The different pathways to citizenship on offer to different types of immigrant mean that some groups can gain a great deal from citizenship, while others will obtain only a few additional advantages relative to their current status. Consequently, the toughening of British citizenship policy has had a disproportionate effect on certain groups. Until recently, EU free movement rules meant that EU migrants could largely obviate the implications of citizenship policy. Following the referendum, however, the question of access to the benefits of citizenship applies with equal salience to EU and non-EU migrants.
We have identified two categories of migrant who would derive substantial benefits from citizenship, but for whom increasing restrictions make its acquisition particularly difficult: the very highly skilled who are globally sought-after, and migrants on low wages.
Highly skilled and high net-worth individuals
The UK today competes with other advanced economies around the globe to attract the same pool of world-class talent. OECD research has shown that a growing range of countries increasingly compete to attract this mobile class of highly skilled workers (OECD 2008).
An ever-increasing number of industries and companies based in the UK rely on attracting ‘highly skilled individuals’, by which term we refer to those at the very top of their industry or sector, those with specific skills that are highly sought-after across the world, and high net-worth individuals. These migrants can bring huge advantages to the countries where they settle: they pay tax, boost innovation, improve firms’ productivity, invest in local economies and employ people.
There is no room for complacency in attracting and retaining the global talent – something that Britain has historically been well-placed to do. While this is partly due to factors such as culture and language, much of Britain’s attractiveness can be attributed to our membership of the EU – specifically our access to the single market and close links with the European economy.
In the post-Brexit world, it is imperative that the UK is able to remain an attractive destination for the top tier of international talent, and to retain the talent that is already here. The survival of our financial services, telecommunications, creative and technological sectors could depend on it. However, given the result of the EU referendum and the recent tightening of our immigration system, the UK’s citizenship policies risk compelling us to make do with second-tier global talent.
As competition continues to increase, countries need to work ever harder to attract these individuals: the share of mobile global talent choosing to settle in OECD countries has been in decline for some time (OECD 2008). While as a country the UK has a good track-record of encouraging the highly-skilled to our shores, the realities of globalisation in the 21st century make the task harder than in the 20th century. The main reason for this is that highly talented people now come from a range of emerging economies. In some cases, the UK’s historical connections through colonialism and the Commonwealth have provided us with strong cultural connections that help attract talent from emerging economies. Many highly talented Indians and Kenyans, for example, speak English, have been educated in an education system similar to that of the UK, and have a good knowledge of British culture and society. However, these legacy bonds from the 20th century are fraying: the next generation of Indians and Kenyans will be less attracted to Britain for these reasons than current ones. Furthermore, many emerging economies do not have any particularly strong cultural links with the UK, so historical migration pathways to it are not well-entrenched. Countries such as Brazil, Indonesia and China will be key sources of global talent as their economies advance. If Britain is to appeal to top talent from these countries over our competitors, we will need to do more than simply rely on the residual dynamics of capital and migration flows and cultural connections from the previous century.
Furthermore, competition between countries around the world for highly talented and wealthy individuals is increasing: countries across the EU, North America and the Caribbean are adapting their immigration and citizenship regimes to maximize their attractiveness (Barclays 2014). OECD countries vary in terms of the ‘intensity’ of their policies designed to attract highly skilled immigrants (OECD 2008), and Britain is by no means leading the field.
However, the UK is in many other ways a highly attractive destination for this talent: we speak English, have a liberalised economy with strong rule of law, a thriving cultural life and excellent schools and universities (UKTI 2013). The solution is not, therefore, to increase the raw number of skilled migrants who seek to come here by encouraging the medium-skilled (see Padademetriou and Sumption 2013). Rather, the challenge for Britain is two-fold. First, we need to attract the very best of the international crop. Second, we must ensure that those who are already here are not enticed, post-Brexit, by the offers of our competitor economies. The length of time that it takes to obtain British citizenship and its attendant benefits, and the complexity and opacity of the British system, risks becoming highly off-putting to these migrants.
British citizenship, as opposed to an investor or entrepreneur visa or even leave to remain, can offer this world-class talent a range of advantages. First, a British passport is a passport to the world. The World Tourism Organisation in 2015 rated the UK top in its index of countries whose citizens are affected the least by visa restrictions (UNWTO 2015). Obtaining a visa is often significantly more straightforward for those with UK passports than those of other countries, because of the UK’s strong rule of law, trustworthy passport system and strong mutual-recognition agreements with other countries. The value of this mobility to world-class talent is hard to underestimate: a non-EU immigrant businesswoman who has obtained British citizenship is able to travel to Paris or Frankfurt for meetings with far greater ease than she would if she had to apply for a visa with her pre-existing citizenship.
Second, obtaining British citizenship offers security to the new citizen. This is a key concern of individuals of high-net worth and globally competitive talent, who tend to demonstrate a highly pragmatic approach to mobility – settling in places that can simultaneously help them to earn and secure their wealth, educate their children to a high standard, and further their business development (Barclays 2014). The absence of a pathway to British citizenship for some types of migrant makes the UK a less attractive destination to those affected: having the full protection of UK law, security from expulsion and the robustness of the laws governing wealth, assets and inheritance that UK citizens enjoy are key concerns for the globally mobile. If the UK’s competitors offer these things, and the UK itself restricts access to citizenship, we will not be able to attract the very top class of global talent.
These migrants are keen to secure British citizenship quickly in order to travel with their new passport (often in the course of their work), and to gain the security they need to make investments and plan for their personal lives. They are on average wealthier than the average migrant, and their employers are keen to spend money in order to attract them. Our current citizenship system is unyielding in accommodating the requirements of those who are time-poor but cash-rich. High net-worth individuals looking to settle in another country are more likely to choose that on the basis of its citizenship programme than on its business merits (EIU 2013). Similarly, those of world-class talent are able to shop around to choose the best option for them, to an extent that other migrants are not.
The British citizenship system should be reformed to make it more attractive to those with world-class talents. Other countries have adapted their citizenship systems to take account of the competition for global skills. Germany once had an historically restrictive conception of citizenship, as discussed above. In the course of our interviews with German policymakers, we were told that the advantages that skilled migrants can gain from citizenship (most notably the ability to travel for their work), and how attractive those advantages are to the highly mobile, wealthy and talented, were among the key concerns of those behind the liberalisation of the German system. Britain is running the risk of being outpaced by countries like Germany in the race for global talent. For example, highly skilled migrants to Germany are able to apply for permanent residency immediately, and migrants can also apply for a permit that allows them to travel and work in other EU countries – an attractive offer to those whose skills enable them to shop around for the best deal.
Tier 1 (investor) visas
Under the UK’s current arrangements, high net-worth migrants can apply for the tier 1 (investor) visa. This requires an investment in the UK of at least £2 million. This group of migrants can also reduce the time required to apply for settlement (and thus for citizenship): if they invest £10 million they can apply for settlement after two years, or after three years if they have invest £5 million.
Clearly, very few people have disposable incomes large enough to spend these kinds of sums on a visa that offers a clear pathway to settlement and citizenship: only the super-wealthy can avail themselves of this pathway to settlement. It is also a very blunt means of facilitating access to the UK. Crucially, it appeals (at least in theory) to the extremely wealthy, while offering no route to citizenship to the highly-skilled migrant, nor those at the top of their industry globally, unless they have millions of pounds at their disposal to spend in this way.
Indeed, investor visas have proven to be a damp squib. After the investment threshold was raised last year from £1 million to £2 million, applications fell by 76 per cent (ONS 2016). Given that the investment requirement can be satisfied by purchasing UK gilts, some have suggested that it is the only way to earn money by applying for a British visa. Alternative routes, such as entrepreneur visas, offer no route to settlement and citizenship, so those with globally attractive skill sets are likely to find other countries more attractive.
It may seem unfair to suggest that the highly talented, who already enjoy extra advantages, should get special consideration in naturalisation rules. However, by passing up the opportunity to attract them to our shores, the UK will lose the opportunities that their talents and wealth could open up. Opportunities will be lost to generate growth, creativity and jobs – opportunities that our international competitors will realise instead.
Migrants on low incomes
The ever-increasing price of naturalisation in the UK puts citizenship beyond the reach of migrants on low wages, so that even those who meet the other stringent requirements are priced out. These costs can therefore have a significant effect on the life chances of many migrants from outside the EU. For EU migrants currently in the UK, who gained a range of free movements rights upon establishing residency, their implications are less severe – for now. In the post-Brexit world, their effects will also be felt by Europeans.
This is because migrants on low wages derive a significant dividend from naturalisation above and beyond the suite of core rights that all citizens obtain. This is why migrants from, for example, Turkey and Somalia – two non-EU countries whose UK-resident communities tend to be low-income – are among those proportionately most likely to apply for British citizenship (Ford 2015).
The benefits of citizenship have become more valuable to low-income migrants as a consequence of recent reforms to the immigration system. Responsibility for immigration checks is increasingly devolved to front-line private sector organisations. Landlords can now be prosecuted if they are found to have rented accommodation to those without the right to reside in the UK in cases in which it is ‘reasonably apparent’ that the person had no such right (Home Office 2016b). Similarly, since 2014 banks and building societies have been responsible for ensuring the immigration status of those they allow to open bank accounts. Employers are also liable for prosecution if they employ those without legal status. These reforms were introduced as part of the government’s drive to create a hostile environment for illegal immigrants.
However, these reforms also pose problems for migrants who do have a legal right to be in the UK, and to rent a home, work or open a bank account. A report by the Joint Council for the Welfare of Immigrants on the obligation placed on landlords to verify would-be tenants’ immigration status found there was a significant risk of discrimination (Grant and Peel 2015). Even the government’s own review into the ‘right to rent’ pilot scheme raised concerns around the risk of such discrimination occurring (Brickell et al 2015). The risk of prosecution can cause the liable agent to err on the side of caution, and thus to rule out or exclude an otherwise lawful migrant. While EU passports are readily recognizable and easily verified, this protection is not offered to migrants with unusual types of passport – even those who do have the legal right to rent.
These problems are most acute for legally-resident migrants at the lower end of the income scale, who are more likely to be in rental accommodation. The Residential Landlords Association launched a review of the ‘right to rent’ scheme in 2015. It found that the government’s policy placed landlords in the undesirable position of ‘either taking a restrictive view with prospective tenants, potentially causing difficulties for the twelve million UK citizens without a passport’ or ‘targeting certain individuals to conduct the checks [on], opening themselves up to accusations of racism’ (RLA 2016). Rental sector experts have criticized the checks not only for being likely to lead to discrimination towards poorer migrants and those with less-common, non-EU nationalities, but also for providing these prospective tenants with no redress should they suspect unfair treatment or discrimination (Osborne 2016).
This is not an isolated problem affecting a few people: the RLA review also found that seven in 10 landlords do not understand right-to-rent rules that oblige them to verify the immigration status of their tenants. The structure of the housing sector in Britain compounds the problem many times over: low-income people are more likely to live in the private rented sector; migrants are more likely to live in the private rented sector; 75 per cent of landlords are private individuals or couples, rather than companies with the capacity to administer immigration law; and over half of landlords own fewer than five properties, meaning that tens of thousands of landlords are affected by these new rules (Davies and Turley 2014).
It is highly likely that a similar dynamic will assert itself in the labour market, particularly for those seeking low-skilled employment. Where an employer is able to choose from a large pool of applicants, those with an easily verifiable status (such as a UK or – for the moment – EU passport) will have an advantage over potential employees whose status requires extra verification. For small and medium-sized enterprises, or those with little experience of employing immigrants, a non-naturalised immigrant can appear higher risk. This is likely to create an unfair discrimination in the labour market based on country of origin rather than on right to work (which these immigrants have) or on capacity to work. Consequently it will become harder for these migrants to earn the money they need in order to apply for citizenship.
The problem is further compounded for migrants who are also from outside the Commonwealth, because unlike other categories of immigrant they have no political rights until they are fully naturalised. There is clear evidence that governments privilege groups that vote. IPPR research has found that non-voting groups, even when entitled to vote, are significantly more likely to be adversely affected by government spending decisions (Birch et al 2013). Non-EU, non-Commonwealth migrants are locked out of the political participation afforded to their counterparts from other countries by the UK citizenship system. With the UK’s withdrawal from the EU now to be negotiated, there is no clarity on whether EU migrants, too, will lose the right to vote in local elections.
The government has a duty to minimise discrimination against migrants who have the legal right to be in the UK. Access to citizenship would protect those affected. However, its high price represents a significant barrier to citizenship for poorer migrants, who would derive a significant dividend from obtaining it. A fee of over £1,200 per person makes citizenship too expensive for a migrant raising a family on the minimum wage, for example, to obtain.
These low-income migrants are here in Britain for the long term. To be eligible for citizenship they must be here legally. Making citizenship more accessible would facilitate improved outcomes in employment, housing and security. They are being unfairly penalised by a set of policies that is designed to target illegal immigration: the unintended consequence of the government’s policies is to move housing and employment – the very things that would improve outcomes for low-income legal migrants – further from their reach.
It is worth noting that the government recently introduced the biometric residence permit (BRP). While it promises to go some way towards helping people to prove their right to be in the UK, BRPs will be available to all migrants on any type of visa, including short-term stayers. They will not overcome the bias towards those with certain passports that the current immigration system has created. Furthermore, due to EU regulations on what the card may officially state, they will give no clear indication that someone has the right to rent in the UK, and so will do little to prevent the discrimination that these law-abiding migrants are likely to encounter.
Germany’s cautionary tale
As mentioned above, the German experience provides a cautionary tale of the dangers of an overly restrictive path to citizenship. Policies in place between the second world war and the turn of the century had led to the build-up of a large class of Gastarbeiter residents, mainly in low-wage work, who had no meaningful pathway to citizenship. It became clear that the policy objective of non-citizens returning to their country of origin was not being realised: in 1997, almost 50 per cent of foreigners in Germany had been there for more than 10 years, and 30 per cent for more than 20 years. This created a dual problem: as a group, the migrants’ lack of access to citizenship impeded their labour market outcomes; and furthermore, with no citizenship rights the migrants had no political rights. The combination of poor employment outcomes and political exclusion was synergetic, leading to concerns about a ‘parallel society’ of poorly integrated, long-term migrant communities.
The German experience of the consequences of a restrictive citizenship policy demonstrates the problems that can arise when a significant portion of the long-term resident population is denied the benefits of citizenship. In Germany, this problem was compounded by a generational dimension, as even the children of Gastarbeiter, born in the country, were not able to acquire German citizenship at birth, and instead inherited their parents’.
By contrast, any child born to a settled or British parent in the UK automatically acquires British citizenship as a birthright, so this generational aspect of the German experience is unlikely to develop here. Nonetheless, the example of the German Gastarbeiter warns us that impeded access to citizenship, especially for those in low-paid work, can lead to social segregation.