Article 50: Immigration impact and implications

Once the UK has left the EU in two years’ time, the UK will be able to control which migrants from the EU come to the UK and in what numbers. At present the UK controls migrants from outside the EU, through the requirement on employers to carry out a local labour market testing process and by other means, but has no control over migrants from the EU. Immigration was undoubtedly a factor in the referendum on 23 June 2016 when the British people voted narrowly to leave the EU.

The EU is based on four fundamental freedoms: free movement of goods, capital, services and people. Negotiations over the next two years will be wide-ranging but immigration is likely to feature in the first phase. There is a particular desire, on both sides, to reassure and to get early agreement on the estimated 2.8 million EU citizens who live in the UK and the one million UK British citizens who live in Spain and other EU countries[1].

There is much less clarity on what UK immigration policy will look like after March 2019. However, the Government, in its recent White Paper on Brexit, committed itself to ending free movement of people and making the migration of EU nationals subject to UK law. Any new system is likely to be phased in over a long period with important safeguards and transitional provisions to allow migrants and industry to plan and prepare for the new arrangements.

That said, ultimately we will go over to a system where if an EU national wants to move to the UK, he or she must make an application of some sort. Immigration from the EU will become a matter of permission rather than of right. What will the new system look like? Our crystal ball is a little cloudy but some broad themes are beginning to emerge.

Work permit system

Robert Goodwill MP, UK Minister for Immigration, has insisted that the UK will have a bespoke immigration system after Brexit, but that any further speculation ahead of negotiations would be unwise. The Government will consult with communities and industry this summer but appears to be working towards a work permit system for skilled workers.

Skill and salary thresholds are likely to be lower than for skilled workers under Tier 2 of the points-based system for non-EU migrants,which focuses on graduate-level jobs. The new system is likely to be sector-based and highly flexible, allowing the Government the freedom to increase and decrease the number of EU migrants permitted to work in the UK in any particular sector at any given time. The independent Migration Advisory Committee is likely to have an important role.

Low-skilled workers

There is likely to be specific provision for agriculture, social care, construction and perhaps for low-skilled workers in other sectors as well. Introduction of the National Living Wage may prompt a higher take up of low-skilled roles from some UK nationals. It is clear, however, that there will also be a continuing need for immigrants to fill those roles. “Labour is the most immediate concern for our sector," said Hayley Campbell-Gibbons of the National Farmers Union.

Some readers will recall the seasonal agricultural workers scheme (SAWS) which operated from 1948 to 2013. Subject to a quota, migrant fruit pickers, for example, could work for a qualifying employer for six months without consideration of whether others in the resident labour market were available to do this work.

In due course SAWS may be reintroduced in some form. It may also be a template for similar schemes in the future covering low-skilled workers in other sectors, possibly with different visa lengths. Speaking to the Environment Food and Rural Affairs Committee of the House of Commons on 15 March 2017, Mr Goodwill ruled out a SAWS for 2017 in view of an increase in migration, particularly from Bulgaria and Romania from which large numbers of people come and work in agriculture, but left the door open for the future and said that a SAWS could be put in place within “five or six months” if required.

Visits

There is likely to be a reciprocal visa waiver programme of some sort for EU business travellers and tourists coming to the UK on short trips.

Ireland

Although the Government has pledged to end free movement rights generally, it is fully committed to maintain the common travel area (CTA) between the Republic of Ireland and the UK and their respective islands, which pre-dates accession to the EU. This means that there are no routine passport controls within the CTA. This special arrangement is likely to continue.

Impact pre-Brexit

It is far too early to assess the likely impact of Brexit on immigration. Interestingly, however, there are already some signs of a dip in immigration from the EU since the referendum. Provisional figures from the Office for National Statistics suggest that in the third quarter of 2016 net long-term migration from the EU was 165,000 compared to 189,000 in the previous quarter.

There are likely to be various reasons for this. One factor is the fall in the value of the pound against the Euro since the referendum, making the UK a less attractive destination for those looking to send funds back home. Some EU migrants may feel less “comfortable” after the referendum or be worried that they could be required to leave the UK at some point in the future. This is a concern which may be shared by some employers making recruitment decisions now.

The large majority of EU migrants in the UK have permanent residence. This means that they have resided in the UK for five years, working, studying or as a self-sufficient person.  Many have not taken steps to prove it by gathering relevant information and documents and making an application for a permanent residence card. Some in this group are worried about the future and, while not mandatory, are now making applications for a permanent residence card. The influx of applications has led the Home Office to recruit an extra 240 staff.

Although not yet formally conceded by the Government, in view of their substantial connections with the UK, we are reasonably confident that EU nationals with permanent residence will likely be allowed to stay in the UK after Brexit. Closely aligned with this group are EU migrants who do not yet have permanent residence because they have been resident in the UK for less than five years but who will acquire it by March 2019.

EU migrants will continue to move to the UK after 29 March 2017. While their position is less clear, such new arrivals will probably have their rights guaranteed if they arrive before a “cut-off” date (to be determined). Specifically, it is likely that this group of EU migrants will be allowed to stay in the UK after Brexit, accrue residency towards permanent residence or something equivalent and retain the right to be joined by family members, whether or not those family members are themselves EU nationals. However, this will be the subject of new UK immigration rules coming into force after March 2019 and is highly speculative at this time. There may also be conditions attached, for example, possession of private health insurance, a valid European Health Insurance Card or an agreement with the migrant’s country allowing the UK to recover the cost of health care treatment on the NHS.

The cut-off date, after which migrants moving to the UK will not have the same rights, will be one of the many matters for the upcoming negotiations with the EU. The cut-off date is most unlikely to be retrospective, however, for example, 29 March 2017. EU migrants arriving after the cut-off date may qualify for a work permit but not be on a path to permanent residence.

That said, nothing is certain yet. Those eligible for permanent residence should review whether to make an application now. The same goes for those who will become eligible over the coming months. Those who have already made a successful application for a permanent residence card have much the same rights as British citizens except the right to vote in general elections. Also, they can apply for citizenship after a further year’s residence if they wish.

For further information about anything contained in this article, or to discuss the possible immigration implications of Brexit in more detail, please contact Andrew Dekany, Partner, Maria Krishnan, Solicitor, or visit the immigration section on our website.