Today’s immigration figures are the first with any
meaningful data after the Brexit vote. And they show – as I predicted back in August – a fall in EU migration to the UK,
particularly those coming from the countries of Central and Eastern Europe (the
“EU8”) that joined the EU in 2004; in the year to September, net migration from
these countries fell by about 20,000. Meanwhile,
the number of new National Insurance registrations in the year to December was
flat, but again numbers from the EU8 fell.
Broadly, the figures are consistent with the fall in the number of EU
nationals in the UK workforce that I highlighted last week. Non-EU immigration also fell, particularly
for students, now at the lowest level since 2002.
So what’s going on? After all, nothing has changed in law or
policy terms– we are still a member of the EU, and will be for some time, and
we still have freedom of movement. But
it’s not just today’s law that matters to existing and future migrants. I also warned back in August that even if politicians behaved
sensibly, dealing with the status of EU nationals already here was likely to be
an intractable bureaucratic tangle. Since then, the government has done little
or nothing to reassure them, nor to streamline the process. It is hardly surprising
that some are already choosing to leave.
More broadly, if people
cannot plan with any confidence, not just about themselves but their families,
they are both less likely to come and less likely to stay. Small wonder that
employers – not just farmers, but sectors
ranging from the National
Health Service to universities – are finding it far harder to persuade EU
nationals to take up jobs in this country.
And this, once again, illustrates a vitally important point; migration
is not just a matter of the UK choosing migrants; migrants have to choose us. Even
if we wish to remain open to skilled migrants from elsewhere in the EU
post-Brexit, they may not choose to come here (or remain here).
It is still very early days –
forecasting migration flows, particularly at a time of policy change, is extremely
difficult. But we can already begin to
sketch out the long-term implications. If, as my previous research predicts, net migration from the EU falls
by more than half over the next five years, the economic
impact on the UK will be significant; the resulting hit to GDP could be
about 0.6 to 1.2%, with a GDP per capita reduction of 0.2 to 0.8%. Over the
period to 2030, the resulting reduction in GDP per capita could be up to 3.4%.
By contrast, the increase in low-skilled wages resulting from reduced migration
is expected to be relatively modest.
So those who – from both
sides – have argued
that Brexit will not lead to a substantial fall in migration, especially from
the EU, are wrong. Indeed, the
government’s target of reducing migration to the “tens of thousands” is not
nearly as unrealistic
as many think – particularly if the labour market weakens significantly over
the next year or two. But the government
– and those who support an end to free movement – should be careful what they
wish for. Perhaps it will ease very slightly
pressure on the wages of some low-paid workers; but this will be far outweighed
to the cost to us all in growth and tax revenues.
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