Cooley (UK) LLP

Brexit: is free movement here to stay?

Question

If the United Kingdom were to vote to leave the European Union on 23 June 2016, would British citizens lose their right to move freely across Europe and would citizens from the rest of Europe lose their right to free movement into the United Kingdom? Or, is free movement of European citizens here to stay in some form, whatever the outcome of the vote?

Answer

The debate

The fundamental right of all EU citizens to move freely across the European Union is guaranteed by Article 20 of the Treaty on the Functioning of the European Union. The fact that citizens of various member states (especially, but not exclusively in Central and Eastern Europe) have exercised this right to move to the United Kingdom in search of work has become a key issue in the 'Brexit' debate, with the 'Out' campaign focusing on a country's ability to limit immigration as a test of sovereignty.

Labour mobility clearly brings many economic advantages. From an employer's perspective, workers who move to where they will receive the greatest rewards are likely to be more motivated and productive. Employers also gain access to a wider pool of talent and are able to overcome local skills shortages that may arise periodically (for example, in the building trade during large infrastructure projects such as the Olympics). From the perspective of employees, although the most tangible benefits of free movement accrue to the mobile workers themselves, citizens of the receiving country also stand to gain indirectly; particularly through contributions to taxes or an increase in income as a result of the movement of capital associated with a larger workforce.

Options following a Brexit

If the United Kingdom were to leave the European Union, the extent of change would be dependent on the nature of any new relationship with the European Union's remaining members. If the United Kingdom were to join the European Free Trade Association (EFTA), it would have the option of EEA membership (the Norwegian approach). In such a scenario, EU citizens would still be guaranteed the right to free movement throughout the EEA (including the United Kingdom), so free movement would not be curbed. Alternatively, an EFTA UK could follow the Swiss model and enter into bilateral trading agreements with the European Union. Such agreements are likely to require continued free movement of EU citizens to the United Kingdom, although some amendments to the current immigration system may be needed.

There are important implications to consider in relation to the above exit scenarios. For example, as an EEA member Norway effectively has an obligation to implement EU law in its territory, including the rules on free movement of people and free trade, without any say in their development. It must also pay an annual contribution to the EU budget. It seems unlikely that this option would provide those in the 'Out' camp with the control over immigration that they desire. While the United Kingdom could try to negotiate a deal that allows free movement for some groups, but the right to impose quotas on others, it is unlikely that the European Union would agree to this, as it runs contrary to the basic EU law principle of non-discrimination on grounds of nationality. Notably, no country has been given full access to the European Union's single market without accepting free movement.

While Switzerland is not a member of the European Union, it benefits from free trade with EU member states and has mirrored EU law in domestic legislation (again, without any say in its development). Like Norway, Switzerland also makes an annual contribution to the EU budget. Following the Swiss model would require the United Kingdom to negotiate and enter into multiple separate agreements with the European Union. Given the current dispute between the European Union and Switzerland concerning Swiss attempts to impose restrictions on free movement of EU workers, it seems highly unlikely that Britain would be able to opt out of free movement altogether while retaining access to the single market.

In the event of a vote to leave, the terms of exit remain highly uncertain. What is clear is that the United Kingdom is unlikely to retain access to the single market without granting EU citizens the right to move to the United Kingdom.

Brits abroad

The impact of a Brexit on British expatriates living elsewhere in the EU is also uncertain. Should this happen, the UK government would presumably seek to negotiate a deal to prevent current reciprocal arrangements that such individuals enjoy by virtue of being EU citizens (for example, in relation to pension and healthcare rights) from ceasing to apply.

Understandably, British expats are concerned about the possible outcomes following a Brexit: will they have to move back to the United Kingdom; will they have to apply for residency and work permits; will their pensions be affected; will they have to apply for dual nationality; and what happens in the event they fall ill? While it seems highly unlikely that those already abroad will be put on the first flight back to the United Kingdom, given that they will have acquired certain rights through residency, British workers who are still in the United Kingdom, but anticipate retirement in the sun would find that harder to achieve.

Impact on education

Under EU rules concerning free movement of people, EU citizens moving to another member state are entitled to the same access to education as nationals of that member state. As a result, students from other member states pay the same tuition fees as nationals of the hosting member state and can apply for the same tuition fee support.

While the UK government would presumably save money that is currently spent on supporting students from other member states (such as loans or maintenance funding), UK students would no longer benefit from the non-discriminatory support that they currently enjoy when studying abroad. UK universities would also lose access to EU research funding and diverse and high-quality teaching provided by non-British EU citizens. Moreover, with a large number of the United Kingdom's academic workforce coming from other EU countries and many British nationals also choosing to spend time abroad to study (for example through Erasmus programmes), a vote to leave the European Union would clearly have a significant impact on education.

It would appear that ultimately universities and students stand to lose out in the event of a 'leave' vote. In any exit negotiation, the UK government would be forced to balance the benefits of openness and diversity for education with the opposing desire of some citizens in the United Kingdom to limit net migration.

Summary

If Britain votes to leave the European Union on 23 June 2016, significant changes to free movement seem unlikely, at least as long as the United Kingdom wishes to retain access to the European Union's single market. Having voted in a referendum to restrict immigration from the European Union, Switzerland is now being forced to think again, faced with the threat of losing its single market access. Further, any negotiations between the United Kingdom and the remaining member states would clearly need to consider the adverse economic impact of restricting free movement of labour into the United Kingdom, as well as the direct impact that losing the right to free movement within the European Union would have on UK citizens, especially students and expatriates.

Irrespective of the result on 23 June, it would seem that in some form or another, free movement isn't moving out anytime soon.

Harriet Swan is a first-year trainee solicitor at Cooley (UK) LLP. She is currently sitting in the commercial litigation team.

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