Brexodus: The UK May Leave the EU, but the EU May Already Be Leaving the UK

Yves here. While the data is not pretty, the overall picture seems less dire than reader reports of particular staffing shortages. The NHS is particularly vulnerable, as the article notes, with its relatively high level of doctors and nurses from the EU when it is already thinly resourced. Our Colonel Smithers has described how both farmers who rely on foreign labor for harvests and owners of racehorses, who again rely on immigrant staff, are coming up shorthanded and finding it difficult to fill the gaps.

By Elisa Mosler Vidal, a migration specialist who has worked with organisations including the Institute for the Study of International Migration (ISIM), the World Bank and an NGO in the Philippines. Originally published at openDemocracy

New data show more EU citizens are leaving and net migration of EU citizens to the UK has hit a five year low. These figures are worth paying attention to.

The Numbers Are In

For the past year, studies have piled up showing large proportions of EU citizens in the UK – from doctors and tech workers to academics – were considering leaving the country. In the meantime, the issue of EU citizens’ rights in the UK has become a politically charged topic and consequently remained unresolved since the referendum in June 2016. This has taken its toll.

New data released on 22 February by the Office for National Statistics (ONS) shows that net EU migration decreased to 90,000 over the last year. This is 75,000 lower than the previous year. In fact, it is a five year low. It also shows that 130,000 EU citizens left the UK – the most since 2008.

Despite stalled progress in divorce talks with Brussels, Whitehall has made unwitting headway towards a trademark Brexit goal. EU migration is decreasing. The figures clearly show that current and potential EU migrants are re-evaluating living in the UK. This seems to be the case across profiles; students, the low and high skilled. It is also the case for western and eastern Europeans alike. For example, Poles and Spaniards were especially likely to leave, and data from the Department for Work and Pensions (DWP) shows national insurance number (NIN) registrations decreased 34% and 25% for those nationalities respectively.

Meanwhile, recent data show 17,000 Brits sought citizenship of another EU country in the year following the referendum. Ireland was the most popular, as applications from the UK increased by 1025% in this period. Over the same year, Italy saw an eightfold increase. British passport applications have also risen markedly for Germany, France, Sweden and Denmark, both from UK residents and British citizens in those countries. For now more Brits are just getting other passports; how many living in the UK will actually leave is a separate question. In any case, the fact that life rafts are being prepared should concern the UK government, and for Brexiteers this will not be a story to advertise.

What Does This Show?

The UK has clearly become less attractive for many EU citizens. Unable to vote on Brexit, many EU citizens are now voting with their feet. May’s insistence that she prioritised EU citizens’ rights has rung hollow and in the harsh rhetoric characterising UK-Brussels negotiations, they have become negotiating collateral. Meanwhile, many applying for UK residence permits and citizenship have muddled through Home Office processes from Kafkaesque to unjust – some were mistakenly sent letters ordering them to leave the country. This has only served to erode confidence in the system. Interestingly, EU citizens have been deciding to leave the UK despite an actual change in status, highlighting the power of uncertainty. For many, over 18 months without visibility of their future has overridden other considerations.

The new data also reflect a recognition by EU and British citizens alike that a theft of rights is taking place without too much background noise. Whatever Brexit ends up looking like, both groups will still lose some rights to free movement, to work or settle in any EU member state or the UK, and to equal treatment in any member state or the UK on the same terms as citizens there. One ongoing case in Holland may set an important precedent here. Triggered by five UK nationals, it argues that EU citizenship rights held by Brits are a matter of legal fact rather than a ‘political gift’. Therefore, as Brexit would strip these rights away, this should be disputed.

What Does This Show for the UK?

Economically and culturally, Brexodus represents a small stampede of ‘grey rhinos’ for the UK. The effects of EU workers leaving have already been negative to date. Between the referendum and the end of 2017 over 10,000 EU citizens working for the NHS left their jobs, and the number of EU nurses applying for UK jobs decreased by 96%. Departures have had negative effects including critical staff shortages. Academia has also been hard hit already; over 2,300 EU academics resigned from UK universities between 2016 and 2017. Beyond this, there are growing problems for areas from fruit-picking to banking.

These trends are already starting to strain the system. The fall in EU net migration has prompted higher demand for skilled workers from outside the EU. As a consequence, the Home Office quota for skilled workers’ visas has been maxed out in three consecutive months for the first time, meaning migrants with medical, software and other specialist skills are being turned away despite vacancies for them. This has made it harder for employers, including the NHS, to hire workers they need. There are now calls for NHS employees to be excluded from these caps.

Issues such as these will only increase after Brexit. The ONS figures show overall net migration to the UK remained quite similar at 244,000 (down by 29,000 from the year before). To reduce this to its arbitrary ‘tens of thousands’ target, the UK government would need to take drastic steps which would give it an immigration system starkly out of step with the country’s economic and social dynamics.

Meanwhile, for the EU and Europe in general, regional migration dynamics are likely to change. Some European cities may receive more arrivals as they become attractive alternatives to London and other cities in the UK. Paris, Frankfurt, and Amsterdam flourishing post-Brexit is planned for, as it is expected some employers may relocate there. Now, it seems employees may actually be moving there before them. If new migration patterns are sustained over time, these could affect labour markets and industries across Europe. This could become a key opportunity for several countries.

What Happens Next?

The end effects depend on what actually happens once a deal for EU citizens is struck. Discussions are locked on the transition period, and whether EU citizens arriving after March 2019 will have the same rights as those previously residing in the UK. Worryingly, the rights of EU citizens – both those already in the country prior to Brexit and those coming afterward – in the event of a no-deal does not seem to be a big talking point.

What happens next also depends on wider questions about Brexit, including perhaps most crucially the UK-EU trade relationship, which looks to be limited to a free trade agreement, and whether the UK can successfully negotiate for financial services to be included in this. Meanwhile, it is continuously difficult to predict how far political infighting will shape outcomes, particularly as Theresa May’s Brexit statements increasingly seem targeted at factions of her own party.

In any case, it is now clear that for many EU citizens, whatever deal is reached will be too little, too late. More EU citizens in the UK are leaving and less are coming in. Governments on both sides of the channel should pay attention to this now-verified trend, which will likely accelerate as Brexit nears.

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  1. Louis Fyne

    shouldn’t the population exodus (or slowing in growth) ease housing prices for who stay (who aren’t on the property ladder), especially in the NIMBY-constrained, historic preservation zoning-constrained, density zoning-constrained, transport-capacity-constrained Southeast? (obviously not if incomes faster than housing)

    Just sayin.

    1. Anonymous2

      Prices have already fallen in Central London and may continue to fall. Elsewhere prices have risen but as they usually follow London they could fall back in due course. Much depends how the Brexit talks pan out.

      A problem, though, is that the UK suffers a housing shortage which can only be met by building new houses (unless you think driving foreigners out is an acceptable policy, which I do not). The UK has insufficient builders who are UK-born. Attracting builders from abroad to build the necessary houses requires an accommodating migration policy which Brexit seems likely effectively to prevent.

      The UK needs, for demographic reasons, a net inflow of migrants to fill a lot of jobs, but for political reasons seems intent on discouraging them from coming. All of which goes to show that yes/no referenda do not deliver carefully considered, nuanced policy responses to problems.

    2. PlutoniumKun

      High property prices in the SE are driven far more by credit (too much loose money) and foreign investors than it is by immigration. The hit on sterling and a flight of investment capital is far more likely to make houses ‘affordable’ than population changes.

      Its arguable anyway that there is a shortage of housing in the SE – its more correct to say that there is a mismatch between the types of housing available and the household formation rate (which is far more important for housing demand that population, and this is related to demographics). Changing migration (internal and external) and household formation rates can affect housing demand independent of population growth.

    3. m-ga

      There’s a property bubble in Manchester. I sold my one bed flat in the city centre a year ago for £115k. It would probably fetch £125k now. Development in the city centre, almost entirely “luxury apartments”, has reached such a height that the Guardian and the FT have described it within the last week:

      The FT covers the most pertinent dynamic. Within the city centre, and a few of the gentrified suburbs, living standards (restaurants, schools, amenities etc) are very similar to London, and the transport links are excellent (second largest airport in the UK, rail hub for the planned HS2 London train). However, property prices are at least a quarter of, and quite possibly an order of magnitude less than, what you’d pay in London.

      On the other hand, the very many ungentrified Manchester suburbs have extensive housing stock in need of attention, very little inward investment, and aren’t seeing price moves except in the eyes of more optimistic estate agents.

      This kind of thing doesn’t look sustainable. Brexit may be what kills it. Many of the new build luxury apartments will be completed within the next year. Perhaps further drops in sterling, encouraging buyers from China and the Middle East, will save the day. Or, as some FT comments suggest, that sales channel may already be saturated. Things will get ugly for the builders if buyers can’t be found.

      1. PlutoniumKun

        Yes, there are signs of bubbles in many regions of the UK, its not just a London phenomenon. Edinburgh shows lots of signs of it too, although it may have a genuinely quite strong economy.

  2. Arizona Slim

    Sounds a bit like the 19th century, when the British Isles lost 40% of their population. And where did a lot of those emigrants wind up? In the good ole US of A, which was engaged in westward expansion and was seeking people to fill those wide open spaces.

    1. Lee

      Alas, the U.S. frontier, consisting of other peoples’ lands, closed in 1890.

      Perhaps what we are seeing in the developed world is a burgeoning Malthusian panic— a widespread belief that globally we are entering a period of physical resource, as opposed to socially constructed, scarcity. I’m starting to wonder if post-apocalypse fiction should be regarded as educational fare.

  3. OldLion

    For some reasons the mechanics of the brexodus as explained here calls to mind the revocation of the Edict de Nantes in 1685.

    Louis XIV wanted to free his kingdom of unwanted protestants from catholic France, impoverishing the country and damaging the king’s (and therefore the state’s) reputation abroad.

    And there was the same effect of neighbouring countries (including Frederick Whilhelm’s Prussia) trying to attract skilled expats for theit own benefits.

    1. RBHoughton

      Well, London got the Huguenot silk weavers who founded the industry in UK. Wonder what we are gifting to the neighbours this time.

  4. J Sterling

    You’re over-dramatising. The France case was France expelling French people, who moved to other countries. Britain is currently the country other Europeans are moving to. Britain in this analogy is Frederick Wilhelm’s Prussia, it is the EU which is Louis XIV’s France.

    And they still are moving to Britain: the statistic being quoted represents a diminution of the rate at which they are leaving other European countries.

  5. Thomas Cobb

    > The fall in EU net migration has prompted higher demand for skilled workers from outside the EU.

    Brexit will fix the low productivity and weak wage growth in the UK. Wages will increase. Interest rates too. Both are a good thing. Watch.

    1. paul

      Can you explain the mechanics?

      Will one set of immigrants be better than another?

      Will ‘free trade’ agreements be created to suit the supplicant?

      Will the bias to profits versus take home pay be through increased productivity be suddenly reversed?

      Low interest rates at least lift a certain burden on the downtrodden.

      How much productivity increase do you need in a precarious,hopeless job market?

      Poorly paid people have always worked hard.

      I’ll watch, and thanks for heads up!

      1. Thomas Cobb

        Hi Paul,

        It seems so obvious to me that I didn’t bother to elaborate. I apologise if my comment seemed flippant to you.

        > Will one set of immigrants be better than another

        I don’t know. Do you know? Don’t worry about things we don’t know the answer too. UK will still have highly skilled immigration through visa programs and low skilled immigration from the commonwealth. Similar to now I would think, just less.

        > Will free trade agreements be created to suit the supplicant.

        Don’t know but don’t think it is relevant to my comment. I think that free trade agreements are mutually beneficial to both sides, but it seems that one side isn’t acting in the interest of its people. The losses in Europe are not spread evenly. It is a big problem for Spanish farmers if Spanish tomatoes rot in Calais but it appears their “sacrifice” is to be for the greater good. I think that philosophy is wrong. It is Maoist.

        > Will the bias to profits versus take home pay be through increased productivity be reversed…

        Yes. Wages will rise through increase productivity. The two will move in concert.

        > Low interest rates…

        Low interest rates are a sign that something is wrong with the economy. It is not normal and was first touted as “emergency measures” that have continued for nearly a decade. Low interest rates are time value of money. Rates of zero mean the future will not be better than today (and have caused build of destabilizing debt). This is obviously wrong – you can see from the development in the last 10 years

        > Hopeless job market

        Last time I looked, UK (and US) job markets were hot. Do you know otherwise? Or perhaps you are talking about Southern Eurozone?

        > Poorly paid people have always worked hard

        Yes. Out of necessity. I hope, and expect, that their lot will improve with increased wages.

        1. Anonymous2

          @ Thomas Cobb

          I fear you are be being too sanguine.

          Immigration – similar to now ? How familiar are you with the UK Home Office? Well known for its incompetence and heartlessness. Having them have a greater role in the running of the UK economy is worrying to anyone acquainted with the challenges in ensuring the UK attracts the right labour resources. Did you miss the point in the post that the Home Office has been refusing entry to doctors who are needed now by the NHS? I am not reassured.

          Free trade agreements – mutually beneficial? Well that depends on the terms of the agreement. You have heard I assume of the unequal treaties. The UK will be in a weak negotiating position outside the EU so I would not count on them obtaining agreements that are beneficial to it.

          One side not acting in the interests of its people – by which it appears you mean the EU. Most objective commentators see the UK government, not the EU, as being the government which is not acting in the interests of its people. Both the UK Prime Minister and Chancellor of the Exchequer have in recent days declined to assert that Britain will benefit from Brexit so they seem to share this view. If the UK market is closed to Spanish farmers it will be because of the UK actions, not the EU’s.

          Productivity – you do not specify what sort of Brexit you are postulating. ‘Crash out’ would crash the UK economy which would damage, not boost, productivity. Note that in terms of the euro the value of UK production and wages has fallen heavily in the last two years, cutting living standards – a portent of things to come?

          The job market – what matters is the future not the past – see Crash-out comments above. Beware also of comparing bare unemployment statistics between countries without digging below the surface. The statistics are often collected on different bases and therefore require careful interpretation to understand them.

          Wage prospects – see comments on Crash-out Brexit above

  6. David

    There’s a fairly well-trodden path (I’ve spoken to people at both ends of it) where young people from post-Communist states come to the UK to learn English, stay a couple of years and go back to get jobs in hotels, tourism, or as taxi drivers, which are usually the only jobs that pay decent wages in those countries. The UK has thrown everything else away, but as long as it continues too speak English (sort of) it will have transient residents like these.

    1. PlutoniumKun

      Yeah, in and outflow figures have to be taken with a pinch of salt. Apart from the huge number of people who don’t appear on official figures (not necessarily illegals, just people who are working for a year or so and don’t bother with taxes, etc), there is as you say a ‘flow’ which has more to do with the availability of work than anything else.

      Plus with Ireland, there are so many factors involved its hard to put numbers to it. There are many Irish with UK citizenship and vice versa, its almost impossible to really know from the figures who is going where.

      I will say though from pure anecdote that a lot of non-UK citizens are worried about taking up jobs in the UK because of Brexit.

      1. paul

        My better 50 % keeps suggesting I claim an irish passport, is there any obvious or foreseeable advantage to doing it?

        1. UserFriendly

          Is there any possible downside to doing it? I could easily come up with a dozen downsides to not having done it.

        2. PlutoniumKun

          I would have thought its a bit of a no-brainer to get a joint citizenship. At worst, it will mean a slightly faster route through some airport gates. At best, it could give you (and your children) more work/retirement opportunities in Europe.

          Almost every Brit I know who qualifies is actively looking into it – for some it may well be the only way they can keep their jobs long term (those in consultancies). Its been a source of amusement in Ireland that even some very hard line loyalists and Unionists in Northern Ireland have been quietly putting their applications in as they know they may need it for business and work.

  7. Darthbobber

    British journalists are still covering the more preposterous aspects of this as if the two sides are playing a game of chicken. Even Kuennsberg goes this route in her nebulous summation of the state of play after the equally nebulous May speech.

    But this seems mistaken. The EU is more like an oncoming train than a car, and it’s loud warnings to the feckless driver of the UK clown car to get off the track are going unheeded. The Brits are right about the EU not really desiring them to crash out in chaotic fashion, but the EU has resigned itself to. that as a realistic possibiility and will live with that before it will grant massive doses of special treatment to the UK in order to avoid it. For reasons that seem obvious to all but the inhabitants of the sceptered isle.

    Once again, the old chess dictum “the threat is stronger than it’s execution” applies to Brexit. Her majesty’s various governments got a lot of mileage over the decades out of various levels of threats to kick over the apple cart if they didn’t get their way on issue after issue. Then, after being the recipients of more exceptions and “alternatives” than any other member state, they elected to depart anyway. They are now in the position of Sheriff Bart holding himself hostage in Blazing Saddles. It’s not working.

    1. Joe

      Unfortunately, this is my view on the situation as well. I am a EU expat in the UK. Not certain I will be able ( or willing ) to stay post Brexit. Shame, really. The British have really shot themselves in the foot with this one and are still pretending the gun’s pointing at someone else.

  8. Scott1

    I theorize that there was a percentage of the Brexit vote that viewed the EU, ECB treatment of Greece as vile, & glad of their financial system’s wisdom at not letting go of their sovereign currency, decided whole hog rejection of the EU therefore made sense.

    It is my view that London & US Finance are the same in where they care to put & take. In the US it is Finance, Insurance & Real Estate.

    Finance is not a particularly real industry. Labor doesn’t like it that people on Wall Street buy seats, and the people buying seats of power in either London or on Wall St. don’t want people buying Union Cards.
    Do the bankers who move to Frankfurt still get to hide money in the Caymans or Cook Islands?

    Bankers & people of finance can make shell companies most anywhere, right?

    Change is hard & I know it can be an risky life lived during the big changes.

    I believe that the goals of bankers, the industries they support lead the direction the nation is taking.

    It is my theory that in the UK, if the banking principals become Industrial Service Banks money will begin to flow into the UK.

    From reading the comments I see that the values of UK real estate are a big part of the discussion. This buttresses my theory.

  9. WorkerPleb

    This has made it harder for employers, including the NHS, to hire workers they need.

    Maybe they’ll have to pay more then? Or train people. Or (horrors!) improve working conditions.

    Employers think Brexit traps workers in with them. Maybe they’re trapped in their with workers.

  10. Bukko Boomeranger

    The hospital system in Melbourne, Oz where I work hires a fair number of British, Irish and Scottish psychiatric nurses. The director of psych nursing, who’s Irish, even goes on junkets back to the olde countries once a year to recruit them. Paid junket home, woo-hoo! I reckon between the five or six psych units I go to (I’m an on-call, gig-economy sort, by choice) there are about half a dozen Brit/Irish in each. Always a certain turnover as currents in peoples’ lives pull them back and forth between hemispheres or their working visas expire. I’ll be curious to see whether numbers of new staff from that region decline in the next few years. I’ll also be looking to get a sense of how many feel drawn back by feelings of loyalty to Old Brexity, or offers of higher pay. Surely the will pay more if there’s a labour shortage, right? And maybe we’ll be getting more Continentals coming to the Antipodes as they’re Brexiled from the NHS. Yves, you should do another targeted comment thread in 2019 like the Flyover Country one, asking what effects the commentariat sees as the fuster starts to cluck.

  11. NT

    If this is the case and people voted brexit because of high immigration then the vote for brexit has been successful. Although my last reading of immigration figures was total immigration figures are still going up but at a reduced rate.

    Maybe we need to go back to the 60s and 70s when the economy in the UK was so bad and taxes so high that lots of people become £10 poms and immigrated to australia. I was there over the winter and outside the big cities there in plenty of land and cheaper housing. -)

    So bring on the 3 day week and economic collapse and we can have another Thatcher in the 203x period. -)

    1. Yves Smith Post author

      The problem with this point of view is that non-EU immigration is greater than EU immigration. There’s no reason to think EU immigrants won’t be replaced with other immigrants.

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