The report will inform new rules for immigration once the UK leaves the union and free movement of people ends.
Home Secretary Amber Rudd will commission official experts on a Migration Advisory Committee to carry out a detailed analysis of the role of EU nationals in the UK economy and society.
The in-depth study will focus on patterns of migration from Europe, considering factors including regional distribution, skill levels and seasonal workers.
Advisers will be tasked with examining issues such as the economic and social costs and benefits of EU migration, and the potential impact of any fall in arrivals from the bloc.
The committee will be asked to report back by September next year - seven months before the scheduled date for Britain’s formal departure in March 2019.
However, Rudd does not appear to have made her cabinet colleagues aware of her request.
BBC political correspondent Norman Smith said Foreign Secretary Boris Johnson was not aware of the report into EU migration.
The committee will be invited to produce interim reports before giving its final findings, as officials attempt to draw up a regime that incorporates an end to free movement while ensuring any fall in overseas labour does not damage the economy.
Writing to Professor Alan Manning, chairman of the committee, the Home Secretary will say that under a future system “we will be able to apply different immigration rules and requirements according to the UK’s economic and social needs”.
He will be asked to examine:
- The current patterns of European Economic Area (EEA) migration, including which sectors are most reliant on EU labour;
- The economic and social costs and benefits of EU migration to the UK economy;
- The potential impact of a reduction in EU migration and the ways in which both business and the Government could adjust to this change;
- The current impact of immigration, from both EU and non-EU countries, on the competitiveness of UK industry and skills and training;
- Whether there is any evidence that the availability of unskilled labour has led to low UK investment in certain sectors;
- If there are advantages to focusing migrant labour on high-skilled jobs.
Brandon Lewis, minister for immigration, told BBC Radio 4′s Today programme that the government’s “long-term aim” to reduce migration to the tens of thousands each year remains in place.
“We want to make sure we’re getting that down to sustainable levels that we do believe is in the tens of thousands,” he said. “We want to work with business so that we develop our immigration policy to support and develop our economy.”
Lewis said free movement of labour ends in March 2019. “It’s a simple matter of fact,” he said. Lewis dodged questions about why it had taken so long to commission the report.
We want to work with business so that we develop our immigration policy Brandon Lewis, minister for immigration
Josh Hardie, deputy director-general of business organisation the CBI, welcomed the move as a “sensible first step”, saying the review will be “vital” to address longer-term questions.
“Businesses urgently need to know what a new system will look like - during transition and afterwards,” he said.
But ministers faced questions over the gap between the referendum in June last year and the request to the MAC.
Liberal Democrat home affairs spokesman Sir Ed Davey said: “The Government needs to explain why this study wasn’t commissioned a year ago, directly after the referendum.
“The NHS, businesses and universities that depend on European citizens need answers now, not in another 14 months’ time.”
And it was a point not lost on the public.
Rudd described the study as a “major step in ensuring we create a system that works in the best interests of the country”, the Press Association reported.
She said: “Leaving the European Union gives us the opportunity to take control of immigration from the EU.
“We will ensure we continue to attract those who benefit us economically, socially and culturally.
“But, at the same time, our new immigration system will give us control of the volume of people coming here - giving the public confidence we are applying our own rules on who we want to come to the UK and helping us to bring down net migration to sustainable levels.”
Rudd will also underline the Government’s position that there will be an “implementation period” when the UK leaves so there is no “cliff edge” for employers or EU nationals in the country.
As well as the committee’s work, talks will be held across sectors including business, industry, trade unions and educational institutions in the coming months.
Official statistics show net long-term migration for EU citizens - the balance between arrivals and departures - was running at an estimated 133,000 last year, a fall of more than a quarter on 2015.
Overall international net migration, including from outside the EU, was also down at 248,000 in 2016, although the measure remains well above the Government’s target of below 100,000.
Lord Green of Deddington, chairman of Migration Watch UK, said: “This is a very welcome step.
“While the contribution of many EU migrants has clearly enriched the UK, recent polls have also highlighted how strongly the public feel about the need to control and reduce immigration.
“The committee’s guidance will be vital in helping to ensure that this is done in a sensible and practical way.”
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