Brexit ‘no deal’ will lead to labour shortages in Greater South East cities, unless Government extends Freedom of Movement

This is according to a report published today by the think tank Centre for Cities, ahead of the release tomorrow of the Government’s Brexit ‘no deal’ plans.

The report examines the economic contribution of EU migrants in English and Welsh cities (1), and how these places could be affected by the end of Freedom of Movement after Brexit.

It highlights that 70% of EU migrants in England and Wales choose to live in cities, bringing significant economic benefits. EU migrants are more likely to be in work than UK-born residents of these cities (70% compared to 58%), and are more likely to have a degree (33% compared to 26%).

Moreover, the report shows that cities in the Greater South East – including some of the UK’s most productive places – are particularly reliant on EU migrants, who account for around 1 in 10 workers in cities such as Cambridge, London and Oxford.

The report calls for the Government to extend Freedom of Movement for two years after March 2019 in the event of a ‘no deal’ scenario. This will ensure cities can continue to attract the workers they need to prosper, especially highly productive places which are integral to the success of the national economy. It will also help people and business prepare for the new post-Brexit migration system.

The report sets out a number of other important findings which should by key considerations for the Government as it develops the UK’s post-Brexit immigration system:

• EU migration to English and Welsh cities has slumped since the referendum – suggesting that they are already less attractive destinations for European workers. Analysis of national insurance number registrations indicates that EU migration decreased in 51 out of 58 English and Welsh cities between 2015-16 and 2016-17. This raises serious concerns about the ability of these cities to prosper if restrictions on migration increase post-Brexit.
• Cities are reliant on both high-skilled and low–skilled EU migrants – and the UK’s new immigration system should reflect this. For example, in cities such as London and Cambridge, around 1 in 10 workers in both the predominantly low-skilled hospitality sector and high-skilled professional services were EU-born.
• Cities also need more flexibility and resources to improve training at the local level. Helping existing residents to access training and education could help cities address skills shortages in the long-term. The Government can support this by delivering its promise to devolve the Adult Education Budget to mayoral city regions, and by working with city leaders to improve take-up of apprenticeships.

Commenting on the report’s findings, Andrew Carter, Chief Executive of Centre for Cities, said:

“The UK’s future outside the EU is unclear, especially in a ‘no deal scenario’. But whatever the outcome of Brexit negotiations, the Government can offer certainty by ensuring cities can continue to attract the high-skilled and low-skilled EU migrants they need to thrive.

“In the short-term, it should continue to allow EU migrants to come and work in UK cities for at least the next two years, even if there is no Brexit deal in place. This will be crucial in helping cities avoid a cliff-edge in terms of recruiting the workers they need.

“In the long-term, we need an immigration system which is more flexible than current rules on migration from outside the European Economic Area. That means scrapping the cap on high-skilled workers, and offering more cities continued scope to attract low-skilled workers. Not only will that be vital for the prosperity of places across the country, it will also be critical for the national economy in the years to come.”

ENDS

For more information or to set up an interview, please contact Brian Semple, Head of Communications for Centre for Cities, on 020 7803 4316 / 0795 439 638 or b.semple@centreforcities.org

NOTES TO EDITORS

All data is based on Census 2011 for England and Wales unless otherwise stated.

About Centre for Cities

Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities. We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange. For more information, please visit centreforcities.org/about