Tuesday, 19 June 2018

The future of free movement of persons in the UK (Part 1)








Catherine Barnard and Sarah Fraser Butlin*



*The authors are both at the University of Cambridge and funded by the ESRC’s UK in a Changing Europe programme. Thanks go to their colleagues, Graeme Ross, Steve Peers, Jonathan Portes and Madelaine Sumption.



Introduction



Concerns about immigration were a - no, probably the - main reason why many voted to leave the European Union on 23 June 2016. There was a strong perception that the UK had ‘lost control’ of its borders; a Leave vote would enable the UK government to take back that control. At one level, the UK had not lost control in the sense that passport checks were - and remain - firmly in place at its borders.  However, public perception was of a flood of migrants, including criminals, entering the UK with the government having limited ability to stem, let alone reverse, the tide. It was certainly true that migration was at its highest level ever at the time of the referendum. Many saw the Brexit vote as an opportunity to address this.



But protesting about immigration is the easy bit. It is quite another to find a solution to the inherent tension between encouraging those with skills to come to the UK while being seen to ‘take back control’. In Theresa May’s Mansion House speech on 2 March 2018 she made reference to migration for the first time:



[W]e must maintain the links between our people. … We are clear that as we leave the EU, free movement of people will come to an end and we will control the number of people who come to live in our country. But UK citizens will still want to work and study in EU countries - just as EU citizens will want to do the same here, helping to shape and drive growth, innovation and enterprise. Indeed, businesses across the EU and the UK must be able to attract and employ the people they need. And we are open to discussing how to facilitate these valuable links.



However, no further detail as to how this would be achieved was set out.  Indeed, Michael Heseltine in an interview with the Observer said “Why is it that after 18 months since the referendum we have not got any closer with these issues? The answer is simple: because no one has got any answer about how to do it.”



When she was Home Secretary, Amber Rudd, commissioned the Migration Advisory Committee to research what the country needs; it is not due to produce its final report until the Autumn. The immigration white paper, expected last year, is still not published. Meanwhile the Windrush scandal has shone an unforgiving spotlight on the effect of the Home Office’s ‘hostile environment’ on British citizens.



Given the now heightened sensitivity of migration as an issue, the UK seems unable to answer the most basic but fundamental question: whether it will continue to have a two-tier policy for immigration (a preferential regime for EEA nationals and a (significantly) less favourable regime for the rest of the world) or a single policy for all immigration.



There have been hints that the two-tier model is preferred, with preferential access to EEA nationals. If that preferential access was on terms as close as possible to the currently model of free movement, this would certainly help oil the wheels of a future deal and keep the door open for UK participation in a number of schemes including those for EU research funding. Speaking in Denmark on 9 April 2018, the Prime Minister Theresa May said that while she would keep the target of reducing net annual migration to below 100,000, she did recognise that ‘UK citizens will still want to come and study and work in countries in the EU27 like Denmark, and EU citizens like Danish citizens will still want to come and work and study in the UK.’  On 29 April 2018, the Independent reported that ‘Britain [is] set to offer EU Brexit immigration deal “very similar” to free movement.’ 



Yet there has since been a new home secretary, Sajid Javid, who is rumoured to have torn up a proposed policy giving preferential access to EU nationals and also removed Non-EEA health service workers from the Tier 2 cap. This might suggest he is looking to a single policy for EEA and non-EEA nationals in the future. Politically this might not fly. The current visa regime for non-EEA nationals is bureaucratic, complex and very expensive – and of course subject to the cap of 20,700 on the number of migrants coming to the UK (within Tier 2). Businesses in certain sectors are highly dependent on (EEA) migrant workers. In the absence of a dramatic overhaul of the visa scheme, many of those businesses will not be able to get the workers they need.



On the EU side, countries sending migrants, such as Poland, Bulgaria and Romania, may still want their workers to be able to work easily in the UK. So, in the context of the UK’s future relationship with the EU, there may be some appetite for the EU to explore a new arrangement with the UK in respect of migration. The UK, in its turn, may ultimately allow pragmatism to prevail, at least for a transitional period until UK workers are being trained, and may be willing to countenance some preferential – but controlled – regime for EEA nationals. This scheme might be based on a notion not of free movement (after all the UK is leaving the EU and, unless it stays in the EEA, it will not enjoy free movement) but ‘fair movement’ or ‘fair mobility’. The scheme that we propose across three blogs published this week, draws on a historical understanding of the EU’s free movement provisions to inform our suggestions as to what that new scheme might look like. Our proposal is pragmatic and tries to steer a course between the competing interests of the EU which will inevitably tack towards free movement and the UK government which will tack towards greater restrictions.



In the first blog, we argue that when the original EU Treaty (the Treaty of Rome) was drafted its focus was on the rights of individuals to move for work. It was not connected to broader ideas of citizenship and state building. We argue that the UK’s new arrangement with the EU could return to those original ideas. At domestic level the current scheme for Croatians working in the UK might provide a template as to how this can be operationalised.



In the second blog we consider how the equality principle might work in a post-Brexit immigration policy, especially in respect to access to benefits. We argue that there should be a phased approach to equal treatment depending on the migrant’s length of residence, with preconditions to accessing that right and specific exclusions from it, particularly in the early stages of a migrant’s arrival.



In the third blog, we consider the final component of a policy based on fair movement, the introduction of an emergency brake.



We turn now to look at the first element of the proposal for fair movement: connecting movement to economic activity.



Back to the Future

In the debates in the run-up to the Treaty of Rome, the notion of free movement of people was focused on the economically active, namely workers and those seeking to access jobs. The idea of free movement of people can be traced back to the 1948 Paris Treaty which established the Organisation for European Economic Cooperation (OEEC) and provided for Contracting Parties to ‘take the necessary measures to facilitate the movement of workers’. However, this was subsidiary to the aim of providing ‘full employment for their own people’ (emphasis added). 



The emphasis on the movement of workers recurred throughout the formal discussions about the establishment of the EU’s Common Market.  The German, Belgian, Italian, Luxembourg and Dutch delegations proposed that the free movement of people provisions of the Treaty should ‘consist in the free access of nationals of the Member States to economic activities in the territory of the Community’ (emphasis added). In November 1955 the Inter-Governmental Conference considered that the concept of free movement of workers included the right to present oneself in any country of the Community, for the jobs actually offered and to remain in that country without any other administrative restriction if a job is actually obtained’ (emphasis added). (Original text: “une interprétation correcte de la notion de libre circulation des travailleurs: elle comporte le droit de se présenter dans tout pays de la Communauté aux emplois effectivement offerts et de demeurer dans ce pays sans aucune autre restriction administrative si un emploi est effectivement obtenu”.)



This formulation of free movement of people was repeated in the 1956 Spaak report and formed the basis for the initial wording of the Treaty of Rome. Subsequent discussions indicated that the right of free movement should cover work seekers as well as workers.



What is abundantly clear is that the original Treaty drafters were concerned only with the economically active. The semi-economically active (students, the retired, and persons of independent means (PIMs)) were given free movement rights only much later, through the adoption of the Residence Rights Directives in the early 1990s, directives now replaced by provisions in the Citizens’ Rights Directive 2004/38 (CRD), which set the condition of having comprehensive sickness insurance and sufficient resources if EU citizens in this group want to reside longer than three months in another Member State. Free movement rights for the economically inactive were only contemplated by the citizenship provisions in the Treaty of Maastricht (1992), were subsequently fleshed out by the Court of Justice but then curtailed. 



We would argue that the link between economic activity and free movement is key. We would argue that for states, such as the UK, keen to have a deep and special economic relationship with the EU, entitlement to movement should return to having an economic focus as the original drafters of the treaty envisaged.  Those who wish to enter the UK for more than three months must be coming to work.  This, in and of itself, would not affect numbers: most EEA citizens come for work and this group has very high employment rates.



However, to reside in the UK beyond the three-month period, we would suggest that the EEA migrants must have obtained work which must not only be genuine and effective but also significantly more than de minimis (e.g. a minimum of 20 hours a week referenced over a period of, say, 4 months). Further, this work – whether as an employed or self-employed person – must be either at a high skill level or paid above a certain minimum threshold. A recently leaked document suggests that the Government might be sympathetic to this idea. It would require EU workers to earn £20,500 (significantly above a full time minimum wage, or £1,254.60 a month for someone on a 2040 hours a year contract) in order to come to the UK.  This would have the effect of bringing down numbers significantly. In addition, we would suggest that an individual should have to work for a period of, say, three months before they can bring family members with them (parents, spouse, dependent children).



We have shown that connecting movement with economic activity was rooted in the origins of EU law. The requirement for the work to be genuine and effective and not purely marginal and ancillary is already a requirement of EU law. However, threshold requirements in terms of skills and/or pay go significantly beyond the requirements laid down by EU law and the EU may find these difficult to accept in any future negotiations unless they could be introduced only for a transitional period.



The semi-economically active - students, the retired and persons of independent means - add significant economic value to the UK. We would argue for their inclusion in the definition of those who would have the right of fair movement subject to having sufficient resources, with those minima being defined (unlike the position in the CRD), and comprehensive sickness insurance (this could either be via the NHS surcharge or through private health insurance). In other words, we would push that the residence requirements already provided for in Article 7 of the Citizens Rights Directive (CRD) continue to be applied to this group but enforced in their entirety. This group would be entitled to work but only up to 20 hours a week.



Finally, there is an issue of those wishing to come to the UK as a service recipient or provider. In the WTO this is referred to as Mode 2 (consumption abroad such as tourism) and Mode 4 services (natural persons supplying services in another country). To facilitate these arrangements, there should be a window of 90 days when EEA nationals can enter the UK as a tourist and to look for work. Short term service providers would need to register on a database to indicate the nature and duration of their work. Their terms and conditions of employment would be mainly covered by home state rules.



Recent examples linking economic activity with free movement



Requiring a link between free movement and (high skilled) economic activity underpins the scheme currently operated by the UK for Croatian nationals during the seven year transitional period following the accession of Croatia to the EU in July 2013. The Croatian scheme distinguishes between different types of Croatian migrants who are awarded different types of registration certificates:



- Purple registration certificate to work in the UK: this requires the individual to meet the requirements for skilled economic migrants, as obtained for Tiers 2 and 5 of the Points-Based System (PBS), to have a job offer and either a sponsorship number from the employer or in certain circumstances a letter from the employer.  They may only work with this prior work authorisation, unless they fall within limited exceptions. After 12 months of authorised work then permission to work is no longer required.



- Blue registration certificate: where the individual holds a UK degree and is a “highly skilled individual” or holds a Tier 1 (Exceptional Talent) Endorsement (for those who are a “world leader or have the potential to be a world leader”). No work authorisation is required.



- Yellow registration certificate: this is for students and those who are self-sufficient individuals (that is, PIMs). They must produce evidence that they have sufficient resources to support themselves and that they have comprehensive health insurance.  Students may work in limited and restricted circumstances.



After 12 months of authorised work, a Croatian national becomes entitled to social security benefits and has the right to reside as a jobseeker, on the same terms as other EEA nationals.  Moreover, whilst in authorised work, they are entitled to means-tested benefits.  Those who are self-employed or have a blue certificate are entitled to social security benefits from the outset.



Similarly, until 1 January 2014 in order to work in the UK Romanian and Bulgarian workers were required to hold:

- a Seasonal Agricultural Workers Scheme certificate; or

- a registration certificate as a “highly skilled person”.  This required the individual to produce evidence showing qualifications, age, previous earnings and experience of the UK in order to obtain sufficient points to meet the threshold in the Immigration Rules. Alternatively it could be awarded to those who had obtained certain qualifications from a UK institution.  The registration certificate gave the individual unconditional access to the labour market.

- an accession worker card for certain categories of employment including au pairs, ministers of religion, teachers, language assistants or midwives. Students and those who were self-sufficient could also obtain a registration certificate, and students were then permitted to work for 20 hours per week in term time.



The mechanics of a registration scheme



The approach underpinning the Bulgarian/Romanian scheme and subsequently the Croatian scheme is that generally an individual should be undertaking some, usually high skilled economic activity to be permitted to remain in the UK.  We would argue that these schemes could be developed to include a salary threshold as an alternative to a skills requirement outlined in section II.



The Croatian, Bulgarian and Romanian schemes also provide an illustration of how to combine a scheme requiring the migrant to be engaged in economic activity with a relatively simple, cheap registration system. We would argue that the registration schemes used in relation to Croatian, Bulgarian and Romanian migrants might provide a prototype for future arrangements.



Specifically, we would envisage employers issuing an electronic document to an individual with an eligible job offer, certifying that the job offer was genuine and effective and with confirmation of the salary and, where appropriate, highly skilled person status. The prospective employee could then apply online for a residence permit at negligible cost (circa £65, the current cost of the Croatian registration certificates).



Were the employment to end within the first twelve months a simple online notification process could be used to notify the Home Office of the ending of employment, automatically giving the individual a further, say 3 months, to find a new job.  Where an individual sought to move to a new employer, the notification process should deal with this straightforwardly, allowing the new employer to update the relevant details. After twelve months, permanent residence status would be granted and the online system updated allowing future employers to check an individual’s status. 


The advantage of adapting, say, the Croatian model for EEA nationals (and in the future high skilled non-EEA nationals?) are four fold. First, it is an off-the-shelf model; no new IT systems need to be built, just an upgrading of existing ones (they would, however, require significant investment - there are currently lots of online reports of lengthy administrative delays for Croatians applying for these certificates). Second, the numbers coming in for work purposes will be checked systematically. Transparency and the knowledge that comes from this is already a precondition of control. Third, the system is still light touch. It avoids complex, bureaucratic and expensive visa schemes. It could be matched with a legal presumption for the employer that the individual has the right to work once the individual has a registration certificate. Fourth, it gives power to employers to determine the type of person they want and in what field. The scheme is not reliant on the Home Office to release permissions to fill a job on a monthly basis.



Conclusions



No employer wants to go through the huge expense and tremendous bureaucracy of a Tier 1 or tier 2 visa scheme. We recognise that there will inevitably have to be a registration scheme of some sort for newly-arrived EU migrants wishing to work in the UK (and distinct from those already in the UK at the end of the transition who have settled status). What we are proposing is a light touch scheme which allows registration without acting as a significant deterrent for those coming to the UK. Our proposal, relying as it does on the individual showing economic activity (or at least sufficient means to support themselves), reflects the ideas underpinning the original version of the Treaty, namely that migration should be for economic purposes. Relying on this as a basis for a future policy, combined with a simple registration scheme, is the first strand of our approach based on fair movement.



Barnard & Peers: chapter 27, chapter 13

Photo credit: BBC

3 comments:

  1. Where would your suggestion leave UK citizens who have retired to the Continent?

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  2. "Fair movement" unfortunately has a rather dumbed-down feel to it. "Free" and "fair" are not of the same category, the current system is arguably fair too, since, inter alia, UK nationals benefit from equal treatment in other EU member states, and the system you are proposing is still a form of free movement, in that everyone within particular categories benefits from free movement without quotas or other limitations. Wouldn't "limited free movement" be a better description?

    “this work – whether as an employed or self-employed person – must be either at a high skill level or paid above a certain minimum threshold”.

    You just say this should be so without explaining why. Though you don’t explicitly say so, you then seem to go on to accept the leaked UK government threshold as a reasonable working figure. Why shouldn’t someone working full-time at the minimum wage be able to benefit from this scheme? (I can think of some arguments - which I vehemently disagree with, finding them to be quite elitist - but you don't articulate these at all.)

    On a related note, if we’ve already accepted that a particular student can come to the UK, why do we need to limit their ability to work to 20 hours a week? What harm would their working 35 hours a week do?

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    1. It feels like the term "fair movement" vs. "free movement" is meant to evoke the same feelings as when one hears about "fair trade" vs. "free trade", wherein fair trade ensures that primary producers are paid a fair price and workers are paid at least minimum wage and given basic protections. However I doubt this concept will take off for the simple reason that in the UK the prevailing mood is for NO movement of outsiders into the country (yet still apparently a poll has shown that interviewed Britons were in a majority in favour of Brits having the right to live and work elsewhere in the EU but also in a majority against other EU nationals being able to come to the UK to do the same...). That plus the fact that as you rightly pointed out the current system is already fair (as UK nationals get the same benefits as other EU nationals) and the EU is very likely to see it that way, then this system is likely dead on arrival. The UK could choose to implement it unilaterally though, but I can't see how it would be really that much fairer than the current system given the unnecessarily tight restrictions on students and the elitism inherent in only allowing this system to benefit persons with high skills levels or earning above a certain threshold.

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