The new immigration figures out from the Office for National Statistics (ONS) yesterday turn up the pressure just one month ahead of the EU referendum. The official figures estimate that UK net migration (the difference between long-term immigration and emigration) reached 333,000 in 2015.
On top of this headline figure comes a rise in short term migration from the EU: around 250,000 short-term EU migrants (who come for less than a year) came to England and Wales for study or work in the year ending June 2014.
With net EU migration accounting for more than half of the net long-term migration figure at 184,000 and short-term EU migration running at sustained high levels, there's no doubt that free movement within the EU is driving a large part of recent migration to the UK. This poses big challenges for both Remain and Leave.
On the Leave side, there are clear consequences to a significant reduction in EU migration after Brexit. For employers, the availability of flexible, seasonal workers from the EU enables certain sectors to adapt to skills shortages and economic conditions, with around a quarter of temporary agency workers being from the EU, according to IPPR's latest analysis of the Labour Force Survey.
Free movement therefore helps employers who need a flexible, temporary work force, such as in food processing, construction and hospitality. And EU migrants themselves face fewer obstacles to returning home if they lose their job or if the economic conditions of their country improve, something that stricter visa requirements could make more difficult.
All of this shows that EU migrants are now hard-wired into our economy. If the UK were to leave the EU and, unlike Norway and Switzerland, decide to opt-out of free movement rules, this could pose a major challenge for employers currently reliant on flexible workers from across the EU.
On the other hand, the Remain side is being confronted by the potential challenges of large-scale EU migration - with respect to both long-term migrants and short-term migrants. Long-term migrants contribute to population growth and can place pressures on a number of public services, such as health and education, as well as housing.
And short-term migrants - although by definition they do not stay in the UK for long and so do not contribute to population growth in the long term - can still place some pressures on services. Indeed, local authorities can face difficulties with effectively planning their services for short-term flows. Moreover, according to IPPR's previous research, this form of highly transient migration can have a knock-on impact on community relations, as local communities find it hard to adapt to rapid churn. Finally, both long- and short-term migration can have a small negative impact on wages in certain sectors. Temporary EU migrants are particularly likely to place downward pressure on wages given they tend to have lower 'reservation wages' - that is, they tend to be willing to work for less.
What does this mean for the referendum? A Remain vote will likely mean sustained high levels of EU migration, and public concern about pressures on services and downward pressure on wages will not go away without concrete action. But if Britain were to leave the EU and subsequently reject freedom of movement, this would put employers in sectors such as hospitality, construction and food processing in a serious bind. To make a persuasive case on immigration in this referendum, each side needs to find convincing answers to these thorny challenges.
This article was co-authored by Phoebe Griffith (IPPR Associate Director), and Stephen Murphy (Research Intern at IPPR)
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