The misrepresentation of migration from Europe was a driving, corrosive force in the EU referendum. And now the referendum is over, free movement is the core issue in the debate over what happens next.
David Davis, Secretary of State for Brexit, has made his distaste for free movement clear, suggesting that “uncontrolled mass migration” has been an “unhealthy characteristic” of our economic growth and suggesting that our “ideal aim” would a Swiss arrangement “but without free movement of peoples”. He claims his Prime Minister’s priority is also border control – even if it comes at a cost to the economy – because “that's what the British public wants, to take back control of the borders.”
But free movement within Europe is still on the table. Brexit may mean Brexit, but that Brexit still includes a full range of free movement possibilities.
We might seek to remain in the European Economic Area (the so-called ‘Norwegian option’), and so be bound by the EU free movement rules. We may choose an adapted EEA agreement. We might seek Swiss-style bilateral agreements, and so be bound by most of the EU’s free movement rules. Or we might have no free movement agreement at all.
6 ways Britain leaving the EU will affect you
6 ways Britain leaving the EU will affect you
1/6 More expensive foreign holidays
The first practical effect of a vote to Leave is that the pound will be worth less abroad, meaning foreign holidays will cost us more
2/6 No immediate change in immigration status
The Prime Minister will have to address other immediate concerns. He is likely to reassure nationals of other EU countries living in the UK that their status is unchanged. That is what the Leave campaign has said, so, even after the Brexit negotiations are complete, those who are already in the UK would be allowed to stay
3/6 Higher inflation
A lower pound means that imports would become more expensive. This is likely to mean the return of inflation – a phenomenon with which many of us are unfamiliar because prices have been stable for so long, rising at no more than about 2 per cent a year. The effect may probably not be particularly noticeable in the first few months. At first price rises would be confined to imported goods – food and clothes being the most obvious – but inflation has a tendency to spread and to gain its own momentum
4/6 Interest rates might rise
The trouble with inflation is that the Bank of England has a legal obligation to keep it as close to 2 per cent a year as possible. If a fall in the pound threatens to push prices up faster than this, the Bank will raise interest rates. This acts against inflation in three ways. First, it makes the pound more attractive, because deposits in pounds will earn higher interest. Second, it reduces demand by putting up the cost of borrowing, and especially by taking larger mortgage payments out of the economy. Third, it makes it more expensive for businesses to borrow to expand output
5/6 Did somebody say recession?
Mr Carney, the Treasury and a range of international economists have warned about this. Many Leave voters appear not to have believed them, or to think that they are exaggerating small, long-term effects. But there is no doubt that the Leave vote is a negative shock to the economy. This is because it changes expectations about the economy’s future performance. Even though Britain is not actually be leaving the EU for at least two years, companies and investors will start to move money out of Britain, or to scale back plans for expansion, because they are less confident about what would happen after 2018
6/6 And we wouldn’t even get our money back
All this will be happening while the Prime Minister, whoever he or she is, is negotiating the terms of our future access to the EU single market. In the meantime, our trade with the EU would be unaffected, except that companies elsewhere in the EU may be less interested in buying from us or selling to us, expecting tariff barriers to go up in two years’ time. Whoever the Chancellor is, he or she may feel the need to bring in a new Budget
Either way, Parliament will have to assent to the next treaty or set of treaties that will govern our relationship with the European Union post-Brexit. Since a clear majority of parliamentarians favoured remaining in the EU, it seems plausible that they may push for continued single market membership. And it is highly likely that if the UK wishes to remain part of the single market, free movement of people would be part of that deal. So we need an honest assessment of free movement, something notable by its absence from both referendum campaigns.
The strong evidence indicating that EU residents in the UK have a positive economic effect has been disregarded for years.
In 2013, the then prime minister David Cameron declared that “free movement within Europe needs to be less free”. In 2014, the government unveiled welfare reforms targeting EU migrants, announcing it was “accelerating action to stop rogue EU welfare claims” and that “abuse and clear exploitation of the UK’s welfare system will not be tolerated.” Yet the Department for Work and Pensions had reported to the European Commission in 2013 that there was no evidence of benefit tourism. This departure from evidence has distorted the ensuing debate, and opened the gates for negative, discriminatory campaigning. But EU migrants could not be benefit tourists even if they wanted to – which, the evidence suggests, they do not.
In the run up to the 2015 general election, Labour and the Liberal Democrats also emphasised the need to address EU benefit tourism. Labour’s Rachel Reeves called for a two year benefit ban and decried the “absurdity” of exporting child benefit to other EU member states, while the then Lib Dem leader Nick Clegg put forward plans to curb benefits. The result of playing to the gallery is that we have populism-led, not evidence-based, law and policy.
But the available evidence suggests the overall impact of EU migration is beneficial to the UK. EU migrants are more likely to be in work than UK nationals. And, according to the UCL Centre for Research and Analysis of Migration, EU migrants provide a net economic benefit of £22bn. As the LSE Centre for Economic Performance notes, “this effects may seem small, [but] in the longer-run impact could be substantial”.
EU migrants are net contributors to public finances, and to a greater degree than UK nationals. They are not merely paying their way – but they are paying some of our way too.
Public services are potentially better funded per head than they would be if EU migrants were not here. If we scrapped free movement there might be fewer people in the UK, but they would be competing for comparatively fewer resources.
Studies have found no systematic evidence to link immigration with pressure on schools or the NHS. In fact, the average use of health services is “considerably” lower for immigrants than UK born nationals, and EU migration does not lead to an increase in waiting times, either.
Existing evidence is unclear as to whether there is a relationship between immigration and social cohesion problems. There are some indicators suggesting a reduction in shared social norms and civic participation as immigration increases, but these may be offset by the creation of more co-ethnic communities, which become cohesive. Other studies have argued that income inequality plays a larger role than immigration in social cohesion.
Many worry that the presence of EU nationals makes it harder for UK nationals to find jobs. But the perception of the labour market as a zero sum game is what economists term the “lump of labour fallacy” – or, as the poet Hollie McNish calls it, “crappy mathematics”.
The Migration Advisory Committee conducted a study in 2012, looking for the relationship between migrant work and the employment of UK nationals. For every 100 EU migrants working the UK, they found there was no statistically significant associated reduction in UK employment. In other words, EU migrants are not making it harder for UK nationals to find jobs.
Studies vary as to whether there is an overall increase or decrease in wages linked to EU migration, but in either case the overall effect is small (a 1 per cent increase in immigration can leading to 0.1-0.3 per cent difference). These differences are not felt evenly along the wage spectrum, however; the Bank of England’s research found that the biggest effect is in the semi-skilled and unskilled services sector, where a 10 percentage point rise in the proportion of immigrants is associated with a 2 per cent reduction in pay, which might provide an argument for stronger wage regulation.
Overall these studies show that free movement is working. When politicians speak of a need to “control” EU immigration, we should be asking why. We are being urged to fix something that is not broken, and which appears to be working in our favour. Brexit need not mean abandoning a commitment to an inclusive, welcoming society; we need to preserve solidarity and unity as we navigate the unknown territory ahead.
Charlotte O'Brien is a senior lecturer in law at the University of York