UK / EU -
Hybrid freedom of movement system with cap based on average salary
In 2004 the European Union was enlarged
with the accession of Cyprus, the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia, and Slovenia. At the time transitional
restrictions for workers from these new countries were put in place by many
countries (Freedom of movement
for workers in the European Union). Similar restrictions were also
applied to Bulgaria and Romania when they join the European Union on 1
January 2007.
Access to the single market but with restrictions to labour movement has
been tried and tested before, when countries have joined, why not when a
country leaves?
The hybrid system of freedom of movement with restrictions outlined below
is a variation of the transitional arrangements applied when new members joined the EU in 2004 & 2007,
however, it is less restrictive in that movement from countries which are
subject to restrictions will still occur. The proposal is based upon the
premise that where countries are economically balanced then migration will also
tend to be balanced and where there is a greater variance then the pull of
economic migration will be more one sided.
The example below uses the most recently available data from the ONS from
2014 (ONS Data inflow employment by country of birth nationality 2014)
for work related migration including those who accompany / join, other forms of
migration like students are excluded from the calculation and it is assumed
that existing freedom of movement would apply to those who fall within these
categories. The net pay data used is from 2016 (Average salary in European Union member countries 2016) however
it will not reflect exchange rate movements.
Issues of compliance and enforcement of immigration rules, which the Border
Agency, HMRC and the DWP will have to deliver by working far more closely than
they have done to date are not considered here.
Hybrid
freedom of movement system rules
1) |
The system will apply to new migration from whatever Brexit cut-off date is agreed. |
2) |
Only established citizens of their host EU countries will be eligible i.e they must have had citizenship for a minimum of 10 years or be dependants of established citizens. |
3) |
Restrictions will be
triggered where a countries average salary rate is below 50% of the UK
average salary rate. |
4) |
The actual difference
between a countries average salary rate and the UK average salary rate will
be applied against the benchmark number of migrants who came to the UK from
the ONS data in 2014 for that country. For example total work related
migration from Poland in 2014 was 29,500, the average net salary in 2016 was
34% of that in the UK. A reduction of 66% is then applied to the 29,500
migration count giving a reduction of 19,470 and leaving an annual limit or
cap of 10,030. |
5) |
As average salaries in
countries subject to restrictions converge over time towards that of the UK
the reduction applied will fall. |
6) |
Once the difference in
average salary is above the 50% threshold restrictions will be removed and
freedom of movement will follow. |
7) |
For bilateral reasons the
UK Government may decide to amend the cap or remove it entirely for example
by waiving restrictions applied to Portugal. |
These rules will ensure that freedom of movement with 15 European countries
will be unchanged upon Brexit. Migration from the remaining EU countries will
be subject to a cap, however, the cap will rise as their economies converge
with that of the UK and migration will still occur albeit on a reduced level.
The proposed system will deliver a reduction in work related migration of
over 76,000 in its first year as per the table below.
Country | Population (M) | Net Monthly Pay (Euro) | Work Related Migration | Accompany / Join | Total Migration | Pay as % of UK Pay | Cap % Based on % Difference to UK Pay | Work Related Cap Applied | Work Related Reduction using cap % | Accompany / Join Cap Applied | Work Related Reduction Accompany / Join Cap % Applied | Total Migration Cap Applied | Total Reduction Cap Applied |
Luxembourg | 0.5 | 3,149 | 900 | 0 | 900 | 149 | |||||||
Denmark | 5.6 | 3,100 | 300 | 0 | 300 | 147 | |||||||
Sweden | 9.5 | 2,560 | 900 | 600 | 1,500 | 121 | |||||||
Finland | 5.4 | 2,335 | 100 | 400 | 500 | 111 | |||||||
Germany | 80.6 | 2,225 | 6,300 | 1,300 | 7,600 | 105 | |||||||
France | 66 | 2,180 | 16,700 | 1,700 | 18,400 | 103 | |||||||
Netherlands | 16.8 | 2,158 | 2,600 | 1,600 | 4,200 | 102 | |||||||
Ireland | 4.6 | 2,129 | 2,600 | 300 | 2,900 | 101 | |||||||
Austria | 8.5 | 2,124 | 100 | 200 | 300 | 101 | |||||||
United Kingdom | 64.1 | 2,113 | 0 | 0 | 0 | 100 | |||||||
Belgium | 11.2 | 2,091 | 1,400 | 0 | 1,400 | 99 | |||||||
Italy | 59.8 | 2,033 | 11,600 | 900 | 12,500 | 96 | |||||||
Spain | 46.7 | 1,754 | 14,300 | 2,300 | 16,600 | 83 | |||||||
Cyprus | 1.1 | 1,574 | 0 | 800 | 800 | 74 | |||||||
Slovenia | 2 | 1,092 | 400 | 0 | 400 | 52 | |||||||
Greece | 11 | 1,069 | 2,200 | 600 | 2,800 | 51 | |||||||
Malta | 0.4 | 1,021 | 300 | 0 | 300 | 48 | 52 | 144 | 156 | 0 | 0 | 144 | 156 |
Portugal | 10.4 | 1,001 | 11,100 | 1,300 | 12,400 | 47 | 53 | 5,217 | 5,883 | 611 | 689 | 5,828 | 6,572 |
Estonia | 1.3 | 903 | 200 | 100 | 300 | 43 | 57 | 86 | 114 | 43 | 57 | 129 | 171 |
Czech Republic | 10.5 | 793 | 2,400 | 0 | 2,400 | 38 | 62 | 912 | 1,488 | 0 | 0 | 912 | 1,488 |
Croatia | 4.2 | 742 | 700 | 0 | 700 | 35 | 65 | 245 | 455 | 0 | 0 | 245 | 455 |
Poland | 38.5 | 723 | 22,600 | 6,900 | 29,500 | 34 | 66 | 7,684 | 14,916 | 2,346 | 4,554 | 10,030 | 19,470 |
Slovakia | 5.4 | 708 | 5,600 | 800 | 6,400 | 34 | 66 | 1,904 | 3,696 | 272 | 528 | 2,176 | 4,224 |
Latvia | 2 | 664 | 3,200 | 2,000 | 5,200 | 31 | 69 | 992 | 2,208 | 620 | 1,380 | 1,612 | 3,588 |
Lithuania | 2.9 | 585 | 7,400 | 400 | 7,800 | 28 | 72 | 2,072 | 5,328 | 112 | 288 | 2,184 | 5,616 |
Hungary | 9.8 | 570 | 6,500 | 400 | 6,900 | 27 | 73 | 1,755 | 4,745 | 108 | 292 | 1,863 | 5,037 |
Romania | 19.9 | 463 | 29,400 | 2,500 | 31,900 | 22 | 78 | 6,468 | 22,932 | 550 | 1,950 | 7,018 | 24,882 |
Bulgaria | 7.2 | 382 | 5,400 | 100 | 5,500 | 18 | 82 | 972 | 4,428 | 18 | 82 | 990 | 4,510 |
Total all countries | 155,200 | 25,200 | 180,400 | 28,451 | 66,349 | 4,680 | 9,820 | 33,131 | 76,169 | ||||
Total countries not subject to cap | 60,400 | 10,700 | 71,100 | ||||||||||
Total countries subject to cap | 94,800 | 14,500 | 109,300 | ||||||||||
Total reductions from cap | 66,349 | 9,820 | 76,169 | ||||||||||
Total all countries after cap applied | 88,851 | 15,380 | 104,231 | ||||||||||