Post-Brexit immigration and skills policy

In the context of this week’s report from the Migration Advisory Committee (set up to advise on immigration policy post-Brexit),  it’s worth outlining the nature of European migration to the UK and the implications of the MAC proposals. By the end of 2016 there were 2.2 million working EU migrants -7% of the labour force. There’s already been specific concern about the effect of Brexit on an already understaffed NHS. EU immigrants make up about 5% of NHS staff (10% of registered doctors and 4% of registered nurses).

Migrants from the original 14 EU member states are more likely to be in better-paid employment (two thirds of western European migrants have degrees) requiring higher skill levels – such as the business and finance sectors.  By comparison, despite significant representation in professional and managerial occupations (1 in 4 have degrees) Eastern European migrants provide a regular supply of semi and unskilled labour. In the ‘hotels, restaurants, and accommodation’ sector they make up I in 8 of the workforces and in construction over 7%. Nevertheless, according to one survey, (CIPD, Facing the future 2017) 40% of EU migrants could be considered ‘over-educated’ for the work they do, compared to 15% of UK nationals. 

Brexiteer proposals to cap immigration for the ‘low skilled’ would lead to a huge labour shortage. With employment levels already at a record high there are limited opportunities for recruiting UK workers.  Wages may well rise slightly, (EU migrants in unskilled jobs earn up to 20% less than UK workers) but this would be restricted to specific trades – maybe in the building industry for example, where employers have relied on ( often casualised) European labour, rather than train apprentices.

Equally likely and because Britain is a highly labour intensive and low productive economy, rising wage costs, not to mention the other diseconomies of Brexit, would cause many businesses to close, reducing economic growth still further. It’s true that many low-skilled roles can more likely be automated, but based on current abysmal investment levels, a move to a high skilled, high tech economy in the way MAC visualise, is most unlikely. 

Contrary to what MAC argues, despite low pay, migrant workers still make a positive (net) contribution in terms of the taxes they contribute compared to the services they use – employment rates for Eastern European workers at 81%, are also much higher than the national average.