Brexit’s Impact on Scotland: Free Movement of Workers

Series: Brexit’s Impact on Scotland

Free Movement of Workers

Christina Boswell | 13 November 2017

Edinburgh Airport, Lebatihem, CC-BY-NC-ND-2.0

As the UK starts considering what its immigration policy will look like after Brexit, it is becoming clearer quite how well the EEA free movement provisions have worked for industry, public services, and for many local communities. This means it is going to be extremely hard to replace it in a way that suits all those who feel they have a stake in future UK immigration.

Benefits to employers

Let’s start with economic and labour market goals. Not only did free movement provide a ready source of labour across skills levels, occupations and regions. It also offered firms a flexible channel for recruitment, which bypassed the various bureaucratic hurdles of the UK immigration system. Unlike provisions for recruiting non-EEA nationals under ‘Tier 2’, employers did not have to undertake a resident labour market test, apply for sponsor status or impose skills or salary thresholds. So employers in all sorts of firms and public sector organisations could recruit suitably qualified staff without high costs and red tape. And they could do this for lower-skilled and lower-paid jobs, something not possible under the Tier 2 route, which is restricted to high qualified workers, and those earning at least £30,000 (or £20,800 for new entrants) – barring some exceptions.

Benefits to employees

Of course, this highly flexible arrangement has not been without its problems. Many EEA nationals have ended up taking jobs below their skills level, at lower wages and with less secure contracts than equivalently qualified UK workers. And some sectors have avoided investing in technology and switching to less labour intensive models because of the availability of low-cost labour. But clearly, EEA mobility has been a boon to many employers, especially smaller firms and those requiring lower-skilled employees.

The second virtue of this model was to allow EEA migrants a high degree of flexibility in their mobility decisions. The free movement framework has allowed them to hold down often precarious, seasonal and low-paid work, because of the possibility of returning home between jobs, bringing over family to help with caring, accessing tax credits and benefits, as well as public services. And it has allowed people to adjust their plans on where to live and work, and when to stay or return, allowing them to deal with uncertainty and risk, and their changing life circumstances.

This set of arrangements has undoubtedly facilitated the flexible matching of labour to skills across the country – and has aided integration in local communities. By contrast, Tier 2 provisions impose a much more rigid framework, with limited potential for these types of adjustments.

Flexibility across the UK

But I want to emphasise a third way in which these provisions have been flexible: they have served to accommodate quite divergent immigration goals across areas of the UK. Let’s consider how immigration has been framed over the past decades. At UK level, the rhetoric on EEA mobility initially revolved around its benefits for the UK labour market and economy. At a time of high employment and economic growth in the early to mid 2000s, EEA workers filled shortages, boosted productivity and growth, and contributed to the public purse.

As the UK economy contracted after 2008, and successive governments started to limit immigration, the story amongst economic experts and business circles was still one of addressing skills shortage – with the emphasis shifting to the highly qualified. Increasingly, those with lower skills were seen as a problem, and the EEA framework blamed for preventing the government from selecting those (high-skilled) immigrants seen as most economically beneficial.

Scotland and free movement

But in Scotland, EEA nationals across all skills levels continued to be welcomed as contributing not just to the economy, but to key demographic goals. And here we need to understand the radically distinct ways in which immigration is framed in Scotland. Contrary to the labour market/economic model prevailing in the South East of England (and in the UK debate more generally), Scottish policy makers have long viewed immigration as a crucial part of their population growth strategy.

Scotland was plagued by a declining population until the late 1980s. And with its longer, traumatic history of depopulation in the 19th century, the spectre of population decline continues to weigh heavily in government planning. Through the 2000s and 2010s, Scotland was able to stem population decline – and indeed enjoy modest growth – thanks to immigration. Some of this immigration is from the rest of the UK, but increasingly, the lion’s share has been from overseas, and especially EEA countries. In 2016, for example, Scotland experienced net immigration of 31,700 – of which 22,900 (72%) were from overseas, and just 8,800 from other parts of the UK.

Now population growth isn’t just about abstract numbers. It underpins economic growth, and – crucially – helps offset the acute problems caused by population ageing. Scotland’s population is set to age more swiftly than the UK average, creating huge fiscal problems (paying for pensions, health and social services), as well as labour shortages. Immigration is seen as key to addressing this.

Depopulation is felt most acutely in remote rural and coastal areas of Scotland. Here, the effects of declining and ageing population are already setting in, creating not just labour shortages in key industries (e.g. agriculture, forestry, food processing and tourism), but also jeopardising the provision of public services such as health and schools. Again, EEA nationals have helped offset these problems, with families settling across all areas of Scotland, and integrating into local communities.

Thus for Scotland, immigration isn’t just about an economic calculation based on labour and skills gaps. It is also about addressing a wider set of demographic challenges, with very real consequences for wider society, including the viability of remote communities.

A One-Size fits all approach will cause problems

EEA mobility has masked these differences. It has proved adept in addressing a wide range of economic, social and demographic challenges across the UK. But the types of immigration policies likely to replace this framework are unlikely to be so accommodating. The emphasis in current debates – including the leaked Home Office paper – is on more limited routes, which prioritise high skills, with lower-skilled occupations enjoying only restricted rights, and no pathway to permanent settlement. This package will do little to attract the volume of immigration sought by the Scottish government. And it will prove difficult, if not impossible, to attract and retain migrants not meeting these skills requirements, especially remoter areas.

The UK government is predictably wary of allowing Scotland and other regions to pursue a more liberal approach (various options for ‘differentiated’ or ‘regionalised’ policies have been mooted – see our paper on this subject). With the government’s net migration target still in place, and the perceived need to show that Brexit will bring back ‘control’ of immigration, the last thing Theresa May wants to do is let the Scots develop a more permissive approach. All the more so given expected media reporting on Scotland as a ‘back door’ to the rest of the UK.

But the UK government would do well to acknowledge the very different set of concerns animating Scottish policy-makers – concerns which, significantly, are shared across all the main political parties in Scotland. Westminster and Whitehall need to engage in debate about the demographic challenges facing Scotland – and recognise the country’s distinctive policy approach to its framing of immigration goals. EEA mobility has masked these divergences. Brexit will mean they surface with a vengeance, creating another faultline in already fraught Union politics.

Christina BoswellChristina Boswell | Twitter

University of Edinburgh

Prof Christina Boswell FRSE is Professor of Politics and Director of Research in the School of Social and Political Science at the University of Edinburgh. She is Advisory Board Member of the Scottish Centre on European Relations.