Past Event

Labour mobility after Brexit

What will Brexit mean for the free movement of workers between the UK and the EU?

Date: December 2, 2016, 12:00 pm Topic: European Macroeconomics & Governance

summary

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Immigration was a major factor – if not the major factor – in the UK’s vote to leave the EU. Brexit is a reflection of values on multiculturalism and globalization. The UK government is promising to take a tough stance on immigration in the negotiations. Meanwhile EU leaders are signalling that freedom of movement is non-negotiable and four central European countries are threatening to block any trade deal with the UK that would restrict the rights of their workers to live and work in the EU.

At this event we brought together three experts to discuss what Brexit is likely to mean for the free movement of workers between the UK and the EU. As a result, three main ideas have emerged:

Economic consequences are adverse

The United Kingdom has witnessed a rapid growth of EU nationals in the labour market in a very short time. Currently, half of the people who access the English labour market are international, half of whom do not have a secured job when entering the UK. This panorama is likely to change.

While in theory the consequences for high-skilled and low-skilled workers would be different, the former facing lower immigration controls, in practice it is not possible to control low-skilled migration without controlling high-skilled migration: A skill-based system implies proof of skills, which is in itself a barrier.  Middle-skilled workers (e.g. lab technicians) are left with a more uncertain picture. They do not qualify under the current UK immigration rules as skilled and often require an investment in training that is unappealing in this setting.

Businesses that rely heavily on low-skilled migrant workers may face costs in changing their recruitment system, as the pool of the unemployed British cannot replace this gap.

In summary, controlling free movement in the workplace is expected to lead to an increase in costly regulatory burdens and bureaucracy. A reduction in openness is likely to have short-term and long-term negative effects in the country’s output and productivity.

Solutions are unclear and complex

While the end of free movement is not a synonym for border controls, it is expectable that applications for work permits will be held at Embassies before entering the country. For non-British residents, formalities to remain in the UK – including the registration process and the eligibility conditions – are still unclear.

Policy choices essentially divide between a ‘hard’ and a ‘soft’ Brexit. A soft Brexit would resemble a ‘Norwegian’ model, characterized by free movement and membership in the EEA. However, the British public’s need to feel a tangible difference might push for a hard Brexit that treats Europeans as third country nationals. In any of the scenarios, effective public acceptance will be hard to measure.

A wider debate is launched

At a time when evidence policymaking is being advocated, the trend seems to be evidence-free policymaking. Labour mobility policies may reduce inequality, yet there is a wide misunderstanding by a large part of the population of the effects of migration. For how long can reality move away from the facts, and how can the public debate be so different from reality? The audience concluded that the wave of populism in Europe cannot be explained using only economics. It is essential that societal factors are taken into account when discussing these issues and bring back the connection to the people. In this sense, it was suggested that businesses too have the responsibility to speak out.

Event notes by Inês Gonçalves Raposo

VIDEO and audio recording


Event materials

Jonathan Portes – Presentation

Schedule

Dec 02, 2016

12:00-12:30

Check-in and lunch

12:30-13:15

Panel discussion

Chair: Zsolt Darvas, Senior Fellow

Lindsey Barras, Director at PricewaterhouseCoopers Legal

Jonathan Portes, Principal Research Fellow, National Institute of Economic and Social Research

Klaus F. Zimmermann, Princeton University and UNU-MERIT

13:15-14:00

Q&A

14:00

End

Speakers

Lindsey Barras

Director at PricewaterhouseCoopers Legal

Zsolt Darvas

Senior Fellow

Jonathan Portes

Principal Research Fellow, National Institute of Economic and Social Research

Klaus F. Zimmermann

Princeton University and UNU-MERIT

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

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