3 June 2016

What have the Remain and Leave campaigns said about future immigration policy?

Unsurprisingly, the Remain campaign has been reluctant to discuss migration given that the majority of the public sees free movement as a cost rather than a benefit of membership. However, during the Sky News debate last night, Prime Minister David Cameron said that in his view, once the Eurozone crisis subsides, the flow of EU nationals into the UK and the flow of UK nationals to the rest of the EU will be “broadly in balance” and that the changes to EU migrants’ benefits will further check low-skilled, low-wage migrantion.

Conversely, immigration is the Leave campaign’s strongest card and its recent upswing in the polls has been widely linked to its strategic decision to go big on the issue. Earlier this week, four senior Vote Leave figures – Michael Gove, Boris Johnson, Priti Patel and Gisela Stuart – unveiled a set of alternative immigration policies the UK should, in their view, pursue post-Brexit. The key points include:

  • A commitment to maintaining free movement for Irish citizens and border free travel (the Common Travel Area) between Northern Ireland and the Republic of Ireland.
  • A promise that there will be no change in status for EU citizens already lawfully resident in the UK – post Brexit they would be granted indefinite leave to remain (as Open Europe and others including British Future and the IoD have argued for).
  • Increased ability to remove criminals and other persons whose presence in the UK is not conducive to the public good.
  • The establishment, by the next general election, of “a genuine Australian-style points based immigration system” which would allow the UK to treat EU nationals on a par with those from elsewhere around the world, including Commonwealth countries.

In a referendum campaign generally characterised by a lack of detail such a relatively comprehensive statement is to be welcomed, although there are several notable omissions. Firstly, there is no explicit commitment to keeping in place the government’s discredited ‘tens of thousands’ net migration target although they conclude that “If we implement these principles, for the first time in a generation it will be possible for politicians to keep their promises on migration.”

This leaves open the possibility of adopting a revised, more realistic migration target, or potentially dropping it altogether, although many leading Leave campaigners and most of its voters supporters support significantly lower migration. Only last week Boris Johnson implied that it would be possible to meet the target outside of the EU while simultaneously easing ‘unfair’ restrictions on non-EU migration. With net non-EU migration at 188,000, the numbers simply do not add up. Also, since free movement is a two-way street, if fewer UK nationals end up moving to the EU post-Brexit, it will further reduce the scope to ease inward migration.

Secondly, there is no consideration of future flows of semi-skilled migrants. The implication of the new points-based system is that only migrants meeting a certain skills threshold will be allowed in but this takes no account of the economy’s need for a flexible supply of labour at the lower end of the skills spectrum. Despite persistently high levels of migration, the employment rate is at a record high of 74.2%, suggesting that the UK’s labour market is already tightening.

 

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If the UK were to scrap free movement after leaving the EU, businesses’ demand for semi-skilled migrants in areas such as hospitality and construction (contrary to what many Leave campaigners claim, it is not just large multi-nationals that benefit from free movement) will not cease. If these sectors of the economy are not to suffer, the government will have to make some provision for continued semi-skilled migration – this in turn will make it harder to keep overall numbers down. If the government does not keep sufficient avenues for semi-skilled migration open, the consequence could be increased illegal employment, something the UK already has a problem with.

Finally, there is no mention either way of post-Brexit visa arrangements for (non-Irish) EU nationals. In our view this remains an unlikely scenario as it would harm tourism and commerce, and could result in UK nationals also having to apply for visas when visiting the continent. It would also make it very difficult, if not impossible, to maintain the border-free CTA with Ireland, which both countries have a strong interest in maintaining.

How should UK migration policy change post-Brexit – Open Europe’s view

In the event of a Leave vote, there will be an intense debate within the Tory party – and the country more broadly – about future immigration policy. As noted above, there will be significant pressure to reduce immigration given the centrality of this pledge in the Leave campaign. However, as we set out in our liberal, free market guide to Brexit – if the UK is to prosper outside of the EU, it will be hard to significantly cut the headline rate of net migration.

Leaving the EU us unlikely to provide a magic bullet but would potentially provide more tools to regulate migration. Nevertheless, any new post-Brexit immigration system will have to balance these conflicting political and economic priorities. Pursuing a policy more geared towards attracting skilled migrants could prove more politically acceptable – polls have shown such migration is less controversial than semi-skilled migration. Currently, it is possible to argue that the UK’s immigration is unbalanced – too restrictive for skilled migrants from outside the EU but too loose for semi-skilled and low-skilled migrants from within the EU.

Open Europe would therefore also recommend adopting a points-based system along the Canadian and Australian models with an annual cap that can be adjusted depending on circumstances. In our view, it needs to incorporate the following features:

  • Businesses have regularly complained about how hard it is to attract skilled migrants while the Government’s own Migration Advisory Committee has warned of “a significant risk that [further restricts] would have detrimental impact on the UK’s productivity, innovation and competitiveness in the short and long run.” Establishing a relaxed and less bureaucratic scheme for ‘high-value migrants’ (entrepreneurs, investors, and those with exceptional talents) and skilled workers will therefore be a priority. Currently, under the Tier 1 and Tier 2 visa programmes, the number of visas is capped at 1,000 and 20,700 per year. Those with a concrete job offer could be offered ‘express entry’ as under the Canadian model.
  • As noted above, there will still be demand for semi-skilled and low-skilled migration and there will need to be programmes to address any post-Brexit labour shortages in key economic sectors as well as schemes to attract seasonal agricultural labourers. It is worth noting that under the Australian model, far more migrants (59%) enter via temporary ‘working holiday’ visas than via the formal points-based scheme (35%).
  • Finally, a consistent and uniform policy can be set with regards to new migrants’ welfare entitlements, something complicated by EU rules on non-discrimination. This would ensure that all migrants have to make a contribution to the exchequer before being eligible for welfare benefits or social housing while the current ‘health surcharge’ of between £150 and £200 per year that non-EU migrants pay towards their NHS treatment would be expanded to cover all migrants. This would again go some way to addressing public concerns about the impact of immigration on the UK economy and public services.

Given the practical difficulties of radically reducing immigration within or outside the EU, there will need to be further thought and debate about how to manage and fund policies to adapt to an increasing population whether the UK remains in or leaves the EU.