09 May 2017

Financial Times: Britain need not slam its doors to limit migration

[...] The uncertainties of Brexit are already lessening the appeal of moving to Britain. The number of EU-born workers in the UK fell by about 50,000 in the last quarter of 2016, with the reduction driven by graduates. Net migration in the 12 months to September was at a two-year low — but it still stood at about 273,000. Most come from outside the EU. It will be possible to hit Mrs May’s target only by clamping down on all categories of migrants — high- and low-skilled, EU and non-EU, family and work-related.

This would please much of the electorate. It is a political reality that many voters would like not only to control immigration, but to let far fewer people in. Mrs May shares these instincts. All the same, she must be honest with the public about the likely consequences.

If the government were to hit its target, there would be profound — if unpredictable — effects on the economy. On the positive side, skills shortages might prompt British people, in time, to train in technical occupations. In low-wage sectors such as agriculture and food processing, employers might automate and adapt (more robots picking tomatoes and less fiddly soft fruit), go abroad, or go out of business. Some businesses may be able to pay more and pass the cost on to consumers. Retailers will surely adapt; it is harder to see how the care sector will.

Immigration policy will have more predictable effects on the Brexit negotiations. The more restrictive its policy, the greater the barriers the UK will face to European markets. Any attempt to limit the rights of EU nationals already in the UK will erode goodwill.

Whatever policy Mrs May adopts, she should be realistic about the speed at which it can be implemented. It will be logistically all but impossible to put a new immigration regime in place by 2019. Moreover, she needs as much flexibility as possible to negotiate transitional arrangements, to avoid the “cliff edge” of Britain leaving the EU before a final deal is in place. This transition regime will necessarily be similar to the status quo — and Mrs May will need to accept that this may mean free movement continuing for several years after the formal date of Brexit.

It is clear that under this government the UK will, in future, keep a much tighter grip on migration. There are ways to achieve this, however, that would be far less disruptive and burdensome than the mix of sectoral schemes and short-term visas and the highly bureaucratic work permit system Mrs May seems to be considering.

The simplest option would be to welcome any EU national with a job offer — keeping control of borders, answering the needs of the economy and making it reasonable for Britain to demand access to the single market.

If ministers’ overriding goal is to cut numbers, so be it. But Home Office officials are not well-placed to judge which migrants the economy needs. Instead, the government should let employers decide, at a price. A flat annual fee to be paid for each non-UK worker — perhaps with exemptions in areas such as health and education — would ensure that employers hired at home where possible. Ministers could always increase the fee if they felt net immigration was still to high. This would, at least, demonstrate just how valuable migrants are to employers, and to Britain’s economy.

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