Poll: Should EU nationals living in the UK be given permanent residence?

Prime Minister Theresa May's refusal to agree the status of the nearly three million Europeans in the country unless the rights of Britons living on the continent are guaranteed is "morally wrong", according to an inquiry run by think tank British Future.

It called for the UK to "make the first move" to demonstrate "goodwill" as it embarks on its divorce negotiations.

The panel, which included a cross-party group of MPs, said all 2.8 million EU nationals should be eligible for permanent residence with the same health, social and education rights as British citizens.

If found that setting the date that Article 50 is triggered as the cut-off point would be fair and legally watertight but would not lead to a surge in migration from across the bloc and European Economic Area nations.

Labour's Gisela Stuart, a Leave campaigner who chaired the inquiry, said: "Our inquiry found that people from different sides of the referendum and politics can quite easily agree on practical, straightforward ways to ensure that EU nationals can stay in Britain with their rights protected. That's the right thing to do and something that most voters agree with too.

"We determined that the triggering of Article 50 should be the cut-off date, after which EU citizens moving to the UK would not be entitled to stay permanently after Brexit. This would limit any 'pull factor' for EU citizens not already in the UK.

"Britain should make clear at the start of the Brexit negotiations that EU citizens already here before that date can stay. This would send a clear signal about the kind of country the UK will be after Brexit and the relationship we want with Europe. We should expect reciprocal deals for Britons living in European countries, but Britain should make the first move to demonstrate goodwill."

Just 3% of European citizens living in Britain are unemployed, with 51% classed as employees, 9% self-employed, 4% students and 7% retired while 17% are children, according to the report.

More than a quarter of the food and drink manufacturing workforce and about 15% of academics are from other EU countries, it added.

Around 1.2 million British nationals live in other EU countries.

Owen Tudor, TUC head of EU and international relations, said: "EU nationals working in the UK and making a contribution are anxious about what happens to them when Britain leaves the EU. They need to know about their future rights to live and work here.

"Everyone agrees this needs to be resolved quickly and fairly. Our inquiry now has practical recommendations for how to do it.

"This shouldn't be a matter for negotiation. The Prime Minister should make the first move to unblock this ghastly uncertainty. It is morally right and pragmatically sensible."

The panel called for the permanent residence system, which is underpinned by EU law, to be converted into the indefinite leave to remain status available to international migrants living in the UK.

But the complex and expensive process should be streamlined and costs capped, it said.

Seamus Nevin, head of employment and skills policy at the Institute of Directors, said: "Businesses throughout the UK are very clear that confirming the status of EU migrants resident here is the right thing to do.

"The evidence the inquiry received showed that uncertainty from valued employees about what will happen to them is tangible in workplaces across the UK. Our members can't plan for the future or give their employees the assurances they need until government sets out its plan.

"Ending this worry and uncertainty, both swiftly and fairly, is not only the humane thing to do. It is also essential to avoid major disruptions to workforce planning and business development if British companies are to be able to prepare to succeed in life outside the EU."`

A Government spokesman said: "The Prime Minster and other ministers have been absolutely clear that they want to protect the status of EU nationals already living here, and the only circumstances in which that wouldn't be possible is if British citizens' rights in European member states were not protected in return."

Shadow Brexit secretary Sir Keir Starmer said: "This cross-party inquiry underlines what Labour has been saying for months: that the Prime Minister could and should end unnecessary uncertainty for EU nationals in the UK by unilaterally guaranteeing their legal status.

"Not only would this be the right thing to do, but it would also help ensure negotiations got off to a much better start than would otherwise be the case.

"There is mounting sense of very real injustice about this. Labour will continue to push the Government to act and to ensure EU nationals are not used as part of the negotiation process."