The problem with term limiting is that you almost ensuring that people will not make long term plans which leads to drain of capital. This is also why for example the current Tier 2 Inter-company Transfer UK visa's are moronic, they force very high minimum pay (50K GBP or more per year) but limit the term to upto 5 years without any option to extend that duration or even switch to another UK visa (with the exception of marriage/partnership).
The idea behind the term limit was to make the local workforce especially in IT more competitive the result was that companies still bring allot of employees from outside of the EU paying them very high salaries, have those employees gain experience and then after 5 years take all their knowledge and capital out of the UK because they can't settle.
The immigration policy in the UK is one of the least efficient and most self defeating immigration policies I've ever seen, it's pretty much structured to shoot it self in the foot every time with idiotic regulations that do no effect those who actually cause the highest financial drain but disenfranchise those who could actually benefit the country.
The EU immigration policy could be more adapted slightly to be better, the general immigration policy in the UK really needs a rework, move to a point based human capital value approach as it's currently one of the few countries that actually would kick out some one who spent 5 years studying in the UK getting a master degree then offered employment with a salary of over 100K$ because they are not from the EU and do not want to provide hospice and nurse the elderly.
What's your reasoning for this? I think it might be attractive versus simply leaving altogether, but who says that's what'll happen?
Consider that the EEA might be unpalatable to people against EU membership due to migration.
EU individuals do not make the bulk of the economic immigration into the UK while making the majority of the high paid migrant workers.
If the UK want to deal with immigration "family" visa's and bogus work permits for people who end up earning below the minimum wage is a far better target than EU nationals.
Perhaps, but I'm not worrying about actual problems here, but rather public perception.
Not to mention that even a vote to exit will take years and there will be provisions to maintain current status it's highly unlikely that the UK will kick out millions of residents not to mention have to take in millions of UK nationals that are living in other EEA countries (which on it's own could cost the UK economy much more in the short term, as when people are forcibly kicked out of their country are quite often not in the best financial position to make that move).
While it's true that the UK takes in a large amount of EU nationals they export almost as many there is a slight difference that the ones that leave the UK often posses high paying jobs in the first place while many individuals that come in come in often as a qualified job seeker meaning that they might receive more benefits at least initially than paying out as far as taxes go.
This situation is also quite common among immigrants from lower income EU countries like Poland and Romania which also historically exported allot of their income back home, it wasn't that uncommon for them to immigrate to the UK for 3-5 years just to make enough money to buy a house in their home country and then return there which is some what of an issue on it's own also.
There probably should be a better process to ensure that there isn't considerable wealth drain on the stronger economies due to economic immigration but more importantly that there isn't a brain and skill drain on the poorer EU members, pretty much any one I've spoken too from Bulgaria and Romania curses the EU more than your average UKIP voter mostly because it seems that joining the EU caused a massive exodus of anyone who could leave for greener fields which often are the most educated and better off people in the first place, those who can actually drive the country forward.