If the UK's route out of the EU was less than clear before the General Election, events of the last ten days have torn the road map into shreds. The Conservative and Labour manifestos ruled out free movement, yet everything now seems to be up for grabs. But with no-one seemingly at the wheel as Brexit talks begin, the future of EU citizens in the UK is still unclear and employers have been reduced top shouting urgent warnings from the back seat.
In the past year employers have been assuming that the rhetoric of 'taking control', combined with rigid adherence to reducing net migration to the tens of thousands, would rule out the continuation of free movement. Our research before and after the referendum vote found employers moving from a state of shock and horror to one of uneasy resignation.
Although a U-turn can't be ruled out, employers expect to soon be facing barriers to both recruitment and trade. Now new research by NIESR and the CIPD, published today, explores in detail the reactions of more than a thousand employers to a range of options which might replace free movement, their preferred arrangement by far.
What do employers want?
1. Clarity over their existing EU workers to stop Brexodus
EU citizens already living and working in the UK should be given the permanent right to remain in the UK without the current requirement to hold comprehensive health insurance and tax receipts. Some employers have already experienced in fall in applicants and an increase in departures. A guarantee of EU citizens' rights would give employers some confidence that at least they won't experience a forced Brexodus on top of the current voluntary one and address their concerns for the wellbeing of their EU workers.
2. Policies that work for all levels of skill
New policies need to take account of labour needs, which they haven't needed to since free movement really took off ten years ago. Employers think they could work with a shortage occupation list - similar to that which applies to high skilled roles from outside the EEA, but extending to lower skilled work. To recruit from the list employers could apply for trusted sponsor status, meeting quality standards on recruitment and training to achieve this - something they seem willing to do.
Where jobs are not on the list, a Resident Labour Market Test (RLMT) could be carried out but with a relatively short period required to advertise roles, in line with notice periods for low skilled work and the need to recruit quickly. We also suggest that the current Tier 5 Youth Mobility scheme could be extended to EU citizens, and that visa holders might be encouraged to work in sectors with shortages, such as hospitality.
3. A minimum of complexity, confusion and cost
New systems need careful design, trial and phased introduction and we suggest a three year transitional period once EU negotiations are completed. Processes must also be as simple as possible to allay employers' concerns about the costs of applications, checks and mistakes. Complex rules and procedures won't deter employers from recruiting EU migrants where they have little choice. They will simply add costs to businesses and services in what is clearly a challenging environment as Britain leaves the EU.
And this is what employers don't want
Sector based schemes, while having some appeal - especially in agriculture - are seen as potentially unfair because it is at occupational level that shortages are experienced and sectors can be difficult to define.
Temporary schemes also get the thumbs down, with almost 9 in 10 employers surveyed saying that one year visas would have a negative impact on their business. Five year visas were seen as more attractive, although a third of employers in high wage industries were against this option.
Limiting visas to migrants with a definite job offer has its attractions to employers geared up to on-line recruitment - but one in four employers say it would have a negative impact on their business, and one in three in low pay sectors. It would also undoubtedly fuel the practice of recruitment through agencies based overseas, a practice which goes down badly with the media and public.
Where next for post-Brexit immigration policy?
Currently the direction of new immigration policy is towards barriers and restrictions on the movement of labour. Some are arguing for a transitional period and, while that might help, it is unlikely that employers in sectors which rely on EU migrants will replace them with British workers however long they are given. A brief look at the history of sectors such as agriculture, hospitality and food and drink shows this. Our young people aspire to work in education, arts and entertainment, IT and communications, not in abattoirs and fish factories. Unemployment is at its lowest level since 1975 so the worker fuel tank is on reserve.
A consultation with employers was promised, and this must go ahead whatever the Government's other priorities. And the Government must listen and develop policies that are workable, enforceable and give employers access to the labour they need. More than one in ten employers surveyed said they were considering or had decided to transfer either part or all of their operations outside the UK as a result of Brexit, and a further 9 per cent say they are likely to concentrate future expansion there. These findings should warn the Government not to speed towards the end of free movement, but consider the hazards and potential damage to the UK's businesses and services.