February 3, 2021
Cast your mind back to 2016, and all anyone could talk about was immigration.
In many ways, it was the defining issue of the EU referendum, and a key driver of the Leave vote.
In the middle of the worst public health and economic crisis for a century, it’s fair to say that times have changed, and we’ve now got more pressing matters to attend to.
But it is still surprising that one of the biggest immigration changes of the post-war period came to pass with such little fanfare.
On December 31 2020, freedom of movement for UK citizens – and EU citizens looking to live in the UK – officially came to an end. The UK became the first country to withdraw from the 1992 Maastricht Treaty, which first established the right of EU nationals to move and reside freely across the Continent.
This is a highly significant development that, in ordinary times, would have been covered extensively throughout the British media. Alas, these are anything but ordinary times.
The new immigration system for Europeans brought into effect from January 1 mirrors the system already in place for non-EU citizens, in the sense that a number of entry routes are points- based.
Under the skilled worker route, anyone coming to the UK for work must meet a specific set of requirements for which they score points.
A total of 70 points is needed to be able to apply for a work visa, and this number can be reached by having things like a job offer from an approved sponsor at an appropriate skill level, a salary of £25,600 or above, a PhD in a STEM subject, or a job in a shortage occupation as designated by the Migration Advisory Committee.
The graduate route will also be available to international students who have completed a degree in the UK, enabling them to work at any skill level for two years after completing their
studies, after which time they will have to follow the skilled worker route.
This new immigration system will have a profound impact on UK migration flows moving forward, with less people expected to come to Britain from the EU.
“Undoubtedly, there is likely to be lower levels of immigration from EU countries,” says Niamh Corcoran, policy adviser at the North East England Chamber of Commerce.
“COVID-19 has already had a significant impact on ordinary migration patterns, which makes the impact of the new points-based system harder to predict.
“According to research by the Institute of Public Policy Research (IPPR), 63 per cent of EU-born workers who currently live in the UK would not be eligible for the skilled worker route.”
These figures imply that the number of EU citizens moving to the UK could fall quite dramatically, as indeed they already have since the 2016 referendum.
In 2019, the number of National Insurance Number allocations for EU citizens was down 28 per cent from 2015.
EU net migration has fallen even further, from an estimated 219,000 in 2015 to 50,000 in 2019.
“Clearly, the economic impacts of this will be concentrated on industries which hire large numbers of EU migrants,” adds Niamh.
“As just one sectoral example, EU-born workers make up one third of the workforce in the food manufacturing sector.”
With fewer migrants coming to the UK from the EU, it is hoped that more non-EU migrants will fill the gap.
But this is not an exact science and will depend largely on our ability to make the UK an attractive place to live and work in the future.
As it stands, the North East has a relatively low reliance on migrant workers, with 93.4 per cent of the region’s workforce being UK-born. The same figure for London is 56.6 per cent.
But this does not mean our ability to attract talent from the EU is not important.
Niamh explains: “Since the North East has an older than average population, attracting labour from the EU is key to growing the regional workforce and economy.
“Research by the North East Local Enterprise Partnership also shows that EU nationals are more likely to work in occupations that are in shortage across the North East.”
The new shortage occupation list reflects some of these skills shortages but not all of them and, at present, is only updated every three years.
“Although the number of EU migrants in the North East is relatively low, the impact they have on the region’s economy should not be underestimated,” adds Niamh.
There is a tendency when faced with the prospect of reduced access to talent from abroad to say that we can simply fill any skills gaps by investing in homegrown talent.
The whole rationale behind ending freedom of movement, for instance, was that it presented an opportunity to find work for a growing surplus of underutilised UK-born workers.
At a time of high unemployment, shouldn’t it therefore be easier for firms to have access to all of the talent they need at home?
Niamh answers: “It’s not either-or, we need to do both.
“Businesses need to be able to hire from abroad when they want to, and we also need to have well-skilled people in the region.
“We don’t want to end up in a situation in five years’ time where we have widening skills shortages in growing sectors because that doesn’t help anyone.”
The time for debating the merits of freedom of movement is long since over but the extent to which the new immigration system gives businesses access to the skills they need is still very much up for debate.
Niamh adds: “In the wake of COVID-19, immigration will play a key role in the region’s economic recovery, reducing the impact of skills shortages and encouraging innovation in business approach.
“The Government needs to ensure the new immigration system is affordable and available to businesses of all sizes.”