William Hague’s proposal for issuing work permits to EU nationals is too simplistic to be effective

William Hague’s proposal for issuing work permits to EU nationals is too simplistic to be effective

Lord Hague has, in his recent interview with the Financial Times (£), called for a “simple solution” to the problem of free movement. The former Foreign Secretary has proposed a straightforward deal under which any EU national with an offer of employment in Britain would automatically be given a work permit. This, he believes, would mitigate the damage to UK businesses following our anticipated departure from the single market.

As part of his proposal, welfare support would be limited or withdrawn entirely thus making the country less attractive and automatically causing migration numbers to fall. He added that the number of work permits could be quite easily restricted in the event of a sudden migration surge.

Unfortunately, this proposal is too simplistic to have even a remote chance of being effective. Net migration from the rest of the EU is already far too high. We need clear plans in place to reduce these levels. If the requirement to have a job offer were to have any effect, it is likely to be only small and temporary. Anyone with access to the internet can apply for jobs in the UK, and we have already seen how easily recruiters can advertise in other countries as well as examples of employers themselves flying out to Eastern Europe to recruit staff.

It is true that the OECD project that Eastern Europe’s wealth will increase in the coming twenty years – but they do not anticipate any convergence in wages between the UK and the countries of Eastern Europe.

It is surely now clear that the primary draw for potential migrants from Europe is the availability of employment at much higher wages in the UK than at home, even while real wages in the UK have seen unprecedented weakness. In this regard, the introduction of the National Living Wage, and subsequent increases in its level, will increase the UK’s attractiveness still further for potential migrants and will help to counteract any deterrent effect that may result from the devaluation of the Pound.

The disparities are huge. The minimum wage in Poland is currently equivalent to £362 a month (1,826 Polish Zloty) compared to three and a half times that amount (£1,308 a month) in the UK. The minimum wage in Romania is £200 a month (1,043 Romanian Leu).

Lord Hague’s proposal also ignores the crucial distinction between migration into highly-skilled and lower-skilled jobs. The latter accounts for about 80% of EU workers who arrived in the last ten years. The independent Migration Advisory Committee did not find any benefit from low-skilled migration on the budget, GDP per head or productivity. The public are also clear that they want this particular type of migration to be reduced (62% say so, according to ICM).

As to benefit restriction, while we would welcome the removal of government subsidies for low-paid workers from abroad, research by Migration Watch UK suggested that cutting benefits was very unlikely to have much impact on levels of EU migration. Half of new arrivals from the EU are single and a further quarter are couples without children. Neither of these categories are currently entitled to any significant benefits. When we raised this during the ill-fated renegotiation, the government at the time conspicuously failed to provide either argument or evidence that, of itself, this would reduce migration at all.

Lord Hague goes on to suggest that a concession on work permits would help achieve a favourable deal with Brussels over tariff-free trade. He believes that proposing something one step short of free movement should provide an outcome that is one step short of the single market.

That seems extremely optimistic.  In any case, it is a serious mistake to make a link between immigration and trade. For example, how could the number of work permits be restricted in the event of a sudden migration surge if trade and migration had been linked in the negotiation?

It is hard to avoid the conclusion that enthusiasm for such a scheme is based on the hope that it would frustrate any effective reduction in the supply of cheap labour from the EU.  Its main effect would be to generate a boom for recruitment agencies as potential migrants sought a formal job offer rather than rely on a relative or friend as an intermediary, as is often the case at present.

As it happens, there is a simple solution, but it is not Lord Hague’s. The simple solution is to confine work permits for EU citizens to skilled migrants by including them in the current work permit scheme. This would enable employers to have such access as they needed to skilled European workers while, in our calculation, reducing net EU migration by about 100,000 a year. That is surely a more attractive proposition.