Why immigration after Brexit is a fine balancing act

Immigration has always been considered, rightly or wrongly, to be the key issue behind Britain's vote for Brexit in June of last year.

But the narrative of the "will of the people" and the need to control EU immigration was compromised by last month's poor election showing for the Conservatives.

Now, more than a year after the momentous EU referendum, the government has commissioned a formal review to provide an "extensive examination of the costs and benefits of European migrants to the British economy", says the Financial Times.

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It's the latest signal that Brexit is being seen more and more through the prism of its impact on business amid a slowdown in economic growth.

This is bolstering those in favour of a softer Brexit, even on immigration.

They've been buoyed by recent interventions from the Chancellor Philip Hammond and from the Home Secretary Amber Rudd, only this morning. She writes in the FT that there will be no "cliff edge", echoing recent hints about a transitional deal that could maintain free movement for up to three years.

But this morning, immigration minister Brandon Lewis said it was a "simple matter of fact" that free movement will end when the UK leaves the EU in March 2019, says the BBC.

This implies the government will bring in interim measures on immigration during a transitional phase before a potentially stricter regime comes in further down the line.

The Confederation of British Industry (CBI) says businesses "urgently" need to know what EU migration will look like, both in the immediate period after March 2019 and beyond.

Sector specific migration

Dr. Patricia Hogwood, a reader in European Politics at the University of Westminster, told Business Insider there were two main ideas within government about how to handle migration post-Brexit.

Ministers who supported Remain and want a more business-friendly Brexit tend to advocate a "free movement minus" regime, which would consist only of "a cap on migrant numbers and an emergency break if they felt that too many were coming in".

Brexiteers, on the other hand, "want to end free movement altogether" and to subject EU migrants to the same work permit system as those from outside the EU.

There is also something of a compromise emerging between these two extremes, which aims to limit the damage from a more restrictive system by changing work permit rules depending on the sector.

Although "very, very complicated" and "very difficult to implement", this seems to be the system the government "looks set" to pursue. By doing this, it believes it will mitigate the impact on the most vulnerable – and valuable – industries in the UK economy.

Notable among these are financial services and insurance, which pay more than £70bn in tax a year and generate a £60bn trade surplus.

Around a third of the financial services workforce is international and many are from the EU. Treasury minister Stephen Barclay is due to meet Lewis this week to discuss a special concessionary visa to exempt the industry from severe immigration curbs, says the London Evening Standard.

There's also technology, which "relies on EU migration to fill about 180,000 jobs", says the FT. The CBI wants a "digital skills visa" to be introduced.

The London First business group is seeking a range of measures to protect professional services sectors, including a long transitional period of up to six years and a lowering of the salary threshold for migrants to count as "skilled" from their current non-EU levels of £30,000.

The group says the control of visas should be taken away from the government and handed to the Migration Advisory Committee, according to the FT.

Need to be flexible

It's not just about professional services and skilled workers, though.

A sharp curb in the number of EU migrant workers could hit many low-paying industries, where migrants make up the majority of the workforce during a period of low unemployment in the UK.

"One in seven workers (14 per cent) in the wholesale and retail trade, hotels and restaurants sector are international migrants, including more than half a million from the EU," says The Mirror.

Seasonal work like fruit and vegetable picking is in many cases carried out by EU workers. An overly-restrictive regime could result in produce not being picked on British farms.

The Royal Institute of Chartered Surveyors warns about a threat to the eight per cent of EU workers in the construction industry, which is already failing to produce a sufficient number of new homes each year.

It wants construction adding to the UK's "shortage occupations list", which is currently weighted towards engineering and healthcare roles.

Acknowledging these pressures, as well as evidence that many companies struggle to recruit British workers, Brexit Secretary David Davis has made assurances that the government will seek a flexible approach to migration controls when it leaves the EU.

In a BBC Question Time panel discussion Davis even admitted that migration targets would need to rise "from time to time" according to business need. Brandon Lewis has said the plan to return migration to the tens of thousands has no set time limit.

The government continues to insist Britain will "take back control" of immigration post-Brexit, but it's becoming increasingly clear it will have to accept compromises in how it exercises that control.