10/03/2015

By Katrina Cooper, Counsel at Faegre Baker Daniels LLP, with support in research from Amy Baker, trainee solicitor


Last week, the media was awash with different facts and figures relating to the massive failing of the current government to reduce net migration. Net migration for 2014 was 298,000 – a 30 percent increase from the previous year. This figure, however, is a mix of both EU and non-EEA migration, including foreign students coming to the UK to study.

In comparison, the Eurostat figures for the 2013 crude rate of net migration per population helps provide perspective and balance in looking at the general net migration across the whole of Europe. Over the last 10 years, the UK has only seen slight buoyant changes but has been largely consistent with net migration per 1,000 population. It is estimated for 2013 that this will be 3.1 per 1,000 population, which is still well below other key EU member states (Germany 5.6, Sweden 6.9, Switzerland 10.2 and Italy 19.7).

There is a plethora of statistical and data analysis currently in the public domain all tracking and monitoring the different layers of migration relating to the UK, the EU and globally. No matter which way the data is sliced and diced the facts remain that the UK is a popular destination for both skilled and non-skilled workers. Further, The Knight Frank 2015 Wealth Report released this week puts London as the number one most important city to the Ultra High Net Worth population. In 2014, we saw a 48 percent increase or 1,173 Tier 1 investor applications for entry to the UK. These are investors that are required to invest a minimum of £1 million into shares, bonds or government gilts.

In 2014, the total number of migrants coming from EU states was 251,000, an increase of 43,000 from the previous year. A closer look at the statistics reveals that 51 percent of these came from the original EU14 countries. A report by the Centre for Economics and Business Research (CEBR) – (Impact of EU Labour on UK, CEBR, 2013) – suggests that migrants from these countries are more likely to be in higher managerial or professional occupations than low-skilled roles. According to the report, this group also earns on average 7.6 percent more than UK workers, meaning they are more productive than their UK counterparts and make a significant contribution to the UK economy.

A recent report by the Chartered Institute of Personnel and Development (CIPD) – (The Growth of EU Labour: Assessing the Impact on the UK Labour Market, CIPD, September 2014) – showed that 22 percent of low-skilled jobs were held by non-UK born workers. In contrast to EU14 workers, 68 percent of EU8 migrant workers are employed in low-skilled jobs. Although UK employment rates are now at their highest level since 2005, the employment rates for UK (native born) population have been surpassed in recent years by higher employment rates for European migrants (Report by the Home Office and Department for Business, Innovation and Skills: Impacts of migration on UK native employment: An analytical review of the evidence, March 2014). In addition, there has been a corresponding fall in the total number of 18-24 year olds in employment since 2004, and it has been suggested that EU migrants are increasing competition for the low-skilled roles which young people would otherwise be engaged in (CIPD 2014).

The data also reveals several reasons why businesses are choosing to hire EU migrants for low-skilled roles. More than half of EU8 migrants are aged between 25-34, meaning they have usually gained significant experience in their home countries, and 60 percent of EU8 migrants in low-skilled jobs are graduates. In addition, businesses have cited the commitment and values of EU8 migrants alongside an inability to attract UK-born individuals as reasons why they have recruited from this group (CIPD 2014). Employing EU8 migrants for these reasons has allowed businesses to expand, in turn creating more jobs and contributing to the UK economy.

The net migration figures saw an increase in the number of non-EEA students and skilled labour coming to the UK. There was an 8 percent rise in work-related visas granted in 2014, compared to 2013. This was largely due to a 14 percent increase in sponsored visa applications for skilled work. This is a further indication of economic growth as the key multi-national organisations that largely use the sponsored work permit routes continue to have the need for the use of such skilled labour.

My prediction for 2015 is that we will not see a reduction of net migration, and any government would be foolish to suggest it. The UK’s demand for both skilled and non-skilled labour will continue to rise but start to level out as other EU countries' economies improve.