Targeting uncertainty? EU migration in the UK

Today’s migration data release from the ONS makes the government’s efforts to reduce net migration from 239,000 in 2010 (the number reported today) to the tens of thousands by 2015 more difficult than ever.

Today’s figures show the highest annual level of net migration since 2004 and a 21% increase from 2009.

One of the key difficulties and uncertainties that the government faces in hitting its overall net migration target is that there are several factors that the UK cannot control – with perhaps the most obvious being immigration and emigration of British and other EU citizens. Today’s evidence of a steep rise in net migration from Eastern Europe is testament to the challenges this causes for the government and raises the question of whether government policies to cut net migration from outside the EU may be stimulating a demand for more EU workers.

It is worth remembering what is actually meant by ‘net migration’. The term refers to the balance between migrants entering a country (immigration) and people leaving a country (emigration). ‘Positive’ net migration occurs when more people arrive than leave and ‘negative’ net migration occurs when the opposite happens.

The impact of total EU migration (this includes immigration and emigration of British people) on total net-migration in the UK has – until recently – been very small as illustrated in figure 1 below. This is because positive net-migration of non-British EU nationals has been almost completely offset by negative net-migration of British citizens.

Figure 1

In 2009 there was positive EU net migration of around 14,000 (which is comprised of -44,000 for British and 58,000 for non British EU citizens). Since 2004 annual net EU migration has fluctuated between a high point of 30,000 (2007) and a low point of -24,000 (2008). During that five year period from 2004-2009 there was negative net EU migration of -12,000 (the difference between –547,000 British net-migration and +535,000 other EU net-migration).

But there is no reason to think that there is some form of natural balance between British and other EU net-migration that will be maintained indefinitely. We do not yet have final data for 2010 but today’s provisional figures from the ONS – based on data from the International Passenger Survey – suggest that British net-migration remains negative but the difference between British emigration and immigration is  smaller than the 2004-2009 average. At the same time, the data suggest a significant increase in net-migration of ‘A8’ nationals – citizens of the eight East European countries that joined the EU in May 2004 – from 5,000 in 2009 to 39,000 in 2010.

Looking at the employment of working age A8 migrants in the UK, for which we have more recent data, we can see that the number grew from around 52,000 in the first quarter of 2004 to 504,000 in the third quarter of 2008, slightly declined to a level that fluctuated between 469,000 and 500,000 in 2008 and 2009 (presumably due to the recession), but has been growing again since early 2010 and in the second quarter of 2011 was at its highest level ever: 651,000.

The UK clearly remains an attractive destination for migrants from A8 countries. Despite all EU member states having had to open their labour markets to A8 workers, the factors that created the initial pull for A8 workers to the UK are still in place – there is a demand for their labour, wages are still much higher than Poland or other A8 nations and there are now well established A8 communities and networks here to help new and returning EU migrants find a job and negotiate the complexities of life in a new country.

This adds up to the likelihood that the UK’s population of Eastern Europeans will continue to increase for some time, as there are no signs on the horizon that the overall trend of positive A8 net-migration to the UK will end soon.

The small reduction in 2008 and 2009 does suggest that if the UK goes into recession again there may be another temporary fall in the number of A8 migrants in the workforce, but it is also worth considering that, as the government continues to focus on reducing non-EU net migration, employers may turn increasingly to EU migrants to fill positions. In a recent survey by the Chartered Institute of Personnel and Development 34 per cent of employers said they intend to respond to the government’s new policies by recruiting more EU migrants where only 23 per cent said they intend to respond by increasing the skills of their current workforce.

Any sustained increase in net-migration of A8 workers makes it substantially harder for the government to reduce overall net-migration to the tens of thousands.

The fundamental problem the government faces is that its target of reducing net migration to the “tens of thousands” contains elements over which the government has varying levels of influence. When it comes to migration of non-EU nationals the government has considerable, although variable, degrees of control – with more control over workers and students than over family members or asylum seekers. But the government cannot control the immigration and emigration of British and other EU nationals.

This means that, regardless of the reductions in non-EU net migration achieved by government policy, there will always be fundamental uncertainty about whether any overall net-migration target will be hit. This fundamental uncertainty cannot be reduced unless the target is reformulated to apply to non-EU migration only.