In the early 1970s, with the UK economy infamously lagging in quality, productivity, and growth, the country joined the European Common Market in order to stimulate its economy by way of maximising opportunities to trade with Europe. Building trade with our nearest neighbours made sense, not just geographically but also in how it helped turn the UK’s inward-looking, sclerotic economy into a vibrant and thriving, outward-looking entity.
Decades later, the debate over the UK’s imminent departure from what’s become the Single Market has largely focused on manufacturing. But it is the mobility frameworks inherent in our membership that have provided UK citizens, from a country where services comprise 80% of its economic output, with service industry jobs, and a contract market across a continent encompassing 31 other countries.
The UK has benefited from the peculiarity of services by its reliance upon the presence of consultants on a client site, and again this has a geographical dimension. Where onsite work is required, consultants are less likely to take projects outside of Europe; with seniority in business, and age, come responsibilities to children or older relatives to whom we wish to return frequently: but it’s impossible to fly staff home at weekends from trans-Atlantic projects. Consultants based in the UK’s regions can also source flights to Europe that are cheaper than rail fares within the UK to hubs in the south-east. Language also plays a role here, as education has been geared for us towards communications with businesses in Europe.
At the other end of the scale, for decades people coming from regions in the UK with higher unemployment could try their luck in Europe, without any minimum salary limit, through those mobility networks. Contrast this to our status as Third Country Nationals (TCNs) as we become from 1 January 2021, whose home countries lie outside the single market/EU/EEA, who require specialised knowledge and large salaries to gain a work permit, in some cases earnings of €50,000 and above.
After the transition period, UK citizens lose the right to work in Europe without a permit; they even lose the right to apply for some jobs or for projects that were hitherto not restricted. Adverts clearly state ‘must be an EU citizen or from single market countries to apply’. We automatically have competition from 31 other countries and they are at an advantage, as before an agency or employer may consider a TCN, laws demand proof that no candidate could be found in Europe.
A TCN visa into the Schengen zone only allows for a person’s presence for 90 out of any 180 days. Remote working became the norm in the pandemic, but many roles demand a physical presence, especially in areas like defence – for at least three months with an option to extend. In other industries a maximum of one day per week remote working is occasionally possible, but even so the European Blue Card does not cover freelancers.
Will this narrowing of our horizons come about? It is highly likely, as Johnson may yet end the transition period with a so-called Australia Deal, which is sleight of hand for No Deal. Britain will be fine on WTO terms, he has said, though his government’s promised Brexit bill and WTO terms do not cover services in the office – services currently provided by tens of thousands of UK citizens to Europe. David Davis and others boasted of booming business in technology, but discounted the movement of a large part of the customer base in sectors like IT as customers shift their operations to Europe and the home market dwindles.
Let’s take IT. Some 45,000 British IT consultants work in Europe, often changing countries per project. Clients need consultants quickly. Consequently, agencies have for over a year now been disqualifying UK citizens from such work due to the uncertainty of their future employment rights. Preferred candidates are sourced from the 31 countries of the EEA first. This is no surprise if we look at typical contract terms which demand that a signatory guarantees the consultant ‘has rights to work and reside in Europe,’ and failure to comply with this means your company/you as a self-employed person/your agency face a liability claim. Even before Brexit day, the impending loss of our right to work in Europe caused challenges. Adverts appeared with requirements that candidates are ‘Schengen passport holders’, must have EU passport or be an EU citizen to apply. Some European customers replaced British consultants on projects so as to guarantee levels of service provision post-Brexit. Being assigned back to base in the UK, and with no replacement projects in sight, the employee faces redundancy.
Tens of thousands of UK citizens have built up businesses based on the right to work across Europe, but now service sectors including banking, engineering and creatives all face barriers to work. It affects businesses and individuals such as fashion models, musicians and technical crews. Even dance students are affected, like friends of mine studying at Newcastle College or the Tyne Theatre who have gained their equity cards from working seasons at European hotels. The barriers dropped down by our own government wipe out years of study, hard work, and business networking, crushing the entrepreneurial spirit that the Single Market was built to serve and help thrive.
No one asked the Leave voters exactly how we should leave the EU. Many, including Leave voters in my family, had thought the UK would leave the political union but remain a member of the common market for trading. There were others who simply failed to understand how the Single Market worked and thought the UK could enjoy its provisions without its costs or responsibilities. Regardless however of the choice made in the 2016 referendum, how many voted to prevent British people from doing business in Europe? Surely trade and opportunities for the unemployed are a great thing? The government has taken this extreme path, and made its choice – but not one that is necessarily that of the public.
In ‘The perils of perception’ (2018) Bobby Duffy describes how the public’s fear is magnified when it does not understand, and what we see is how the British public was inculcated to fear immigrants by populist newspapers and falsehoods spread across social media. Yet those very migrants bring with them important skills: not least for our NHS and industry, bringing expertise to specialised, high-level jobs paying hefty income tax to our Treasury. Many wins have resulted.
An objection to preserving mobility frameworks stemmed from fears that immigrants to the UK could benefit from NHS services without making a contribution, and that they would steal jobs from locals.
The fact is, we need not fear competition from cheaper outsiders. Europe has established the Agency Workers Directive, and more recently the Posted Workers Directive which ensures that an employee is paid the same rates as locally based candidates. Fair play for all, including British people who would seek to work in Europe.
Even then, the UK government never had to leave the Single Market to control immigration. Article 7 of the Citizens’ Rights Directive from European law, adopted by all Single Market members, allows members to control immigration by mandating that a European moving to another member state for at least three months must prove they have a source of income, e.g. some form of employment, as well as comprehensive health insurance. Non-compliance allows the host country to deport the citizen.
The UK’s failure to apply these controls long pre-dated Brexit, particularly in the many years that Theresa May was at the helm of the Home Office before becoming prime minister. Further, other foreign states with which the UK seeks to broker its own trade deals are already demanding that the UK accept higher quotas of their own nationals, if not outright freedom of movement, as part of any trade deal. Conversely, Australia famously rejected suggestions of freedom of movement for British citizens, much to the surprise of many Brexit voters. Mobility frameworks are a two-way street.
As the Covid-19 pandemic hits Britain, a crisis unseen in the UK in centuries, economists predict unemployment could rise to 9%, and the in event of a second wave, hit 15% – just at the time when UK citizens find themselves excluded from a job market of 31 countries on their doorstep. There is no trade deal in the world that can replace such a market, and at a time when we need it most.
A replacement mobility framework is not on the agenda in trade talks. The government never surveyed the freelancers who built up businesses and careers based on that right. The impact these factors will have on the economy and unemployment statistics are unknown.
Mobile freelancers spend money at home in the UK, earned from these European business activities. They engage the retailers, builders, hairdressers, taxi drivers, etc. Furthermore, the rights of British citizens based in Europe to work cross-border are not taken into account. The Withdrawal Agreement only includes the right to work in their host country alone.
And manufacturing and services are intertwined. Take Rolls Royce, which sells engines but whose business includes services for engine maintenance performed on site in Europe. We cannot mask these losses, even in a pandemic which has impacted aviation. Despite complaints from the services industry and individual constituents for the last four years, the focus was always on manufacturing. This is despite Robin Walker at the UK government’s Department for Exiting the EU writing in 2018 that the government would include services in an ambitious deal, and that it would not pull up the drawbridges.
Unemployment rises, business opportunities shrink, and ultimately there will be less taxation revenue for the Treasury: the lifeblood of income for our NHS. The government is restricting our opportunity to recover successfully from this Covid-19 crisis.
Economic effects are not the only downsides. We are cut off from opportunities for knowledge and cultural exchange. British consultants who gain specialist skills abroad share those back home. The damage done by No Deal will already be bad, but could not come at a worse time – amidst a pandemic.
Individuals and organisations such as British In Europe warned that European countries face delays in the establishment of policies for residence and work permits due to the pandemic. The government still opted not to extend the transition period. No form of compensation exists for British self-employed people and companies facing problems from the loss of mobility.
For the North East, could these problems spark more unemployment that the pit closures? Yes. Services make up to 80% of the UK economy and the prospect of Nissan closing is too awful to think about. Nor can North Eastern grafters take advantage of the Auf Wiedersehen, Pet option (to cite the famous TV series – based on fact – about Geordie tradesmen bereft of jobs in the closed shipyards seeking building work in Germany, and opportunities in Rotterdam).
My advice to the government would be to put services on the agenda, and invite professionals to describe how we work at select committees. It’s not too late to reconsider. A mobility framework, Single Market membership or the Norway model once favoured by Farage and even Johnson himself – which would include the available controls on immigration under the Citizens’ Rights Directive – could be a way forward. We always did control our borders as we opted out of Schengen, the membership of which is not compulsory for countries in the Single Market. Even a deal like Switzerland has with the EU, where a work permit is readily available when a suitable candidate has an offer of work, would be better than the current course of action.