Applications for permanent residency

Summary

The request sought documents regarding the impact of No Deal Brexit and permanent residency applications on the Isle of Man's net migration, skilled workforce, and population growth. The Cabinet Office disclosed two documents totaling 18 pages, though the majority of the content within the provided text is redacted.

Key Facts

• The response included a confidential National Strategy Group paper from 2018.
• The document acknowledges that the Isle of Man operates a work permit system but still has relatively free movement of EU citizens.
• EU migration is identified as important for the labour market, particularly in lower-skilled and entry-level occupations.
• The paper references Bank of England forecasts suggesting a reversal of net migration trends with EU workers leaving in large numbers.
• The UK is noted as likely to struggle filling vacancies in sectors like agriculture and hospitality that rely on EU labour.

Data Disclosed

• 145,000 EU nationals emigrated in the year leading up to September 2018
• 15,000 more people from EU8 countries departed the UK than immigrated
• Nearly half of all highly skilled EU workers could leave Britain before 2022
• 18 pages
• 2 documents
• 2019-09-09
• 2019-09-25
• 2018

Original Request

In the year leading up to September 2018, around 145,000 EU nationals had emigrated in the past year, with many being from eastern European countries such as Poland, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovakia and Slovenia. There were 15,000 more people from these countries, known as the EU8, who departed the UK than immigrated. A report from Deloitte in 2017 stated that nearly half of all highly skilled EU workers could leave Britain before 2022. What is and what will be the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth? Please provide all meeting notes, minutes, papers, assessments, impact assessments, forecasts, analysis, lists of key dates, documents (in whatever form), requisition notes and phone transcriptions as well as any other documents that are information pertaining to the impact of applications for permanent residency in the Isle of Man on net migration and population growth forecasts, the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth. Please provide all information pertaining to what the Isle of Man Government and the Council of Ministers are proposing/have agreed and are implementing to mitigate, manage and compensate for the effects of the impact of applications for permanent residency in the Isle of Man on net migration and population growth forecasts, the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth. Thank you.

Data Tables (3)

Full Response Text

CONFIDENTIAL
Page 1

NSG Paper No. 18/XX

PAPER FOR NATIONAL STRATEGY GROUP

From

Chief Officer

Responsible Departmental Officers Please complete
Cut ups to be sent to As above Date of Meeting

Title

Collective Responsibility: (Mandatory field, please choose an option)

Not a Collective Responsibility matter Which of the 3 Government Strategic Objectives does this proposal comply with?

Not Applicable Which of the Council of Ministers Sub- Committees will consider this proposal?

National Strategy Group The proposal relates only to the Department’s core or statutory responsibilities

Not Applicable

Does the paper refer to a specific corporate objective or target? Ref:
Has appropriate consultation taken place? Not applicable Are there any resource/personnel implications? Not applicable Are there any inter-Departmental implications?
Not applicable If yes, which others Departments are involved?

What is the intention of this paper?
Choose an item. Purpose of the Paper:

Background:

Recommendations (if any):

Appendix (if any):

Chief Executive Department [Day / Month/ 2018]

CONFIDENTIAL
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Contents

1. [redacted] ............................................................................................................. 3
2. [redacted] ............................................................................................................. 4
3. [redacted] ............................................................................................................ 11
4. [redacted] ............................................................................................................ 13
5. [redacted] ............................................................................................................ 14
6. Conclusions ........................................................................................................... 15
7. Recommendations ................................................................................................. 15

CONFIDENTIAL
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1. [redacted] [redacted] 1.1 [redacted]. 1.2 [redacted]: a) [redacted]; b) [redacted]; c) [redacted];
   d) [redacted]. e) [redacted]. 1.3 [redacted]. 1.4 [redacted].

CONFIDENTIAL
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1. [redacted] 2.1 [redacted]. [redacted] 2.2 [redacted].
   2.3 [redacted]. 2.4 [redacted]. 2.5 [redacted].
   2.6 [redacted]: a) [redacted]; b) [redacted]; c) [redacted]; d) [redacted]. 2.7 [redacted]. 2.8 [redacted]. 2.9 [redacted]. [redacted] 2.10 [redacted].
   [redacted] 2.11 [redacted]: a) [redacted]. b) [redacted]. c) [redacted]. d) [redacted]. e) [redacted]. f) Inward flow of labour (immigration) reverses, resulting in a reduction in labour supply, predominately as EU workers return home as the value of their overseas remittances fall. 2.12 [redacted]. 2.13 [redacted]. CONFIDENTIAL
   Page 5

[redacted] 2.14 [redacted].
GDP 2.15 [redacted].
2.16 [redacted]. 2.17 [redacted]:  [redacted];  [redacted].
 [redacted].

Figure 1 [redacted]

[redacted] 2.18 [redacted]. 2.19 [redacted].
2.20 [redacted]. 2.21 [redacted]. Figure 2 [redacted]

2.22 [redacted].
Unemployment and jobs EU Labour 2.23 Although the Island operates a work permit system, there is still relatively free movement of EU citizens. This migration is important to the labour market, particularly in lower-skilled / entry level occupations. A central assumption from the Bank of England forecasts is that the trend for net migration into the UK will be reversed, with EU workers leaving in large numbers. The UK is therefore likely to struggle to fill vacancies for entry-level occupations, (eg in agriculture and hospitality) which typically rely on relatively cheap EU labour. CONFIDENTIAL
Page 6

2.24 At a very high level, the worst case scenario in the Bank of England reports that immigration will reverse. Assuming that the people leaving the UK are EU workers, this equates to around 5% of total UK-based EU workers that will leave the country each year. Applying the same factors to the Isle of Man equates to around 100 workers leaving the Island each year. Based on the weighted average level of taxation and National Insurance for sectors in which EU migrants are working, this could equate to around £200,000 loss of Government Income per year. This excludes the multiplier effect of these workers’ household spending.
2.25 For the Isle of Man, the Census in 2016 recorded over 1,789 EU nationals working in the Island. Certain sectors are more reliant than others on EU workers and the emigration of EU nationals could have severe impacts. Given the overall shortage of labour supply, this could lead to further inflationary pressures as the bargaining power of workers increases. 2.26 The below charts show the reliance of particular sectors on EU labour. In particular, the tourism-focussed sectors, and Food & Drink manufacturing are vulnerable to a loss of EU labour, especially given the current difficulties in filling vacancies.
Figure 3 EU Workers by DfE Agency CONFIDENTIAL
Page 7

Figure 4 EU Workers by Economic Sector

CONFIDENTIAL
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2.27 The below chart shows the reliance on EU labour for particular skillsets.

Figure 5 EU Workers by Occupation

[redacted] 2.28 [redacted]. 2.29 [redacted]. ‘[redacted]

2.30 [redacted].
2.31 [redacted]. Table 1 [redacted] [redacted] 2.32 [redacted].

CONFIDENTIAL
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Table 2 [redacted]

‘[redacted]

2.33 [redacted].
2.34 [redacted].

CONFIDENTIAL
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Table 3 [redacted] [redacted] 2.35 [redacted]. Table 4 [redacted]

2.36 [redacted].

CONFIDENTIAL
Page 11

1. [redacted] Financial Services 3.1 [redacted].
   3.2 [redacted]. 3.3 The Finance sector is also relatively insulated from a loss of access EU labour, with EU workers making up only a small proportion of the total labour force. [redacted] 3.4 [redacted]. 3.5 [redacted]. Engineering, Manufacturing, and Food exports
   3.6 [redacted]. 3.7 [redacted]. 3.8 [redacted].
   3.9 [redacted]. 3.10 [redacted].
   3.11 [redacted].
   3.12 [redacted]. 3.13 [redacted]. 3.14 [redacted]. 3.15 Some areas of Food and Drink manufacturing are heavily reliant on EU labour (such as shellfish preparation). Given there are already difficulties recruiting for these positions, a loss of access to the EU labour market could be a serious threat to the viability of the industry. [redacted] 3.16 [redacted].
   3.17 [redacted]. Visitor economy CONFIDENTIAL
   Page 12

3.18 [redacted]. 3.19 A longer term risk is around the availability of workers. Currently EU workers make up a significant proportion of workers in Visitor-focussed occupations. Tourist Accommodation, and Entertainment & Catering are the two sectors most reliant on EU labour, while the Visit Agency sectors as a whole are significantly more reliant on EU labour than the wider economy. Public sector 3.20 [redacted]. The public sector is not particularly reliant on EU workers.

CONFIDENTIAL
Page 13

1. [redacted] 4.1 [redacted]:  [redacted],
    [redacted]; and  [redacted]. 4.2 [redacted]. 4.3 [redacted]. Table 5 [redacted] Table 6 [redacted] Notes and Assumptions 4.4 [redacted]. 4.5 [redacted]. 4.6 [redacted]:  [redacted];  [redacted]; and
    [redacted]. [redacted]. [redacted]: Table 7 [redacted] Within these estimates, no allowance has been made in the situation where a proportion of the individuals made unemployed choose to leave the Island in order to obtain work, as no information is available upon which to make a reliable estimate. [redacted]. 4.7 [redacted]. 4.8 The public sector pensions, in a similar fashion to the state pension, have a direct link to UK CPI inflation, so if the UK experiences the level of inflation estimated by the Bank of England then there will be significant upward pressure. The cost increase presented in the two tables represents the additional cost per year between ‘normal’ inflation of 2% and the higher rates of inflation experienced in each financial year. CONFIDENTIAL
   Page 14

4.9 [redacted].
4.10 [redacted]. 5. [redacted] 5.1 [redacted]. 5.2 [redacted]. Table 8 [redacted] 5.3 [redacted]. 5.4 [redacted].

CONFIDENTIAL
Page 15

1. Conclusions 6.1 [redacted]. 6.2 [redacted]. 6.3 [redacted]. 6.4 In particular, data on EU nationals living in the Island suggests that a number of these people - who are for the most part performing low skilled, low paid jobs e.g. in the hospitality industry - will not have the disposable income or desire to stay and so a number of these - in the region of 5 % (around 100- 200 pa in number) - can be expected to leave the Island. 6.5 [redacted].
2. Recommendations 7.1 [redacted]. 7.2 [redacted]. 7.3 [redacted]: [redacted] 7.4 [redacted]. 7.5 [redacted]. [redacted]

7.6 [redacted]. Policy Intervention 3: Working population - attraction and retention of labour

7.7 If there is a large decrease in the working population due to the emigration of EU nationals, and / or the departure of highly-qualified individuals to alternative jurisdictions, there may be a case to introduce further measures to increase the working population. Such initiatives may need to cover both skilled and unskilled labour, depending on the level of decrease in the working population and the sectors most affected.

Government Office Douglas Isle of Man IM1 3PN Telephone: (+44) 01624 686244 Website: www.gov.im/co

Our ref: 937848 25 September 2019

Dear ###

We write further to your request received on 9 September 2019 which states:

"In the year leading up to September 2018, around 145,000 EU nationals had emigrated in the past year, with many being from eastern European countries such as Poland, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Slovakia and Slovenia. There were 15,000 more people from these countries, known as the EU8, who departed the UK than immigrated. A report from Deloitte in 2017 stated that nearly half of all highly skilled EU workers could leave Britain before 2022. What is and what will be the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth? Please provide all meeting notes, minutes, papers, assessments, impact assessments, forecasts, analysis, lists of key dates, documents (in whatever form), requisition notes and phone transcriptions as well as any other documents that are information pertaining to the impact of applications for permanent residency in the Isle of Man on net migration and population growth forecasts, the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth. Please provide all information pertaining to what the Isle of Man Government and the Council of Ministers are proposing/have agreed and are implementing to mitigate, manage and compensate for the effects of the impact of applications for permanent residency in the Isle of Man on net migration and population growth forecasts, the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth. Thank you."

On 27 August 2019 we asked for further clarification from you in accordance with Section 14(1)(a) of the Freedom of Information Act 2015 to assist with identifying the information requested.

Specifically we asked “In particular, it would be helpful with regards to your request for information "...pertaining to the impact of applications for permanent residency in the Isle of Man" - can you clarify whether you mean: i) permanent residency applied for under the Immigration (European Economic Area) Regulations or ii) an immigration status applied for under the European Union Settlement Scheme created via Appendix EU of the Immigration Rules. In order to provide advice and assistance, with our request for clarification, i) permanent residency applied for under the Immigration (European Economic Area) Regulations pre-dates the United Kingdom's withdrawal from the European Union; ii) an immigration status applied for under the European Union Settlement Scheme is a new status that has been created within the Immigration Rules as result of the United Kingdom's withdrawal from the European Union. For your information, these documents are primarily applied for by individuals already resident on the Isle of Man.” You replied on 9 September 2019 providing the following clarification: “What is and what will be the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth?

Please provide all meeting notes, minutes, papers, assessments, impact assessments, forecasts, analysis, lists of key dates, documents (in whatever form), requisition notes and phone transcriptions as well as any other documents that are information pertaining to the impact of applications for permanent residency in the Isle of Man on net migration and population growth forecasts, the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth.

Please then answer the following as a follow up:

Please provide all information pertaining to what the Isle of Man Government and the Council of Ministers are proposing/have agreed and are implementing to mitigate, manage and compensate for the effects of the impact of applications for permanent residency in the Isle of Man on net migration and population growth forecasts, the impact of a No Deal BREXIT on net migration to the Isle of Man, the Island's skilled workforce and the projections for population growth;

And with reference to: i) permanent residency applied for under the Immigration (European Economic Area) Regulations; ii) immigration status applied for under the European Union Settlement Scheme.” We have conducted a search for recorded information that falls within the scope of your request. Please find attached a draft paper held by Cabinet Office that falls within the scope of your clarified request. Parts of the draft paper are redacted as they fall outside of the scope of your request. Please quote the reference number 937848 in any future communications.

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