By triggering Article 50, the UK Government has started the process of leaving the EU and will end ‘free movement’ between the EU and UK. But what then on migration? Free movement and EU expansion were behind substantial increases in migration to the UK in the last decade, and likely led to policies which reduced non-EU migration. Our new analysis also suggests the UK now accepts hardly any migrants from the poorest countries.
Here we review UK migration trends, their implications for development, and the immediate outlook for the Government’s policy. We argue that the UK migration debate will start afresh, and that now is the time to develop new policies and approaches to inform manifestos for the general election scheduled in mid-2020.
The story so far: a step-change in 21st century migration to the UK
Migration to the UK has increased significantly in the two decades. There were three notable jumps: at the end of the last century from non-EU migration; when the EU expanded its membership to the eight Central/ Eastern European accession countries in 2004; and when restrictions were lifted on Bulgaria and Romania in January 2014.
The above chart shows the net migrant flow with EU and non-EU migration now at similar levels— each of around 165,000 in the year to September 2016.
The rate of population increase is still incremental. Even the record net increase seen in September 2015 (of 322,000) was, against the UK’s 65m population, an increase of just 0.5 percent. To illustrate that with a metaphor: if I had savings growing at that rate, I wouldn’t be too worried that the interest payments (i.e., migrants) were about to swamp my existing savings (i.e., UK incumbents).
Increasing migration flows is a global trend
The UK’s stock of foreign-born population is not unusually high, though the recent increase has been steep relative to other rich countries. OECD data shows the UK’s foreign-born population increased from 8.9 percent of the population in 2000 to 13.3 percent in 2014 (in line with the OECD average but well below, say, Australia’s 28.1 percent). The UK increase reflects a wider global trend—OECD countries saw a similar increase from 9.5 percent to 13 percent. Expressing this as the change in the foreign-born population share, the UK had the fifth largest increase (50 percent) behind other north European countries Iceland (70 percent), Norway (84 percent), Finland (85 percent), and also Hungary (53 percent).
What role has EU “free movement” played?
It’s clear that “free movement” has significantly increased EU migration to the UK. Recent analysis from independent think-tank NIESR, which models migration using a gravity structure (i.e., where economic prosperity pulls and distance weakens), suggests that “free movement” increased flows from eligible countries by roughly 500 percent. Although some of this may be transitional, free movement has clearly had a major impact.
Non-EU migration to the UK has also fallen since the EU expanded in 2004. The chart above shows that non-EU migration peaked around 250,000 in 2004 just when the eight accession countries joined the EU. In the latest data, it is roughly 100,000 below that peak. This has reflected an explicit UK policy to reduce non-EU migration including through restricting VISAs (for example, see p248 of OECD’s 2010 Migration Outlook). In this way, free movement with the EU has squeezed out migrants from non-EU countries.
UK migration policy and poverty reduction
Migration is an important part of any country's contribution to the global goal of poverty reduction. Our Commitment to Development Index scores developed countries on their contribution to poverty reduction and includes migration is one of seven components. The UK’s approach to migration falls well-short of its peers in supporting development. The UK places 18th out of the 27 countries assessed.
In more recent data, it appears that the UK is barely accepting any migrants from the poorest countries. Our new analysis of the latest International Passenger Survey (IPS) data on UK net migration flows in 2016 suggests the proportion who are citizens of countries currently classified by the World Bank as ‘low income’ was just 1.4 percent of (net) arrivals in 2016. ‘Lower middle income’ arrivals were some 14.7 percent. Historically, UK migration has been more inclusive—the equivalent figures on the stock of migrants in the UK (based on country of birth) are 8 percent (with Somalia, Zimbabwe and Afghanistan the three largest) and 31 percent (India, Pakistan, and Bangladesh the three largest).
Looking at the EU, none of the 27 countries are from these two income categories; even Bulgaria and Romania—the poorest EU countries—are both ‘upper middle income.’
Although the timing of the UK’s shift away from developing country migrants is unclear—and an area for further research—the figures do suggest there has been dramatic slowdown in the rate at which the UK accepts inward migration from the developing partners.
Where to next on UK migration policy?
The Conservative government has publicly shifted its position on migration, and effectively abandoned its manifesto pledge to reduce net migration below 100,000. Last month, Prime Minister Theresa May allowed some indications of her post-Brexit policy on migration. Writing in the Sun, the UK’s most-read newspaper, Daniel Hannan a Conservative Member of the European Parliament suggested “entitling” EU nationals here to 5-year (renewable) work permits, and also suggested: “The fall in numbers will be largely accounted for by unskilled EU migrants, of whom around 70,000 a year arrive without a job offer.”
Whilst a 70,000 reduction would be unhelpful for the economy, and may be accompanied by a further voluntary reduction in EU migration, it will still likely leave net migration somewhere around 200,000 going into the next election in 2020.
Paradoxically, the UK Government will want to maintain migration and its positive economic contribution to help mitigate the very real wider economic risks of Brexit (especially a scenario without an EU-UK trade deal).
Brexit will reset the migration debate
Brexit will give the UK control over its migration policy and it will need to decide how to use that control before for the scheduled election in mid-2020. It’s not inevitable that migration should be substantially reduced, nor limited to rich countries and people but new approaches will be needed.
CGD is working on understanding how migration will evolve in the coming years, and identifying new approaches and ideas that can make migration work better for people in developing and developed countries alike. One example is a new working group on “Innovative Finance for Resettlement,” which will consider ideas like a Humanitarian Investment Fund.
Migration is a global phenomena, a major pathway for development, and an important part of dynamic economies. New policies and approaches are needed if these benefits are to be clear and more widely felt.
I am very grateful for comments from Owen Barder and Caitlin McKee on an earlier draft of this blog post.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.