EU immigration and a potential Brexit

*This note intends to clarify the situation at the core of the EU referendum namely immigration but also dispel some myths as regards EU migrants settling in the UK. It does not aim to exhaust all issues around immigration just shed some light on topics that are normally presented in an obscure or misleading manner in the media.

 EU immigration numbers

One of the main points “Leave” campaigners stress when they speak about Brexit is “regain control of our borders” (we hear Boris Johnson – and others – going on and on with it on a daily basis) as if all migrants getting into the UK were only EU nationals and those were the main problem. Even though no one can deny that an important amount of EU nationals come to work and live in the UK, the proportion it makes compared with non-EU migrants is, most of the times, left unexplained.

So, let’s clarify a bit. As explained in the November 2015 bulletin of the think-tank Centre for European reform  “[n]et immigration into the UK has picked up strongly over the last couple of years as the country’s economic recovery has gained momentum and sucked in workers from elsewhere. But contrary to much of the British press coverage, net immigration into the UK over the last 15 years has not been exceptional in an EU context. For example, between 2000 and 2014 net inflows to Italy and Spain were higher than those to the UK (or Germany or France). The share of Britain’s population comprising non-Britons is not out of line with other EU countries. And a higher proportion of immigrants living in the UK come from non-EU countries than in any other EU Member State“.

Let’s add some official numbers to that. The latest ONS statistics covering 12 months up to September 2015 show that 290,000 people  immigrated for work. Almost 60% had already secured a job and the share rose to 67% for Romanians and Bulgarians. Around 165,000 EU nationals came to the UK for work-related reasons: 96,000 arriving to a job and 69,000 looking for work. If the majority came with a job secured it means the national market could not offer the required workforce. Further, net migration of EU nationals was estimated in 172,000 and of non-EU nationals in 191,000.

Non-EU immigration is higher than EU-immigration. Therefore, the latter is not the main problem and the former remain within the realm of UK sovereignty (not under EU free movement). It would seem that the Government has already realised that and intends to tackle the matter via the new rules for Visas Tier 2 which come into effect on 6 April.

In late February the BBC reported that according to the latest Labour Force Survey around 2 million EU nationals are currently working in the UK, 1.2 million non-EU nationals and 28.3 million UK nationals.

  • Employment of EU nationals increased by 215,000 to 2 million
  • Employment of non-EU nationals increased by 38,000 to 1.2 million

So, if employment of EU nationals grew more than employment of non-EU nationals and the latter make up the bigger number of immigrants, where do you think the problem lies?

EU nationals are taking jobs from UK nationals

At first this may sound correct and understandable, however, reality is not that straight forward. Leaving aside the hospitality and retail sectors (and to a point some NHS services), where that claim is correct, at least for London, it is also true that there are many more sectors in the UK economy. Many EU nationals are taking up jobs that UK nationals are simply not qualified to do (or do not want to do as some prefer to remain on benefits). For instance, many international – and some UK – companies have headquarters or subsidiaries in other countries – not only in the EU – so it makes sense for them to hire people that can easily communicate and understand their colleagues in other jurisdictions. This is not only about language skills but mostly they look for multicultural and highly educated workers and that is simply not on offer in terms of an important proportion of UK-born workers (many do not speak a second language, have not lived abroad and have just an undergraduate degree versus the masters or PhDs of many EU nationals). I refer you to the statistics section explained above. So, the claim is not necessarily true.

As for low-skilled workers for instance the construction sector, the claim holds more truth but the question remains: would UK nationals take up those jobs in the event of a mass departure of the EU nationals currently holding them? the answer may not be …..yes.

Has Boris Johnson, Mayor of London, explained how he envisages London will function without the vast numbers of EU workers that make London and surrounding boroughs the open-for-business 7 days a week city that today is?

Further, in a Brexit scenario do you think international companies would rely on UK nationals to fill those vacancies – even if they do not possess the right skills – or simply relocate to another country where they can find the workforce they need? it may not happen immediately but logic indicates it will. It is also possible that they will not leave altogether but restructure their offices and hire people in other jurisdictions, effectively downsizing their UK presence. A few international companies have already hinted they will relocate, they just need a welcome gift (eg tax-related) and I see countries such as Spain, Italy, Germany or France rolling the red carpet. Ireland has lured many companies already with tax incentives and Brexit has not yet occurred!

About public services and benefits

Immigrants in general, and EU migrants in particular, are blamed for putting the NHS and education services under pressure. But what many forget is that many EU nationals contribute a lot to funding those services (many hold high paid jobs making their contribution to the system higher than that of some UK nationals or non-EU migrants). In fact, one could argue that EU nationals are, to a point, subsidising public services for the entire UK population and the attached benefits culture, but let’s not go that far.

While school places and hospital beds are under pressure rising birth rates and an ageing population are also at the core of the problem and the Government does not set aside sufficient funds to tackle the situation. In other words, if, as EU national I pay my taxes and national insurance contributions it is only fair I should be entitled to use public services if I need them. So, if the Government does not allocate more funds (as in pass my contribution to the public services kitty) whose fault is that? Maybe my taxes go to bailing the banks or reducing the deficit instead, not where they should go.

According to data released by the Guardian in November 2015 (sourced from governmental departments) EU migrants make up only a small proportion of the overall benefits caseload. They accounted for 2.5% of benefits the Department of Work and Pensions (DWP) administered in 2014 -mostly out-of-work benefits- in 2014, and 7% of tax credits, based on the HMRC definition (ie. migrant non-UK family: where at least one adult is a migrant when issued with a national insurance number. Any couple where one partner is a British national will be included in its data). So “EU migrants ‘taking advantage’ of the UK benefits system is likely to include thousands of British people who are part of the same family, possibly including children”. Please note that, as stated in the referred article, different branches of the Government refused to provide data.

The truth is that the Government did not want to disclose data on how many EU nationals are claiming benefits so the statement that they abuse the system remained unsupported until some reliable numbers were revealed. I agree that it is possible that “some” are abusing the system but those do not represent a large proportion of EU nationals living in the UK (as I will explain below). Besides, how many UK-born or those who have become Brits based on UK citizenship law are abusing the system? just turn the TV and watch Britain on benefits.

At this point I would like to remind you that citizenship, and who can apply for it, is not influenced -or dictated- in any way by the EU, it remains within the realm of UK sovereignty.

In late February 2016, in a U turn the Government published DWP benefit expenditure on EEA national-led claims 2013/14. The results, even if the terminology is a bit obscure, are quite clear. The statement made that EU migrants make up only a small proportion of the overall benefits caseload is now supported with numbers. Keep in mind the numbers cover EEA nationals, not only EU. The overall DWP Working Age expenditure on EEA-led claims was only 5% with an out-of-work expenditure on EEA-led claims of only 3%. I encourage you to read the document.

So, EU nationals are not per se abusing the system, in fact, they contribute a lot to support those on benefits as the majority are in-work (ie they pay taxes and NI contributions which in turn go to those ‘in benefits’).

Final words

Not long ago newspapers caused some fear in the UK immigration population by reminding them of the entry into force of new immigration rules namely the 35K earnings threshold for Visa Tier 2 (to get it and/or to avoid deportation). Many confused non-EU migrants, to whom the new rules will be applicable, with EU nationals and started to worry about their future should Brexit really occur.

To be perfectly clear and honest should Brexit become a reality most likely many EU nationals will be subsumed in the Tier 2 visa and the above-mentioned or any other requirements the Government decides to set will be applicable to those who want to remain in the UK beyond secession from the EU. It is also true that some rules may be relaxed to avoid exodus and shortage of labour but also that it will most likely be sector-specific.

A lot more could be said about the immigration facts and myths but this is not the time. Now people need simple and honest information on key facts to make up their minds and I hope the above helps.

David Cameron continues to say in his UK tour for the “Remain” campaign: “you have in your hands the future of this country, for you, your children and your grandchildren…for the country that we will have in 50 years”. He calls on you to think not to be driven by an exacerbated sense of nationalism and the words of those who rely on a few punching lines without backing them with facts and numbers.

Simon Tilford, from the Centre for European Reform, says that “attitudes to immigration are being fanned by the failure of successive governments to tackle the country’s real problems: housing, the poor educational performance of the white working class and the financing of public services. Immigrants, in turn, have become an easy scapegoat for politicians of nearly all persuasions. It is easier to blame them than address the chronic policy failures driving the rise in anti-immigrant sentiment”. He further expresses that “[i]f Britain votes to leave the EU it will be because of hostility to immigration”.

My words to you are: do not let misinformation drive your opinions and, more importantly, your decisions. What will happen beyond 23 June is yet unknown but you will decide, the power rests with you. Make sure you vote with your head, having considered all the facts – pros and cons – and do not only rely on a handful of politicians that are only good with words, research and seek the opinion of those who have studied the matter and can explain it in a simple manner. After all, we know that politicians will say and do whatever suits their interests… not necessarily yours. And, what is on the line now is your future.

 

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