I’ve been following the shipwreck looking for a coastline that is Brexit. It’s not looking good, folks. I make no predictions but the magnitude of the task seems to be surpassing the competence of the political class in the UK.
At stake here are the lives of millions of mobile EU and UK citizens. No one knows for sure if they will be able to stay in the countries where they live and work. If they are allowed to remain, under what conditions will they be living in the UK or the EU?
If you are interested in the possible fates of UK citizens in the EU a recent Migration Policy Institute report Safe or Sorry? by Meghan Benton is a must read. She brings some much-needed clarity to the many issues to be resolved before any Briton in the EU can feel “safe.”
Benton makes a very important point at the beginning of her report and that is the diversity of UK citizens on the continent. It’s not one population, it’s many and while they share one concern (the ability to remain in Europe) what they need to be able to stay differs. For example, a young Brit working in Germany is living in a very different context from a student in France or a retiree in Spain. The first may be more concerned about continued access to the labor market, the second about having to pay non-EU tuition, and the last about the status of their pensions and having access to health care.
Access to the EU labor market: Under EU law UK citizens enjoy a number of benefits: free movement across the EU, recognition of professional credentials, and no labor market tests “which employment agencies impose to determine whether a local (or EU) worker could do the job before it can be offered to a third-country national.” Benton argues that UK citizens who are already working be “grandfathered” and allowed to keep their jobs (provided that they get residency) but those from the UK seeking jobs in the EU will find it much harder and she notes that there may already be discrimination against them because there is risk in hiring a UK citizen in the EU right now given their uncertain status.
Pensions: National pensions can be independent of the country of retirement: Americans in France get their Social Security from the US, French retirees in North Africa receive their retraite from France, and I even met a retired Scottish woman in Japan who was still drawing on her French pension. Every year she visits the French consulate and declares “I’m still alive” and the payments continue. The issue for the UK retirees in the US is not about continuing their pensions but about, as Benton notes, automatic increases in pension amounts based on inflation, for example. According to Benton the UK usually freezes pension amounts on the date the British retiree leaves the country but “exceptions have been made for those who leave for EEA countries and Switzerland…” (The EEA is the European Economic Area which includes all the EU member states plus Norway, Lichtenstein, and Iceland.)
The question is will the UK continue to “uprate” the pensions of UK citizens in the EU? It’s not obvious that they will because it’s a lot of money. Benton says that the UK could save 511 million GBP (573 million euros) over 5 years by freezing those pensions.
These are just two of the many issues facing Brexpats in the EU. Read Benton’s report for more about healthcare, for example.
I was very interested in what she had to say in the final section of her report Looking Ahead: Issues to Watch. Here are some things she thinks we should pay attention to as the deadline for Brexit gets closer and closer:
Changing UK Expat Communities in the EU: I think it’s safe to say that there will be far fewer new arrivals in the EU from the UK. In areas where there are large communities of Brits there will be a lack of new blood to invigorate and sustain them. At the same time there is likely to be an exodus back to the UK. What will these communities look like in 5 years?
Mass Movement of Retirees: If there is an exodus back to the UK will many if not most be retirees? If so that has some important consequences for the National Health Service and the pension system. The return of a large number of older citizens who are likely to need much more healthcare will put a strain on the system. And returning retirees are likely if their pensions are locked to have their pensions increased once they become UK residents. It may not be in the interest of the UK to have these people come back. From a purely financial perspective the ideal situation for the UK would be to have these retirees stay in their EU countries of residence with frozen pensions and either private healthcare insurance or access to the local national healthcare systems that would not be reimbursed by the UK. I would watch for new constraints on access to public services for the elderly returning from abroad.
An Unfriendly EU Labor Market: Benton points out that there is not much incentive right now to hire a UK worker. This is not likely to improve once they become “third-country nationals.” Benton says that those who will keep their jobs may find themselves stuck in them: too risky to try to find another employer and impediments to looking for work in another EU country.
Winners and Losers: As I said above not everyone is in the same boat here. Students who have the financial capacity to pay more tuition at EU universities will pay and stay. Same for retirees who have other sources of income and not just their state pensions. Furthermore, as Benton points out some will be able to get EU citizenship or will marry their EU partners and get automatic residency.
Given the early evidence that some Britons are exploring their options for claiming long-term residence or citizenship of other EU countries, the next few years may see these people – the affluent, resourceful, cosmopolitan – retain EU citizenship while the majority of Britons lose it (and the free-movement rights it brings).
In other words the Brexit rain will fall most heavily on the most vulnerable present and future UK expats in the EU: job seekers, retirees on fixed incomes and the “merely middle-class” (and below). Would Peter Mayle have been able to move to Provence under the conditions likely to be applicable after Brexit? One has to wonder. I do note, however, that he has become a French citizen and with the success of his books I’d say that he’s set.
And that, I think, drives home Benton’s point which is that Brexit has little impact on the lucky few. As for all the other Britons dreaming of a life in Europe this may be the end of “migration for the UK masses.”