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Last-Minute Brexit Turbulence Prolongs Uncertainty in the UK

Rob McNeil, Deputy Director and Head of Media and Communications at the Migration Observatory the University of Oxford in the UK

A year ago it would have been inconceivable that Brexit would be relegated to being a secondary concern for most who follow UK migration issues. The tragic impacts of Covid-19 have exploded the concept of ‘business as usual’. The pandemic has forced a fundamental re-evaluation of how businesses and industries function, how education is delivered, and even whether friends and relatives in other countries can be visited.

Nevertheless, as the end of 2020 approaches, yet another dramatic Brexit ‘finale’ looms. The end of the transition period is in sight, yet there is a real risk that disagreements or political brinkmanship will see the UK leaving the EU with no deal. Whatever the final form of the UK’s departure from the EU, it is likely to affect migration. After the 2016 referendum, the depreciation of the pound reduced the UK’s attractiveness to EU workers — something that may recur if Brexit rattles financial markets further. Meanwhile, increased restrictions on EU migrants’ access to the UK labor market, including skills and income requirements, are set to be implemented as new rules under the 2020 immigration bill. It seems inevitable these will lead to a fall in EU migration to the UK.

The potentially bumpy ride ahead for 2021 follows a migration rollercoaster in 2020. By the first quarter of 2020, the Office for National Statistics reported that annual net migration to the UK had reached 313,000 — levels not seen since before the referendum. But as Covid hit and a national lockdown was enforced, migration ground to a halt.

Home Office data reveals that in the second quarter of 2020, the UK saw falls of 96% in skilled work visas, 90% in family visas, and 99% in study visas issued compared to the same quarter in 2019.

How long these effects will last remains unclear, and it is worth considering what lies behind these dramatic statistics. For example, the closure of many of visa application centers during the crisis will have reduced the number of visas issued. And while people may have been hesitant to submit applications during the uncertainty of lockdown, humanity’s extraordinary ability to adjust has seen the quick emergence of a ‘new normal’, in which society has tentatively begun to function again. There may well be a rise in the number of visas issued, even if moderate, as visa centers reopen and clear backlogs, and people dust-off the applications they had put on hold.

But more enduring economic effects can be expected. Covid-19 has caused some businesses to collapse, others to furlough or lay-off much of their workforces, and an overall reduction in confidence in the state of the nation’s businesses and labor markets. A weaker economy could tarnish the attractiveness of the UK to would-be migrant workers and reduce demand for migrant labor, with fewer jobs available, and political efforts being concentrated on employing resident workers.

The future for international students is particularly uncertain. UK universities are highly reliant on overseas students, and the extent to which their numbers will fall as a result of Covid-19 will only be clarified at the end of 2020 when the third quarter’s statistics are published, as this is when most students receive their visas. But analyses from economists do not bode well, with bodies such as the Institute for Fiscal Studies suggesting that universities can expect lower international student numbers, potentially causing serious financial difficulties for tertiary education institutions.

So, buckle-up. The rollercoaster ride is not over yet.

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Henley & Partners

Henley & Partners

The Global Leader in Residence and Citizenship by Investment — www.henleyglobal.com

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