Ending free movement may not reduce migration or fix low wages, says Lords report

-          Government should pursue “two-way agreement” with the EU on future migration flows

-          Evidence base currently available to policy-makers responsible for devising a future framework for

UK-EU migration is incomplete and unsatisfactory

-          Not clear that resident UK workers will fill the jobs vacated by EU migrant workers

-          In publicly-funded sectors, there may be a trade-off between immigration and public spending

The House of Lords EU Home Affairs Sub-Committee today publishes its report Brexit: UK-EU movement of people. The Committee have warned that restoration of national control over EU migration may not deliver a reduction in overall net migration or provide a quick fix for low wages. The report examines possible arrangements that could replace freedom of movement and their implications.

Until the referendum, net migration to the UK from outside the EU had consistently been higher than net migration from the EU, despite the relevant policy levers already being under national control. Restoration of national control over EU migration may not therefore deliver a reduction in overall net migration. Further, reducing EU immigration is unlikely to provide a quick fix for low wages, since factors such as the National Minimum Wage, National Living Wage and inflation are more significant in driving or impeding real wage growth for low earners.

The report concludes that offering preferential treatment to EU nationals in the UK's future immigration regime could increase the likelihood of securing reciprocal preferential treatment for UK nationals in the EU, and could also improve the UK's future access to the Single Market. The Committee endorses the Government’s intention to pursue a “two-way agreement” with the EU on future migration flows, and deems it “vital” that the Government should not close off policy options on future regulation of EU immigration ahead of negotiations.

The report states that if the UK were to extend the work permit system it uses for non-EU nationals to EU nationals, this would disproportionately affect some employers’ ability to sponsor EU workers, and could result in labour shortages. To avoid this, the Government may be tempted to consider a work permit system that is hedged with exemptions for particular sectors and schemes. This approach could produce the worst of all worlds, failing to deliver a meaningful reduction in immigration while also proving more onerous and costly for employers, prospective applicants, and those charged with enforcement.

The Committee warn that the evidence base to support or refute the Government's assumption that resident UK workers will fill the jobs vacated by EU migrant workers is simply not there. The Committee recommend that the Government focuses on improving its evidence base before further entrenching the skills-based immigration policy that the UK operates in respect of non-EU nationals.

The report also states that the evidence base currently available to policy-makers responsible for devising a future framework for UK-EU migration is incomplete, in some cases insufficiently reliable, and dispersed across a range of sources that are not always directly comparable.  This is an unsatisfactory basis from which to start developing policy, and also complicates scrutiny of future policies.

Chairman of the Committee, Baroness Prashar said:

“The precise manner in which the Government proposes to "end" free movement is a pivotal aspect of the United Kingdom's approach to negotiations with the European Union and could have far-reaching consequences for the UK's future trading relationship with the EU.

“Crucial sectors of the economy depend on EU migrant labour, so it is essential that any changes don’t endanger the vibrancy of the UK economy. We therefore recommend a phased transition to avoid short-term shocks to particular sectors.

“The Committee was struck by the weaknesses and gaps in the UK's migration statistics.  Different measures of who counts as a migrant sow confusion in public debate, and contribute to a gap between perceptions and reality.

“If the Government's ultimate objective is to reduce dependency on low-cost migrant labour, it needs to look beyond immigration policy. We need a reassessment of the Government's industrial strategy, its education and skills policy, and its public spending plans.”