The European Union needs to ramp up its contingency planning for the effect a no-deal Brexit could have on UK citizens who work in EU countries, according to a raft of recommendations from the CBI.
Recommendations from the report, What comes next? The business analysis of no-deal preparations, are based on an in-depth study of existing plans laid out by the UK government, the European Commission, member states and businesses.
With an estimated 3.6 million EU citizens living in the UK and 1.3 million UK citizens in the EU, the CBI says that thousands of employers rely on the ability to move staff easily across the Channel, whether to carry out short-term work, provide ‘fly-in-fly-out’ services or go on longer-term secondments.
It is not just today’s jobs that rely on a smooth withdrawal from and deep relationship with the EU, but the jobs of the decades ahead” – Carolyn Fairburn, CBI
“The effect of no deal on people is just as important as the effect on trade,” say the report’s authors.
The CBI says that the UK government is more prepared than the EU in the short term and, in the long term, it will be more expensive and difficult for people to work, study and live across borders.
Boris Johnson, the prime minister, has said the UK will leave the EU on 31 October 2019 “do or die” and yesterday Michael Gove, who Johnson put in charge of no-deal preparations said that, while the government still aimed to come to an agreement with Brussels, it is now “working on the assumption” of no deal.
Josh Hardie, the CBI’s deputy-director general, says that businesses are desperate to move beyond Brexit. “They have huge belief in the UK and getting a deal will open many doors that have been closed by uncertainty. There is a fresh opportunity to show a new spirit of pragmatism and flexibility. Both sides are underprepared, so it’s in all our interests. It cannot be beyond the wit of the continent’s greatest negotiators to find a way through and agree a deal.
“But until this becomes a reality, all must prepare to leave without one. It’s time to review outdated technical notices; launch an ambitious communications campaign for every firm in the country and rigorously test all government plans and IT systems. ”
Looking first at EU people who live and work in the UK, the CBI said the UK has “gone a long way” to protecting the rights of EU citizens but that this had not been reciprocated for UK nationals in the EU.
Late last year the European Commission published a No Deal Contingency Action Plan calling on the 27 member states to take a “generous approach to UK citizens already resident” and to take measures so that all UK nationals legally residing in a member state on the day the UK leaves the EU will continue to be considered as legal residents of that member state without interruption.
The effect of no deal on people is just as important as the effect on trade” – the CBI report’s authors
Several countries have already given assurances to UK nationals about their residency rights, but the nature and scope varies significantly across member states.
Hardie added: “The EU must come to the table and commit – at the very least – to matching the UK’s sensible mitigations. Failure to do so will hurt all our economies. While the UK’s preparations to date are welcome, the unprecedented nature of Brexit means some aspects cannot be mitigated. We can reduce but not remove the damage of no deal.
“It’s not just about queues at ports; the invisible impact of severing services trade overnight would harm firms across the country.”
No deal would significantly and permanently damage businesses who regularly send UK staff to the EU for short-term work or provide “fly-in-fly-out” services, according to the report. While the UK has taken “nearly all the steps it can to mitigate the impact of no deal on mobility, EU member states have not reciprocated.
The report predicts that on Day 1 of a no-deal departure from the EU, there will be immediate disruption for UK nationals travelling to the EU for work, to undertake intra-company transfers or to provide ‘fly-in, flyout’ services. Overnight, member states’ third-country immigration rules will apply with no transition period or flexibility. There is no expectation of disruption for EU nationals travelling to the UK for short-term work.
If it becomes clear that no deal is to be a permanent state, the CBI says that by January 2020, businesses which rely on sending their staff to the EU – particularly service exporters and international companies with their European headquarters in the UK – will begin to consider relocating operations, activity and, ultimately, jobs to the EU.
Preparing for no-deal Brexit
The business body said that:
- EU member states should adopt a pragmatic application of their immigration rules for UK nationals – recognising that no deal and the immediate end of free movement is likely to cause significant disruption for UK nationals travelling to the EU for work or to provide a service;
- The EU should adopt a pragmatic approach to application of rules for UK “frontier workers” – both those travelling to the EU from the UK daily for work (i.e. to Calais) or between EU member states;
- The EU should monitor reporting of passenger delays at the border to ensure member states are conducting efficient implementation of passport checks; and
- Member states should review, and amend where necessary, their national legislation to ensure there is a mechanism for UK nationals to seek first recognition of their UK qualifications after Brexit – just as the UK has done for EU qualification.
For longer term work, it is a similar story of unpreparedness among EU member states. The CBI states that while the UK government has made sensible steps on temporary mobility and current EU citizens living in the UK, businesses are “extremely concerned” about long-term plans for future immigration.
Some firms are already taking steps to move production, operations and associated jobs out of the UK. For example, an agricultural producer has trialled importing spring onions from Ghana over the summer months, when these have been previously grown in the UK.
In addition to existing jobs and operations being moved, the CBI says firms are considering future access to workers in the UK as they make investment decisions, with reports of factories being opened in Poland and France instead of the UK as a result.
While the authors of the report welcome the UK’s proposed temporary system for registering EU citizens wanting to work in the UK in the event of no deal, they say it has drawn confusion.
“The Home Office has stated that while European Temporary Leave to Remain will be in place following a no deal, employers will continue to only have to check an EU Identity Document such as a passport or driving licence,” says the report. “This is positive, but it also raises legal questions for employers.
“Despite lawfully carrying out a correct right to work check at the start of employment, firms could end up inadvertently employing an EU national who is in the UK illegally – if the individual fails to apply for European Temporary Leave to Remain after three months. This risk is placing employers in an uncertain legal position. It is also unclear how European Leave to Remain will be effectively enforced without right to work or rent checks – as these are key mechanisms for enforcement within the UK immigration system.”
The CBI recommends that the government should reduce confusion for businesses on the enforcement of European Temporary Leave to Remain through a simple, easy to understand communication aimed at HR directors.
Carolyn Fairbairn, the CBI’s director general, said: “We have to remember why a deal is important. In all the talk of backstops, Brexit bills and obscure sections of international law, it must not get lost why a deal with the EU adds to the UK’s strengths and is one of the building blocks to the prosperous UK we all want to see. It is not just today’s jobs that rely on a smooth withdrawal from and deep relationship with the EU, but the jobs of the decades ahead.”