Businesses ‘should be worried’ by drop in EU migration, say experts

Official data suggests net migration from Europe is at its lowest level since 2013, though employers may not yet be feeling the brunt

Businesses that rely on migrants from EU countries are facing a “worrisome” time, experts have said, after official figures revealed net migration to the UK from the EU had fallen to its lowest level since 2003.

The net migration figure of 48,000 for the year ending June 2019 meant the number of people entering the country from the EU was around a fifth of the peak in 2015 and early 2016, demonstrating the effect the Brexit referendum and subsequent uncertainty – as well as economic factors – has had on availability of migrant labour.

Office for National Statistics (ONS) data also found non-EU net migration had gradually increased since 2013 and at 229,000, was now more than 4.5 times greater than EU migration.

Overall levels of net migration remained broadly stable, but the radical rebalancing away from EU countries – particularly those such as Romania and Bulgaria, which have accounted for large and strategically critical parts of the UK labour market in recent years – represented a significant shift in the nature of labour available to UK businesses.

The ONS data found the number of EU citizens coming to the UK for work had fallen to 90,000: the lowest level since 2012 and down from 190,000 in 2016. But Madeleine Sumption, director of the Migration Observatory at the University of Oxford, said Brexit and the broader political situation were only partly to blame.

“The reasons will include things like the lower value of the pound making the UK less attractive, improving economic prospects in EU countries of origin, and potentially the political uncertainty of the prolonged Brexit process,” said Sumption. 

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“It’s easy to imagine migration policies are the only things that affect migration, but in reality, policies act more like a filter than a tap. The state of the economy, demand for workers by UK employers and conditions in the countries of origin can have a big impact on migration, in some cases even more than changes in policy.” 

And Gerwyn Davies, senior labour market advisor at the CIPD, said that “the evidence suggests there are a combination of factors behind the fall in EU immigration for work-related reasons, including the strong labour market performance of several EU countries and the fall in the value of the pound in recent years.

“However, it may surprise some that employers actively recruiting from overseas are reporting few problems with attracting EU workers to the UK,” added Davies. “This will undoubtedly change if migration restrictions are introduced in just over a year.”

The nature of the post-Brexit migration system has been one of the factors affecting sentiment among migrants and businesses, and has been compounded by delays to a Brexit agreement, and the forthcoming general election. The Conservative Party has committed to ending free movement and introducing an 'Australian style' points-based system, while the Labour Party has said it will consider free movement as part of negotiations on the UK-EU relationship.

While the uncertainty continues, Jonathan Beech, managing director of Migrate UK, said there was little surprise employers were having difficulties attracting and retaining staff. “It’s looking quite worrisome for employers – they will have to be drumming up pretty good incentives to get EU migrants on board, as well as trying to plan for new immigration rules,” he said.

Sophie Wingfield, head of policy and public affairs at the Recruitment & Employment Confederation (REC), said the UK is becoming “a less attractive destination for workers from overseas. 

“Employers and recruiters need to be able to attract migrant workers to fill these vital roles. It is essential that we build a post-Brexit immigration system that is evidence-based and works for business, workers and the economy

“An immigration system that only allows for the ‘best and brightest’ or excludes flexible workers would seriously affect employers’ ability to hire the staff they need,” she said.