Now that Prime Minister Teresa May has signed Article 50, ULSB’s Dr Fabian Frenzel discusses the possibilities for post-Brexit immigration.
There has been much debate about the post-Brexit trade deals for the UK, following the stated aim of the government to not maintain membership in the single market. Much less attention has been placed the future policy area considered a major concern of many Leave voters: immigration.
The Government has thus far remained relatively quiet about its post-Brexit plans are for migration policy. In the public domain recent discussions have focused on the fate of the existing 3.2 Mio non-British EU citizens in the country, many of who face great uncertainty, after proposed amendments to the Brexit Bill to guarantee their rights were rejected by Parliament.
What is to be expected for future immigration policy? In September 2016 Theresa May said the Government would not pursue a points-based immigration system, proposed during the referendum by the Leave campaign. May rejected the model after studies showed it would probably not lead to a reduction of immigration. At the Conservative Party Conference in October the new Home Secretary Amber Rudd announced that British companies will be forced to report their non-British staff to the government, a measure later withdrawn amid broad public criticism. Premier Minister May used the same conference to controversially describe migrants as ‘citizens of nowhere’.
A hard line on immigration is Theresa May’s defining policy interest. As Home Secretary from 2010 she signed responsible for the creation of what staff in the Home Office openly describe as a ‘hostile environment’ for non-EU immigration. Part of the process was the creation of deliberately misleading and opaque visa application forms, prohibitively high application fees, a flourishing private sector immigration services industry contracted to implement government rules and ever more severe limits to the applicants ability to challenge home office decisions legally.
This was flanked by large-scale outsourcing of the implementation of immigration rules to employers, landlords, to the health service and, in the case of international students, to universities. UK universities now have designated ‘visa check points’ and are forced to electronically monitor student attendance under threat of loosing their right to admit international students in the case of non-compliance.
The Conservative government was particularly harsh on India, all but closing down a key market for international students and even de-railing EU negotiations with India over a free trade agreement by refusing to listen to India’s wishes for a re-consideration of the immigration rules.
As Home Secretary May attempted to implement the Conservative government promise to bring down net-migration down to ’10 thousands’ or (more recently) to under 100.000 per year. But these targets have been consistently missed. Net-Migration, the number of immigrants minus the number emigrants, has remained around 300.000 over the last decade or so. The figures seem to correlate less significantly with government immigration rules and more with key indicators of the UK economy. The slight decline to just under 300.000 since the referendum can be thus partly attributed to the drop in the value of the Pound which makes jobs in the UK less attractive for migrant workers.
A number of questions arise with regards to future migration policy. Many observers have pointed out that May’s ‘hostile environment’ policies failed to reduce the number of non-EU net-migration, an area where the government has full control prior to Brexit, to under 100.000. To ‘take back control’ over immigration does not seem to be easy. How likely is it that Prime Minister May will be more successful in curbing EU migrant numbers post-Brexit? And more strategically: how can a ‘hostile environment’ for future EU immigration be reconciled with the broadly pro-business and free trade stances of the government?
It is no secret that key UK industries depend on migrant labour. Could these workers be replaced by indigenous labour? Recently Pret a Manger’s head of HR, Andrea Wareham, made headline news by pointing out that 1 in 50 applicants to the restaurant chain were non-British. The British Hospitality Association estimates that its members employ 700.000 EU migrants, 15% of the total workforce. While the public discussion at times veers to the hope that more British workers may take up jobs, current unemployment figures stand at 5%, fairly close to what economists consider full employment. In purely economic terms, limits to immigration thus may lead to higher wages. While this may be an outcome some Leave voters were hoping for, it also makes UK production more expensive. Without protection from imports, industries like agriculture will be less competitive while costs for products and services in the UK will rise.
This is emphatically not what the current government, nor the affected industries want. One alternative approach industries and the government seems to be actively exploring is seasonal labour. Amber Rudd has already promised the agricultural sector new legislation to that effect. But what is seasonal labour?
The Gulf Corporation Countries, where seasonal labour is the preferred migration policy, might serve as a model. Here migrants are allowed into the country for defined periods of time often not exceeding three months. They are housed in designated and segregated accommodation, often hostels and sometimes camps.
In comparison to current EU migrants, seasonal labourers would have very limited rights. Very likely they will not be allowed to vote in local elections, to form or join Trade Unions, or to move to Britain with their families, and they might not be covered by social security legislation. A further question is whether the minimal wage will apply to seasonal labour.
The model is attractive for industries as they retain access to cheap labour. The government would also benefit from seasonable labour: migrants only start to count in immigration statistics once they have spent over a year in hosting country. Seasonal labour would not appear in the net-migration figure.
Other migrants that escape statistics are those without papers. Britain has a significant number of undocumented migrants already and government policy tents to express the desire to prevent undocumented migration. However, it can be considered a potential model for a more deliberate migration policy. In the United States undocumented migration has for decades functioned as an unofficial, but tolerated part of the migration regime.
More even than seasonal labour, undocumented migrants have very limited rights in their host country. As a consequence they accept lower wages, very much to the benefit of domestic competitiveness.
In these models the harsh anti-migration rhetoric of Theresa May and the leave campaign can be reconciled with the interests of British industries for cheap labour and increased competitiveness of Brexit Britain. Thus it seems very likely that tougher immigration rules post-Brexit will not lead to less immigration. Rather migrant labour in Britain will be less protected, less documented, and thus cheaper. Such developments will put downward pressures on wage levels in the country, very much against the interests of British workers.