Brexit Economy

Immigration after Brexit

Brexit is bringing imminent changes to an array of policy areas in the UK, representing an exceptional moment for immigration policy. In September the Migration Advisory Committee (MAC) published its report on EEA migration in the UK, the UK Government is in the midst of Brexit negotiations, and an immigration White Paper is expected by the end of the year that could outline the biggest changes to the UK’s immigration system in decades.

19 November 2018

Darllenwch yr erthygl yma yn Gymraeg | View this post in Welsh

This is a guest article by Lucy Stone of the Bevan Foundation.

Brexit is bringing imminent changes to an array of policy areas in the UK, representing an exceptional moment for immigration policy. In September the Migration Advisory Committee (MAC) published its report on EEA migration in the UK, the UK Government is in the midst of Brexit negotiations, and an immigration White Paper is expected by the end of the year that could outline the biggest changes to the UK’s immigration system in decades.

While immigration policy in the UK is reserved to Westminster, proposals will be of interest to communities and sectors in Wales, especially the NHS, social care, economic sectors and higher education institutions.

Migration in Wales

Wales relies heavily on migration for its population growth, including the growth of its working age population.

Between 2016 and 2017, almost 97 per cent of Wales’s population growth was due to net migration – 57 per cent from internal net migration (people migrating in and out of Wales from within the UK) and 39 per cent from international net migration (people migrating in and out of Wales from outside the UK).

In total, Wales’s population grew by 12,476 people, 7,386 people from within the UK and 5,090 people from outside the UK.

Of those coming into Wales from outside the UK in 2016, 61 per cent came from outside the EU and only 28 per cent from inside the EU (a further 11 per cent were UK born).

The current UK immigration system

Currently, EU citizens have treaty rights to live and work in the UK under free movement, which is due to end on 31 December 2020 after the Brexit transition period. Non-EU citizens who want to live and work in the UK are subject to the rules under the UK’s points-based immigration system which is made of up 5 Tiers:

  • Tier 1: for highly skilled individuals, who can contribute to growth and productivity and consists of several different strands;
  • Tier 2: for skilled workers with a job offer, to fill gaps in the United Kingdom workforce and is also made up of different strands and has an earning threshold of £30,000 a year;
  • Tier 3: for limited numbers of low-skilled workers needed to fill temporary labour shortages. This Tier is closed for applications;
  • Tier 4: for students who wish to study in an institution that is not an academy, or a school maintained by a local authority;
  • Tier 5: for temporary workers and young people covered by the Youth Mobility Scheme, who are allowed to work in the UK for a limited time.

EU Settlement Scheme

For EU citizens residing in the UK, the UK Government has developed the EU Settlement Scheme. According to the Home Office, the EU Settlement Scheme enables EU citizens resident in the UK and their family members to continue living in the UK permanently. Consistent with the draft Withdrawal Agreement with the European Union published in March, the EU Settlement Scheme means that:

  • By 31 December 2020, EU citizens and their families who have resided in the UK for five years or more will be eligible for ‘settled status’ enabling them to stay in the UK indefinitely;
  • EU citizens and their family who arrive by 30 December 2020 but have not been continuously resident in the UK for five years will be eligible for ‘pre-settled status’, enabling them to reside in the UK for five years allowing them to apply for settled status;
  • EU citizens and their families with either settled or pre-settled status will have the same access to healthcare, pensions and other benefits that they had previously.

The rights of EU citizens under EU law will be unchanged until 31 December 2020. The full roll-out of the EU settlement Scheme is expected by the end of March 2019 and the deadline to apply for settled or pre-settled status for those residing in the UK by 31 December 2020 will be 30 June 2021. However, the Home Office has not explicitly confirmed whether the deadline for applications will change in the case of a no deal Brexit.

The Migration Advisory Committee (MAC)

In July 2017, the UK Government commissioned the Migration Advisory Committee (MAC) to report on the current and likely future patterns and impacts of European Economic Area (EEA) migration in the UK. On Tuesday 18 September 2018, the MAC published its report titled ‘EEA migration in the UK’. The report aims to provide an evidence-base for the design of a new UK immigration system post-Brexit.

The MAC report found that EEA migrants tend to have little to no impact on the levels of employment, unemployment and wages of the UK-born workforce. However, the little impact they did find showed uncertain evidence of negative effects for lower-skilled workers.

It also found evidence that EEA higher-skilled immigration has a positive impact on productivity with higher-skilled migrants having a positive impact on innovation. But lower-skilled migrants were found to have slightly negative impacts. There was also no evidence that migration affects training among UK-born workers.

The report found that on average EEA-born citizens pay more in taxes than they received in benefits. They also tend to contribute much more to the health service and social care in financial resources and through employment than they consume in services.

Finally, there was no evidence that EEA migration has an impact on crime or that migration has reduced the average level of subjective well-being in the UK.

MAC proposals

Alongside new research, the MAC report makes a number of proposals for the new UK immigration system, which include:

  • Giving no preferential treatment for EEA citizens, and adding EEA citizens into the UK’s current Tier 2 scheme;
  • Abolishing the Tier 2 visa cap (which is currently 20,700) and adding medium-skilled jobs to the Tier 2 scheme;
  • Retaining the £30,000 salary threshold throughout the UK for the Tier 2 scheme;
  • Rejecting a work route for lower-skilled workers (with the exception of seasonal agricultural workers scheme). If there is to be a route for low-skilled migrant workers the report recommends using an expanded youth mobility scheme rather than employer-led sector-based routes;
  • Restricting access to migrants with below Level 3 qualifications on the regulated qualifications framework to work in the UK, and
  • Rejecting the introduction of more regional variations, especially lower salary thresholds.

It is important to add that these proposals focus on the future UK immigration system if it is set in isolation and excluded from Brexit negotiations. If EEA migration is included within Brexit negotiations it could look quite different.

But what could these proposals mean for Wales?

If the MAC recommendations to include medium-skilled jobs and scrap the cap on Tier 2 visas are adopted, the range of jobs open to migrant workers would widen, helping to fill some harder to fill skilled jobs in Wales. However, if the suggestion of retaining the £30,000 earning threshold for migrant workers under the Tier 2 visa requirements is implemented this could have the opposite effect. In 2017, the average gross salary in Wales for full-time workers was £26,327 and salaries for some medium- to highly-skilled jobs are below the £30,000 threshold.

According to the MAC interim report, EEA workers make up a significant share of the workforce in some lower-skilled sectors in Wales with EEA workers making up 25.6 per cent of the manufacturing of food and beverages workforce, and 5.4 per cent of the share of the accommodation and hospitality workforce. If the recommendation to limit the number of lower-skilled migrants into the UK is included in the new system, this could lead to a shortage of workers in these sectors in the future.

UK Government position

Prior to the MAC report, in the Brexit White Paper the UK Government announced that free movement will end after the Brexit transition period. Since the MAC report was published the UK Government has endorsed some of their proposals.

At the Conservative Party conference in early October the UK Government announced its proposals for a single immigration system for non-EU and EU citizens that gives priority to highly-skilled workers and aims to curb lower-skilled migration.

The Home Secretary, Sajid Javid MP, said that he would consider scrapping the current cap on Tier 2 visas for higher-skilled migrants and alluded to reviewing the £30,000 Tier 2 salary threshold.

The UK Government has also proposed that highly-skilled migrants will be able to bring their immediate family, but only if they have sponsorship from their future employers. However, the final terms are expected to be subject to the Brexit negotiations and any future trade deals.

Welsh Government position

In October, the Welsh Government commented on these post-Brexit immigration plans stating that plans to limit immigration after Brexit will harm Wales. After a Joint Ministerial Committee in Westminster, the Cabinet Secretary for Finance, Mark Drakeford AM stated that

“I had to set out the reasons why the Welsh Government is fundamentally opposed to the way in which this UK government intends to go about migration, and to explain how their policies would do damage to Welsh businesses, Welsh public services and Welsh universities”.

In its 2017 ‘Brexit and Fair Movement of People’ paper, the Welsh Government called for migration to be linked to employment, while maintaining substantial access to the Single Market and having a preferential approach to immigration for EEA nationals.

It does not support the UK Government’s approach to reducing migration numbers to meet their target of ‘tens of thousands’, claiming that this approach would cause intra-UK competition for workers that could effectively reduce immigration to areas outside south east England to zero.

The 2017 paper also did not support a sector-based scheme that would not benefit the sectors in Wales that rely on EU workers the most, but at the same time it is not seeking a ‘spatially-differentiated’ or regional approach. However, it stated that if the UK Government’s approach did not recognise the needs of Wales, its “preference would be for a spatially differentiated approach, where the Welsh Government would have a stronger role in determining how future migration to Wales would be managed, in order to ensure that Wales’ key sectors, public services and universities can continue to recruit from Europe”.

The paper also notes that the distinct needs of Wales “cannot easily be met through the blunt and resource-intensive UK-wide approach currently in place”. While the MAC does not favour sector-specific schemes and both the MAC and the UK Government wish to link migration to employment, the general positions of the MAC and the UK Government do not reflect the position set out by the Welsh Government.

What’s next?

Currently, it is very unclear what will happen to EU migration if no Brexit deal is reached. Statements from the Minister of State for Immigration, Caroline Nokes MP, at a Home Affairs committee meeting on Tuesday 30 October suggested that, if there is a no-deal Brexit, free movement will end on 29 March 2019 and employers will need to check whether EU citizens arriving after that date have the right to work in the UK. Nokes later stated that “employers will need to check passports or ID cards as they do now for EU citizens and indeed for British citizens when making a new job offer. We will not be asking employers to differentiate, even if there is no deal.”

These uncertainties and more are expected to be addressed in the immigration White Paper which is due to be published by the UK Government imminently. This White Paper should set out the UK Government’s plans for a new UK immigration system post-Brexit and could signify one of the biggest changes to the UK immigration system in decades. It is plausible to think that these plans will consider some of the MAC proposals in their original form.

The UK Government has also committed to introduce an Immigration Bill early next year before 29 March 2019 or ‘Brexit day’. However, it is unclear whether the Immigration Bill will have gone through Parliament before March 2019.


Article by Lucy Stone, Bevan Foundation.