‘Full-Fat, Semi-Skimmed or Skimmed?’ The Political Economy of Immigration Policy since Brexit

In 2016, the campaign to leave the European Union (EU) was fought on notion of ‘taking back control’, largely of immigration. Yet, while the UK has regained immigration powers over European nationals, net migration is at record levels. Before Brexit, net migration averaged around 200,000–250,000 per year; after Brexit, it shot up to an all-time high of 745,000. But why?

The UK’s capitalist model has generated a structural dependence on migrant workers, exacerbated by the labour supply shock of Brexit and compounded by post-Covid withdrawals from the workforce. If the government wanted to reduce the economy’s reliance on immigrants, it would need to address the prevalence of low-paid work and the lack of investment in skills.

Immigration since Brexit

Net migration to the UK almost tripled from 249,000 since the referendum in 2016 to 2022. Since then, net migration has been at the highest levels ever recorded. The increase in net migration (the difference between immigration and emigration) has been driven by a large increase in immigration since the new post-Brexit immigration system in January 2021. By the year ending June 2022, immigration was just over 1 million, reaching 1.18 million in the year ending June 2023. European migration declined immediately after the referendum, with non-EU net migration increasing almost fivefold between 2019 and 2022. By the year ending June 2023, only one in ten immigrants came from the EU, down from seven in ten in 2016. Net migration of EU nationals is now negative.

Students and their dependants account for about 43 per cent of the increase in non-EU immigration between 2019 and 2023, being some 39 per cent of all non-EU immigrants in the year ending June 2023. These students also pay up to £38,000 per year in tuition fees, raising revenue for UK universities with domestic fees frozen. Humanitarian migration routes, especially new schemes for Ukrainian refugees and Hong Kong British National (Overseas) status holders, have also raised migration numbers. In 2022, these routes accounted for about 19 per cent of non-EU immigration, falling to 9 per cent in 2023. The remaining near-twelve per cent of UK immigration is people arriving on family visas and those claiming asylum. Since Brexit, the UK has replaced a system of free movement of migrants from the EU with a regulated immigration system with growing numbers of non-EU immigrants driving an unprecedented increase in net migration.

The political economy of immigration under UK capitalism

Global migration is driven fundamentally by demand for labour. In the UK, immigration is embedded at both ends of the labour market. UK healthcare has become highly dependent on migrants across the wage distribution. Following the referendum, a combination of political uncertainty, growth in some Eurozone countries and a decline in sterling value caused many European workers to leave. The two sectors that lost most were agriculture and hospitality, seeing a decline of 28 and 25 per cent respectively in their EU workforce between 2019 and 2021. Chronic skills shortages across a range of sectors – worsened by austerity – made Britain even more dependent. Immigrants have increasingly bridged the gap between the demand for skills and the available supply in the domestic workforce.

At the end of free movement, the government introduced a new ‘skilled worker’ visa and reintroduced a route for international graduates to enter the labour market. The minimum salary for this visa was reduced from £30,000 to £25,600 and the process was made less bureaucratic. As a result, the number of licences granted increased and the number of work-based visas issued grew. The government also restarted a scheme for seasonal agricultural workers and created an exception to the skilled worker criteria for care workers. Although intended to compensate for a lack of EU workers, the number of visas issued to care workers since 2022 outstripped the number who previously came under free movement. By the year ending 2023, care workers represented the majority of skilled work migrants.

Going big—and going home?

In 2022, the government announced plans that they claimed would produce the ‘biggest ever reduction’ in net migration. These included an increase in the salary threshold for Skilled Worker visas from £26,200 to £38,700. Health and care workers, however, are exempted. Why? Because labour shortages in the care sector are caused by low pay and poor working conditions. Measures to raise wages and improve conditions would almost certainly increase costs, which would be borne partly by wealthier people who pay for their own care. The Conservatives are unlikely to hit the financial interests of their core vote (the elderly). As much of care is now privatised, profitability is key, so this depends largely on low pay for staff. Increased pay could reduce dependence on low-wage migrants, but would likely raise fees for older voters and reduce profitability. In both cases, core Conservative support would be hit.

Conclusion

The UK economy is structurally dependent on migrant workers. A capitalist model based on a low-wage service sector with chronic under-investment in skills training, plus a higher education sector dependent on international student fees, combine to produce huge demand for immigration. Precisely because Brexit risked labour and skills shortages, the Johnson government selectively liberalised routes for workers and students. The Sunak government then attempted to undo this by stripping care workers, international students and many British citizens of their right to bring family members to the UK. None of the recently proposed policies address the causes of demand for migrant labour. A government seriously committed to reducing net migration would spend more time and money on improving wages and skills in the British economy. This would mean pursuing policies to increase pay and improve working conditions in low-wage sectors like care, while prioritising investment in further education, vocational training and apprenticeships to address skills shortages. But it’s a style of politics that the Conservatives abandoned some time ago.