Sunday, 26 February 2017

Is Theresa May really as economically illiterate as her immigration based stance on Brexit tends to suggest?

The pronouncements of Prime Minister Theresa May on Brexit are at face value economically incoherent.

Can the Prime Minister be seriously contemplating cutting links with the single market – Britain’s largest trading area – because she really believes that “securing the borders” is a more important priority?

The need to secure the borders, a hardly concealed code for keeping out migrants, is a total nonsense. The borders are secure or if they aren’t a lot of public money is being expended on the Borders Agency and a myriad of private supporting companies charged with attaining that goal.

The whole Brexit vote it seems was increasingly prefaced on a number of lies. Foremost among these was the migrant myth, namely that migrants were all flocking in for benefits because Britain is an easy touch. Among the migrants were criminals and wrongdoers.

Now to leave the la la land of Express and Daily Mail story telling, the reality is somewhat different.

Migrants come to the UK predominantly to work or study. It has been their contribution among other things that has led to the buoyancy of the UK economy. If the work were not here neither would the migrants be.

During the EU referendum debate the good news story on immigration rarely surfaced. If it had people would understand that migration was not the cause of growing levels of poverty across the land.

Some facts. 17% of the workforce is made up of non-British born workers (that is 5.4 million of a 31.6 million workforce). This has increased from 8% in 2000.

Some 19% of NHS workers are foreign born. The IPPR think tank has warned that the NHS would “collapse” without its EU workers.

Education is a major growing sector for the UK economy, with foreign students estimated to contribute £11.8 billion.

A study by University College London found that European migrants made a net contribution  of £20 billion to UK public finances between 2000 and 2011.

Many of the migrant workforce is made up of single people who work here for a while but then go home. They pay taxes for which they do not receive the requisite public services in return. Net winner the British tax payer.

Migrant labour is also needed to meet skills shortages, that become particularly stark when the reducing ratio between the young (under 16s) and the old (over 65s) are taken into account.

If UK citizens want to retain their present level of public services then the revenue generated by migrant workers - as well as those workers themselves - are desperately needed.

The fact there has been free movement over recent years is a major factor in the buoyancy of the British economy. Ironically, it has been the high level of migrants coming into the UK over recent years compared to other European countries that has contributed to the strength of the economy here compared to elsewhere.

Given, all of the aforesaid, how incredible to hear the Prime Minister welcoming the news that there are now fewer EU nationals coming to the UK, post Brexit. This PM seems to hang onto the ridiculous ideal of the former occupant of the office that it is a good thing to reduce net migration down to the tens of thousands. This is an economically illiterate position for any leader of a political party to adopt.

The one way to really reduce migration is to destroy the economic base. An economy in recession will not offer the jobs , so migrants will not be coming. This position in reality is the one the PM seems to be saying she wants above all else, when she puts controlling immigration above trade with our neighbours.

All of that said migration has not been handled well over the past couple of decades, Migrants have been allowed to come in and used by unscrupulous employers – including private householders wanting work done on the cheap to their properties – to undercut the pay and terms and conditions of the indigenous workforce. This effective use of migration as an unofficial incomes policy has led to some of the grievances that helped to build the anti-migrant atmosphere.

These problems could have been addressed by having a higher minimum wage, that was stringently enforced. Also, no undercutting of terms and conditions, whilst ensuring the migrant labourers joined trade unions.

The problem with the EU referendum debate was that people were fed a pack of lies to the effect that all of their problems were due to migrants and the EU. The reality was most of their problems emanated from the banking crisis of 2008 and the austerity policies that followed.

The result has been large numbers of people across the country seeing their wages flatline or reduce. The banks have got away with ripping off the tax payer for huge amounts of money and continue to do so.

The direction of anger toward the scapegoats of migrants and the EU has largely resulted from a number of unscrupulous MPs lying to the electorate and the cacophony of xenophobic ill informed racist coverage of issues like immigration in the right wing media.

The great irony of the result of the referendum is that the mass of the people who voted to leave the EU together with everyone else stand to become poorer. Wages will not rise but prices will courtesy of the falling pound.

The attacks on migrants are making this country seem like a hostile place, so fewer are coming = this will have huge implications for the economy as a whole and the education sector in particular. It is reported that the number of foreigners looking to attend further education institutions in the UK is plummeting.

The net effect is less money for public services, like education, health, care and transport.

So is the PM really as daft as a number of her recent pronouncements on Brexit  suggest? Or is it all window dressing for a new deal with the EU that can be to the benefit of all. We all have to hope it is the latter. But given the positive reaction to the news of reduced numbers of migrants coming to the UK and begging bowl approach of British ministers seemingly trotting round the world looking for whatever trade deals the likes of the US, Australia and New Zealand will offer I would not bet on it.

Published New Internationalist - 2/3/2017 - http://newint.org/blog/2017/03/02/is-prime-minister-theresa-may-really-as-economically-illiterate/

Tribune - 11/3/2017

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