220132014201502505007501,0002012●

 Polish: 658● Irish: 407● German: 306● Romanian: 106● Italian: 135

Conditions in sending countries

g) Comparatively high unemployment & youth unemployment

21. Unemployment in the Euro area (9.3% in April 2017) has declined since its high of more than 12% in 2013.^[12] However, the average Eurozone unemployment rate remains more than double than that of the UK. As figure 11 below shows, unemployment across southern European countries is expected to fall by 2020, although it is projected to remain above 10% in Greece and Spain. In Poland unemployment is expected to rise slightly, while Romania’s jobless rate is projected to remain relatively constant.

Figure 11: Projected unemployment rates in selected EU countries 2017 to 2020, Trading economics.Figure 11 Projected unemployment rates in selected EU countries to 2020Trading EconomicsGreeceSpainItalyPortugalFranceRomaniaPolandUnited KingdomGermany2017202005101520252020●

 Greece: 18.8● Spain: 14.9● Italy: 8● Portugal: 8.5● France: 8.2● Romania: 5.4● Poland: 6.8● United Kingdom: 5.1● Germany: 5.1

22. Figure 12 below shows that youth unemployment is projected to remain at or above 30% in Greece, Spain and Italy by 2020, while Romania’s youth unemployment rate is expected to reach more than 20%. However, Poland’s rate of youth unemployment is projected to fall below the UK’s.

Figure 12: Projected youth unemployment rates in selected countries until 2017, Trading economics.Figure 12 Projected youth unemployment in selected countries until 2020Trading EconomicsGreeceSpainItalyPortugalFranceRomaniaPolandUnited KingdomGermany20172020010203040502020●

 Greece: 38● Spain: 30● Italy: 30● Portugal: 21.7● France: 18.3● Romania: 20.4● Poland: 12● United Kingdom: 14.6● Germany: 5.1

h) Projected annual GDP growth

23. Romania’s GDP grew at an annual rate of 5.6% in the first quarter of 2017, the highest in the EU.^[13] However, figure 13 below shows that the annual growth rates of Poland, Spain and Romania are projected to fall by 2020. Conversely, growth rates are projected to increase in Greece.

Figure 13: Projected annual GDP growth rates in selected countries until 2020, Trading Economics.Figure 13 Projected annual GDP growth rates in selected countries until 2020Trading EconomicsRomaniaPolandSpainUnited KingdomPortugalItalyGermanyFranceGreece2017202002462020●

 Romania: 3.2● Poland: 2.4● Spain: 2● United Kingdom: 1.9● Portugal: 2.8● Italy: 1.6● Germany: 2.3● France: 2.2● Greece: 2.1

i) Alternative destinations

24. The continuing effect of the Eurozone debt crisis means that previous alternative destinations in southern Europe remain less attractive to migrants from Eastern Europe than previously. The Romanian population in Italy reportedly almost doubled between 2006 and 2007.^[14] This trend has slowed in recent years as Italy has suffered its longest post-war recession. Similarly, what have been traditionally large inflows of Polish citizens into Germany may be mitigated as Germany attempts to integrate hundreds of thousands of migrants from the Middle East and Africa. On the other side of the coin, however, Germany is projected to have healthier GDP growth and relatively low unemployment by 2020 so this could help to draw larger numbers of Polish citizens across the border into Germany.

j) Declining population of younger people in EU member states

25. Declining populations of younger people in Eastern and Southern European states may have a mitigating effect on EU migration to the UK in the longer term. For example, the population in Romania of those between the ages of 20 and 34, who have a high propensity to migrate, is projected to decline between 2015 and 2037 from 4.2 million in 2017 to around 3.2 million in 2035 (see figure 14 below).^[15]

Figure 14. Population of Romania aged between 20 and 39, OECD.Figure 14 Population of Romania aged between 20 and 39OCEDRomanian population aged 20-392017201820192020202120222023202420252026202720282029203020312032203320342035203620373,0003,5004,0004,5002020●

 Romanian population aged 20-39: 3,959.666

k) Political uncertainty

26. Political turbulence in Eastern Europe could act as a push factor for potential migrants to other parts of Europe. In February 2017, as a result of political disputes over corruption, Romania experienced its biggest anti-government demonstrations since the fall of communist leader Nicolae Ceausescu in 1989. A crisis following the 2016 presidential election in Bulgaria, meanwhile, seemed to have been stabilised by the time of the victory of the centre-right party GERB, headed by Prime Minister Boyko Borisov, during the parliamentary elections of March 2017. Poland’s ruling Law and Justice Party has been accused of pursuing a polarising agenda, a factor which may drive opponents of the government to seek residence elsewhere in the EU.

l) Secondary movement of migrants and refugees

27. The migration crisis reached a peak in October 2015 with sea arrivals to Greece and Italy reaching an average of more than 7,000 per day. The migration crisis reached a peak in October 2015 with sea arrivals to Greece and Italy reaching an average of nearly 7,500 each day. Flows into Greece were somewhat stemmed after EU and Turkey implemented a plan to halt illegal migration across the eastern part of the Mediterranean in March 2016. However, during 2016 a total of more than 360,000 migrants arrived in Europe by sea. By 4th July 2017 more than 100,000 migrants had arrived in Europe by sea since the start of the year. Moreover, of 1.1 million first-instance decisions on asylum applications in EU member states in 2016, around 61% (or just over 670,000) resulted in positive outcomes (including grants of refugee or subsidiary protection status, or an authorisation to stay for humanitarian reasons)^[16]. Those who are granted asylum will be able to gain citizenship after qualifying periods of between two and twelve years. The majority of migrants have gone to Germany where those granted protection can apply for citizenship after six years. Such migrants will acquire the right to freedom to move anywhere in the EU after gaining citizenship. As a result, this could account for a significant source of secondary movement of migrants to the UK in the period from 2017 to 2030 and beyond.

Conclusion

28. Looking ahead, the attractiveness of the UK for potential migrants from the EU could be reduced by uncertainty stemming from the Brexit process, by the risk of a further devaluation of sterling and by the possibility of a period of lower growth. On the other hand, there will continue to be a large wage disparity between the UK and Eastern Europe, while the substantial diaspora of EU nationals already in the UK will continue to act as a pull factor.

29. As regards Europe, the conditions in home countries will vary substantially over the medium term. The EU14 can be expected to have moderate growth in GDP but to retain quite high levels of unemployment, especially youth unemployment. Accordingly, we can expect that net migration from the EU14 will be somewhat lower than its 2016 level of 73,000, and to perhaps fall to around 50,000 a year.

30. As for the EU8, there has clearly been a sharp reduction in net migration in the last year which may reflect improving conditions in Poland, a reduced exchange rate in the UK and possibly uncertainty arising from Brexit. Nevertheless, the large Polish diaspora will be a significant factor and we would expect net migration to recover from its 2016 level of 5,000, to about 25,000 a year.

31. Romania and Bulgaria are a different proposition. Economic and political conditions in those countries are poor. It is therefore likely that there will continue to be a significant EU2 inflow. The number of National Insurance Number registrations, particularly by Romanians, remains high (registrations by Romanian nationals stood at 180,000 in 2015/16 while registrations by Bulgarians stood at 40,000). We expect net migration from these two countries to continue at 50,000 a year. In total, this gives an estimate of EU net migration of the order of 125,000 a year.

32. Note that this estimate does not include the potential secondary flows of migrants who have been granted humanitarian protection or refugee status after arriving in Europe.

33. Current levels of non-EU net migration stand at 175,000. Unless further restrictions are introduced that number is not likely to fall significantly. Subtracting net British emigration of 50,000 a year and adding our estimate for EU migration, total net migration would run at around 250,000 a year. We note that the ONS population projection high migration scenario is 265,000 a year. It is therefore likely that net migration in the medium term will remain around this level rather than fall in line with their principal projection, which has a migration assumption of 185,000 a year. This in turn means that the UK population is likely to increase by nearly six million over the next decade and by just over ten million over the next twenty years. In effect, a failure to control EU immigration would result in the ONS high migration scenario under which the population rises at half a million each year; 75% of that increase would be the result of the direct and indirect effects of immigration.

Footnotes

1. The dotted part of the EU line indicates the figures which have been adjusted to reflect the undercount in EU8 migration identified by the 2011 Census which amounted to 50,000 a year over the period 2004-2008.
2. The Office for National Statistics (ONS) state that improvements to the IPS in 2009 mean that data on EU8 migration from that year onwards is reliable. If you would like to read more on this, see our paper here: https://migrationwatchuk.org/briefing-paper/304
3. Minimum wage data from the OECD and the ONS.
4. The dotted part of the EU8 line indicates the figures which have been adjusted to reflect the undercount of EU8 migration identified by the 2011 Census which amounted to 50,000 a year over the period 2004-2008.
5. Migration Observatory, April 2017, URL: http://www.migrationobservatory.ox.ac.uk/resources/commentaries/p… -currency-devaluation-migration-uk/
6. OBR Economic and Fiscal Outlook, March 2017, URL: http://cdn.budgetresponsibility.org.uk/March2017EFO-231.pdf
7. Knoema, UK GDP growth forecast, updated June 2017, URL: https://knoema.com/pcggtre/uk-gdp-growth-forecast-2015-2020-and-up-to-2060-data-and-charts
8. OECD Economic Outlook, June 2017, URL: http://www.oecd-ilibrary.org/economics/oecd-economic-outlook_16097408
9. BBC News, July 2017, URL: http://www.bbc.co.uk/news/business-40579523
10. OBR Economic and Fiscal Outlook, March 2017.
11. Eurostat, minimum wage statistics, February 2017, URL: http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics#Database
12. Eurostat, May 2017, URL: http://ec.europa.eu/eurostat/documents/2995521/8002525/3-02052017… 4b69232-83a9-4011-8c85-1d4311215619
13. Economist, June 2017, URL: https://www.economist.com/news/europe/21723844-sorin-grindeanu-wh… orms-corruption-out-romanias-social
14. Financial Times, December 2013, URL: https://www.ft.com/content/c545b32e-6f19-11e3-bc9e-00144feabdc0?mhq5j=e1
15. OECD, URL: https://stats.oecd.org/Index.aspx?DataSetCode=POP_PROJ#
16. Eurostat, Asylum Statistics, Mar-May 2017, URL: http://ec.europa.eu/eurostat/statistics-explained/index.php/Asylum_statistics

1. A ‘Soft Brexit’ entails the UK remaining in the Single Market when the UK leaves the EU. While this claims to ‘prioritise jobs and the economy over immigration’ it would require the UK to continue to accept the free movement of people. We estimate that under such circumstances EU net migration could well continue at an unacceptable level of well over 100,000 a year for the next decade.

Introduction – What does ‘hard’ and ‘soft’ Brexit mean?

2. Those who favoured remaining in the EU claim that the government plans amount to a ‘hard’ Brexit. As an alternative they propose a ‘soft’ Brexit, but that would involve remaining in the Single Market with no prospect of effective national controls on immigration.

3. This paper summarises the Government and Opposition’s rather similar visions for Brexit and explains what they would mean for migration control. It also summarises the position of those who call for a ‘soft’ Brexit, which is often described as prioritising jobs and the economy over immigration.

The Official Government Position

4. The government position on Brexit was laid out in a speech made by the Prime Minister in January 2017, known as the Lancaster House speech and further elucidated in a White Paper ^[1]. In her speech the Prime Minister was clear that, as Britain leaves the EU, we will not be seeking membership of the Single Market and will leave the Customs Union as well. In its place the Prime Minister spoke of her ambition to agree ‘a new strategic partnership with the EU, including an ambitious and comprehensive Free Trade Agreement and a new customs agreement.’ (For more information on the Single Market and the Customs Union, see Annex A).

5. Leaving the Single Market would allow the UK government to end its obligation to allow the free movement of people which is a condition of being in the Single Market and repatriate control over EU immigration to Westminster. The government would then negotiate with the EU on its future trading relationship free of any immigration elements (save perhaps for some provisions on posted workers in relation to cross border trade in services). It is significant that none of the trade agreements with third countries recently entered into or under negotiation by the EU cover immigration matters.

6. The Prime Minister was also clear that ‘no deal for Britain is better than a bad deal.’ Under this scenario, the UK is offered a punitive deal on the future relationship with the EU which is rejected by the British government and the UK leaves the EU, the Single Market and the Customs Union and falls back onto World Trade Organization rules and tariffs. Clearly, leaving the EU under these circumstances would allow the UK government to pursue an immigration policy on a unilateral basis.

7. Critics of the Government have described the position as outlined in the Lancaster House Speech and the Government White Paper as a “hard Brexit” with the latter option of ‘no deal’ as the hardest possible Brexit.

The Labour Party Position

8. The Labour Party position is less explicit than the Conservative position. The Manifesto does not clearly state that they are in favour of Britain leaving the Single Market, however it does state that free movement of people should end once Britain leaves the EU, and the EU are clear that this rules out membership of the Single Market.

9. The Shadow Chancellor, John McDonnell has also stated that ‘people will interpret membership of the Single Market as not respecting that referendum’. (Peston on Sunday, June 2017). Furthermore three Shadow Cabinet Ministers were sacked from their positions after defying the Labour whip and voting in favour of an amendment (put down by the Labour backbench MP Chuka Umunna) calling on the government to remain in the Single Market and the Customs Union. The manifesto does state that Labour would focus on ‘retaining the benefits of the Single Market and the Customs Union’^[2] but clearly freedom of movement is not considered to be one of its benefits since they say that this will end after Brexit.

10. From this we can deduce that the Labour leadership are in favour of leaving the Single Market and the Customs Union and negotiating a new relationship with the EU. This is the same approach as the government.

11. Where Labour and the Conservatives do differ is in their approach to the prospect of ‘no deal’, with the Labour Manifesto very clear that “’no deal’ is the worst possible deal for Britain.”

Transitional Arrangements – A slower Brexit?

12. The impact of the election result on government policy is unclear. Some urge that the Government should soften their tone as a result of losing their majority in the general election, claiming that there is no longer a mandate for ‘no deal’. On the eve of the start of the Brexit negotiations, the Chancellor Philip Hammond told the BBC that ‘no deal would be a very, very bad outcome for Britain’, suggesting a softening of the government line on this matter.

13. Others believe that the Prime Minister’s preferred outcome is unrealistic, pointing to the length of time that Free Trade Agreements (FTAs) ordinarily take to negotiate. For example, negotiations between the EU and Canada on a FTA began in 2009 and concluded in 2014. Some point to the EU South Korea FTA as evidence that trade negotiations need not be so lengthy, with this particular agreement negotiated in just two years, concluding in 2009. Furthermore, the UK would have the advantage of starting from a position of full compliance with EU regulations currently in force.

14. It is worth noting that under Article 50 the UK has just two years in which to agree a future relationship, unless the EU agrees to extend this period. Time is also needed to ratify the treaty which is why Michel Barnier (the EU’s Chief Negotiator) has said that the Brexit deal must be agreed by October 2018 allowing just 18 months for negotiations.

15. It is for this reason that many, including the Chancellor of the Exchequer, are now talking of the possibility of transitional arrangements or “an implementation period” that would give both sides more time to negotiate an FTA. Arguably the destination under this scenario is the same i.e. that the UK would eventually be outside the EU, the Single Market and the Customs Union, but business and individuals would have more time to prepare. A transitional period could involve the UK remaining in either the Single Market or the Customs Union for a transitional period. The European Parliament, in its response to the UK government’s notification of withdrawal under Article 50 suggested that any transitional arrangement ‘must be strictly limited…not exceeding three years’.^[3] This would be essential to ensure that the terms of the transitional period do not become permanent.

16. Were the UK to remain in the Single Market for a period after withdrawal then this would entail continued free movement for the duration. Remaining only within the Customs Union would, however, allow the government to pursue its own immigration policy on a unilateral basis.

A ‘Soft Brexit’

17. While the government and the Opposition both favour leaving the Single Market there are many other voices advocating alternative approaches, some of which have significant implications for our ability to control and reduce migration from the EU.

(a) Leave the EU but remain in the Single Market

18. The option that many in the business community have advocated is for Britain to leave the EU but remain in the Single Market on a permanent basis. This is essentially the position of the EFTA countries (Norway, Iceland and Liechtenstein) in the European Economic Area. Some describe this option as prioritising the economy over immigration.

19. Remaining in the Single Market would mean that the UK would be obliged to continue to accept the principle of free movement of people since the EU is clear that the four freedoms (in goods, services, capital and persons) are indivisible. It would also mean that the UK could continue to trade in goods and services as at present but the government would continue to have no control over the level of migration to the country. It is likely that EU net migration would continue to run at well over 100,000 a year for the next decade.

20. Advocates of this position point to ‘Safeguard Measures’ contained in the EEA agreement (at Article 112-114 of the agreement^[4]) which allow contracting parties to take unilateral measures in the event of ‘serious economic, societal or environmental difficulties of a sectorial or regional nature’ and which are ‘liable to persist’. This, they argue, provides an ‘emergency brake’ that would allow the UK government to control immigration.

21. However, the EEA agreement is also clear that any country wishing to take unilateral action must ‘notify the EEA Joint Committee without delay and enter into consultations with a view to finding a commonly acceptable solution’ (the EEA Joint Committee includes ambassadors of the EEA states as well as the European External Action Service, otherwise known as the EU’s Diplomatic Service). Moreover there must be consultations every three months with a view to the abolition of the safeguarding measures. Norway, an EEA member, has never used this ‘emergency brake’ – reportedly for fear that it would provoke a retaliatory response from the EU. It seems clear that this would not in any way be an adequate measure to control EU migration to the UK.

22. Moreover, the UK would be bound by free movement rules but would have no vote nor any influence over them. As Open Europe note of Norway in particular (but the same would apply to the UK) ^[5] This would be far worse than our current situation because while presently we must apply free movement rules at least we have some ability to influence those rules.

b) Leave the European Union but remain in the Customs Union

23. This would put the UK in a similar position to Turkey, which is in a customs union with the EU. The Customs Union is simply an area within which there are no import tariffs for goods but which has a common external tariff. The UK would therefore be able to pursue an immigration policy on a unilateral basis but would not, of course, be free to reach separate trade deals with third parties.

Conclusions

24. The terms ‘hard’ and ‘soft’ Brexit have no agreed definition. However, generally speaking, those who advocate a ‘soft’ Brexit wish the UK to remain in the Single Market when the UK leaves the EU. This would require the UK to continue to accept the free movement of people and it is likely that net migration from the EU would be well over 100,000 a year for the next decade.

Annex A

What is the Single Market?

The Single Market is an area within which there is free movement of capital, services, goods and workers. The EU are absolutely clear that “access to the Single Market requires an acceptance of all four freedoms”.

If you do not accept all four freedoms then as a matter of definition you are not seeking membership the Single Market. For example, Canada is not a member of the Single Market and nor are Ukraine or Turkey, because there are no provisions for free movement of workers in the agreements they have with the EU. Nonetheless, all three countries have access to EU markets to varying degrees. Turkey’s access is largely restricted to trade in goods, but Canada’s and Ukraine’s extend to trade in services and to investment (capital) too.

Freedom to trade (whether with the EU or anyone else) is not contingent on free movement of workers or any others, nor has the EU even in its most recent and deepest free trade agreements sought to provide for any such movement.

What is the EU Customs Union?

The EU Customs Union is an area within which there are no import tariffs for goods but which has a common external tariff. The former necessitates the latter, otherwise importers could simply bring in goods to the country with the lowest external tariff and then move them freely into the other countries, thus circumventing the higher external tariffs applied by other member countries. However, a common external tariff does not mean that the same tariffs are applied to imports from all third countries. Instead, imports from any particular country have the same tariff applied by all members of the Customs Union. Thus where the Customs Union enters into a trade agreement with a third country, all members of the union collectively reduce or remove tariffs on imports from that country. Leaving the Customs Union of which the UK is presently part means that UK exports to the countries remaining in the Customs Union would then be subject to their common external tariff in the same way as the US, China or Japan. To preserve the present trade in goods between the UK and the EU would require a new agreement between the parties.

Notes

The EU Customs Union includes all members of the European Union, Monaco and UK territories which are outside of the EU (such as the Isle of Man, Guernsey and Jersey). In addition, the EU has a customs agreement with Andorra, San Marino and Turkey, with exceptions for certain types of goods. These countries are not therefore in the EU Customs Union but instead they have a customs union with the EU’s Customs Union.

Footnotes

1. of 2 February 2017 https://www.gov.uk/government/uploads/system/uploads/attachment_d… and_partnership_with_the_EU_Web.pdf
2. http://www.labour.org.uk/page/-/Images/manifesto-2017/Labour%20Manifesto%202017.pdf
3. http://www.europarl.europa.eu/sides/getDoc.do?type=MOTION&reference=B8-2017-0237&language=EN
4. See here: http://www.efta.int/media/documents/legal-texts/eea/the-eea-agree… %20the%20Agreement/EEAagreement.pdf
5. http://openeurope.org.uk/intelligence/immigration-and-justice/norway-and-switzerland/

That is a conclusion of two reports (MW415 and MW416) being released by Migration Watch UK today as a new round of Brexit negotiations begins.

The ‘soft’ Brexit championed by some commentators and politicians would mean the UK remaining in the Single Market, via the European Economic Area. The first paper points out that this would be a disastrous halfway house as the UK would remain subject to the rules on free movement of people but crucially would have no power to influence them. The UK would join Norway as a ‘fax democracy’.

An alternative ‘soft’ Brexit which involved leaving the EU but remaining in the Customs Union would give the government control of immigration from the EU but would rule out free trade agreements with third countries.

By contrast, a Brexit along the lines which the Prime Minister has outlined, involving a comprehensive Free Trade Agreement but no Single Market or Customs Union membership, would allow the UK to repatriate border controls and then negotiate a future trading relationship with the EU. In this case a transitional period, with a clearly defined end point, would be perfectly reasonable and should be acceptable to EU partners who surely have no interest in the dislocation of trade with one of their largest markets.

The second paper finds that, if the UK were to remain subject to free movement rules following departure, net migration from the EU is likely to continue at around 125,000 a year for at least the next decade.

The effect of uncertainty surrounding Brexit, the risk of further devaluation of sterling and the possibility of a period of slower UK economic growth are likely to be offset by the continuation of strong incentives for immigration from the EU – namely a much higher minimum wage in the UK relative to the countries of Eastern Europe and continuing high youth unemployment in southern Europe.

With non-EU net migration unlikely to fall below its current level of 175,000 unless further restrictions are introduced (and subtracting net British emigration of 50,000 a year), that would mean overall net migration continuing at the current level of around a quarter of a million a year

This is close to the Office for National Statistics’ high migration scenario of 265,000 a year which foresees the UK’s population rising by nearly six million by 2027 and by over ten million over the next twenty years. The current population of Birmingham is just over one million.

Commenting, Lord Green of Deddington, Chairman of Migration Watch UK, said:

The prospect of having to build the equivalent of a city the size of Birmingham every two years is simply appalling in a country that already feels overcrowded. These negotiations come at a critical point at which the whole scale and nature of our society risks slipping out of control. The government must hold their nerve and get EU immigration sharply down.

A number of widely-reported commentators argue that the UK should seek a Norway-style “halfway-house” Brexit to protect jobs and the economy.

This would involve the UK remaining in the single market as a member of the European Economic Area (EEA).

But there is a key drawback. This would leave the UK subject to the free movement of people for the indefinite future — an outcome that would be unacceptable to the majority of British people who only last month gave more than 80 per cent of their votes to parties that promised to regain control of the UK’s borders .

Reports published by Migration Watch UK today suggest that the result would be EU net migration continuing at well over 100,000 a year for the next decade if not longer.

Despite uncertainty surrounding Brexit and the devaluation of the pound, there is still nothing to suggest that there has been any real diminution of the main push and pull factors. These include high rates of youth unemployment in southern Europe, a large gap between wages in the UK and eastern Europe and a ready availability of low-paid jobs in a flexible labour market.Nearly 600,000 National Insurance numbers were registered by EU citizens in 2016/17, including nearly 224,000 from just two countries, Romania and Bulgaria.

Factors such as the diaspora of more than three million EU citizens already in the UK, the lowest UK unemployment rate since 1975 and a national living wage increasing to £9 an hour by 2020 are only likely to ensure that the UK remains a highly attractive destination for many EU citizens, particularly those from southern and eastern Europe.

The consequences for our society would be very serious. With net migration of those from outside the EU likely to continue at the current level of 175,000 a year unless further restrictions are introduced and net British emigration of 50,000 a year, overall net migration would continue at its current level of about a quarter of a million a year.

According to the ONS population projections, this would mean the UK population rising by more than ten million over two decades. We would have to build the equivalent of a city the size of Birmingham every two years.

Quite apart from growing pressures on the NHS and on our schools, official housing projections show that net migration to England at around the present level means that a home will need to be built every five minutes, day and night, at least until 2039 just to house future migrants, yet the government remains in denial.

Meanwhile some politicians, including Nick Clegg and Labour’s Stephen Kinnock, have tried disingenuously to suggest that a Norway-style Brexit would allow the UK to control EU migration.

Mr Kinnock, for example, argued that transitional membership of the EEA would allow the UK to make use of an “emergency brake” in the EEA agreement. But this would only allow for temporary controls in the event of serious disruption.

In practice, Norway’s brake is by no means in its own hands and it is said that they have never used it for fear of retaliation by the EU. The reality is that the EEA safeguard measures are not designed to provide any more than limited and temporary restrictions that certainly cannot be called control of immigration.

In David Cameron’s ill-fated attempts at renegotiating our membership, although the EU recognised that the UK was in a situation of serious disruption, they were only prepared to offer to allow the UK phased restrictions on some benefit payments. At the time, despite recommending this deal to the public, the government was unable to say that this would have any impact at all on the numbers coming to the UK.

Thus EEA membership does not of itself appear to provide any realistic prospect of taking control over immigration from the EU.

However it came about, continued free movement of people would be against the wishes of most British people, 58 per cent of whom say it is “essential” for net migration to be brought down with only 18 per cent disagreeing.

Brexit provides a crucial opportunity for the UK to finally regain control of its borders and significantly reduce net migration. The public expect no less.

Talk of a “soft” Brexit, sometimes dressed up as a “Brexit for jobs” or for “prioritising the needs of the economy” is thoroughly misleading. In practice it can only mean continued membership of the Single Market. That, in turn, would mean continued free movement, continued jurisdiction for the European Court of Justice (ECJ) and indefinite payments into the EU budget.

We would thus lose all ability to influence the laws and regulations to which we would remain subject for the indefinite future. Brexit on these terms would be self-defeating. Perhaps it is the prospect of just such an outcome to the negotiations that determined Remainers are seeking to engineer in the hope that the public might be persuaded to change their minds in some further referendum or election.

Part of any such strategy seems to be to label the Government’s approach as a “hard” Brexit: not so. The Government’s policy is clear and logical. It aims to deliver control over our borders, our laws and our money – as foreshadowed in the referendum campaign itself. The key distinction is between membership of the Single Market and access to the EU market for goods and services. The former entails the drawbacks outlined above, whereas access to EU markets can be negotiated by means of an exchange of trade concessions by both sides. Indeed, South Korea, Canada and the Ukraine have reached trade agreements with the EU that contain no provisions for free movement.

It seems that the Government is now signed up to the objective of access for trade rather than membership of the Single Market, albeit with concerns expressed by the Chancellor about the feasibility of getting the trade negotiation sorted in the time available. Hence talk of a “transitional period” or an “implementation period” for trade matters which might also embrace implementation of a new immigration system. This is a perfectly reasonable approach which should be acceptable to EU partners, who surely have no interest in the dislocation of trade with one of their largest markets.

Nevertheless, there remains a risk that the negotiation might reach deadlock towards the end of this year, either on the jurisdiction of the ECJ or on what payments should be made to satisfy the UK’s continuing financial obligations. This could result in the UK leaving with no agreements in place, and reverting to trade on WTO terms. That is the true meaning of a “hard” Brexit.

So let us not be misled by the cosy adjective “soft”. “Hard” and “soft” are not the options. Talk of a “soft” Brexit is cover for determined remainers and for financial interests that dislike the referendum result and seek to manoeuvre in the hope of reversing it.

Any suggestion that a Norwegian-style emergency brake within the European Economic Area would allow the UK to control levels of migration is simply false. The reality is that this was designed as a strictly temporary measure. Norway does not have full control of the brake – and, indeed, has never used it for fear of retaliation.

There is a great deal at stake: namely, the continuation of massive levels of immigration from the EU into the foreseeable future. There is no sign that the incentives of higher wages and the greater availability of employment in the UK, which have led to record levels of EU net migration, have diminished.

Romania’s minimum wage is still a fifth of the level of the UK’s, and the OECD predicts that there will be no convergence of UK and East European wages in the next 20 years. We could be looking at continued net inflows from the EU of well over 100,000 a year until the late 2030s.

In this case, overall net migration could well continue at around the ONS population projection’s high migration scenario of 265,000 a year. That would mean the UK’s population growing by just over 11 million by 2039 – two thirds of which would be the result of the direct and indirect effects of immigration. An increase on that scale would be the equivalent of adding a population nearly the size of the city of Birmingham every two years.

Even these huge numbers take no account of the recent revelation by their former Head of Enforcement that the Home Office have kept secret their estimates of illegal immigration which range from 150-250,000 per year, many of whom will have entered illegally and will therefore add to net migration.

We are now at the point where the whole scale and even nature of our population risks spinning out of control. The government must, therefore, keep their nerve. There really is no alternative.

Labour MP Stephen Kinnock made news in the last few days with his claim that he was in conversation with around 15 Conservative MPs about a transitional arrangement which he believes should involve EEA membership.

Enough support, of course, potentially to threaten a defeat for the Government. Mr Kinnock is apparently in favour of EEA membership as a ‘stepping stone’ out of the EU. He believes that interim membership of the EEA would give the Government more time to negotiate a free trade agreement with the European Union.

He was clear that EEA membership should be ‘temporary’ and ‘time bound’ but, crucially, when pressed said that it was ‘not possible to put a deadline on it’. He is quoted as saying: “The case for the EEA is three-fold.

It buys us time to negotiate the final state deal with the EU, it delivers certainty for business and workers, and it allows us to reform Freedom of Movement.

The EEA has legal precedent for reforming freedom of movement as it exists in the European Union.

Article 112 of the EEA Agreement allows member states to introduce a quota based immigration system, and I would only advocate the UK entering the EEA if we used Article 112 to reform freedom of movement.”

Mr Kinnock seems to be suggesting that, by temporary membership of the EEA, we can remain in the Single Market for a period after Brexit (and so protect trade in goods and services) and can also impose limits on EU migration.

He suggests that Article 112 (usually described as the emergency brake) would allow the UK to control EU migration and claims that this would amount to ‘reform’ of free movement. This is very misleading.

If the UK were to join the EEA it would theoretically be possible to impose temporary controls on EU migration using Article 112.

This is one of three Articles called Safeguard Mechanisms, which are designed for times of serious economic and social difficulty.

It is worth quoting it in full:

If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement.”

Article 113 requires a country to notify its partners and enter into immediate consultations to seek a commonly acceptable solution.

Moreover, the state cannot impose such unilateral measures (for example, immigration controls) until one month has passed since notification has been given or a commonly acceptable solution has been found.

Consultations must then continue every three months “with a view to their abolition before the date of expiry envisaged, or to the limitation of their scope of application.”

It is clear therefore that any such limits are designed to be no more than a very temporary opt-out of free movement and in exceptional circumstances.

Indeed, in evidence to the House of Lords EU Committee, Dr Ulf Sverdrup, the Director of the Norwegian Institute of International Affairs, said that any such limits under Article 112 “should be temporary and proportionate” and was very clear when he added that “I do not think the Article 112 strategy is designed for countries that want to be left out of the free movement of persons”.

Furthermore, it is said that Norway has never used the ‘emergency brake’ under Article 112-114 for fear of retaliation by the EU. One might think that such fear is warranted.

After all, when Switzerland voted in a referendum to introduce quotas on EU migration it was suspended from the Erasmus scheme.

The EU Employment Commissioner Laszlo Andor remarked that this was “not a punishment or sanction of the expression of the Swiss electorate but a logical consequence of the choice Switzerland itself has made.”

Mr Kinnock is therefore misguided if he believes that the UK could unilaterally impose numerical limits on migration by EU citizens during our temporary membership of the EEA for what he admits could be an indefinite period.

There is also the wider picture to consider. The EU27 were not willing to contemplate any serious concessions on freedom of movement when there was a risk of the UK leaving the Union. So why would they do so now when we are on the way out?

They would be well aware that, in the light of the tensions in the EU over the migrant crisis, they would be opening a can of worms that could well have wider consequences.

The reality, therefore, is that EEA membership, even as a transitional arrangement, would require the UK to continue to accept free movement of people for the full period that we remain in the EEA and it is disingenuous to suggest otherwise.

And then, of course, there is the possibility that the French quip that “there is nothing so permanent as the temporary” would come to pass. Could that explain Mr Kinnock’s enthusiasm?

Labour MP Stephen Kinnock made news in the last few days with his claim that he was in conversation with around 15 Conservative MPs about a transitional arrangement which he believes should involve EEA membership.

Enough support, of course, potentially to threaten a defeat for the Government. Mr Kinnock is apparently in favour of EEA membership as a ‘stepping stone’ out of the EU. He believes that interim membership of the EEA would give the Government more time to negotiate a free trade agreement with the European Union.

He was clear that EEA membership should be ‘temporary’ and ‘time bound’ but, crucially, when pressed said that it was ‘not possible to put a deadline on it’. He is quoted as saying: “The case for the EEA is three-fold.

It buys us time to negotiate the final state deal with the EU, it delivers certainty for business and workers, and it allows us to reform Freedom of Movement.

The EEA has legal precedent for reforming freedom of movement as it exists in the European Union.

Article 112 of the EEA Agreement allows member states to introduce a quota based immigration system, and I would only advocate the UK entering the EEA if we used Article 112 to reform freedom of movement.”

Mr Kinnock seems to be suggesting that, by temporary membership of the EEA, we can remain in the Single Market for a period after Brexit (and so protect trade in goods and services) and can also impose limits on EU migration.

He suggests that Article 112 (usually described as the emergency brake) would allow the UK to control EU migration and claims that this would amount to ‘reform’ of free movement. This is very misleading.

If the UK were to join the EEA it would theoretically be possible to impose temporary controls on EU migration using Article 112.

This is one of three Articles called Safeguard Mechanisms, which are designed for times of serious economic and social difficulty.

It is worth quoting it in full:

If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement.”

Article 113 requires a country to notify its partners and enter into immediate consultations to seek a commonly acceptable solution.

Moreover, the state cannot impose such unilateral measures (for example, immigration controls) until one month has passed since notification has been given or a commonly acceptable solution has been found.

Consultations must then continue every three months “with a view to their abolition before the date of expiry envisaged, or to the limitation of their scope of application.”

It is clear therefore that any such limits are designed to be no more than a very temporary opt-out of free movement and in exceptional circumstances.

Indeed, in evidence to the House of Lords EU Committee, Dr Ulf Sverdrup, the Director of the Norwegian Institute of International Affairs, said that any such limits under Article 112 “should be temporary and proportionate” and was very clear when he added that “I do not think the Article 112 strategy is designed for countries that want to be left out of the free movement of persons”.

Furthermore, it is said that Norway has never used the ‘emergency brake’ under Article 112-114 for fear of retaliation by the EU. One might think that such fear is warranted.

After all, when Switzerland voted in a referendum to introduce quotas on EU migration it was suspended from the Erasmus scheme.

The EU Employment Commissioner Laszlo Andor remarked that this was “not a punishment or sanction of the expression of the Swiss electorate but a logical consequence of the choice Switzerland itself has made.”

Mr Kinnock is therefore misguided if he believes that the UK could unilaterally impose numerical limits on migration by EU citizens during our temporary membership of the EEA for what he admits could be an indefinite period.

There is also the wider picture to consider. The EU27 were not willing to contemplate any serious concessions on freedom of movement when there was a risk of the UK leaving the Union. So why would they do so now when we are on the way out?

They would be well aware that, in the light of the tensions in the EU over the migrant crisis, they would be opening a can of worms that could well have wider consequences.

The reality, therefore, is that EEA membership, even as a transitional arrangement, would require the UK to continue to accept free movement of people for the full period that we remain in the EEA and it is disingenuous to suggest otherwise.

And then, of course, there is the possibility that the French quip that “there is nothing so permanent as the temporary” would come to pass. Could that explain Mr Kinnock’s enthusiasm?

The Basics of the Proposal – Who can remain after Brexit?

2. Until the UK leaves the European Union, EU citizens will continue to have the right to come to the UK under free movement rules. However, after Brexit, free movement will end and a new regime will be introduced to govern movement from the EU to the UK. The future framework will be either decided as part of the negotiation with EU partners or unilaterally by the UK government (presumably this would be the case if the negotiations break down).

3. EU citizens who have lived in the UK for five years when the UK leaves the EU will qualify for ‘settled status’ under forthcoming legislation.

4. EU citizens who have lived in the UK but who have not lived for five years by the time the UK departs the EU will be allowed to remain in the UK and will be granted a temporary residence card which will entitle them to continue to accrue time towards ‘settled status’, so long as they arrived before a cut off date. This date is to be negotiated between the UK and EU partners, but will be at some point between 29th March 2017 (the day the UK government notified the European Union of its intention to depart the EU under Article 50) and the date that the UK actually leaves the EU.

5. Those EU citizens who arrive after the cut off date will be granted temporary leave to remain when the UK leaves the EU and may be able to remain permanently, ‘depending on their circumstances’ but they ‘should have no expectation of guaranteed settled status’.

6. ‘Settled status’ means that no immigration conditions will be placed on their residence so long as the person continues to live in the UK. In that sense ‘Settled status’ will be the same as present arrangements for non-EU citizens who can apply under certain circumstances for ‘Indefinite Leave to Remain’ (ILR) after five years. Settled status is not the same as citizenship – it does not confer on the holder a UK passport and nor does it give the holder the right of abode in the UK. Instead they have a right of residence in the UK which is conditional on their continued residence. ‘Settled status’ could be lost if the holder is absent from the UK for a continuous period of more than two years, unless they have ‘strong ties’ to the UK.

7. The government have produced a summary diagram of their proposal, which is reproduced below.

When do EU citizens need to apply for ‘Settled Status’ or temporary leave towards ‘Settled Status’?

8. EU citizens currently residing in the UK do not need to apply for ‘Settled Status’ before Brexit, indeed the scheme is not due to be open until 2018. The Home Office will instead ‘provide a period of blanket residence permission’ which will begin on the day that the UK leaves the EU. They say that this will be a ‘generic ‘”umbrella” of temporary leave applying to all existing lawful EU residents (and their family members)’ which will give EU citizens time between the end of free movement and the time that they obtain their residence document in which they can remain lawfully.

9. EU citizens will have a grace period (expected to be up to two years) in which they must apply for their individual ‘settled status’ or a temporary residence document which allows them to continue to accrue time towards ‘settled status’ if they arrived before the cut off date (between Article 50 day and Brexit day).

10. Those who arrive after the cut off date will also have to apply for a temporary residence document, but again the government are clear that they ‘should have no expectation of guaranteed settled status’. Once the grace period has expired, those who arrived after the cut off date will have to obtain further permission to remain. Eligibility will depend on those rules in place at the time and these are yet to be decided.

11. Anyone who has not applied for individual residence by the time the grace period has expired will no longer have the right to live in the UK.

Employment Rights

12. EU citizens in the UK now or who arrive before the cut-off date who qualify for ‘Settled Status’ and those who qualify for a temporary residence card with a pathway to ‘Settled Status’ will continue to have full access to the labour market, meaning that they will be able to look for and take up work as an employee or on a self-employed basis (they will also be allowed to live on a self sufficient basis or to study). Before the UK leaves the EU, EU citizens will continue to be able to come to the UK to look for work or take up a job even after the cut off point but after the grace period has expired EU citizens will have to obtain further permission to remain if they wish to continue working in the UK. Thus permanent rights are guaranteed only for those arriving before the cut-off date.

What Social Welfare and Public Services Rights will they have?

13. EU citizens who qualify for ‘Settled status’ will be able to access public services and welfare (including pensions) ‘on the same basis as a comparable UK national under domestic law’.^[2]

14. EU citizens on a path to ‘Settled Status’ will be able to access the same benefits that they can now. Once they are eligible and obtain ‘Settled Status’ they will be able to access services and welfare ‘on the same basis as a comparable UK national under domestic law’.

15. This means that EU citizens who are living in the UK now or arrive before the cut-off date will be able to have continued access to benefits and tax credits (if their circumstances qualify), pensions, the NHS, and education (including higher education). However, no such rights are guaranteed to those arriving only after the cut-off date or for anyone coming to the UK in the future after the UK has left the EU.

Family Members

16. Family members (EU and non-EU spouse/partners, children under 21 years of age, parents in the case of those EU citizens under 21 who live with and are dependants of that parent, and dependent parents^[3]) of eligible EU citizens will also be able to apply for ‘Settled Status’ if they arrive in the UK before the UK leaves the EU and have lived lawfully for five years.

17. Alternatively, if they arrive before the UK leaves the EU but at that point have not yet lived lawfully for five years they can apply for a temporary residence document that will allow them to continue to accrue time towards ‘Settled Status’.

18. This is most pertinent for non-EU family members of EU citizens living in the UK as most EU citizens living in the UK will have the right to remain as a result of their own EU citizenship and residence in the UK.

19. With regard to family members, it does not matter whether they arrive before or after the cut off date but they must arrive before the UK departs the EU to benefit from these arrangements.

20. Future family members who arrive after the UK leaves the EU, such as a future spouse, will be subject to the same rules that currently govern non-EU family migration (i.e. the sponsor must have a minimum income of £18,600 to bring a spouse/partner, and more if they are also sponsoring dependent children) or alternatively satisfy the post-exit immigration arrangements.

21. The children of EU citizens who are eligible for ‘Settled Status’ will also be eligible for this same status, regardless of where they were born, and regardless of whether they were born or arrived in the UK before or after the cut off date. Parents must apply for permission to remain on behalf of their children as every person must have a residence card specifying their right to remain after the grace period has expired.

Legal Status

22. The government have made clear that they believe that the rights of EU citizens living in the UK should be overseen by the UK courts.

What are the main differences between the UK and EU position?

23. First, the UK government is of the view that only those who arrived in the UK before the cut off date (to be negotiated) should be guaranteed settled status after five years of lawful residence. The EU has taken the view that anyone who has ever lived in the UK should be covered – potentially involving at least 6 million EU citizens, rather than the 3 million currently resident.

24. The UK government is of the view that the cut off date should be at some point between 29th March 2017 (the day that the UK notified the EU of its intention to leave) and the day that the UK departs the Union. The EU is clear that the cut off date should be the day that the UK leaves the EU.

25. There are also differences over what rights should be preserved in the future. The EU has suggested that all rights derived from Union law should be preserved after Brexit. While the government proposal includes the maintenance of the vast majority of rights that EU citizens currently enjoy, the main difference is that the right to future family reunion (i.e. the right to bring a future spouse/partner to the UK) will no longer be unrestricted and sponsors will have to meet the UK domestic immigration requirements that British citizens and non-EU third country nationals settled in the UK currently have to fulfill.

26. The final key difference is legal oversight, which the UK government is clear should be by UK judges. The EU is of the view that citizens’ rights should be upheld by the European Court of Justice. A compromise solution might involve an independent arbitration court (staffed by UK and EU judges) being set up to enforce the rights of EU citizens in the UK and UK nationals living elsewhere in the EU.

Footnotes

1. The UK Proposal can be found here: https://www.gov.uk/government/uploads/system/uploads/attachment_d… 621848/60093_Cm9464_NSS_SDR_Web.pdf
2. The glossary to the Policy Paper outlining the UK offer on EU Citizens’ Rights states that ‘A UK national is the term referred to in this document to describe those people who are regarded as UK nationals for EU law purposes.’
3. See here for the definition of a family member in EU law: http://www.mvcr.cz/mvcren/article/the-definition-of-a-family-memb… -liechtenstein-and-switzerland.aspx