The impact of free movement on EEA migration

After 14 months of stakeholder engagement and research, the independent Migration Advisory Committee (MAC) have published their long-awaited report on the impact of European Economic Area (EEA) migration on the UK.

Key findings

Among the report’s key findings is that migration under free movement has had little to no impact on employment, unemployment or wages of UK-born workers. It also highlights that there is very little evidence of a negative impact of immigration on investment. Furthermore, EEA migrants pay more in taxes than they receive in benefits – worth net £4.7bn in 2016/17.

The MAC makes 14 key policy recommendations

The headline for business from the MAC report is that it recommends a future immigration system not give any preference to EU migrants over those from non-EU countries. If implemented, this could hurt the UK economy as key workers are unable to come to Britain. 

Amongst the highlights for business are the positive proposals for higher-skilled workers to abolish the Tier 2 cap of 20,700 visas and remove the 28-day resident labour market test (RLMT).

However, disappointingly the MAC recommended to retain the £30,000 salary threshold and not have a route for ‘lower-skilled’ migration below this level. This would block many essential workers from coming to the UK. The MAC also recommended reviewing the current sponsor licensing system, which is complex and costly for employers to navigate, but without making specific proposals for improvements. 

CBI response

In response, CBI Chief UK Policy Director, Matthew Fell, was clear that the MAC missed making a critical recommendation that migration should be part of trade negotiations, starting with the EU. Matthew also said that the current system is highly bureaucratic and cannot be extended to EU workers without major reform.

In addition to Matthew’s comments, CBI Chief Economist, Rain Newton-Smith, discussed the report on BBC news. Watch Rain respond to the report 

The CBI's analysis of the MAC report

The CBI’s analysis includes a ‘Red, Amber, Green (RAG) rating’ of these, as well as a summary of the CBI’s public response.

The publication of the MAC report marks a key milestone in the Government’s development of a new immigration system after Brexit and following its publication, the Cabinet met to agree the overarching principles of a new immigration system. The Government is now expected to publish a White Paper outlining details on design of a new system before the end of the year.