What's New United Kingdom

 5 August 2017

Brexit: Young EU migrants could be given two-year work visas 'to boost economy' after UK leaves

  • Independent body the Migration Advisory Commission has been asked by ministers to examine the likely economic impact of the imminent exit from the EU which is set to end freedom of movement to and from the UK.

    In its call for evidence, published this week, the committee suggests the UK economy could benefit by giving preferential treatment to younger migrants, who are likely to have a longer working life ahead of them and to pay more into the tax system than they take from it – for example, because they are less likely to have long-term health problems.

    This proposal is similar to the migration policies of countries such as New Zealand, Australia and Canada, which have more relaxed entry requirements for temporary workers aged under 30.

    The report states that younger workers are believed to integrate more successfully into host countries than those who arrive when they are older.

    The report raises the possibility of an Australian-style points-based system for would-be immigrants after Brexit, with many businesses expressing concerns they will not be able to recruit the workers they need once freedom of movement ends.

    It suggests younger migrants would receive more points, or be given a lower salary threshold for the amount they must earn before they are allowed to settle in the UK.

    It points to the current Youth Mobility Scheme that allows people aged 18-30 from nations including Australia, Canada, Japan and New Zealand, to live and work in the UK on a two-year visa.

    The report also suggests that regional variations should be taken into account when deciding salary thresholds for those wanting to come to the UK.

    And the report suggests low-skilled migration should be curbed in favour of allowing those with specific, in-demand skills to come to the UK, in common with countries including Australia and the US.

    “The economic literature suggests that migrants are more likely to have beneficial economic effects when they have different skills from the resident population,” it says.

    It adds that there are likely to be positives as well as negatives to both the general population and to businesses through reducing low-skilled migration.

    “Sectors and businesses are likely to react differently to a reduction in low-skilled migration. On the one hand, a reduction in the supply of low-skilled migrants might push up wages and costs to businesses, which could translate into higher prices for consumers. On the other hand, a reduction of fairly cheap low-skilled migrants could force businesses to substitute labour for capital, boosting productivity.”

    It also suggests that seasonal worker schemes could help the UK economy.

    “There are some sectors where the demand for labour is very seasonal. In some cases, a large amount of labour may be required in a very specific place for a short period of time.”

    The number of EU migrants working in the UK has more than quadrupled since 2004 from around 600,000 to more than 2 million today.

    In the wake of the EU referendum, however, the ONS found that around 117,000 EU citizens left the UK in 2016, an increase of 31,000 on 2015 and the highest recorded estimate since 2009.

    Those who left were mostly from EU8 countries – a group which includes Poland, the Czech Republic, the Baltic states and Hungary.

    With the clock ticking on the UK’s exit in March 2019, Home Secretary Amber Rudd has said that EU nationals will still be able to come to the UK during a transitional period after Brexit but will have to go through a “registration and documentation” process rather than having an automatic right to enter.

    It was an attempt to reassure business there will be no “cliff edge” for the current migration system, although free movement will end as a point of principle when the UK leaves the 28-state block.

    Ms Rudd laid out the Government’s proposals in a letter to the committee looking at migration, in which she said that after the transition period, the UK would find a new relationship with the EU.

    “We will move to the third phase, which will be our long-term arrangements covering the migration of EU citizens, designed according to economic and social needs at the time, and reflecting our future deep and special partnership with the EU.

    “The Government will want to ensure that decisions on the long-term arrangements are based on evidence. The commission that we are now asking the (Migration Advisory Committee] to undertake is very much part of this.”

 

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