On 23 June, EEF published a new report – Making migration work for manufacturers: accessing skills in a post-Brexit world, based on a survey of 243 manufacturing employers, regional focus groups and one-to-one discussions with manufacturers. The report looks at how EU nationals form part of the UK’s manufacturing workforce and sets out recommendations on how the Government should act to ensure that manufacturers can continue to access their vital skills post-Brexit.
On 26 June, the Government published a policy paper detailing its proposals on the rights of EU citizens to remain in the UK post-Brexit. In this article, we outline the key points from those proposals and briefly consider how they might impact on the manufacturing workforce given what we know from our survey.
Manufacturers’ reliance on EU nationals
Our report identified that EU nationals form an important part of manufacturers’ workforce in the UK, with over three-quarters (76%) of manufacturers employing at least one EU national in their business and EU nationals making up 11% of the manufacturing workforce on average.
The report also highlights that EU nationals fill job roles across the business but that the greatest number of EU nationals are employed in process, plant and machine operative roles (48%), skilled trades (19%) and associate professional and technical positions such as engineers (18%).
When we asked manufacturers about their reasons for recruiting EU nationals, 64% said that they do so because they have an insufficient number of UK applicants applying for their jobs, while a third said that the skills their business needs can’t be found among UK nationals. Others recruit EU nationals because they have a better work ethic, have foreign language skills, or because they are part of the company’s intra-company transfer programme.
How is Brexit impacting the manufacturing workforce?
When we surveyed members soon after the EU referendum a quarter expected to face difficulties in attracting EU workers and almost one in three expected a loss of skilled EU workers. In reality, the impact has been limited to-date with just 16% saying they’ve seen an increase in the number of EU nationals leaving their business since the referendum. However, 26% have seen a decrease in the number of job applications from EU nationals. To mitigate the impact of this, we have seen manufacturers increase their training investment for new employees from the UK labour market.
Going forwards, the consensus among manufacturers is that applying the same, or similar, immigration restrictions to EU nationals as currently apply to non-EU nationals would make it significantly harder for manufacturers to access the skills they need.
Another key issue here is certainty: while manufacturers have sought to support and reassure their EU employees, some companies have seen an increase in requests from their existing EU employees for support in making applications for permanent residence documents but have been reluctant to provide this as they could not be sure which EU nationals would need it. And it now appears from the Government’s policy paper that current permanent residence documents will no longer be valid after Brexit. This means that all EU nationals and their families in the UK will, after Brexit, need to apply for a new immigration status under a new scheme.
The proposed right to obtain ‘settled status’
The Government’s policy paper sets out a promise that qualifying EU individuals will be granted ‘settled status’ in UK law, meaning that they will be free to reside in any capacity and undertake any lawful activity, to access public funds and services and to apply for British citizenship.
The paper distinguishes between three main categories of EU national:
- EU nationals who arrived in the UK before the ‘specified date’, have been resident in the UK for at least five continuous years before Brexit takes effect, and remain resident here, may apply for settled status immediately following Brexit.
- EU nationals who arrived and became resident before the specified date but who have not accrued five years’ continuous residence at the time of Brexit will be able to apply for temporary status in order to remain resident in the UK until they have accumulated five years, after which they will be eligible to apply for settled status.
- EU nationals who arrived after the specified date will be allowed to remain in the UK for at least a temporary period and may become eligible to settle permanently, depending on their circumstances – but this group should have no expectation of guaranteed settled status.
The ‘specified date’ is yet to be confirmed, but the Government envisages it being sometime between 29 March 2017 (when Article 50 was triggered) and the date that Brexit takes effect. In addition to being required to provide proof of their continuous residence in the UK, applicants for settled status will be subject to criminal checks as the Government aims to exclude serious or persistent criminals and those who are a threat to the UK. The Government has, however, indicated that the application process will be as simple and streamlined as possible.
In order to avoid a cliff edge scenario on Brexit, the Government is proposing to implement a grace period during which all EU nationals (and their families) resident in the UK would be subject to a blanket permission to remain. The length of the grace period has not been decided but the policy paper suggests a period of two years immediately following Brexit. EU nationals would be able to make their application for settled status (or for temporary status if they are not yet eligible for settled status) at any time during the grace period.
So, what next?
While the policy paper provides welcome detail as to the Government’s intentions, the ‘settled status’ regime is only a proposal at this stage and it is as yet unclear whether it will be accepted by the other EU member states. Further, there is no information regarding the fees for applications for settled status or the evidential requirements.
Indeed, Tim Thomas, Director of Employment and Skills, stated in a press release that: "The frustrations felt by many employers will not be eased with the publication of the Government’s migration offer… Employers need clarity and certainty well before the date we officially leave the EU and face a tipping point after which it becomes almost impossible to retain or attract employees from Europe."
Without a clear understanding of the deal that the UK will strike with the EU, it is difficult to determine what actions a business will need to take. Indeed, as identified in our report, 45% of manufacturers are waiting to see the terms of the deal before they review and change their business strategy in preparation for the UK’s exit from the EU.
Given the importance of EU nationals to the manufacturing workforce, Brexit and migration are high on our list of priorities and our report makes a number of recommendations to Government, including:
Clarifying the reciprocal rights of EU nationals in the UK and UK nationals in other EU member states and mapping out the new model for migration as soon as possible.
- Enabling industry to continue to recruit low-skilled EU workers until the UK labour market is able to support businesses’ demand for these workers.
- Allowing skilled workers to come to UK to work for up to 5 years and then be able to apply for permanent residency.
- Allowing global companies to recruit and move mobile employees through intra-company transfer programmes.
You can read the full report here.