Uncharted Territory

August 9, 2016

After the Brexit Referendum (1) – Free Movement vs Immigration

Filed under: Brexit, Economics, Migration, Politics — Tim Joslin @ 5:34 pm

In the days before the Brexit referendum I found myself unable to focus on anything other than the last frantic round of debates, speeches and pleas.  It was clear to me even before the vote that there are several huge interconnected problems with our political culture which could lead to a major political accident.  So I began drafting a letter/paper to send, initially to my MP. Of course, the exercise grew like Topsy and, whilst I may still produce a single document, I’m breaking it up in the first instance and posting it on my rather appropriately named blog.

My original idea was to be clever and couch my thoughts as “regardless of the result of the referendum”, so please don’t think my views are just a snap reaction to the setback.

My overall view has consistently been that the referendum should never have been called and that, even if we Brexit, we must rebuild and strengthen our trading, political and cultural relationships with Europe.  Isolation is not the answer.  Instead we must address the causes of so much dissatisfaction and fix our democracy.

We mustn’t just roll over.  Rather, we need to be tough not only on Brexit, but also on the causes of Brexit!

The most significant issue for Remain was the utter, abject failure – not just during the referendum campaign, but over many years – to build a case for free movement within the EU, or, strictly speaking, the single market of the European Economic Area (EEA), which includes a few additional countries in addition to the EU.  The desirability or otherwise of free movement remains a live issue, since the UK may wish to stay in the single market, members of which are supposed to permit free movement.  Since UK membership of the single market would be highly desirable, it’s definitely worthwhile to start making a coherent argument in favour of free movement.  The horse may have bolted, but it’s still in sight.

First, let me define my terms.

“Immigrants” vs “EU migrant workers”

The core issue in the referendum campaign was “immigration”, though, whatever Teresa “Maggie” May, and many other politicians and commentators are now saying to justify their stance on immigration controls, the question on the ballot paper was Leave or Remain, so the vote gives no clear indication of the level of opposition to free movement.

Furthermore the scapegoats for all our problems are not actually “immigrants”.  Immigrants arrive on visas and are generally on a path to citizenship.  At some point, very soon in many cases, they get to vote.

The term “immigration” suggests an intention of permanency from the outset, whereas “migration” is less committal.  It may or may not lead to long-term residence.  It’s unlikely to involve an immediate change of citizenship.

I’ll therefore use the term “EU migrant workers” to refer to those who are in the UK under the free movement provisions of EU treaties.  I should say that, whatever the context, I don’t like the negative connotations of the word “immigrant” and I’d prefer a more distinct term with a different root rather than “EU migrant workers”.  But those are the words we have and it’s kind of important to actually be understood.

Of course, some EU citizens come to the UK for reasons other than to work or to seek work.  Such “EU migrants” may be economically self-sufficient – retired or the wealthy enjoying the London lifestyle, perhaps – and are unlikely to be able to claim benefits or subsidised housing.  The issues cited in the referendum campaign relate, though, mostly to “EU migrant workers”, not “EU migrants”.

The Rationale for Free Movement of Labour

Why does the EU insist on freedom of movement within the single market?  It seems not to have occurred to the leaders of the Remain campaign to try to answer this simple question.

When I started drafting this post I assumed that the argument for free movement would have been clearly stated by the founding fathers (sorry, they seem to have all been male) of the EU (or, strictly, of the organisation’s predecessor, the EEC).   If there is such a statement – and I may research further – it’s not likely to rank highly in any citation index.  We’re not talking about the Rights of Man, here.

No, all accounts I have seen suggest that the freedom of movement we see now evolved from an initial freedom of movement specifically to work, that is from the free movement of labour.

I’ll come onto why free movement purely to work is unworkable (intended, of course – I can’t resist a play on words) in a fair society, but, first, why is the free movement of labour so important?

The argument is not often stated clearly, but there are several threads of thought:

First, the observation was made in the mid 20th century – predating the EEC, I understand (sorry, more research needed) – that one reason the US economy is more dynamic than Europe’s is because of the higher rates of migration between states in the US than between countries in Europe.  This allows new industries – Motown, Hollywood, Silicon Valley – to develop rapidly and regions to regenerate through “creative destruction” rather than stagnate when the local economy declines – Detroit, for example.

Second, it’s often said that free movement of labour is necessary for free movement of capital.  I take this to mean that if companies or an entire industry moves, or an industrial  cluster exhausts the local labour supply, trained workers can move too.  The alternative would be skilled workers in one country having to retrain or be unemployed, whereas workers in another country have to acquire the relevant skills.  Those with a vocation may be frustrated in their ambitions.  This aspect of European free movement is presumably most beneficial in very highly-skilled occupations, such as research and financial services.

Third, free movement benefits the European economy as a whole when one or more countries face an economic downturn.  As we’re seeing now, young people from some of the southern European countries which suffered most in the euro crisis, who would otherwise be unemployed, are able to find work in the UK and other economies where demand is presently creating more jobs.  Or, conversely, one economy may boom and draw in labour from its neighbours.  Germany’s post-WWII economic miracle led to “Gastarbeiter” (literally “guest-worker”) deals with its neighbours (and, famously, Turkey) which clearly foreshadowed more general free movement in Europe (and complemented free movement between the Treaty of Rome signatories).

Why Free Movement of Labour is Not Enough

Having established free movement of labour – relatively uncontroversial for some decades, certainly in the UK – the EU in 1992, through the Maastricht treaty, and by various directives and court rulings, granted additional rights to EU nationals resident in other member countries, in effect a form of EU citizenship.

There’s little disagreement about the basic narrative of how freedom of movement of labour became EU citizenship, though if you listen to Farage or Johnson you’d assume it was mission-creep, perhaps a plot by European superstate zealots.

But if you reflect for a moment on how people live their lives it’s obvious that freedom of movement purely to work is not enough.  People put down roots where they work.  They may want to retire there.  They start families, or have children already.  Crucially, because people don’t necessarily make a conscious decision that they’re going to remain forever in their adopted EU country, they don’t tend to apply for citizenship.  So the rights of EU nationals to benefits, pensions, housing, healthcare, education of their children and so on has to be protected and on the same basis as the locals.  This is simply a logical consequence, which should have been instituted from the outset.

There are, however, those who deny this logical consequence.  For example, David Goodhart argues in Prospect magazine (August 2016) that:

“A guest citizen is not a full member, does not have full access to social and political rights and leaves after a few years.  Formalising guest citizenship would mean that we could concentrate rights, benefits and integration efforts on those who are making a commitment to this country. … If we don’t want to continue with relatively high inflows we have to guard full citizenship more jealously.”

In other words, he wants us to become more like Qatar.

Why Free Movement is Preferable to Other Forms of Migration

During the entire Brexit referendum campaign I only heard one voice defending free movement.  Mine.  I piped up, somewhat uncharacteristically, in a meeting organised by UCL, where the aforementioned David Goodhart was one of the panelists, to point out that, from the point of view of the home country of migrant workers, free movement is preferable to a points-based system.  It’s less of a brain-drain.  So, I tried to explain, EU countries aren’t going to agree to anything less than free movement as part of any Brexit negotiations.

Goodhart seized on what I said to emphasise that migration in itself is a brain-drain, period, twisting the point I’d made.  So, having put my head over the parapet I had to reiterate my point that free movement is less problematic than a points-based system, since not only doctors are being tempted abroad; their patients are as well.  Wealth-creators may leave for sunnier climes; but so do the unemployed.

The problem with Goodhart’s suggestion that free movement has been bad for migrants’ home countries is that their governments – most vocally Poland in the UK context – simply don’t agree with it.  And he doesn’t repeat his claim in his Prospect article, acknowledging that migration to the UK has been an “unemployment safety valve for struggling southern or eastern European economies”.

But free movement is not only preferable to a points-based system from the point of view of the originating country.  It’s also better for the UK.

First, free movement is simple.  A points-based system not only requires a huge bureaucracy just to keep track of who should be working and who shouldn’t – a dead-weight cost on economic activity – it also implies some bod in Westminster making decisions on how many pheasant-pluckers and widget-testers the UK “needs”.  And all the lobbying that’s bound to accompany the process.  No wonder that in the example of the Australian system that is always cited, the vast majority of immigrants come in with company sponsorship – recruited abroad, something the Brexit brigade are always railing against.

Second, free movement is flexible.  Because it doesn’t involve granting citizenship, migrant workers remain mobile.  Should they fail to retain work in the UK they can return to their home country or go to any other EU country.  In particular, they lubricate the free movement safety-valve (if that’s not taking the metaphor too far) – in the event of a downturn in the UK (as we will no doubt see during the post-Brexit recession) those who have already migrated to the UK for work are no doubt better equipped than UK nationals to find work in their home country or elsewhere rather than swell the numbers of job-seekers in this country.  Perhaps flexibility is why David Goodhart champions a work permit scheme.  But such schemes are flexible only for the host country, not the migrant workers.  If the UK proposes to the EU a system of sector-specific time-limited work permits – as Goodhart seems to be advocating – in return for access to markets they’ll no doubt be told where to go.

Third, if we did institute a points-based scheme to address skills-shortages, won’t that reduce even further the incentive for UK employers to train British workers?  Or to promote them.  At present, migration from outside the EU is in part capped by salary requirements.  So your employer can recruit senior staff, but not junior ones.  Is that really what you want more of?

And, fourth, free movement also confers rights.  What is possibly achieved by restricting migration to and from countries from which the net population flow is low?  Restrictions on movement are almost bound to be reciprocated, so, if Brexit leads to the end of free movement, the opportunities for UK citizens will be reduced and British businesses hamstrung because of restrictions on the ability of their staff to work in France and Germany.  As ever, it’s easy to try to solve problems by taking away other peoples’ rights.

Finally, free movement is a mechanism for economies to converge.  Migrant workers relieve unemployment in their home countries and send money back home – the so-called remittances, helping those countries’ economies.  And economic convergence may take years, even a decade or two, but is a finite process.  Net bilateral migration flows are likely to reduce eventually to zero as the source country develops.  If we keep free movement, then eventually Poles, Bulgarians and Romanians will stop coming to the UK to work.

It seems to me that, if we abandon free movement after Brexit on the dubious assumption it was “the” rather than a reason for the vote – of course there’s no denying it was a factor – we’ll be making a huge mistake.  The current migration flows from Eastern European countries are a temporary phenomenon, and would reduce as their economies transition to be more like those in the West, and anyone who thinks the UK itself won’t someday need an “unemployment safety valve” is living in cloud cuckoo land.  Indeed, net flows of EU migrants may well reverse as the UK economy goes down the pan ahead of Brexit.

The tragedy is that arguments in support of free movement as opposed to other forms of migration were so rarely heard during the referendum campaign.

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2 Comments »

  1. […] my previous post, I argued that free movement is the best way to organise migration.  During the referendum campaign we heard Boris Johnson parrot the phrase “Australian-style […]

    Pingback by After the Brexit Referendum (2) – Free Movement vs Work Permit Schemes | Uncharted Territory — August 23, 2016 @ 3:22 pm

  2. […] mentioned in my previous posts (Free Movement vs Migration; Free Movement vs Work Permit Schemes and the Mobile Classes vs the Rooted Classes) in this so far […]

    Pingback by After the Brexit Referendum (4) – Why UK-Resident EU Citizens Should Get the Vote | Uncharted Territory — September 22, 2016 @ 7:15 pm


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