Three-quarters of EU citizens working in the UK would not meet current visa requirements for non-EU overseas workers if Britain left the bloc.
The rate would rise to about 81 per cent once new rules, due to come into force in April, take effect, according to research carried out for the Financial Times by Oxford university’s Migration Observatory.
For certain sectors the impact would be even greater: as many as 94 per cent of EU workers currently employed in hotels and restaurants would fail to meet existing entry requirements, as would 96 per cent of those working on Britain’s farms.
The study acknowledges that Britain would be likely to change its immigration requirements if it were to quit the EU, potentially easing the rules to allow some EU immigration. Legal experts say those already in the country would be entitled to stay and Vote Leave says EU workers already here would have their “rights unaffected”.
However, it illustrates the scale of the challenge employers would face in finding staff in the event of a British exit if the government moved to curb immigration from the EU, as pledged by Brexit campaigners.
In other parts of the workforce including construction, manufacturing, energy and transport, about three-quarters of EU workers would not be allowed in if they had to qualify under the current rules applied to other overseas workers.
Even the banking and financial sector — which includes professional services firms and management consultants, as well as the cleaners, back-office staff and security guards that work for them — would suffer, with 66 per cent of EU workers excluded.
The study shows that there are almost 2.2m EU workers in the UK, comprising of about 6.6 per cent of the total workforce. Manufacturing companies have more EU workers as a proportion of their workforce than any other sector, with a little more than 10 per cent of the 3m workers overall.
A total of 442,000 EU citizens are employed in retail, hotels and restaurants, making up almost 8 per cent of the sector’s 5.7m workforce. Banking and finance has about 360,000 workers from the EU, or about 6.8 per cent of the sector.
Carlos Vargas-Silva, author of the report, said: “Most sectors of the UK labour market now have a significant EU migrant workforce — and many of these are lower-paid sectors, such as hotels and manufacturing. Even if the immigration system is redesigned after a Brexit vote, any system that selects EU workers based on skills and pay is likely to hit these sectors hardest.”
Immigration is a critical issue as campaigning intensifies in the run-up to the June 23 referendum of EU membership, with the Leave camp making it one of its two main lines of attack — alongside the financial contributions Britain makes to the EU.
However, the Migration Observatory’s research presents a challenge to Leave campaigners and their promise to regain control over Britain’s borders. It poses the question of how many EU migrants they would be prepared to see enter Britain every year to sustain the economy if the UK was outside the union.
The Leave camp often talks of introducing an “Australian-style points system” to bring in the brightest and most talented migrants. But it is unclear how that might apply to those hoping to work in Britain as fruit pickers or hotel receptionists.
The study illustrates just how hard it would be to untangle the UK economy from an often hidden army of hundreds of thousands of people from all over the EU who have found work in Britain.
The independent research group’s findings are derived from the Labour Force Survey, which is the largest household survey in the UK and broadly representative of the country’s population.
The Migration Observatory applied the two key criteria underpinning the government’s tier-2 skilled worker visa programme for non-EU workers and applied it to the existing EU workforce in the UK. The first is that the job must be a graduate-level role, and the second is that the salary for the job must be more than £20,800.
The study also applies a new earnings threshold of £30,000 the government plans to introduce for most non-EU workers in April 2017.
While the data provide an understanding of the number of EU citizens living and working in the UK, the study does not give information on the flow of workers in and out of the country. A better understanding of that movement is likely to come at the end of this month, when the government publishes detailed figures on inactive national insurance numbers.
UK’s EU Referendum: How people would vote
For a more detailed summary of opinion polling visit the FT’s Brexit poll tracker page
Understanding what exactly immigration policy would be if Britain was outside the EU was the big unknown in the campaign, said Jurga McCluskey, head of UK immigration at Deloitte.
“Nobody really understands the complexity of leaving the EU because no one has ever left the club,” she said. “If we do leave, the landscape for immigration will change significantly — it won’t be so much what we do but who we chose to work with. Who will those migrants be?”
Matthew Elliott, chief executive of Vote Leave, said Britain’s immigration system was “deeply flawed and unfair” and that visa requirements for skilled workers were “far more restrictive because there is unlimited immigration within the EU”.
He added: “It is a fatuous exercise to apply these requirements as an example of a post-Brexit scenario given those requirements are a direct result of our EU membership. If we vote Leave, we can ensure Britain has a flexible migration policy — one that allows us to bring in the talent that business needs but one that ensures we have control of our borders.”
But Jonathan Portes, of the National Institute of Economic and Social Research, said: “Leaving the EU does increase flexibility on migration policy but that doesn’t get you off the hook about having to make some very hard choices.”
Under the current rules, the UK’s 137,000 managers, directors and senior officials who come from other parts of the EU would qualify for a work visa, as would the 340,000 in professional occupations and 227,000 so-called associate professionals and technicians.
The research also shines a light on the regional dispersal of EU citizens in the UK. London has about 964,000 EU workers but almost 2.2m from outside the EU. In the south east of England, there are about 421,000 EU workers compared to 671,000 from outside the bloc. In no part of the country do EU workers outnumber other foreign nationals.
The Engineering Employers Federation says 73 per cent of manufacturers have struggled to fill skilled engineering roles in the past three years. In a separate survey by the NIESR found that employers in the hospitality, food and construction sectors believed the government “would need to continue to allow free movement in some form to prevent damage to business”.
UK’s EU referendum: full coverage and analysis
View the FT’s comprehensive guide to the vote on whether Britain should stay in Europe, with all the latest news, analysis and commentary from both sides of the debate. See more
Get alerts on UK business & economy when a new story is published