2 Free movement of workers in the EU
| (30210)
16162/08
COM(08) 765
| Commission Communication — The impact of free movement of workers in the context of EU enlargement — Report on the transitional arrangements set out in the Accession Treaties of 2003 and 2005
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| Legal base | — |
| Document originated | 18 November 2008
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| Deposited in Parliament | 25 November 2008
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| Department | Home Office |
| Basis of consideration | EM of 26 January 2009
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Not cleared: oral evidence requested from Government Ministers
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Background
2.1 Article 39 of the EC Treaty establishes the right of EU nationals
to move freely to another Member State to take up employment.
2.2 A Treaty of 2003 provided for the accession to
the EU of ten countries on 1 May 2004.[4]
It also gave the 15 existing Member States discretion to place
temporary restrictions on access to their labour markets by workers
from the new Member States with the exception of those from Cyprus
and Malta. A Treaty of 2005 provided for the accession to the
EU of Bulgaria and Romania and included discretion for the 25
existing Member States to place temporary restrictions on the
access of Bulgarian and Romanian workers to their labour markets.
2.3 Both Treaties limited the total length of the
transitional period to seven years, made up of three phases:
- Member States could restrict
access for an initial two years;
- Member States could extend their restrictions
for up to a further three years; and
- restrictions should, in principle, cease at the
end of the second phase but a Member State might, in the event
of actual or potential serious disturbances to its labour market,
extend the restrictions until the end of the seven years since
accession.
2.4 The Commission's Communication and this report
use the following abbreviations:
- the EU-15
— the 15 Member States which comprised the EU before 1 May
2004;
- the EU-10 —
the new Member States which joined the EU on 1 May 2004;
- the EU-8 — the
Member States which joined in May 2004 and to which the transitional
arrangements apply for restricting access to the labour markets
of the EU-15 (that is, the EU-10 minus Cyprus and Malta);
- the EU-25 —
the Member States which comprised the EU before 1 January 2007;
- the EU-2 — Bulgaria
and Romania after their accession to the EU on 1 January 2007;
and
- the EU-27 —
the current members of the EU.
2.5 Eleven of the EU 15 have opened their labour
markets to workers from the EU-8. The remaining four apply various
restrictions.
2.6 Ten of the EU-25 have opened their labour markets
to workers from the EU-2; and 15 Member States restrict access
to workers from those countries.
The document
2.7 The Commission's Communication is intended to
provide a basis for the Council of Ministers to review the first
two years of the transitional arrangements for workers who are
nationals of the EU-2 and a further review of the application
of the transitional arrangements to the EU-8. The document provides
extensive statistical information about, for example, the nationality
of workers who have moved to other Member States, the main countries
of destination, and the distribution of mobile workers between
economic sectors such as agriculture and construction. For example:
- Polish nationals comprise about
25% of the EU nationals who have moved to other Member States
in the last four years; Romanian nationals account for about 19%
of the total; United Kingdom nationals account for 6%; and Bulgarians
for about 4%.
- The UK was the destination of 59% of Polish nationals
who were resident in another Member State for four years or less;
- France was the destination for 39% of the UK
nationals who were resident in another Member State for four years
or less;
- in 2003, 900,000 nationals of the EU-10 were
resident in the EU-15; the current number is about 2 million;
- 5% of Ireland's population of working-age comes
from the EU-10 — a higher proportion than in any other Member
State. In the UK, EU-10 nationals comprise 1.2% of the population
of working age;
- in all but two Member States, the number of recent
arrivals from non-EU countries exceeds the number from other Member
States (the exceptions are Ireland and Luxembourg); and
- most of the recent arrivals from the EU-10 have
found work in manufacturing, construction, hotels and restaurants,
business-related services and private households.
2.8 Commenting on the effect of labour mobility on
wages and employment, the Commission says that:
"Practically all available research finds little
impact of post-enlargement labour mobility on wages and employment
of local workers and no indication of serious labour market imbalances
through intra-EU mobility, even in those Member States with the
biggest inflows.
"For example, one study finds that wages in
the EU-15 are on average only 0.08% lower in the short run than
they would have been without additional mobility from the EU-8,
with no impact at all in the long run. The short-run impact on
unemployment is also found to be marginal, with an estimated increase
of the average EU-15 unemployment rate of only 0.04 percentage
points in the short run and a neutral effect in the longer run
due to the inflow of EU-8 workers and a similar moderate effect
concerning EU-2 mobility."[5]
2.9 The Commission's concludes, among other things,
that:
- workers from Bulgaria, Romania
and the EU-10 have helped to meet higher demand for labour in
the receiving countries and have, therefore, made a significant
contribution to sustained economic growth;
- there are signs that mobility flows from the
EU-2 and EU-8 may have peaked and that much of the recent mobility
of workers between Member States has been temporary;
- the volume and direction of mobility flows are
driven by the general demand for and supply of labour rather than
by restrictions on access to the labour market;
- restrictions may delay labour market adjustment
and increase undeclared work;
- the overall impact of post-enlargement mobility
has been positive; and
- experience suggests that cross-border mobility
tends to decline in times of economic downturn.
The Commission calls on Member States to consider
whether they need to continue restricting access to their labour
markets by workers from the new Member States.
The Government's view
2.10 In his Explanatory Memorandum of 26 January
2009, the Minister of State at the Home Office (Mr Phil Woolas)
tells us that nationals of the countries which joined the EU on
1 May 2004 are currently required to register under the Worker
Registration Scheme if they get a job in the UK. The Government
has not yet decided whether the requirement should continue after
1 May 2009.
2.11 He says, however, that the Government has decided
that the restrictions on access to the UK labour market by Romanian
and Bulgarian workers should continue in 2009 but that the quota
for the number of workers admitted under the Seasonal Agricultural
Workers Scheme should be increased from 16,250 to 21,250 for this
year; and that the quota of 3,500 places under the Sector Based
Scheme should remain unchanged but may be opened to a wider range
of occupations within the sector. The Government will review these
arrangements before the end of 2009.
2.12 The Minister says that:
"The Government consulted the Migration and
Advisory Committee on the likely labour market impacts of lifting
these restrictions. Its principal recommendation was that the
existing restrictions should not be lifted given the uncertainty
as to how far other Member States will open their labour markets
and given the current economic downturn which increases the risk
that opening up labour market access may result in the displacement
of UK workers. In addition to the MAC's assessment of the labour
market position, the Government believes that it remains sensible
to continue to take a gradual approach to opening up labour market
access for Bulgarians and Romanians in order to avoid undue pressure
on public services and social cohesion. While the number of nationals
of the Member States that joined the EU in 2004 coming here to
work has started to diminish, it is less clear how the current
economic downturn will impact on the stock of Accession workers
already present in the United Kingdom, both in terms of numbers
and in terms of any additional demands they may place on public
services and the benefits system." [6]
Conclusion
2.13 In our view, the Commission's Communication
contains much useful information and analysis about an issue of
major political importance. We are minded, therefore, to recommend
the document for debate in European Committee B. First, however,
there are some matters on which we believe it would be useful
to receive oral evidence from the Minister and from the Secretary
of State for Business, Enterprise and Regulatory Reform. Meanwhile,
we shall keep the document under scrutiny.
4 Cyprus, the Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Malta, Poland, Slovakia and Slovenia. Back
5
Commission Communication, section 4.3, pages 12-13, first and
second paragraphs. Back
6
Minister's Explanatory Memorandum of 26 January 2009, paragraph
16. Back
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