The UK and Europe

How to solve the free movement conundrum

Denis MacShane / Sep 2016

Photo: Wikimedia Commons

One of the myths of Europe is that the right to free movement must be to the disadvantage of what are called native workers. The Leave campaign brilliantly fused the latent long-standing prejudices against “immigrants” that have been a stock of British politics since the days of Enoch Powell with the arrival of European workers in regions and towns where few had been seen before.

350,000 French citizens working in high pay jobs in London is something British politicians like to boast about and no-one has ever bothered counting or being concerned about the scores of thousands of young Greeks, Italians and Spanish who moved to the UK after the crash of 2008-9 to create the new coffee culture in city centres.

There are fears of foreign workers in all European labour markets.  France's communist leader, Georges Marchais, used to demand in the 1980s that jobs in France should be reserved for French citizens.  British television made a sit-com series, Auf Wiedersehen Pet about unemployed shipyard and steel workers escaping from employment in the 1980s to work in the black or unofficial labour market in Germany.

Ski instructors on every Alp moan when British ski-teachers turn up and offer ski lessons at lower rates and in fluent English to ski tourists. But the particular problems of the UK labour  market have been made worse by British rules or absence of them.

For example, free movement does not apply to work in the public sector. The NHS employs 57,000 EU citizens and 130,000 non-Brits overall. It would be perfectly legal to reserve work in the NHS only for British nationals. But that would require investment in training sufficient doctors, nurses and other hospital staff. Indeed public sector employment can be reserved for nationals but so much has been contracted out so employees lose their public sector status as they work for private sector employers who cannot reserve jobs for national citizens.

Another mechanism is to insist on full training qualifications for many jobs. This again assumes that there is a structure of obligatory apprenticeships with a commitment to offer a job at the end of the training period.

When firms have to abide by industry-wide pay agreements negotiated with trade unions as in German-speaking Europe as well as most Nordic countries or the Netherlands it is harder to offer low- or minimum-pay jobs which do not sustain a family but which are attractive to men or women coming from countries where wages are far lower and decent jobs hard to come by.

Writing for InFacts  the accountant Philip Shirley has pointed out that there is no need for the Government to grant the personal tax allowance to newcomers from abroad.  This means that a worker has to earn £10,000 before paying tax. Tax rates are reserved for national laws and are not an EU prerogative and it would be possible to make the tax allowance conditional on 5 years residence in the UK. According to Mr Shirley: “Somebody earning £10,000 would pay tax of £2,000 and have take home pay (ignoring national insurance contributions) of £8,000. Such a change would be fairly easy to administer through the tax system. It would not prevent foreign workers from coming to the UK, but would have an economic impact on what they earn from the UK.”  

Already the EU was mulling over a so-called ‘emergency brake’ on access to welfare benefits for the first years of a EU citizen working in another country. Again there is little evidence that EU workers came or come to Britain to access benefits. It is rather the job offers that matter. But making official such an ‘emergency brake’ would ease fears not only in Britain about too rapid a mass arrival of foreign workers especially in unskilled working class jobs.

Another mechanism would be to enforce rigorously EU social rules like the posted workers directive and the agency workers’ directive. Low-pay employers have driven a coach and horses through these directives to employ at the lowest rates possible workers from East Europe delivered by employment agencies at the expense of local British workers.

Employers, including the biggest UK employer – the Government - may complain they cannot be competitive if they have to meet these obligations.  Yet in much of Europe, in or out of the Eurozone, firms do well and employ local workers as well as European migrants.

Mrs May says she wants to see more fairness in the workplace. Measures to help British workers goes with that agenda as well as lowering the über-attractiveness of the lowpay British labour market to EU citizens.  Many firms as well as the Confederation of British Industry and the British Chamber of Commerce may moan but have to ask themselves if being excluded from the Single Market is a price worth paying if, as an alternative, the EU principle of free movement can be made compatible with more jobs and decent pay for British workers and Britain ceasing to be the employer of last resort for the unemployed of East Europe.

Instead of getting into a tangle about a new system of work permits, entry visas for tourists from Europe who then overstay, residence permits which do not discriminate on grounds of nationality or race, as well as family visits not to mention the giant bureaucracy to handle all this, it would be better to control free movement of European workers by altering the way workers are hired in the UK in a manner that support training and skills amongst British citizens.

Mrs May says she wants more fairness at work and for employees to have a voice in the workplace. Instead of provoking a difficult conflict with 27 EU member states she could change the rules of employment in Britain and satisfy those who want to see more jobs for British workers and more fairness in the workplace.



Denis MacShane

Denis MacShane

September 2016

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