It’s too early to tell what Brexit means for labour market, say experts

24 Aug 2017 By Hayley Kirton

But data reveals net migration is at a three-year low; third of food companies already losing EU staff

Experts are advising that it’s still too soon to say what Brexit’s full effect on the workforce will be, after official statistics revealed that net migration had dropped to a three-year low.

According to Office for National Statistics (ONS) figures released this morning, estimated net migration – the difference between immigration and emigration – dropped to +246,000 in the year to March 2017, down 81,000 compared with the year before and the lowest it has been since March 2014.

The change was largely attributed to a sharp decrease in net migration from EU citizens, which was down by 51,000. In particular, emigration rose by 17,000 among people from the EU8 countries: Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary and Slovenia.

Meanwhile, of the 275,000 people who moved to the UK for work during the year, the majority (188,000, or 68 per cent) had a definite job lined up. By contrast, the number of people coming to the country to look for work fell by 39,000 to 87,000.

Gerwyn Davies, senior labour market analyst at the CIPD, pointed out that net migration from the EU remained above the average level seen before the bloc expanded to its current 28 member states. “Initial fears that Brexit would have a material impact on employers’ ability to fill vacancies therefore seem to be somewhat premature,” he said.

“While employers may be breathing a temporary sigh of relief, it remains to be seen how many EU citizens are still in wait-and-see mode before the negotiations have been resolved. The outcome of the government’s post-Brexit EU immigration policy could become a significant factor in deterring some EU nationals from coming to the UK, especially if the axe falls particularly hard on low-skilled roles.”

Nicola White, head of international migration statistics at the ONS, noted that the figures “indicate that the EU referendum result may be influencing people’s decision to migrate into and out of the UK, particularly EU and EU8 citizens. It is too early to tell if this is an indication of a long-term trend”.

Meanwhile, a survey of companies involved in the UK’s food supply chain, which was compiled by the Food and Drink Federation and also published today, found that almost half (47 per cent) had spotted signs of EU nationals considering leaving the UK and almost a third (31 per cent) said they had already seen EU nationals leaving since the referendum.

One in three (36 per cent) warned that their business would become unviable if they had no access to EU workers, and just under a fifth (17 per cent) said they would have to relocate overseas if they had no access to EU staff.

“It is only a matter of time before the uncertainty reported by businesses results in an irreversible exit of EU workers from these shores,” said Ian Wright, director general of the Food and Drink Federation. “This is a scenario that will hurt the UK culturally and economically.”

A CIPD survey published in February revealed that more than a quarter (27 per cent) of employers had noticed evidence of EU27 staff members planning to leave the organisation, or the UK entirely, in 2017.

In June, prime minister Theresa May said the UK would be introducing a settled status following Brexit, which will essentially maintain the rights of those EU migrants who had been in the country for at least five years.

The following month, home secretary Amber Rudd commissioned the Migration Advisory Committee to review the state of EU migration. The final report, which is due late next year, is likely to contain some discussion on possible immigration systems for workers.

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