Free movement will not end with this deal - and that's welcome news

Blog posts

15 Nov 2018

Tony Wilson

Tony Wilson, Institute Director

As the Prime Minister stood in Downing Street last night, announcing the temporary agreement of her Cabinet to a withdrawal deal, one phrase caught me by surprise. The deal would, she said, ‘end free movement’. However, back in March, the government and EU confirmed that free movement would continue throughout the transition – with those provisions shaded green in the draft agreement. So what has happened?

The reality, to coin a phrase, is that 'nothing has changed' – the withdrawal deal confirms that free movement for UK and EU citizens will continue throughout the transition, and so at least until December 2020, and almost certainly for some time beyond.

On residence rights, Article 13 sets out that EU citizens will have exactly the same right to reside in the UK as exists now, making clear (for the avoidance of any doubt) that:

‘The host State may not impose any limitations or conditions for obtaining, retaining or losing residence rights… other than those provided for in [EU law]. There shall be no discretion… other than in favour of the person concerned.’

Similarly on the right to work, Article 24 sets out that Union law on free movement of workers will continue to apply – making explicit that this includes guaranteeing equal treatment between EU and UK citizens.

So, far from ending the right to work, the withdrawal agreement guarantees it until the end of the transition period.

What the deal does do is get the UK to a point where it can start to negotiate on a future deal that could limit free movement (and which will require the unanimous consent of all Member States).

As Jim Hillage set out a few months ago, EU nationals account for 7 per cent of all workers but a much larger share in sectors including manufacturing, hospitality and administration. These are often, but not always, low-skilled and low-paid jobs – for example we’re working with the RCVS to help them understand the impact of leaving the EU, with one in five of the UK veterinary workforce being graduates of EU universities.

So, ending free movement would have disrupted the supply of new labour in a range of sectors of the economy, and would have done so at a time of acute labour demand – with this week’s labour market figures reporting record-breaking levels of vacancies, unemployment nudging 4 per cent and wage growth (in nominal terms) at its highest in a decade. Curtailing free movement would have made things a little bit worse – putting upward pressure on inflation and downward pressure on demand.

These impacts would not be huge – only affecting new arrivals, and mainly being felt in lower-paid jobs. Some have also argued that in the longer term this could be a good thing – putting more pressures on employers to pay more, improve conditions and employ those further from work. But, just as the overwhelming evidence has shown that EU migration hasn’t led to downward pressure on wages, training or employment of natives, so cutting migration will not, on its own, lead to a larger, more productive, better-trained and better-paid UK workforce.

Ironically, there is also some evidence that EU nationals currently working in the UK may be voting with their feet – with figures this week reporting that the number of EU workers has fallen by 132,000 in the last year and is now at its lowest level since before the 2016 referendum.

Ending free movement would have been disruptive, difficult and entirely avoidable, so it is welcome that the UK government has confirmed that it will maintain the status quo while we work out what a better system would look like. We set out in a blog last year the three main options available to replace free movement, and some of the issues and risks. The Migration Advisory Committee has since also made proposals, which would treat EU and non-EU nationals in the same way and limit migration to employer-sponsored, medium- and higher-skilled jobs paying at least £30,000.

We’ll say more on this in the coming months but, in our view, we need a coherent approach that doesn’t artificially constrain supply when there is high demand, and that joins up our migration policy with investment in active labour market programmes, training support – including apprenticeships and the national retraining scheme – and improved employment legislation (where leaks last weekend suggest that government will soon set out its proposals for implementing the Taylor review).

In the meantime, as I write, our newly minted withdrawal deal hangs by a thread. If it is voted down in Parliament (or even if it doesn’t get that far), all bets could be back off. But, even in a ‘no deal’ exit, the Home Secretary has suggested that free movement will have to continue for some time. So amid all the chaos and confusion, at least one thing is becoming clearer – free movement will continue, for now.

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Any views expressed are those of the author and not necessarily those of the Institute as a whole.