What impact did Brexit have?
Prior to Brexit the UK operated a two-tier immigration system for work. This provided preferential treatment to EU citizens who could come to the UK under freedom of movement. Brexit replaced this with a level playing field. Free movement into the UK for EU workers was ended. But, for those coming to work in the UK from outside the EU, the rules were relaxed.
The cap on numbers and the Resident Labour Market Test requirement were removed. The required minimum skill and salary level for overseas workers were reduced – subsequently even further for those working in social care. In addition, the ability for international students to stay on to work in the UK after finishing their studies was made significantly easier.
These liberalising changes had the greatest impact in terms of migrants from India, Nigeria and Pakistan, countries with which the UK has unique, deep, and longstanding connections. These countries have very large pools of potential workers. India’s population is nearly 40 times larger than Poland’s, the EU country that had provided the largest flow of workers to the UK under freedom of movement. Overall, immigration numbers to the UK grew post-Brexit.
In the period between the EU referendum and Brexit itself, long-term net migration from the EU into the UK declined by more than 80%. This may partly have been due to uncertainty around Brexit. But inflows from some EU countries remained robust during this period. And, under the EU Settlement Scheme, the UK made a generous offer to EU citizens – including those continuing to come to the UK in this post-referendum period – of permanent settlement in the UK, which an estimated 5.8 million EEA nationals have so far taken advantage of. Other explanations for the lower inflows from the EU in this period were: exchange rate movements reducing the effective take from working in the UK, a stronger Polish economy incentivising workers to return there, and a natural reduction in the size of the inflows from what had been unusually, and unsustainably, high numbers in the period immediately preceding the EU referendum.
The picture of what then happened when Brexit finally occurred is obscured by the impact of the COVID-19 pandemic. The pandemic not only halted inbound movement to the UK, it also scrambled the UK’s official immigration statistics. For a period, no official overall net migration number was reported for the UK at all.
Soon though the official reported numbers returned, with a vengeance. The year to end of June 2023 is now recorded as having seen net migration into the UK of 906,000, dwarfing what had been the then record of 335,000 in the year running up to the EU referendum in June 2016.
Does the mix of immigration to the UK matter?
In the light of this overall robust immigration picture, does it matter that freedom of movement to the UK from the EU has ended, and the numbers of EU citizens coming to the UK to work have greatly reduced?
Workforce fluidity is particularly important to some sectors of the UK economy which rely on less skilled, lower paid workers. And this fluidity is best sourced and served from the neighbouring region, from which it is easiest for potential workers to come and go relatively swiftly and cost effectively. Prior to Brexit examples abounded of those from the EU, utilising freedom of movement, engaging in circular migration – the same person moving back and forth at different times – and replenishing migration – different people moving back and forth at different times.
In social care, EU workers could in effect tag team in pairs, one of the pair coming to the UK to provide care for a few months before returning home and being replaced by the other worker in the pair to take over for the next few months. In horticulture, workers could come to the UK for the picking season, then go back home but return again the following season. In hospitality, many young EU citizens came to the UK to work in the sector for a period before returning home, to be immediately replaced by fresh EU citizens doing the same.
This was particularly important in the hospitality sector, with its workforce structure of many entry-level employees who do not stay long, with the employer or even in the sector, with many businesses replacing the majority of their teams each year. EU freedom of movement had been a boon to hospitality, facilitating a constant new flow of workers. After Brexit, whereas horticulture and social care received special exemptions from the core salary and skills requirements of the new immigration system, to make up for the loss of freedom of movement, the same dispensation was not granted to businesses in the hospitality sector.
Instead, hospitality businesses had to adapt or cease. And the lower-paying nature of the sector means that the minimum salary threshold required by the post-Brexit immigration system has made it hard to adapt. The result: in the period 2021-Q1 2024 only 4% of skilled worker visas issued in the UK were for the hospitality sector, and over three quarters of those went either to chefs, proprietors or managers. The significant rise in the minimum salary threshold introduced in 2024 has only further challenged the sector.
Competing visions of a Youth Mobility Scheme?
One mitigant for the hospitality sector though is its attractiveness to young people coming to the UK through the UK’s Youth Mobility Scheme (YMS). Under this reciprocal scheme young people from specified countries, with sufficient savings, can come to the UK for two –in some cases three – years. They cannot bring dependants, but they are allowed to work. Unfortunately for the hospitality sector though, the EU-27 countries currently are not included in the YMS. And suggestions – including from the European Commission itself – that they might be added to it have been met with a straight bat defence from the UK’s two main political parties, adamant that they are not for reinstating EU freedom of movement through the back door.
But to add the EU-27 countries to the existing YMS would do no such thing. Including the inclusion of EU countries would simply allow their young people wanting to come to the UK for a time limited period to be put on the same footing as those from South Korea, Japan and Uruguay, who can currently avail themselves of this opportunity. And, indeed, on the same footing as those from Andorra and Iceland, whose young people, for the purposes of YMS eligibility at least, are fortunate that their countries are in Europe but not in the EU.
On the face of it the likely impact on the UK’s overall immigration numbers of an extension of the YMS to include the EU-27 would at most seem modest. The YMS works on a reciprocal basis, and in any event gives no permanent right to stay for those coming to the UK. In any event, the numbers coming to the UK through the YMS thus far – a little under 25,000 in the year ending September 2024 – are not large.
This does not mean though that including the EU in the YMS is a no-brainer quick win for the UK, and that failure to do so would be irrational. The modest numbers through the YMS thus far reflect the fact that most of the countries currently part of it have relatively small populations. They have also agreed quotas to place a ceiling on the annual inflows to the UK from their country. By contrast, the EU’s population is huge. And the European Commission’s proposal for its youth mobility arrangement with the UK is that it should not be subject to a quota.
In addition to which, a number of the Commission’s other proposed parameters of its vision for how a youth mobility arrangement with the UK should look imply a scheme rather different to the existing YMS. These include the Commission’s suggestions:
- of a more extended period – of up to four years – as the time limit for stay,
- that the UK’s health surcharge – the fee charged to migrants to cover their use of the NHS – be waived for youth mobility from the EU,
- that the restriction on bringing dependants should also be waived, and
- that the arrangements be extended into higher education, with EU students being entitled to study in the UK at the lower domestic student tuition fee level.
The art of the deal?
These proposals create a significant challenge for the UK government. But also an opportunity.
In the run up to the EU referendum arguably nothing was more damaging to the Remain cause than the perception of David Cameron’s failure, ahead of the vote, to extract meaningful concessions from the EU on freedom of movement. It reaffirmed a perception among many voters that the UK had become relatively powerless in the face of the EU, consigned to the role of a rule taker rather than a rule maker.
In some quarters, of course, any suggestion that the UK should now have a closer relationship with the EU about anything engenders an allergic reaction. But it does not seem that a closer relationship with the EU over youth mobility would necessarily be unpopular with the broader British public.
To be sellable politically though, the UK government must be seen not as a rule taker but as a rule maker. Taking back control will be achieved not by ignoring the EU’s overture on youth mobility, but by negotiating. Hard. Fortunately, the European Commission’s proposal invites, indeed requires, negotiation. The Commission’s proposal was an opening gambit, as it has publicly admitted.
Across the Atlantic the returning United States President has arguably founded an entire political career on an approach that regards almost everything as a negotiation, and every statement as an opening gambit. That approach does not appear to have dented his political popularity; rather to have cemented it. The UK government should bear this in mind when considering its approach to its future relations with the EU, both over youth mobility and more broadly. It may also find the negotiating practice worthwhile, should the United States – also currently excluded from the YMS – feel left out and itself wish to commence negotiations to join.
