Around 3.7 million people living in the UK in 2018 were citizens of another EU country. That’s about 6 per cent of the UK population. Every study I’ve seen shows that they make a vital net contribution to our economy, and in some employment sectors they constitute as much as 30 per cent of workers.
That’s why the announcement last week that the government would act to end freedom of movement for EU nationals on day one of a no-deal Brexit came as a bit of a surprise. And a worry. Most of the coverage focused on two issues. Firstly, whether it is possible, legally and logistically, for it to be implemented; secondly, on the human impact, with a range of upsetting stories about how it will affect EU nationals living and working in the UK.
Brexit and freedom of movement
Both are important and make for interesting reading, but both failed to mention how an end to freedom of movement would play out in the labour market and how that, in turn, could harm our economy.
Alongside many other reports in recent years, last year’s CBI report showed how vital EU nationals are in filling semi-skilled, skilled and professional job roles across the economy.
Yet, even without a no-deal Brexit, it’s almost certain that there will be fewer EU nationals moving here to live and work. In fact, it has already started, probably as a result of uncertainty and unease as well as the drop in the value of sterling. A scary but useful marker is that the number of nurses from the EU registering with the Nursing and Midwifery Council dropped from 6,382 in 2016-17 to just 805 in the following year.
While it is down to the CBI and others to debate future immigration policy, I have serious concerns about current plans for a minimum salary threshold for work visas. The idea that a skilled migrant must earn somewhere between £30-£35k will likely heighten the skills gap in all sorts of vital jobs. Whether it’s a shortage of nurses or chefs or plumbers or shop workers, employers will find it even harder to recruit than they do now.
Investing in training and skills
Our survey last autumn found that 60 per cent of SMEs believed that finding skilled staff was their biggest concern about the future, with half already struggling to fill job vacancies.
All of this means that over the next few years we might see fewer EU nationals in the labour market, growing skills gaps, hard-to-fill vacancies limiting business growth and productivity continuing to flat-line. At the same time, we are investing less in post-18 education, training and skills than our competitors after a decade of cuts in both public funding and employer investment.
No wonder the Learning and Work Institute's report "Time for Action: Skills for economic growth and social justice" recommended investing more in skills. The report sets out clear economic and social reasons for investment, lays bare the consequences of the cuts (a halving of adult learning opportunities in colleges, and employers investing only half the EU average per worker) and forecasts that the UK will fall even further behind other countries in skills levels over the next decade.
It also worryingly predicts the UK falling even further behind other countries in levels of literacy (from 10th to 14th out of 17 countries) and numeracy (11th to 14th) unless action is taken. The Learning and Work Institute made the simple case that improving our employment rate to the same as Sweden, the Netherlands and Japan would see 500,000 more people in work; with the right skills investment that could help fill the job vacancies which are sure to emerge.
Boosting the economy
None of this is in the realms of fantasy. Increasing investment in adult education back to 2010 levels, alongside a modest increase in employer investment (£1.9 billion overall annually) could help 200,000 people into work and boost the UK economy by £20 billion. A failure to do this could see employers losing business and the economy in serious trouble.
The economic case is strong, and the political argument perhaps even stronger. If Brexit has taught us anything, it is that large parts of the population believe that they have been neglected and that the opportunities for them are not good enough. What better way to show that this government has heard that than investing in skills, education and training opportunities that can help people get better jobs, gain promotion and have better lives?
The chancellor, a fan of colleges, has it within his gift to make a start on this in his September spending statement. A boost to adult education and training would be a great way to show that he understands the economic and social challenges that Brexit highlights.
David Hughes is chief executive of the Association of Colleges