Germany and France bend single market rules - so why can't Britain control immigration?

But if Theresa May's obsession with immigration caps scuppers a deal, Remainers should block Brexit.

NS

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Prepare for an autumn - and, then, years - of Brexit, Brexit and Brexit.  Some Remainers will try to tell you that the referendum was a mistake, gave the wrong answer and should be run again. Some Brexiteers will tell you that any compromise, however necessary, is a betrayal.  Neither position is sensible or sustainable.

The 48 per cent Remainers, of which I am one, will have to accept that the decision is made for better or worse. Action to control EU migration is the single most important consequence. The 52 per cent will have to accept that this must be achieved with minimum disruption to the close economic relationships with the EU on which numerous jobs depend, in key industries like motor vehicles, aerospace and their supply-chains, and financial services.

Theresa May appears to understand this equation. But her Tory conference speech, aimed at the cheap seats, seemed to suggest that in forthcoming negotiations immigration control is top of her agenda. By contrast, the maintenance of EU relationships seem very much secondary.

Her starting point is that Britain should end freedom of movement. This is one of the four pillars of the single market, which Mrs Thatcher negotiated, and is at the heart of our current EU relationship (free movement of labour and capital; free trade in goods and services).  Until recently Britain was the main champion of the single market. We are now seeking to opt out of one of the four elements.  

We are told by people on both sides of the argument that it is not possible to keep the single market without freedom of movement. It is all or nothing. In or out: period.

This absolutism seems to me to be lacking in common sense - the product of people who don’t want to compromise saying that compromise is impossible.

And why should this be the case? Germany does not accept another pillar of the single market. It blocks free trade in services to maintain German professional standards and to prevent dilution of its privacy laws in a digital single market. France resists another pillar, free movement of capital, if this results in French firms being taken over. 

The UK has been asking for some relief on free movement, having been the most generous and open country in welcoming Eastern Europeans. David Cameron’s failure to negotiate an exemption, for which EU governments also deserve their share of the blame, is a major reason why we are where we are. The question now is whether, in the light of the Brexit vote, more sense will prevail to prevent a messy, nasty, costly divorce. Immigration policy is the key.

Reasonable Brexiteers will argue that they are not against immigration in principle, but merely want to see the ability to exercise the same controls we already apply to non-EU migrants. Reasonable Remainers will accept that it is irrational to exercise severe controls on people from India or Australia, while allowing unrestricted admission to anyone from Poland or Romania. And reasonable people, on both sides, can accept that we should give secure status to those who are already here (or there): Brits in Spain; Poles in Britain. A more rational approach to immigration could also stop the ridiculous practice of including overseas students in the immigration numbers.  A few overstay, illegally, as do tourists. But, as a group, they are not immigrants, and are a valuable source of income for universities. It is not helpful that May’s political baggage includes an obsession with curbing overseas students

A rational and reasonable approach to immigration will reflect the complexity of the issue. Different categories of people require different treatment. Refugees, dependents, workers, entrepreneurs (as well as students) and British emigrants all contribute to the net figure. This complexity makes it unhelpful to be obsessed by one single number, 100,000 net. This was her party’s arbitrary target which, as home secretary, she failed hopelessly to meet. Worryingly, she now seems to feel that this commitment must be maintained indefinitely. 

The debate about immigration has become angry and toxic and suffused with inflammatory rhetoric. Yet there is a fair degree of common ground. Hardly anyone is arguing that immigration should be totally uncontrolled. Conversely, almost all critics, even in Ukip, accept that some degree of net immigration is necessary. There should be broad agreement too on the benefits and costs. Migrant workers almost certainly make the economy more productive, since most are hard-working, flexible and skilled. Many set up companies employing British workers. Others are part of the global talent pool of international companies. They contribute more to the Treasury than they take out, if only because they are relatively young. 

But there are also genuine costs - not just blind prejudices. Serious, and economically literate, Labour MPs like Rachel Reeves have acknowledged the downside of immigration. More people on scarce development land pushes up land and house prices and rents. There are pressure points in public service provision. Companies are deprived of the incentive to train local workers or invest in automated equipment. Some companies exploit more competitive labour markets. The evidence is mixed.

There are some sensible compromises being aired. The most straightforward is to restrict freedom of movement to those who have already organised employment, not to those looking for work. The idea of applying a "brake" if immigration soars is also attractive but not straightforward in practice.

I believe the Prime Minister is right in principle to aim for a form of Brexit which delivers greater migration control but minimises economic disruption. If she can negotiate such a compromise - the so-called "soft" Brexit - she deserves the support of other parties. But incompetent negotiation, the undue influence of hard-line Brexiteers or an obsession with specific immigration targets may prevent such a compromise. In that case, Remainers will have every justification for blocking the outcome, by whatever constitutional means available.

Vince Cable served as secretary for business, innovation and skills during the Coalition government of 2010-2015. He was the Liberal Democrat MP for Twickenham between 1997 and 2015, and has served as deputy and acting leader of his party.