Britain’s economy could be in for a seismic shock.
The government is planning to stop EU citizens from being able to live and work in the UK without visa requirements in March 2019, when Brexit is scheduled to finally happen. While it is not a certainty—after all, negotiations with the EU are underway and subject to change over the next 18 months—the plan could be especially devastating for the services sector.
The services sector, everything from retail to banking, is the lifeblood of Britain’s economy, accounting for around 80% of GDP. The problem with stopping the freedom of movement for EU citizens is that EU migrants account for a large share of jobs.
The services sector relies on the lower-skilled workers from the EU who take up jobs that Britons don’t want. The Institute for Public Policy Research (IPPR) found that some industries filled around a third of their jobs with workers from the EU.
|Sector||Share of EU nationals|
|Packers, bottlers, canners and fillers||41.6 %|
|Food, drink, and tobacco processors||39.6|
|Weighers, graders, and sorters||34.2|
|Vehicle valeters and cleaners||26.7|
|Cleaning and housekeeping||26|
|Launderers, dry cleaners, and pressers||24.6|
|Fork-lift truck drivers||21.9|
|Other elementary services||20.5|
|Routine inspectors and testers||20.2|
The UK government has not presented any concrete plans on how EU citizens will apply for residency or work in post-Brexit Britain. The government is working on a year-long study into migration. Whatever the country’s policymakers decide on won’t be known until six months before Brexit happens.
But if EU citizens had to fit the criteria of those applying to live and work in Britain from outside the EU, the salary and skills requirements mean most would not be successful in their applications. Currently, Britain’s government requires migrants seeking “Tier 2” visas for skilled workers to fill graduate-level roles and earn at least £30,000 ($39,600) a year. (The requirements for people under 26 or migrants switching from student visas are a bit less strict.)
So while bankers might be okay—that is, if banks haven’t moved jobs away from London—baristas won’t be. In fact, a study by Oxford University’s Migration Observatory last year found that around three-quarters of EU migrants in Britain would fail this test (paywall).
It looks like EU citizens are starting to give up anyway. Annual net migration was 248,000 in 2016, down from 332,000 the year before, mostly due to a drop in migration from elsewhere in the EU.