April 12, 2017    4 minute read

Can the UK Economy Survive without EU Citizens?

Quid Pro Quo    April 12, 2017    4 minute read

Can the UK Economy Survive without EU Citizens?

The simple answer is no. Employers in both the public and private sectors are urging the UK government for an early resolution on the status of over three million EU migrants. Even PM Theresa May has accepted the need for a possible extension to freedom of movement beyond that date to accommodate lengthy and protracted transitional arrangements.

This will be the case if the UK wants to stay part of the single market during the negotiations. May has stated:

“Once we’ve agreed what the new relationship will be for the future, it will be necessary for there to be a period of time when businesses and governments are adjusting systems and so forth, depending on the nature of the deal, a period of time during which that deal will be implemented.”

A fresh measure of reality is starting to pervade the higher echelons of government.

Priority Treatment

Until recently, a window had existed for the UK government to make a unilateral “honorable gesture” guaranteeing rights for EU migrants. But it looks as if this opportunity is being submerged in the overall “divorce” negotiations. The UK government’s side hinted a solution had been on the table earlier but laid blame for inaction squarely at the door of EU politicians.

Evidence of any serious intent looks thin when seen how the House of Lords failed in its efforts to persuade the government through its controversial amendment to the Article 50 (Notification of Withdrawal) Bill. Even the all-party House of Commons Committee on Exiting the EU recommendation to confirm guarantee status on EU citizens was ignored.

Even though the opportunity to upstage its EU partners may have been lost there is still time to set a more amicable tone in the forthcoming negotiations.

Now that Article 50 has been activated, and the “phoney war” is over, pro-active action needs to come from both sides. A pre-emptive strike could be initiated by the European Parliament. Britain is accused of using EU migrants as “bargaining chips”. But this is no excuse for French, Polish and Italian MEPs – and European Council members – to sit on their hands waiting for the horse trading to begin. They have an influential role in championing the rights of their constituents.

A reciprocal agreement, for the three million EU citizens (in the UK) and 1.2 million Britons living in the EU27 deserves priority treatment. Many of these so-called “expat” Britons were disenfranchised from a vote in the June 2016 Referendum in spite of the results having such an impact on their future.

Impact on the UK Economy

The economic argument for guaranteeing the rights of current EU workers is both critical and overwhelming. The government needs to move fast. It is estimated that over a hundred thousand have already left since the Referendum vote. By the end of 2016, the total number employed dropped to 2.2 million. Among the factors cited are the rapid depreciation in the pound and the continued economic uncertainty. One should hope most EU citizens can wait.

A further substantial departure of EU migrants would be alarming for vital sectors of the economy. The NHS, construction and the hospitality industries would struggle to function without them. Conveniently forgotten is that these very doctors, nurses and other highly technically skilled employees gained and paid for their qualifications in their country of origin so at no cost to the British taxpayer. Research shows they pay more in taxes than they draw in benefits – and provide in excess of £2bn net contribution annually to the Exchequer.

A Welcome Change of Tone

A growing sense of economic reality is softening the stance of even some (not all) hardline Brexiters who share the view that EU citizens, in situ before the 2016 Referendum (23 June 2016), should be guaranteed the right to remain in the UK. Snatching back the illusion of sovereignty through “control of borders” will not help the post-Brexit economy desperately in need of retaining foreign workers.

At last, the government has come clean on the need for EU migrants. Only recently, Brexit minister, David Davies, acknowledged on a visit to Slovakia it would take years before UK citizens could fill these positions, trying to re-assure that Slovakian citizens in the UK will have equally good arrangements in the future as they have now. Pragmatism rather than dogma may become the order of the day.

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