Over six months have now passed since the UK electorate voted to leave the EU. Whilst the UK has not yet formally notified the EU of its intention to withdraw, it intends to do so by the end of March. It has become clear that control of immigration is going to form a central plank of the Government's demands as it negotiates the UK's departure from the EU. We consider here the likely consequences for EEA nationals (including HNWIs and senior executives) and their families.
As we all know, on 23 June 2016, the majority of the UK electorate who voted in the referendum chose to leave the EU. The Government intends to give effect to that decision. This has caused great uncertainty for both individuals and businesses. In a major speech on 17 January, the Prime Minister set out the 12 objectives she will pursue in her negotiations to leave the EU. In light of this speech, we examine whether there is any greater clarity regarding the position of European nationals in the UK after Brexit.
Although the UK is leaving the EU, it is not just nationals of EU countries that will likely be affected. Any changes to immigration law for EU nationals will also affect the EEA countries (Iceland, Liechtenstein and Norway) and Switzerland, all of which currently benefit from the same freedom of movement provisions as EU nationals. For convenience, we therefore refer to EEA nationals rather than EU nationals.
Control of EEA immigration is a central plank of the UK's negotiating position
The Prime Minister has stated that she intends to formally serve notification to the EU of the UK's intention to leave under Article 50 of the Lisbon Treaty by the end of March 2017, and indeed Parliament has passed a motion calling on the Government to invoke Article 50 by 31 March. Invoking Article 50 will start the process of the UK's withdrawal from the EU.
It has become increasingly clear that the Government is going to place restrictions on freedom of movement of EEA nationals at the forefront of its demands in the negotiations to come. Immigration control is said to be one of the Government's red lines. The Prime Minister has made it clear on several occasions that EU freedom of movement must end. For instance, in her keynote speech at the Conservative Party Conference on 5 October 2016, she said:"[L]et's state one thing loud and clear: we are not leaving the European Union only to give up control of immigration all over again."
In her speech on 17 January, the Prime Minister included control of immigration amongst her 12 objectives. It is also noteworthy that she said that the UK will leave the Single Market because membership of it means accepting the "four freedoms" of goods, capital, services and people. It seems likely that one reason why the UK is not seeking to stay in the Single Market is because it would not be possible to restrict free movement of people without leaving.
Since the referendum, many have assumed that at the end of the day EEA nationals would still retain some form of privileged immigration status over non-EEA nationals – if for no other reason than to retain some reciprocal rights for British citizens in EEA countries. However, on 15 January 2017, Politico reported that "senior government sources" had said that the government was considering formally tying its industrial strategy for the economy to a new EU visa scheme that will aim to bring down the number of workers entering Britain by controlling access for "every sector and every skill level". One official familiar with the plans said that ministers favour extending the current regime for non-EU migrants to EU migrants. Although no final decision has been taken yet, it appears that ministers are now seriously talking about imposing the same rules on EU nationals as those currently imposed on the rest of the world.
At the end of the Prime Minister's speech on 17 January, she was asked by a journalist whether there would be a two tier system of immigration control for EU and non-EU nationals after the UK leaves the EU. She did not directly answer the question, stating simply that she wants to welcome the brightest and the best to Britain, and said that the Home Office is working on immigration rules according to the objectives that she had set out. Her answer again seems to suggest that the same immigration rules will apply to EEA and non-EEA nationals, who will be subject to rules designed to attract the brightest and the best. On the other hand, if the Government takes the view that the brightest and the best are to be found in the EEA, then conceivably different rules could apply to those countries.
It must be stressed that nothing is yet definite and that any changes will not take place until the UK actually leaves the EU, something that is likely to take two years from the date that Article 50 is triggered. It is also entirely possible that the statements being made at the moment about the future status of EU nationals simply form part of the Government's negotiating strategy. By not ruling anything out at the outset, the Government will be in a position to make concessions in the course of the negotiations.
However, in view of the rhetoric being deployed, at this stage absolutely nothing can be excluded. This means that EEA nationals could end up being subject to exactly the same immigration controls as non-EEA nationals. If this happens, then under the current immigration rules they would require visas to enter and remain in the UK to work, to be self-employed, to be a student, or to live here as a self-sufficient person. They would be subject to minimum income requirements, and would not be automatically allowed to have their spouses or children here.
Such changes would have a serious impact upon the ability of EEA nationals to live and work in the UK. For instance, EEA nationals of independent wealth are currently free to move to the UK as self-sufficient persons. They are not required to make any investment here. All they need is comprehensive medical insurance. In contrast, the only non-EEA immigration category which does not require the migrant to work or study is the Tier 1 Investor category, which requires an investment of at least £2,000,000 in the UK in order to obtain leave to remain here.
Similarly, EEA nationals are currently free to establish themselves as self-employed persons or to take employment here. There is no minimum investment or income requirement. The nearest equivalents for non-EEA nationals are the Tier 1 Entrepreneur visa (which requires access to £200,000 in investment funds) or the Tier 2 visa for employees (which is restricted to certain types of employment, requires a sponsor, and has a minimum income requirement).
EEA students are currently treated as domestic students for fee purposes. They are free to study at any institution. At the end of their course, they are free to enter employment here. Non-EEA students in contrast are subject to much higher fees. They require a sponsor and a Tier 4 visa. There are limitations on the types of courses and institutions at which they can study. Tier 4 visas do not lead to settlement and there are limits upon the number of years non-EEA migrants can study in the UK. It should be noted that the current Prime Minister, when she was in charge of the Home Office, believed that the Tier 4 route was abused and introduced numerous restrictions to the Immigration Rules for students. She also resisted pressure from David Cameron to exclude students from the net migration statistics. It may therefore become increasingly difficult for EEA students to come to the UK.
Currently, EEA nationals exercising Treaty rights are free to bring their families, even if they are non-EEA nationals, with them. However, most of the non-EEA immigration categories have additional financial requirements for partners and children. Tier 4 students are generally not even allowed to bring their families with them. If extended to EEA nationals, these restrictions would constitute a significant deterrent to migration to the UK for many individuals.
Furthermore, non-EEA nationals are subjected to very expensive fees simply to make their applications, and have to pay an annual contribution to the NHS for each member of the family residing here. These costs, along with the bureaucracy involved in making an application, would have additional potential to deter EEA migrants if applied to them.
Finally, it is entirely possible that British citizens may also lose the right to bring an EEA spouse, civil partner or child to reside with them in the UK unless they satisfy minimum income requirements.
EEA Nationals living in the UK now
All of the above is based upon a worst-case scenario – that EEA nationals become subject to general immigration controls after Brexit takes place. At the end of the day, the Government may strike a deal with the EU whereby some reciprocal free movement rights are preserved and a less onerous immigration regime is introduced for EEA nationals than for non-EEA nationals. Nevertheless, given that an extension of non-EEA immigration controls to EEA nationals is under serious consideration, we would strongly advise anyone who is in a position to do so to take steps now to secure their right of residence in the UK. As we do not know what the position of EEA nationals will be once the UK leaves the EU, the only guaranteed way of obtaining such a right is by acquiring British citizenship.
It should also be emphasised that current free movement rights will be fully preserved at the very least until such time as the UK officially leaves the EU. The UK is unlikely to leave the UK until the two year Article 50 process has concluded: ie not before the end of March 2019 on the current timetable. In her speech on 17 January, the Prime Minister said that she wanted an agreement to have been reached by the end of this two year period. However, she added that she believed there would be a phased process of implementation from that point onwards: ie transitional arrangements. She specifically identified immigration controls as one area to which such arrangements might apply.
We do not at this stage know what the content of those arrangements would be, or how long they might last. However, we believe that it is likely that a 'cut off point' will be set. It is likely that people who were present in the UK for a certain period of time before this cut off point will be exempted from some or all of the post-Brexit restrictions on immigration. However, it has to be said that some pro-Leave groups are lobbying for the Government to set a cut off date shortly after Article 50 is triggered.
The Government's current position regarding EEA nationals already resident in the UK is one of deliberate uncertainty. Essentially, the Government does not want to commit to their status at least until the situation of British citizens resident in the EEA is resolved. The Prime Minister told the Commons on 19 December:
"I made it clear to the other EU leaders that it remains my objective that we give reassurance early on in the negotiations to EU citizens living in the UK, and UK citizens living in EU countries, that their right to stay where they have made their homes will be protected by our withdrawal.
This is an issue which I would like to agree quickly but clearly that requires the agreement of the rest of the EU."
She repeated this position on 17 January, stating as one of her 12 objectives that she wants to guarantee the rights of EEA nationals who are already living in Britain, and of British nationals living in Europe as soon as early as possible. She said that she has told EU leaders that this is something a deal could be reached on now.
Consequently, whilst there is every reason to hope that EEA nationals already here will be allowed to stay, there is as yet no guarantee that they will be able to do so.
What should EEA nationals do now to protect their status?
In light of the current uncertainty and the real possibility that EEA nationals could at some point become subject to the same immigration controls as currently apply to non-EEA nationals, we would advise anyone who sees their future as being in the UK to take action to protect their right to reside here as soon as possible. As stated, it is likely that a cut off date will be imposed at some point in the future, and different rules may apply to applications made after that date. It is unclear when that will happen but is possible that in order to benefit from any transitional arrangements, EEA nationals may need to show that they have been in the UK prior to the date of the Article 50 notice, the date of the formal exit from the EU or at some cut off date in between or later.
The action that can be taken is as follows:
(i) People who have a permanent residence card or certificate and have been living in the UK for a period of at least 6 years can apply for British citizenship – as stated, this is the only route which we can currently say will guarantee the right to stay;
(ii) People who have been living in the UK for 5 years or more should apply for a permanent residence card or certificate. People who have become permanently resident are most likely to benefit from any reciprocal agreement between the UK and the EU regarding the status of their nationals; and
(iii) People who have been in the UK for less than 5 years would be well advised to apply for a Registration Certificate, evidencing their right to live in the UK. This will assist in any future permanent residence or citizenship application. Furthermore, it is possible that EEA nationals who are resident in the UK on any future cut off date will benefit from reciprocal agreements. Proof of residence may therefore become of crucial importance.
We point out here that there have been a number of stories in the press about individuals experiencing difficulty in obtaining permanent residence. In particular, the Home Office are reported to have been rejecting applications from EEA students and self-sufficient persons who have been unable to produce evidence that they have held comprehensive sickness insurance throughout the period of their residence (workers and self-employed persons are not required to hold such insurance). Applications have also been rejected because of the failure to include all of the relevant supporting documents.
Another factor to take into account is that there are about 3 million EEA nationals currently resident in the UK. In addition, there are many non-EEA family members of EEA nationals residing here. Many will have seen no need to formalise their status before 23 June because residence cards were not compulsory. One effect of the referendum is that it has suddenly become of urgent importance for a very large number of people to obtain permanent residence and/or British nationality. There will therefore inevitably be delays caused by the sheer volume of applications.
The process of obtaining British nationality has been further complicated by a change to the regulations made in November 2015, under which a person with permanent residence who wishes to apply for British citizenship must first apply for a permanent residence certificate or card. Previously it was possible simply to adduce evidence of residence for the relevant period. The requirement that applicants must have a permanent residence card adds an additional layer of bureaucracy to the process.
An additional reason for taking action now, therefore, is to allow sufficient time to deal with any problems caused by unexpected rejection of the application or delay on the part of the Home Office.
EEA Nationals intending to move to the UK
For those who are considering moving to the UK for the long term in the near future, we think it would be prudent to accelerate those plans and establish themselves here sooner, rather than later.
As noted above, there is a risk that once the UK leaves the EU, EEA nationals will be brought into line with non-EEA nationals for immigration purposes. At the very least, the rules will become more restrictive than they are now. Furthermore, it is almost certain that the rules will be more onerous for those who have not been here long. Given the possibility that this differentiation may take place from some as yet unidentified cut off point, we believe that any EEA nationals considering migrating to the UK for the long term in the near future would be best advised to do so as soon as possible.
Individuals thinking of moving to the UK for the short term in the near future will not be affected as it is likely that the current rules will continue to apply for at least two years.
Although it is still very unclear what the position for EEA nationals will be after the UK leaves the EU, in light of recent Government statements, we would urge any EEA nationals who see their long-term future as being in the UK not to be complacent. We think that there is a real possibility that there will be a single-tier immigration regime after the UK leaves, and that the same rules will apply to both EEA and non-EEA nationals. Action taken now to obtain British citizenship, permanent residence or a residence card may prevent unnecessary, serious problems in the future.
We will issue further updates when significant developments occur. In the meantime, if there is anything on this subject that you would like to discuss, please contact Lee Jackson (firstname.lastname@example.org; +44 (0)20 3375 7194) or any other member of our Immigration team.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, January 2017