Restricting immigration from Europe after Brexit is very likely to lead to lower growth in total jobs and in the output of the UK economy, the government’s official migration advisers have said.
Labour market experts cite official projections that zero net EU migration post-Brexit may not merely halt population growth in parts of northern England, Scotland, Wales and Northern Ireland but may actually lead to shrinkage in the next 20 years.
The Migration Advisory Committee (“MAC”) whose members are appointed by the home secretary Amber Rudd, has noted that cutting EU migration will not necessarily mean lower growth in output per head, an index which is most closely connected to living standards, but lower EU migration will very likely lead to lower growth in total employment and lower output growth. Their findings contradict statements made by Andrew Green, the chair of Migration Watch.
The report provides strong evidence that many employers – particularly in lower-skilled sectors – fear the impact new post-Brexit restrictions will have on their ability to recruit EU migrants. The economists challenge employers over the role of wages in their decision to hire migrant workers, saying they are too reluctant to discuss the issue. The MAC says businesses employ EU migrants not because they are the best available candidates and are prepared to accept lower pay and poor conditions, but because they are prepared to do work that British workers will not. The report points to a big pay differential between western European migrants who are paid on average 12% more than UK-born workers and eastern European workers who are paid, on average, 27% less. Labour market experts counter this by saying the differences can be largely explained by differences in age, region and industry.
The economists place the blame for the fall in real wages for UK-born workers on the financial crisis in 2004. They note that the fall in real wages has not been confined to the low-skilled where the rise in EU migration has been the most marked. Further, the report cites 40% lower absenteeism rates for EU migrants compared with their UK-born counterparts in some lower-skilled sectors.
The MAC’s chair, Professor Alan Manning, said nothing in the interim report should be used to pre-judge the committee’s conclusions on the impact of EU migration on wages, unemployment, prices or the provision of public services. Ms Rudd has made clear that the committee’s final report which is due in autumn will be used to design the government’s post-Brexit immigration policy.
