Last week marked the fifth anniversary of the European Union’s most extensive and significant enlargement. On 1 May 2004, ten new member states from central and Eastern Europe joined the EU club.
The enlargement was to have a considerable impact on the UK economy, too. Entry to the EU confers the right of free movement. The UK opened its labour market to eastern Europeans immediately. The effect was widespread. Hundreds of thousands have migrated to the UK, seeking work and new challenges. By 2006, around 400,000 people from these countries had registered for work here. The largest incoming group has been from Poland, but many have arrived from countries such as Hungary, the Czech Republic and the Baltic states.
The Eastern European migrants have been an economic plus, filling jobs that British workers refused to do. Many companies in the UK, particularly in construction and catering, have been helped by this labour supply.
The post-enlargement migrants typically do not claim benefits and tend to be young and hard-working.
Despite the fears, evidence suggests that this wave of migration has not led to long-term bouts of increased unemployment. Their contribution has helped the economy in good times, boosting growth and aiding productivity. But the slowdown in the economy has affected the migrants. A report last year from the IPPR think-tank showed that while one million had come from Eastern Europe since 2004, half have returned to their countries of origin. Much of the migration is responsive to changes in the economy.
In some circles there has been a backlash against “foreign workers”, and while the freedoms offered by open labour markets invariably carry social and political pain, in the long-run they will ensure that the economy is in better competitive shape.