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How to cut EU migration without leaving the Single Market

Denis MacShane
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Liechtenstein
The Alpine principality of Liechtenstein is no model for Britain to follow (Source: Getty)

The Tory MEP Vicky Ford has taken a major step back from the idea of closing frontiers to European citizens which still appears to be the throbbing desire of Tory-Ukip hard Brexiters.

In a newspaper interview, she set out ideas for reducing inflows of European workers within EU rules. She cites Liechtenstein, which was allowed a small derogation for its remote mountain villages when it entered the European Economic Area two decades ago but in all other respects faithfully follows EU laws and directives.

With a population of 37,000 and with two-thirds of its workforce foreign, the Alpine principality is not a realistic model for a United Kingdom of 65m people with a far lower share of foreign-born workers than Australia, Canada and any number of European nations.

From the first days of European construction – the European Coal and Steel Community in 1951 – discrimination in hiring workers on the basis of race, religion and nationality was outlawed. Now 380,000 foreigners cross the German frontier to work every day and Britain always kept its labour market and right of residence fully open to citizens of a foreign republic – Ireland.

Read more: Why Ireland only sees risks from Britain leaving the EU

No EU Prime Minister can return home and tell his or her electorate that, to appease the unyielding hard Brexiters, there is an agreement to allow Britain to begin discriminating against citizens of other partners in Europe.

But Ford is on to something when she argues that British labour market rules unfairly tilt the balance against British employees. For example, free movement does not apply to work for government, nationally-owned industries or agencies. The NHS employs 57,000 EU citizens and they are welcome here. But might it be better to require investment in training sufficient doctors, nurses and other hospital staff?

Another way to support the domestic labour market is to insist on full training qualifications for many jobs. This again assumes that there is a structure of obligatory apprenticeships with a commitment to offer a job at the end of the training period.

When firms have to abide by industry-wide pay agreements negotiated with trade unions as in German-speaking Europe as well as most Nordic countries and the Netherlands, it is harder to offer low-paid jobs which do not sustain a family but which are attractive to men or women from countries where wages are far lower and jobs hard to come by.

Another mechanism would be to rigorously enforce EU social rules like the posted workers directive and agency workers directive. Low-pay employers have driven a coach and horses through these directives to employ at the lowest rates possible workers from East Europe, delivered by gang master-style employment agencies at the expense of British workers.

Instead of some Labour MPs talking of work permits, an updated “Passport for Pimlico” for City bankers (but not baristas), or undefined managed migration, it would be better to make the case for a more balanced internal labour market.

Read more: Brexit is a chance to build a points-based visa system that actually works

Already the EU was mulling over a so-called “emergency brake” on access to welfare benefits for the first years of a EU citizen working in another country. There is little evidence EU workers come to Britain to access benefits. It is the job offers that matter. But making official such an “emergency brake” would ease fears not only in Britain about too rapid a mass arrival of foreign workers, especially in unskilled working class jobs.

Theresa May says she wants more fairness in the workplace. Measures to help British workers fit with that agenda, as does lowering the über-attractiveness of the low pay UK labour market to EU citizens. Many firms will moan. But they have to ask themselves whether being excluded from the Single Market is a price worth paying if, as an alternative, the EU principle of non-discrimination on grounds of nationality can be made compatible with backing UK workers.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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