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The UK economy finds no easy answers to Brexit

With EU migrant arrivals to the UK in rapid decline, it gets worse for key sectors

The UK’s situation is getting more difficult by the day following the Brexit vote, thus creating new implications and challenges for the economy. Besides what we mentioned in previous articles, the latest data reveal that EU nationals have started to leave Britain in fear of any prospective development that might result in them losing their privileges as European citizens.

According to the data, the number of immigrants declined in March by 81,000 on a yearly basis to 246,000, brought on by a fall in the number of arrivals from EU countries. There were a further 17,000 EU nationals who left the UK to relocate, either in their home countries or to other EU countries such as Germany, where economic conditions are getting better and they are treated as full-fledged citizens. The UK will withdraw such privileges on leaving the EU.

Moreover, further exodus of EU citizens from the UK is expected over the course of the coming period given that there are better opportunities available in other EU countries. And because they are fully convinced that “You don’t need anyone who doesn’t need you”, placing a further burden on the British economy. These details were not taken into account when voters took the Brexit decision.

The first of Brexit’s many implications has directly affected the tourism and service sector, with hotels and restaurants suffering from a lack of easily available workers. The manpower that used to come from Eastern Europe constituted 80 per cent of workers in this sector.

However, many owners are now complaining about the shortages after 17,000 workers left the country, with no replacements to fill. This leaves owners in the lurch. It is expected the situation will get even worse — and complicated.

The UK’s decision-makers are perplexed by the new obstacles as possible solutions are not easy. And to reassure EU workers in the UK, the immigration minister stated that the UK will always welcome EU immigrants even after exiting the EU.

Yet the situation now is completely different. Most EU citizens came to the UK on the assumption that they would be treated like citizens with privileges and permanent residency. But now the circumstances are not encouraging — from an EU perspective — as EU citizens will have to conduct complicated procedures like any other immigrant.

The alternative, seems to be worse than that. According to the economic reality, Britain needs 100,000 immigrants per year and it has set that as a goal, meaning the EU immigration pause will force UK to open its doors to those from developing countries.

This would be a move with serious implications as the vast majority of incoming migrants will be uneducated and need training and help, apart from the profound cultural differences that may arise and lead to many a problem. But attracting professionals from overseas will be an important asset for the UK economy.

At the end of the day, the only way out is to continue treating EU immigrants as normal citizens, but that’s seen as a complicated legal matter because the UK will break free from many EU laws that give citizens such rights.

As a result, the UK will have to amend some of its internal laws, which is not an easy thing to do, as the UK is no longer a EU member, thus making for discrimination against other immigrants. Undeniably, the UK has put itself in a great and complicated dilemma, and the fact is that it is not easy to overcome the Brexit implications in a few years after 45 years of EU membership.

Consequently, there is a high cost the UK needs to pay.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.

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