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The Deal in Detail 5) Immigration

David Goodhart is Head of Demography at Policy Exchange and author of The Road to Somewhere: The New Tribes Shaping British Politics.

A sense that the country was changing too fast and a desire to reclaim normal national controls over who comes and goes and who, in effect, becomes a citizen was one of the primary motivations behind Brexit. And on January 1 the EU free movement rules will duly come to a formal end, with EU citizens no longer able to come and live and work here as if they were British citizens.

A last minute flurry of EU citizens arriving in the UK was expected, Covid-restrictions allowing, as anyone resident here for only one day prior to 2021 will be able to claim the right to live and work here for five years (and then apply for the right to stay permanently).

Most of the UK’s new “points-based” immigration rules, levelling the field between EU and non-EU people wishing to come for more that a visit, became law in early 2020, and the Withdrawal Agreement dealt with the rights of EU citizens already here. But the final Brexit deal did contain some new details on such things as the Erasmus student exchange system and on mutual recognition of professional qualifications.

Overall on the post-Brexit movement of people many important things will stay the same (visa-free short stays up to 90 days will continue to be allowed in both directions), many things will change quite radically (such as the ability of EU citizens to work in low-skill jobs) and some things remain uncertain (the mutual recognition of professional qualifications).

First, the bigger picture immigration story that began life on December 1 2020 for the rest of the world and January 1 2021 for the EU. Ian Robinson of immigration lawyers Fragomen puts it like this:

“We now have one of the fastest and most certain immigration schemes in the world for skilled workers, though it is also one of the most expensive. That said, it could never be as fast or certain as free movement”.

The new so-called points-based visa system liberalises skilled immigration, which now applies equally to EU and non-EU people, and essentially turns the UK into an employer-sponsorship immigration system for anyone with A-level equivalent qualifications or paid above £25,600. The previous cap of 20,700 on skilled workers from outside the EU is suspended and employers no longer have to observe the resident labour market test (advertising the job to British citizens first).

Immigration into lower skill jobs, by contrast, is essentially closed with no exemptions (apart from the seasonal agricultural workers scheme).

Will this reduce or increase overall numbers? In the short-term, the pandemic is likely to depress numbers arriving in the main work and student categories. In the medium term the numbers could rise, especially if there is a significant influx from Hong Kong, but the liberalisation for skilled worker immigrants is likely to be more than matched by the reduction in EU citizens coming to do low-skill jobs.

Government will have two tools for regulating flows if numbers do creep up: it could reintroduce a cap on the visa numbers if unemployment starts rising too high and it can increase the cost to the employer of bringing someone in. That cost is already high by international standards (though both Australia and the US are comparable), with a single person costing an employer £5,500 for a three-year visa, assuming the employer pays the annual health charge of £625 and the visa cost of £600, and for someone with a spouse and three children for five years the cost rises to around £27,000.

And what about the impact of the low skill immigration stop? The Government’s intention is that employers will make those jobs more attractive to those already living here or phase them out by investing in labour-saving equipment.

There is some tentative evidence that that is indeed happening. EU citizens make up about seven per cent of the UK workforce (17 per cent in London) and about two-thirds are classified as low-skill, but some sectors have become heavily dependent on them: food production (around one third), hotels (20 per cent), and warehousing (18 per cent). Only about four per cent of NHS nurses are from the EU, but that rises to eight per cent for the social care workforce. (If there is to be an exemption on low-skill immigration anywhere it is most likely to be in social care.)

Most EU citizens intend to stay, with around 3.5 million signing up for the EU settlement scheme which grants continuity of rights (though only permanently once you have been resident for five years). But by the end of June next year anyone who has not signed up will be regarded as an illegal immigrant and subject to the so-called “hostile environment”.

It is likely that the few thousand people who are likely to have slipped through the net will be granted some kind of amnesty, the problem for the Government is that will then set a precedent that many of the estimated one million illegal immigrants from outside the EU will want to exploit.

Things are likely to be somewhat more difficult for British citizens wanting to work in an EU country, with the exception of Germany and the Netherlands work permit systems tend to be highly bureaucratic. Moreover, the EU rejected the UK’s wish to continue with the existing system of mutual recognition of professional qualifications for doctors, lawyers, accountants etc. The Brexit deal has established a framework for making agreements in this area but these are usually quite hard to reach and it seems likely that the UK will have to negotiate 27 bilateral arrangements.

The other big story is students. EU students will no longer get privileged access to UK universities and will have to pay the same higher tuition fees as those from outside the EU. This is likely to leave a big dent in the number of EU students, currently 143,000 (including post-grads). The UK is also pulling out of the Erasmus student exchange scheme which has been running for more than 30 years. In 2017 about 16,000 UK students had a term (about three months) at an EU university and 31,000 EU students came here.

Both decisions have caused some dismay in the higher education world. But Erasmus accounted for less than half of all UK student exchanges and will be replaced by the Turing scheme with a more global focus. The Government argues that Erasmus was unnecessarily expensive, staying in the scheme would have cost hundreds of millions of pounds, and that the new scheme will underscore the two main things that Brexit is about: global Britain and levelling up.

The Government has committed to spending at least £100m on the Turing scheme with a goal of 35,000 student participants and instead of attracting generally affluent language students from Russell Group universities, as Erasmus has done, it will aim at a wider social mix.

Finally, one dog that didn’t bark. The Youth Mobility Scheme has not been extended to young people from the EU. The scheme currently attracts a few tens of thousands of people under 30 each year, mainly from Australia and New Zealand but also Japan and South Korea, for a two year period in which they are allowed to work. The UK was apparently quite keen on extending it to Europeans but the EU decided it didn’t have competence to negotiate it. Bilateral deals may well be struck. But as bar work, one of the staples for scheme participants, is going to be in short supply for a few more months the lack of an extension to young Europeans isn’t going to be missed.

The new migration rules will need time to settle and will produce some unintended consequences, but the decision to end free movement is a broadly popular one, and one that even most Remainers now accept. Most employers will be happy with the liberalisation of skilled migration though there will be pressure in some sectors for temporary exemptions from the low-skill ban.

More generally, under the new regime we might start to see migration anxieties shift from being felt predominantly among lower socio-economic groups to higher ones, complaining about affluent areas becoming unaffordable as more high paid professionals enter the country. The new migration landscape will also see an increase in short-term flows and a reduction in permanent residence, and that broadly fits with the democratic desire for the UK to remain an open country but with slower underlying demographic change.

This is the fourth in a series of pieces from Policy Exchange looking at specific issues that arise from the Brexit trade deal.

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