Although freedom of movement rights for EU citizens to the UK (and reciprocally, for UK citizens into the rest of the EU) have not formally ended, we can see already see that the EU referendum has made a big dent in EU net migration. Due to shortages in skilled workers, this needs to be compensated so there are now more non-EU immigrants coming in, as can be seen in the ONS chart below.
At the moment I am writing this, Tories like Ken Clarke are putting their weight behind a soft Brexit of customs union + single market membership. But Labour is not supporting this position because of immigration. As Emily Thornberry, shadow foreign secretary said (quoted in The Guardian): “Our reservation about being in the single market is that we would have to accept things as they currently are in relation to immigration,” and further on: “We can’t pretend that the referendum, part of the debate, wasn’t about immigration.”
We now have the bizarre situation that Labour is opposing a less damaging Brexit because it does not wish workers (from the EU-27 or the UK) to move freely to look for work or to study. Instead, Labour supports stricter immigration control, presumably because its voter base wishes this.
One can wonder at the wisdom of Labour to base its decisions on potential voter feelings back in 2016 rather than on decisions of how changing the movement of workers into the UK might change both power relations between workers and their employers and ethnic diversity in the UK.
For example, the US has relatively high net migration, and it controls its immigration through various policies. An interesting finding, described in detail here by Elizabeth Cohen, is that although many of these policies had clear racist intent, for example, to get more people from favoured white populations (i.e., similar to the population of the original settlers) they always resulted in more people coming into the country who didn't match their desired characteristics.
If the US had a laissez-faire immigration policy then for instance lots of Canadians would come in. The diversity lottery was explicitly made to favour people from like, say Sweden and Belgium, but eventually over 70% of people coming in through this channel are from Africa and Asia.
The reason that those immigration policies ended up not having the effects they intended is that it is difficult to predict how future immigration will go. While Americans in the past (primarily WASPs) worried about too many Irish or too many Eastern Europeans, they ended up admitting more people from countries outside of Europe. Similarly, the UK experienced relatively high net migration in the years just prior to the EU referendum but it is unclear if that growth would have continued, given the improved economic outlook in countries where most Europeans exercising freedom of movement were coming from. The current nativist anger is directed against people mainly of newer accession countries like Romania and Bulgaria, but who can predict where future unhappy native Brits will direct their anger towards, and is it wise for Labour to support ending freedom of movement for this reason?
The result of Brexit will likely be more ethnic diversity in the UK. This will be a good thing for the UK. Overall, I still prefer freedom of movement to controlled migration. I do not prefer it because of “preferential treatment” or because I think Europeans are more deserving. Rather, I think freedom of movement is preferable because of the principle behind it, namely, that under its rules migration is a right and not a favour to be bestowed by the host country, and that this right is reciprocal, i.e., also enjoyed by British people.
There is often a tendency in public discourse to reduce immigrants to "assets" for countries, this notion is implicit in discussions on who is worthy enough to come to the UK (translated in minimum income requirements), and in discussions of "braindrain" for the countries that people move away from, as if countries have some prima facie rights to keep these people. Freedom of movement puts people's personal freedom, choice and agency first, and the benefits of countries only second. Now it does so happen that the UK does benefit, significantly, from Europeans coming here and net paying into the system and contributing their skills.
I also prefer freedom of movement because it gives employers less power over their workers. In the US restrictions through employment-sponsored visas reduce the negotiating position of, say, Indian software engineers who can’t easily move from one job to another. This seems to result in wage depression in some sectors such as tech. By contrast, there is clear and comprehensive evidence that freedom of movement, unlike visa-based immigration, does not lead to wage depression, except in the very lowest paid sectors and even then the effect is very small. That is in part because the freely moving worker is not tied to their employer in the way a visa-sponsored worker is.
So it is rather ironic that Labour favours the net migration of workers who will be in a more dependent position to their employer. For example, they will not be able as workers using freedom of movement to strike to demand better working conditions, they cannot move jobs as easily, and thus will skew worker’s rights. If you didn’t know any better you’d think Labour was supporting employers, rather than workers.
Labour's stance is not about supporting British workers, because British workers are better off with freedom of movement than controlled immigration. They are better off with freedom of movement because their fellow workers who use freedom of movement are able to demand better working conditions and are not as dependent on their employers for their continued right to stay in the UK. They are better off because freedom of movement means they too, can seek out better working conditions in 27 other countries. Now British workers will be cut off from union-based actions in the rest of the EU, which will make them more vulnerable.
No, Labour's stance is about placating white, nativist anger, spurred on by high inequality and worse working and living conditions. In case they didn't realize, the current situation in the US shows clearly that having controlled immigration does not make white, nativist anger go away. Labour should rather address the underlying factors leading to this anger (e.g., high inequality) head on than support immigration policies which won't reduce net migration and which will worsen workers' conditions and their negotiating position.