EU Referendum


Brexit: EU support on immigration?


27/10/2016




In her report to the Commons on the European Council last Monday, Prime Minister Theresa May found herself complaining about the tendency of MPs to reduce Brexit to "binary decisions between either being able to control immigration or having some sort of decent trade arrangements".

"That is not the case", she said: "We are going to be ambitious for what we obtain for the United Kingdom. That means a good trade deal as well as control of immigration".

And now, it would seem, there are stirrings in the brush which may indicate that Mrs May has a far stronger hand on controlling immigration than has been imagined, with allies who may be willing to support her when the chips are down.

The clue lies in a recent report in Hungary Today of a multi-national manpower survey, which had 57 percent of Hungarian employers having trouble filling positions.

Of this, 32 percent were struggling with a lack of applicants for the vacant positions while 31 percent complained of a shortage of skilled labour. Overall, the shortage of skilled labour in Hungary exceeded the global average by 17 percentage points.

Furthermore, there is no doubt as to the reason for this shortage. Hungarian employers are finding that they not only have to compete for skilled employees with domestic competitors but with employers from western Europe and other surrounding countries.

The most significant disadvantage in this competition is the low payment Hungarian companies offer, but there has been a reluctance to increase rates for fear of risk competitiveness. But now the shortage of skilled labour has increased so significantly that it, too, endangers competitiveness.

Thus, while Hungary may toe the line in public, when it comes to supporting the "colleagues" on concessions over freedom of movement, behind the scenes there may well be some support for restraints imposed by the UK after it leaves the EU.

Nor is Hungary alone. Only last year, we were being told that desperate Polish authorities were trying to encourage the hundreds of thousands of workers who moved to the UK to return home amid fears a brain drain is leaving the country short of talent.

With the UK having become the top destination for Polish emigrants, the Warsaw government had set up a Powroty (Returns) programme, and in 2015 launched an internet portal aimed at persuading back the army of well educated and skilled workers who had flocked to the UK. Officials feared they were losing much needed talent and are now trying to provide new opportunities for their expats if they return.

The same year, the Guardian was telling a joke about Bulgarians: three Bulgarian men, dressed in traditional Japanese costume and armed with swords, were walking down a street in Sofia. A passer-by asked them what they were doing. "We are the seven samurai and we want to make this country a better place", the men said. "Why are there only three of you then?", the passer-by asked, "The other four are all working abroad", they replied.

Written by Bulgarian Ivan Krastev, he went on two write that mass emigration of people, mostly aged between 25 and 50, had dramatically hurt the Bulgarian economy and its political system. Businesses were complaining about a shortage of qualified labour. Bulgaria's health system had been deprived of well-trained nurses who could earn several times more by taking care of a family in London than working at a low-paid local hospital.

More recently, we have seen an obscure protest party in Lithuania with just one MP in parliament storming to power in a shock general election victory after pledging to tackle the country's emigration crisis.

Hundreds of thousands of Lithuanians had been lured abroad by higher wages in an alarming "brain drain" that has seen the population plummet to less than 2.6 million It has lost more than 370,000 people - of which roughly half had gone to Britain - since the eastern European country joined the bloc in 2004.

But concern has been evident for more than five years with President Dalia Grybauskaite in 2011 telling the Irish Times: "We are a small nation, and we are losing the most active people between 25 and 40 years old after we have trained them and invested in their education. It is a huge loss".

With a declining population, emigration is now considered to be the most urgent national problem and it is thus unsurprising that the issue has gained so much political traction.

It is not only politics that might work in our favour, though. A crucial driver of migration has been the ability of workers here to send remittances home – worth €13.2 billion in intra-EU flows in 2014. But with the current weakness of the pound, this is becoming less attractive for migrants to Britain.

There is also some sense that economically, after years of recession, the EU-27 are turning the corner, with optimistic forecasts projected for the Autumn Economic Forecast, due in November.

Part of the reason for the rush of migrants to the UK is its relatively buoyant economy, with workers coming to this country instead of Germany and other traditionally high-employment areas. But if the relative balance between the UK and mainland economies changes, there could be commensurate changes to migrant flows.

This relationship is well-proven, with Norway reporting that foreign workers are leaving the country at record levels as the economy dips into recession. Some 3,500 Poles have left Norway, with net losses also experienced amongst migrant workers from Sweden, Lithuania and Germany.

All of this points to the distinct possibility that, when it comes to the Brexit settlement, the "colleagues" may be prepared to tone down their rhetoric and start talking sensibly about immigration quotas. Already, there might have been behind-the-scenes talks, which could explain Mrs May's optimism.

But then, as we have already indicated, freedom of movement always has been negotiable. And just now, the odds of a favourable outcome are looking better by the day.