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Immigration to The UK And Its Economy Post-Brexit?


Under new UK immigration law, migrants coming to the UK from the European Union face greater restrictions than those coming from the rest of the world. The new immigration system was implemented on 1 January 2021, ending the free movement of people between the UK and the EU, as well as the wider EEA (European Economic Area). The system has had an impact on the numbers of migrants from the EU and will have a future impact on the shape of migrants in terms of overall skills and sectoral mix, impacting the economy in some shape or form.

The new system applies to any person moving to the UK for work, to study, or for family reasons. The exception to this rule is the migration of Irish citizens. There are also new rules relating to migrants from non-EU countries, although these are looser than the restrictions people from EU member states face. This has led to an influx of people requiring the expert legal advice of UK immigration solicitors.

Immigration trends since the decision was made

During the expansion years of the EU between 2004 and 2011, the UK had already begun to evolve away from central integration in the EU in terms of trade, but the trends for migration tell a different story. In the same period, migration to the UK from the EU grew significantly, with over 3.6m UK residents born in a different EU member state. There were many reasons for this, namely a welcome approach to migrant labour, the appeal of London, good education, and English as a world language.

By the end of 2019, the impact of Brexit could be felt in immigration trends, with net EU migration falling by more than 150,000. Between the referendum and the beginning of the Covid pandemic, the pound had fallen sharply, reducing the relative wages in the UK against the original countries of migrants, but generally, the labour market remained strong. You could say that there has been a psychological impact of Brexit, making migrants look at other countries as more welcoming than the UK. During this same period, however, there was a significant rise in the migration of people from non-EU countries. This is partly due to the shortage in certain sectors due to the loss in EU migration. We have seen this in both skilled sectors (such as the shortage of skilled workers in the NHS), and with important seasonal work, such as fruit pickers. Overall, EU migration has fallen sharply since the referendum, and non-EU migration has increased.

The future of the UK immigration system

With these figures and trends in mind and the movement of people back to somewhat normal levels since Covid-19, the new immigration system has been introduced in the UK.

What are the rules?

The new system sets out key provisions as follows:

  • Migrants entering the UK to take up a job paying more than £25,600, or the lower quartile of the average salary (whichever is higher), in an occupation with requirements for A-level equivalent qualifications can apply for a skilled work visa.

  • For sectors where there is a shortage of workers, a lower threshold for initial salary exists. For some industries, this could be as low as £20,000. Those entering the UK to study for a Ph.D. in science, technology, mathematics, or engineering also have a lower threshold.

  • The skill threshold no longer applies to those applying for a visa to work in the NHS.

  • A new graduate visa for international students allows them to remain in the UK for two years post-graduation.

Economic impacts of the new system

Through various assessments and studies, there is a general consensus that GDP will fall due to the reduction in EU migration to the UK, even with the increase in non-EU migration. This fall in GDP might only be small, however. You also need to factor in the migration of British National Overseas passport holders from Hong Kong. These migration trends will be determined by conditions in Hong Kong and China rather than any policy decisions made by the UK government.

Generally, the impact of migrant workers is a positive one in terms of productivity levels and the subsequent desire for native workers to improve. Of course, the reduction in migration flow to the UK should mean that the UK is worse off, but there are studies that show GDP won’t be impacted too much. With wages, free movement was argued by some to reduce wages for low-paid, low-skilled British workers, but there has been little impact on wages, which have been stagnating for years.

Conclusion

The new immigration law in the UK is designed to have trust in the UK labour market to adjust to whatever changes and trends come in the future. This doesn’t seem to fit well with the broader agenda of the government, which has not been as active in some of the policy ideas that have been sold in the last few years, such as ‘levelling up’ and the ‘net zero’ target for the environment. The impact of the pandemic so soon after the Brexit vote cannot be ignored, of course, and there will be a need for the government to make more changes to ensure immigration law marries up more comfortably with broader economic goals.



Yomi is the Managing Partner of Owens Solicitors - A specialist immigration & family law firm based in Luton.


Yomi has been building Owens' reputation within the world of immigration law since 2007. Her stellar reputation has established her as a trusted first point of contact UK-wide.


Yomi has seen particular success in obtaining spouse visas and successfully processing immigration sponsorship licence applications.


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