Brexit Bulletin September 12, 2016

12 Sep, 2016

Brexit

The following is a roundup of recent developments concerning Brexit negotiations and the United Kingdom’s withdrawal from the European Union.

Political

Points-based system out

Prime Minister Theresa May last week rejected the idea of an objective points-based system for controlling migration from the European Union to the United Kingdom, saying she supports a system that would give the government more subjective control over who comes into the country and when.

“What the British people voted for on 23 June was to bring some control into the movement of people from the European Union into the U.K,” she said. “A points-based system does not give you that control.”

May offered her remarks 5 September at the G20 summit in China. While May pulled a points-based system off the table, it remains to be seen what type of migration system the U.K. might put in place – and how a new system would impact migration for both EEA and non-EEA workers.

Second vote debated

Members of Parliament debated the idea of a second referendum last week. Some MPs have argued that the specific details of the U.K.’s exit from the EU, once formulated, should be ratified by voters. Others say that a second referendum would violate the public trust and undermine the clear decision delivered by the 23 June referendum.

The idea has split the Labour Party. Owen Smith said if he is elected Labour Party leader, he would block May from triggering Article 50 exit procedures unless there is a general election or a second referendum to approve the terms of a Brexit. Current Labour Party leader Jeremy Corbyn has ruled out a second referendum.

Past the two-month mark

Some Leave campaigners have expressed frustration and have called for May to invoke Article 50 as soon as possible, thereby triggering the U.K.’s formal withdrawal from the EU. May is standing by her position that further plans are required before any formal exit process is started and that she will not invoke Article 50 until 2017. It is not clear whether May intends to invoke Article 50 in early or late 2017.

It also remains constitutionally unclear whether May has the power to invoke Article 50 on her own. U.K. courts continue to grapple with lawsuits seeking to force May to obtain an Act of Parliament before invoking Article 50, on the expectation that elected MPs would not support any move to “leave” the EU in line with the popular referendum result.

Immigration

Status unchanged

There is still no change to the immigration status of EU workers in the U.K. or British workers in the EU – and there will be no change until after Article 50 is invoked and the U.K. formally exits the union. For a more detailed analysis, see BAL’s Backgrounder on this topic.

New migration stats released

Net migration to the U.K. stood at 327,000 for the year ending March 2016, according to government figures released in August. The figure represents a small dip compared to migration over the same period last year, but net migration numbers have remained largely flat.

Poll: Highly skilled migrants welcome

According to survey published 25 August, only 12 percent of people surveyed want reduced migration of highly skilled workers to the U.K. Forty-six percent would like an increase. Even among Leave voters, 45 percent wanted more high-skilled migration and only 15 percent thought high-skilled migration should be reduced. Current EU free movement rules do not, and cannot, distinguish between highly skilled business migration and lower-skilled migration. Read the full report by British Future here.

Low-skilled EU migrants may need permits

Low-skilled EU migrants may be subject to work permits after the U.K. leaves the EU, the outgoing Migration Advisory Committee chair David Metcalf has said in an interview with The Daily Telegraph. The permits would stem EU migration in industries such as retail, construction and food processing and could be modeled after the seasonal agricultural work-permit scheme.

Business

Short-term bounce

Data released last month showed that July unemployment claims fell, retail spending was up and inflation rose slightly. The figures were some of the first hard economic numbers since the referendum and eased fears of an imminent recession.

Falling Sterling boosts tourism

Tourists are giving a boost to the U.K. by taking advantage of the slide in the pound since the Brexit referendum. In July, tax-free shopping rose 7 percent – visitors from Japan spent nearly double compared with the same month last year, while American visitors spent 46 percent more and Indonesian visitors spent 88 percent more.

Preparing Your Business

Brexit negotiations have not yet begun and a new immigration regime has not been presented, but that does not mean businesses should not start preparing. BAL can assist with a number of services including:

  • Assessing your company’s EU dependency.
  • Tracking EEA employees and new hires.
  • Exploring EEA employee options, including EEA Registration Certificates and permanent residency in the U.K. or British citizenship, or eligibility under the Tier 2 regime.

Should you have any questions or require more information on how BAL can help with Brexit planning, please contact us at uk@balglobal.com.

The Brexit Bulletin has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@balglobal.com.

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