Two years after exiting, Britain is already beginning to re-think its relationship with the Europe Union. As we approach the second anniversary of the UK’s exit from the European bloc, a growing chorus of criticism is being aimed at the particularly damaging version of Brexit chosen by Theresa May and Boris Johnson, and negotiated by Lord Frost. We need to learn from the last two years. To this end, Yorkshire Bylines has decided to offer our help by publishing a series of linked articles: the lessons of Brexit.
Immigration
Controlling immigration was a central issue in the referendum. Theresa May staked everything on it, opting for the most damaging Brexit – leaving Britain outside the single market with its four indivisible freedoms, including that of movement of people – in order to control our borders.
The issue, however, goes back to David Cameron’s rash 2010 promise to reduce immigration to the “tens of thousands” without any analysis of need or plans to fill the skills or worker gaps that would inevitably ensue. Even now, for example, the funding for medical school places is below the replacement rate, making immigration essential.
What Brexit has revealed is the true extent to which vital sectors of the UK economy relied on EU workers.
Net migration is now at record levels
The Office for National Statistics says net migration for the 12 months to June 2022 reached an estimated 504,000 more people arriving long-term to the UK than departing. Net migration of non-EU nationals was estimated at 509,000 in the year ending June 2022, compared with 51,000 and 45,000 for EU and British nationals respectively who left our shores. These are extraordinary numbers.
Yet there has been no overt backlash from Brexit voters, prompting the FT to report:
“During [2021], almost one million visas were issued to people seeking to come and work, study or live in the UK. All of these figures are the highest they have ever been. Cast your mind back to June 2016, and the idea that Brexit – a cause shot through with anti-immigration rhetoric – would result in a greater number of foreign nationals entering the UK than before the referendum would seem fanciful, yet that is where we will most likely find ourselves this year.
“Perhaps even more surprising is that the increase has not been met with outrage from the millions whose votes to leave the EU were motivated primarily by concerns about immigration. Indeed, one of the most striking dynamics in the past five years has been the decoupling of concern about immigration from immigration levels themselves.”
“Ten years ago, only one in four felt that immigrants were necessary to help the UK’s economic recovery; half felt they hampered it by taking away jobs from Britons. In 2022, those shares have switched places, according to a new British Future report to be published this month.”
Evidence regarding freedom of movement was ‘misrepresented’
This may not be quite as surprising as the FT suggests. The wide-ranging 2012–14 balance of competences review, commissioned to inform government policy on UK-EU matters, included a report on the whole issue of freedom of movement. The review heard evidence that claims of freedom of movement being abused were unfounded.
The report was criticised by the House of Lords for not being more widely publicised and by the think tank UK in a Changing Europe for misrepresenting the evidence received.
Charlotte O’Brien, senior lecturer at York Law School, claimed the evidence submitted to the freedom of movement consultation “did not support the driving premise of government policy in this area for the last few years, namely that the free movement of persons must be reduced, that it is being abused, and that it encourages benefit tourists”.
She accused the report’s authors of giving prominence to submissions from David Goodhart of the right-wing think tank Demos, Open Europe (now merged into another think tank Policy Exchange), and Migration Watch. Twenty-eight other respondents (including the Scottish government and the National Institute for Social and Economic Research) stated that there was no evidence for claims that free movement was being abused.
Only ten of those who gave evidence took the position that there was a problem with freedom of movement. This includes one submission of a single sentence for the whole questionnaire while nine “provided no extrinsic evidence, and some were borderline abusive (‘I would never employ a foreigner… we are FLOODED with unwanted immigrants’)”.
Despite this, the report was never cited or used by the government during the EU renegotiation process.
The eventual result was that May prioritised controlling EU immigration over all else and Britain had no option but to exit the EU single market. Industry (e.g., farming and hospitality) now complain they are being held back because of a shortage of foreign workers.
Non-EU migrants have a lower employment rate
Immigration numbers are as high if not higher than before, yet paradoxically we are still experiencing shortages of both skilled and unskilled workers.
Part of the reason may be because non-EU migrants tend to have a lower employment rate than immigrants from the EU, according to the chief economist at the UK investment bank Panmure Gordon, Simon French. He points out that while immigration numbers in aggregate have remained broadly stable, what has changed is the composition, with more non-EU immigrants who tend to have a lower employment rate, impacting UK productivity.
The situation is also creating tensions inside government. Chancellor Jeremy Hunt, in order to boost economic growth, has advised the Office for Budgetary Responsibility to assume 200,000 immigrants arriving every year – doubling earlier assumptions. Meanwhile, the home secretary wants to reduce immigration to tens of thousands.
Jonathan Portes, writing in Byline Times, says the UK’s post-Brexit immigration policy has been a “rare success”. He challenges the idea that what “those who voted for Brexit really wanted and voted for – was much lower immigration”. This he says was “simply not the case”. He acknowledges “the undercurrent of xenophobia” in the Leave campaign and even admits a “substantial majority” of voters, both Leave and Remain, expected that Brexit would reduce migration flows.
He puts the absence of widespread disapproval to current immigration levels down to voters accepting EU immigration is now being ‘controlled’. The UK of course has always had the ability to control non-EU immigration.
The cost of overseas recruitment has increased
What is undeniable is that recruitment from overseas is now far more difficult and the free-market Brexiters are apparently happy to effectively nationalise the supply of immigrant labour, with control exercised by Home Office officials.
The Chartered Institute of Personnel and Development says under the new immigration system, employers will be subject to more bureaucracy and a range of extra costs in recruiting (non-UK) workers from overseas. These include a sponsorship licence, visas (which could extend to dependants of the skilled migrant) and the immigration skills charge for each worker. All non-UK citizens will also be subject to an immigration health surcharge of up to £624 per year, which some employers may also feel compelled to pay, with the exception of health and care staff who will be exempt from the charge.
For global businesses who frequently relocate employees, this is another disincentive to invest in the UK. It may be possible to bring EU workers in, but some foreign investors may think it’s better to be established in the EU where the recruitment of skilled workers is easier, quicker and cheaper.
Refugee and immigration policies interact in ways that were never foreseen. Lack of free movement of labour has also increased modern slavery, human trafficking and illegal immigration (and the non-immigrant grey economy).
The issue of asylum seekers crossing the channel has become a political hot potato, with a huge rise in numbers. Outside the EU, returning those found not to be genuinely fleeing persecution has been made far more difficult. Although as a member state Britain made little use of the so-called Dublin III agreement, this was when boat crossings were a relatively minor issue.
Does the public now accept high levels of immigration?
Images of food left to rot in the field for the want of seasonal pickers, and difficulties recruiting care workers and clinical staff for the NHS, may have persuaded voters that allowing in more foreign workers is not the problem Brexiters had implied.
Tony Danker, director general of the CBI, in a recent speech has already called for a rethink on immigration if the UK is to grow its economy. He says, “Remember that GDP is a simple multiplier of two factors – people and their productivity. And it’s time to be honest: we don’t have the people we need, nor do we have the productivity”.
“People are arguing against immigration but it’s the only thing that’s increased the potential growth of our economy since March.” – Tony Danker, CBI
Portes may be right to assume voters are satisfied with the current high level of immigration because they now perceive it being ‘controlled’. Only time will tell. And it is only a perception that ‘control’ came after Brexit. Britain always had full control over non-EU immigration.
The EU’s free movement directive (2004/38/EC) only permitted EU workers to “remain in the UK for up to three months from the date of entry, provided they do not become a burden on the social assistance system” and if they did, they could be removed. Belgium and Italy use this legislation to repatriate thousands of EU migrants each year. Britain could have done, but did not.
Lessons learned
It’s clear that low net immigration – in the tens of thousands – is not only unrealistic but is damaging the economic growth needed to maintain public services. In any event, immigration cannot be turned on and off like a tap and governments are never fully in control.
It’s also clear that putting the government in charge of deciding which sectors need workers, how many and which ones are allowed in, is cumbersome and costly. If there was never any evidence of freedom of movement being abused and the total immigration numbers are still not an issue, perhaps the lesson here is that freedom of movement worked. Market forces determined which sectors received migrant labour, and government interference was not necessary beyond removing EU workers without the means to support themselves after three months.
UK ministers have spent several years negotiating with the EU to restore as much as possible of three intra-EU freedoms: the movement of goods, services and capital. If the public attitude to high levels of immigration is softening, could that herald a return to the freedom of movement of workers too?
If so, Brexit itself may be called into question.
The next article, on deregulation, is available here.
