Expert analysis: Migration to the UK and EU Free Movement

Chris Lawton from Nottingham Business School analyses recent migration trends to inform discussion on the impact of EU Free Movement rules.

According to the latest estimates from the Office for National Statistics (ONS), the level of migration to the UK has never been higher, exceeding the high point that followed the 2004 expansion of the European Union to include the eight central and eastern European countries. [1]

East Midlands Councils [2] is delivering a project on behalf of the UK Representation of the EU, which aims to raise awareness and to inform key decision-makers and wider stakeholders at regional, national and European levels of the impact of EU policies. The project will result in a report to the UK Representation of the EU, highlighting the main issues, conclusions and recommendations.

As part of this, East Midlands Councils invited Chris Lawton from the Economics Division at Nottingham Business School to analyse recent trends to inform discussion on the impact of EU Free Movement rules. Here, Chris outlines the main findings of the Nottingham Trent University analysis.

"Net long-term international migration measures the number of migrants leaving their usual place of residence to come to the UK for a period of more than 12 months (immigration) less the number leaving the UK to other countries (emigration), combining all types of long-term migration (work, study, family reunion, asylum, etc.) and all countries of origin or destination.

Asylum makes up a very small part of net international migration to the UK, at around 4% each year.

Chris Lawton, Nottingham Business School

"During the 12 months ending with March 2015, net migration was estimated to be 330,000, which exceeds the previous highest level estimated for June 2005 of 320,000. Although migrants from non-EU countries account for the largest share, inflows from the EU have increased much more rapidly, reaching the highest on record.

"Unlike in 2005, when immigration from the 'A8' countries drove the increase in total migration, in 2015 the largest share of EU migrants came from states who were members before 2004, with Spanish and Italian nationals making up particularly large numbers. Additionally, a large proportion of the total increase on the previous year was accounted for by Bulgarian and Romanian immigration following the lifting of transitional controls at the start of 2014.

"Our analysis establishes that, despite the understandable public, media and political interest in the current refugee crisis, asylum makes up a very small part of net international migration to the UK, at around 4% each year. In 2015, total applications for asylum were well below their 2002 high point.

"The other important message is that work-related migration has driven the increase in total migration. Between 2009 and 2012, work-related immigration fell significantly during the period of UK recession and uncertain recovery while travel for formal study accounted for the largest share. From 2013 onwards, work-related migration has increased strongly while migration for study has remained flat. EU nationals make up the majority of work-related immigration (59%), while non-EU migrants continue to account for the majority of study-related immigration (72%).

"The strongest growth has been in work-related migration with a definite job offer – accounting for 61% of all EU work-related immigration to the UK. The level of migration with definite job offers was also the highest on record, complementing recent survey evidence from national and regional employers on the importance of EU Free Movement to meet skills shortages, especially for managerial and professional jobs and the skilled trades. [3]

"The latest Labour Force Survey indicates the very high levels of employment amongst EU migrants in the UK (higher than both the UK average and the rate for UK nationals), and also indicates that employment rates for all groups – including UK nationals – have increased over the last year. [4]

"Because work related reasons account for the majority of EU migration and because EU migrants have significantly higher than average rates of employment, it is very unlikely that the welfare system contributes a significant 'pull' factor in their decision to leave their country of origin and choose the UK.

"Instead, a far more important factor is the relative strength of the UK labour market. Of the five EU countries whose nationals account for the highest proportions of National Insurance registrations (Spain, Italy, Poland, Bulgaria and Romania), all have significantly lower employment rates than the UK. According to Eurostat, employment rates in Italy and Spain in the three months to March 2015 were 55.5% and 56.4%, compared to 72.4% in the UK.

"Where a free trade agreement may allow movement of goods and services between signatory countries, EU membership also confers free movement of the means of producing those goods and services - capital and labour. This right to 'Free Movement' applies to all EU citizens (and also non-EU members in the European Economic Area, Norway, Iceland and Liechtenstein, plus Switzerland). The theory is that, with deeper economic integration, the differences in push / pull factors between member states would become very small over time, leading to a balanced flow of work-related migration around Europe.

"But this has not been the case, particularly in two key instances. EU Enlargement in 2004 included those central and eastern European states that, at the time, had much weaker economies and labour markets. while all other EU countries chose to apply temporary transitional controls on Free Movement from these countries, the UK, Sweden and Ireland did not – leading to unexpectedly high levels of migration to the UK in the period immediately after 2004.

"More recently, with southern EU states like Italy, Spain and Greece still mired in recession and sovereign debt crises, this has again led to very unequal flows of labour. Strong growth in the demand for labour in the UK, with record employment levels alongside persistent skill gaps in key sectors and a high demand for unskilled, casualised and temporary labour, have together provided a strong pull for both southern European and central and eastern European migrants.

"A wide range of research suggests that the UK benefits from migration both economically and fiscally. The Government's Office for Budgetary Responsibility estimated that fiscal targets could not be met without current levels of migration. There is also little evidence of displacement of UK workers.

"Therefore, in the view expressed in our independent research, the key challenge for policy makers is to ensure that greater priority is given to long-term structural improvements in UK workforce development, education, and careers advice and guidance – accepting that employers currently place great value on the labour available through EU Free Movement to meet short-term recruitment and skills needs.

"This could include working with EU partners to identify best practice (for example in vocational training and lifelong learning) and ensure greater cross-EU cooperation in workforce planning. This is a particular priority for the UK because, despite strong employment growth, the country continues to perform poorly in terms of productivity – especially when compared to Germany and France. [5]"

Chris Lawton
Senior Research Fellow, Economic Strategy Research Bureau
Nottingham Business School

Expert analysis: Migration to the UK and EU Free Movement

Published on 22 September 2015
  • Category: Business; Press office; Research; Nottingham Business School

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