Uncharted Territory

June 12, 2017

The Brexit Logic Trap

Filed under: Brexit, Complex decisions, Economics, Markets, Politics, Reflections, Regulation — Tim Joslin @ 11:52 am

170612 Pic for Brexit post doh

“I think people will interpret membership of the single market as not respecting that referendum.” – John McDonnell

You can’t build a rocket to reach the Moon without understanding the laws of physics.  In politics, as in many other fields of human endeavour, we are most likely to succeed not through raw emotion, but when our goals are aligned with logic and a clear understanding of the real world.  Thus, political projects have for centuries been informed by the carefully crafted logical, evidence-based arguments of thinkers from Adam Smith to Karl Marx.

Somewhat more parochially, the UK will only resolve its Brexit conundrum by finding a solution that works in practice, not just in the fevered imagination of one or other political leader.

Why do I say we’re in a “Brexit conundrum”?  Surely we’ve voted for Brexit and should “just get on with it!”.  Well, no – putting the hard-line “Remoaners” to one side for the moment – it’s not quite as simple as that: the argument now is apparently over whether we have a “soft Brexit” or a “hard Brexit”.  Oh well, I hear from the gallery, we were going to have a “hard Brexit”, but Theresa has put her expensively shod foot in some seriously pungent doo-doo and now we’ll have to have a “soft Brexit”.

Yes, it seems to have turned out that a “hard Brexit” is not a politically viable option, though David Davis and Liam Fox are still in denial.  Nor is a “hard Brexit” economically viable, I might add.  Never mind, “just get on with it!!”, say the great British public: we’re more concerned about the NHS and inequality anyway.

Unfortunately, it’s still not quite as simple as that.

Why?  Because a “soft Brexit” is not a logically viable option.  If it was, Theresa May would probably have proposed it already, since, contrary to popular belief, she and her advisers are not entirely stupid.  No, it turns out that, no sooner have you pulled on one loose thread of the UK’s relationship with the EU, than you’re standing in front of the nation completely starkers, as Theresa May hinted during the election campaign.

For example, if we go “hard” and leave the European customs union, then, for starters, there’s a border problem in Ireland, not to mention with Gibraltar.  Huge bureaucratic costs arise for business, plus we revert to WTO tariffs on all our trade until we can negotiate something different.   Enough!   Let’s stay in the customs union, then, you say.  Oh, but then we wouldn’t be able to negotiate our own trade deals.  We need to do that to offset leaving the single market.  And trade is kind of important because we need to import stuff.  Like food.

OK, then, let’s stay in the single market.  Ah.  But then we’d retain free movement (I know I am on record as thinking that’s a good thing, but I’m trying to be detached and objective here).  And, incidentally, be subject to the European Free Trade Area (EFTA) court, which apparently doesn’t violate our precious sovereignty as much as the European Court of Justice (ECJ), though I’m not sure the great British public would be fully appreciative of the fine distinction.

Hmm, surely we can remain members of uncontroversial European agencies, Euratom, perhaps?  Nope, sorry, not unless we submit to the authority of the ECJ (which Labour don’t happen to feel is worth mentioning in their manifesto, I note), assuming we haven’t already done so by trying to stay in the customs union.

So the dilemma facing the nation’s glorious leadership cadre is to propose either a “hard Brexit” – which might not have got through the Commons even before the General Election and would lead to years of economic chaos and decades of underperformance – or opt for a “soft Brexit”, which would involve remaining in the single market and customs union, but also mean retaining the ECJ and free movement, and (presumably) land us with the same £50-100bn bill as hard Brexit would, as well as no influence over the single market and customs union rules nor the ability to negotiate our own trade deals.

In other words, dare I say it, if we don’t have a “hard Brexit” we may as well stay in the EU.

This is the logic trap in which we find ourselves.

This is why the Labour Manifesto, as David Davis correctly points out, pretty much paraphrases the Tory government’s Brexit White Paper.  Labour write:

“We will scrap the Conservatives’ Brexit White Paper and replace it with fresh negotiating priorities that have a strong emphasis on retaining the benefits of the Single Market and the Customs Union.”

whereas the Guardian’s commentary notes that:

“The [government’s] white paper [die!, evil capital letters, die!] reiterates that the government aims to secure ‘the freest and most frictionless trade possible in goods and services’ with the EU outside the single market and via ‘an ambitious and comprehensive free trade agreement’.

[The Tory government] also wants to be outside the customs union, so it can negotiate its own trade deals, but would like ‘a new customs agreement’, which should be theoretically possible thanks to new technology. … [No kidding, this really is their argument]

… [T]he UK will not seek to adopt an existing model used by other countries, but try to ‘take in elements’ of the single market in certain areas – in other words, bespoke deals for important business sectors. From the EU perspective, all this is ambitious: it sounds suspiciously like cherry-picking.”

Of course, Labour’s presentation during the election campaign was very different to that of the Tories, emphasising that they’d prioritise the economy over immigration, for example, but in essence both are just nuanced versions of Boris claiming he can simultaneously have his cake and shove it into his stupid gob, spraying crumbs and spittle in all directions.

Reality awaits.

Advertisements

September 22, 2016

After the Brexit Referendum (4) – Why UK-Resident EU Citizens Should Get the Vote

Filed under: Brexit, Migration, Politics, UK — Tim Joslin @ 7:15 pm

I’ve 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 fortnightly series that EU citizens living in the UK should be fully enfranchised, that is, able to vote in General Elections as well as local and regional ones, not to mention in any referenda that may be held.  In this post I want to approach the issue from a different angle.

To be crystal clear, my proposal is that anyone – EU citizen or not – who has legally lived and worked in the UK for a qualifying period of let’s say 3 years should be entitled to vote in all elections and any referenda, the same as UK and Commonwealth citizens.  Essentially I agree with the “If you live here, you can vote here” position advocated by Jon Danzig, a man who clearly has more than the one blog.

Simple arithmetic suggests it may well be the case that the Brexit Referendum would not have been lost had EU citizens had the vote.  But I believe the disenfranchisement has had much more insidious effects on our political discourse.  As Danzig notes, we’ve been “talking about them as if they’re not in the room”, during the referendum campaign, even more so afterwards, but also for years before.  Had politicians had to take UK resident EU citizens’ votes into account the tone of election campaigning over the years might well have been very different and we might never have had the Brexit referendum at all.

We’ve become accustomed to talking about EU citizens as separate from our “communities” – thereby undoing half a century of community relations effort, as I’ll explain another time – but exactly how can we justify denying them the vote?

Do EU citizens living in the UK have less of a stake in the country’s future than do UK citizens?  Well, they are living here, paying their taxes and reliant on the rule of British law and the provision of state services exactly the same as UK citizens, though of course the details depend on everyone’s individual situation.

Are they here only temporarily?  Well, they might be, but the 3 year qualifying period for a vote suggests at least some commitment to the UK.  The majority will most likely stay considerably longer, not least because most of them are in work.  On the other hand, some UK citizens may emigrate, maybe to retire abroad.  We don’t deny categories of UK citizens the vote on the basis that they’re statistically more likely to move overseas.  Even if EU citizens are more likely to leave the UK in the 5 years after a General Election, the number leaving will be only a fraction of those who have been here 3 years or more already, many of them for a decade or more, so the possibility hardly seems to justify denying all of them the vote.  Besides, I could even argue that the EU citizens who leave the UK during the 5 years after a General Election in some sense “speak for” the EU citizens who may move to the UK after that election, not having had a vote.

So there doesn’t seem to be a rational justification for denying EU citizens a vote in General Elections (or referenda) on the basis that they have less stake in the outcome – or less responsibility for the decisions taken by the elected government, for example in terms of paying taxes.

What about other responsibilities?  I’m thinking of the Colonel Blimps who “fought for this country” or rather whose parents or grandparents did.  Well, many EU citizens could argue that their parents or grandparents fought on the same side in the same wars.  More fundamentally, do we really want to grant the vote only to those who pass some test as to the contribution of previous generations?

OK, so what about future responsibilities for the defence of the realm?  For the vast majority of us that simply comes down to paying the taxes that pay for professional armed forces, taxes that apply to EU migrant workers as much as to UK citizens.  We don’t have conscription any more, but even if we did, would it even exclude the 18 year old children of EU citizens who’ve settled in the UK, children who may well be British citizens?

So there doesn’t seem to be a case for denying the vote to EU citizens living in the UK on the basis that they have less responsibility towards the country or have done less for it in the past.

What about ancestry, then?  On one talk-show during the referendum campaign I heard a woman suggest that her family had been in the UK for 700 years and that this gave her greater rights than her interlocutor, who, as I recollect, could only claim a century or two.  Well, I rather suspect everyone’s ancestry is more complex than that, judging by my own family history and that of those celebs who’ve explored theirs on some TV programme, the name of which escapes me just now.  The practicality of DNA tests to measure Britishness would be undermined by the mongrel nature of our nation, as well as, perhaps, by the political need to ensure the Royal Family score highly.  The blood-line idea is twaddle, isn’t it?

That leaves us with the idea of citizenship.  But that is undermined on two counts:

First, EU citizens resident in the UK have never had to apply for UK citizenship.  They have been treated equally with UK citizens under EU treaties (incorporated into UK law), for example, in their entitlement to grants and loans for higher education.  They haven’t even had to apply for Indefinite Leave to Remain (ILTR) as some foreign residents need to.

And, as I mentioned in previous posts, people don’t change their citizenship unless they have to.  Doing so may involve giving up some rights in their country of origin.  People don’t necessarily make a decision to stay permanently – that is something that just happens.  And they may reason that, depending on how the UK and other economies do, they might need to look for work in another EU country, Germany say, sometime in the future.  It wouldn’t make sense applying for a UK passport.  Besides, it costs around £1000 (for EU citizens) in the UK nowadays (an agenda item for the Brexit discussions, perhaps) and you have to do a stupid test, involving, I understand, the need to memorise the names of the Eastenders and Coronation Street pubs.  If the only advantage is getting a vote, the price is too high for most people.

The right to participate in the democratic process is surely a right, not something you may have to pay for.

Second, and here’s the kicker, other UK residents born overseas do get a vote, even if they’ve been here less time than EU citizens.  In general, non-EU citizens who want to reside in the UK either have to become UK citizens, giving them the right to vote, or apply for ILTR, which doesn’t confer the right to vote but is usually a necessary step to naturalisation.

So an EU citizen may have lived and worked in the UK for 10 years, the same as an American.  But the American has had more incentive to naturalise, since doing so may be necessary to ensure continued residency, for example, if they wish to spend time outside the UK (which could result in ILTR status lapsing).  Though, as I said at the outset, the American should have the right to vote even if they haven’t taken UK citizenship or even obtained ILTR.

And while we’re at it, why should one American living in the UK with ILTR status (or even without such status) not have a vote, while another who has become a UK citizen does have one?  Especially if the American who has become a UK citizen has done so because they wished to spend a few years abroad before returning to the UK?!

It’s absurd that the right to participate in the UK’s democracy depends on the details of the process you have to follow to maintain residency rights.

The big inconsistency, though, is with Commonwealth and Irish citizens.  When I first looked into this I thought Commonwealth citizens needed ILTR status in order to vote.  I now realise when I read the relevant explanation more carefully that they only need to be in the UK legally:

“A qualifying Commonwealth citizen is someone who has leave to enter or remain in the UK, or does not require such leave.”

So, not only are Commonwealth-born UK residents more likely to have become UK citizens – in order to lock-in their right to reside in the UK – than are those from the EU who’ve come to live here under the EU’s free movement provisions and who haven’t needed to lock-in residency rights (at least up until the Brexit referendum), they don’t need to become a citizen to get a vote anyway.

It might be worth pointing out that the Commonwealth now includes some countries – Rwanda and Mozambique – that have no particular historic connection to the UK.  They’ve merely joined the Commonwealth, perhaps out of dissatisfaction with their own former colonial power or simply to enhance their international profile or even just to create more competitive opportunities for their sportspeople!  Of course, in terms of affecting the outcome of elections or referenda, the number of UK resident Rwandan and Mozambique citizens is insignificant.  But it’s the principle that counts.

The franchise for UK general elections and national referenda is not only illogical but also discriminatory.

It should be amended forthwith on the principle of “If you live here, you can vote here”.

Furthermore, carelessness over this one detail may very well have cost us our EU membership, a disaster the scale of which only history will be able to judge, though perhaps they should place the portrait of David Cameron that, following tradition, will soon adorn the walls of No 10, right next to that of Lord North.

September 9, 2016

After the Brexit Referendum (3) – the Mobile Classes vs the Rooted Classes

Filed under: Brexit, Migration, Politics, Reflections, UK — Tim Joslin @ 9:53 pm

I’ve worked out why I’m overcome with rage whenever I hear Frank Field championing the needs of the “ordinary white working class”, in the Guardian’s words (it’s not clear whether Field actually said “white”), besides, that is, his uncanny resemblance to Ian Richardson’s Francis Urquhart in the original UK early 1990s House of Cards series.  I suspect that Field and I see the world quite differently.  Hence my irritation.

The contrast between Field and, for example, Gordon Brown could not be more stark.  It seems to me that Brown, and Blair for that matter, both share my view that, when in power, whilst they represented the British people – and they are patriotic – their concerns were not limited to the welfare of the British.  Others, Poles and Romanians, say, deserve no more or less than us Brits.  You could say that Brown, Blair and the many others who supported the Remain side, including myself, are internationalists, but there may be a more fundamental distinction – between open and closed thinking.  An example of closed system thinking is to carefully conduct a laboratory experiment, varying only one factor at a time; but the real world is an open system, with numerous uncontrollable variables.  Closed thinkers only want to worry about their own area of concern; open system thinkers grapple with complexity.  I’m sure Frank Field believes Poles deserve a good life just as much as Brits do.  I presume he just doesn’t think it’s his problem.

But that means Field has to ignore many of the people who make up today’s British society.  And it seems to me that the specific closed way in which he is thinking is to consider only what I will term the “rooted” classes, the people Labour has historically represented.  Perhaps this form of closed thinking explains in part why there’s not only a divide down the middle of the Conservative Party, but also a damaging – because the issue is so fundamental – schism in the Labour Party, the majority enthusiastic for Remain on one side and Field, Gisela Stuart, Kate Hoey, John Mann and Dennis Skinner, to name the most high-profile Brexiteers – assuming we take Corbyn’s Remain stance at face value – on the other.

Just because the Tories are divided over Europe doesn’t mean Labour has to be.  The vocal minority of Labour Brexiteers (4% of their MPs said Field) have done untold damage to the Party, as well as skewed the referendum debate by portraying Labour as more evenly split on the issue than it in fact is.  I expect many enthusiastic Remainers will transfer their allegiance to the Lib Dems, especially if Corbyn stays on as Labour leader.

So, to the point I wanted to make in this post.  It seems to me that we have to begin with the observation that within each social class, in the UK specifically, but also elsewhere – however many classes you want to define – we have a significant subdivision that I would describe as “mobile”.  For simplicity’s sake, I contrast these people with those we might term “rooted”.  So we have skilled and unskilled or “blue collar” and “white collar” working class who will seek employment only near where they live, which is most likely where their parents live.  “Community” – a term which I find to be another source of irritation, since it is far too often glibly used to refer to all those living in an area, whether they ever talk to their neighbours or not – is all important to them.  But we also have skilled and unskilled, “blue collar” and “white collar” working class, however you want to divide them, who are prepared to travel across continents for employment.

Many of the uber-rich are extremely mobile, seemingly basing themselves in multiple global centres or even, to rub in the point, on £200m yachts, though some are undoubtedly more rooted than others.  Though having said that, it occurs to me that it’s not unknown for even royal families to spend a generation or two in exile.

For large numbers of professionals – the middle classes, if you like – the employment market is national, if not international or even global.  In fact, given the custom in the UK of leaving home to attend university, many of us relocate, at least temporarily, while still in education.

Some industries are so concentrated in small numbers of geographical clusters – consider Hollywood, the City of London, the English Premier League – that, if you want work, you’re pretty much obliged to relocate.  Great cities, such as London and New York, are magnets for the aspirational. Companies increasingly require employees to relocate, often across borders – I’ve been told myself that “international experience” may be necessary for career progression.

Of course, not everyone, not even a majority, move to another country, but mobility has been a feature of the last few decades of globalisation.

Although many have emigrated for centuries, in particular to the New World, to some extent renewed mobility has recently trickled down to what Frank Field would call the working classes.  Or let’s put it another way.  Many families have become rooted over the last century or so, particularly in those former industrial heartlands we hear about that voted Brexit so strongly.  Their ancestors, several generations ago, left the countryside during the era of urbanisation ushered in by the Industrial Revolution.

Other families, such as my own, have moved intermittently for generations, around the country and around the world.  For many, moving for work, or for personal reasons, is just something you do.  You make a life where you find yourself.  I have never had any expectation of remaining in the same locality for my whole life.

Here’s my proposition.  At the present time there is a conflict of interests, at least in the UK, between the rooted classes and the mobile classes.  This was a critical divide between Remainers and Leavers in the Brexit referendum.  The rooted classes see the mobile classes as a threat.  This is particularly the case amongst Field’s “ordinary white working class”.  And, indeed, in some ways they are a threat, since as a society we have allowed rights and privileges to accrue to the rooted classes, in particular entitlement to housing.  But, as in the Industrial Revolution, as in the urbanisation of modern China, economic growth and development has always thrived on mobility.  And the economy never stands still.  You can’t make a decision to freeze the economy as it is – you’ll be destroyed by competition.  The mobile classes are essential to the process of economic renewal, to support technological change.  That’s why it’s a mistake for policy to be determined solely by the needs of the rooted classes.

A large part of the reason for the schism in the Labour Party, then, is that the Brexiteers, particularly the likes of Frank Field, see themselves as representing the rooted “ordinary white working class”.  And, to be honest, they have a point, if they take the narrow view that they represent those who vote for them.  Because we – the UK and the EU – have shamefully allowed the mobile classes to become disenfranchised.  Not only were citizens of other EU countries living, working and paying taxes in the UK denied a vote in the Brexit referendum, so, ludicrously, were UK citizens living overseas, even in Europe, if they’d left this country more than the arbitrary number of 15 years ago.

In part this disenfranchisement has occurred because the rooted classes are seen as privileged.  And see themselves that way too, no doubt – I’m sure there is a certain kind of Brit who would be apoplectic at the idea of giving the vote to “EU migrant workers”.  It’s this idea of the “nation” as a people, rather than a place, of course – an idea which perhaps another time I will argue is unsustainable, though I doubt I have anything new to say on such a longstanding and tediously emotive question – together with the idea of citizenship, which rather ignores the fact that a large part of the point of free movement of labour in the EU was to avoid the bureaucracy and emotional hurdle of the citizenship process.  The aim of course was to create a mobile workforce, with individuals perhaps working in the UK today and Germany tomorrow – something Brexit will no doubt make a more common experience!

But citizenship is only a piece of paper (or a bit in a Home Office computer these days, I suppose).  Granting citizenship to immigrants doesn’t necessarily reflect either commitment on the part of the new arrival, though of course it may often do so, nor assimilation into British society.  People become citizens in large part because they need to or perceive that they need to, especially given the significant cost involved to apply in the UK nowadays.  And EU citizens living in the UK under free movement provisions in EU treaties haven’t needed to become citizens, even though they may be just as committed to the UK and integrated into our society than arrivals from elsewhere who have taken citizenship.  In fact, EU citizens have not up to now had to apply for “indefinite leave to remain” in the UK, a status which gives citizens of Commonwealth countries the right to vote in General Elections and referenda.

Thus recent immigrants to the UK from non-EU countries who became UK citizens soon after arrival in this country were able to vote in the Brexit referendum, whereas citizens of EU countries who’d lived here for decades were not.  Compounding the problem, citizens of Commonwealth countries with UK residency status were also allowed to vote, even from those Commonwealth countries which were never British colonies, as in the case of francophone Rwanda and Mozambique, who seemingly joined the Commonwealth out of dissatisfaction with their own former colonial power.  And the status of citizens of Zimbabwe, suspended from the Commonwealth, was so unclear, I had considerable trouble finding out whether or not they were allowed a vote (for the record, I’m pretty sure they were)!  Most of these enfranchised non-UK citizens were also non-EU citizens, but there is in fact overlap between the Commonwealth and the EU, so citizens of Malta and Cyprus could vote.  As could many hundreds of thousands of Irish citizens living the in the UK, for separate historical reasons.  You could hardly make it up.

The electoral bias against the mobile classes arises not just from the electoral franchise, though.  Even when they have the vote, people may not know who to vote for.  They are likely to be unfamiliar with the UK’s political parties.  And our political structures are geographically based, favouring the rooted classes.  Those who have lived in an area for many years are much more likely to join political parties.  Not only will they have an understanding of local issues, they are also much more likely to see their involvement as a worthwhile investment of time.  The political agenda is consequently driven by the rooted classes.

The idea of the Brexit referendum, indeed, any electoral process, was to weigh the views of all those affected by the decision – in this case all those with a direct stake in the UK’s membership of the EU.  Excluding large numbers of the mobile classes simply biased the vote.  For the mobile classes the opportunities provided by the EU may outweigh any downsides, whereas for the rooted classes aspects of the EU may seem a threat, perhaps one not sufficiently counterbalanced by the benefits to the UK economy.  To reach the right decision all these individual experiences need to be taken into account.  And since the outcome was 52% plays 48% – a difference of a bit over a million votes – somewhat less than the number of EU citizens living in the UK but denied a vote, let alone the total if we also took into account the UK citizens who’ve been living abroad for more than 15 years, it’s very likely that we’ve actually reached the wrong answer as to what is best for the UK.

August 23, 2016

After the Brexit Referendum (2) – Free Movement vs Work Permit Schemes

Filed under: Brexit, Economics, Migration, Politics — Tim Joslin @ 3:22 pm

In 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 points system” with nauseating regularity.  Putting to one side the inconvenient fact that even Australia doesn’t have an Australian-style points system, since a large majority of migrants to Australia are brought in through company sponsorship schemes, I nevertheless assumed that the UK would, after Brexit, attempt to implement some kind of points-based system.

I argued that a points-based system was misguided, in part because it’s bound to reduce social mobility within the UK.  Nevertheless, as the Guardian reports, a survey by ICM on behalf of a think-tank, albeit one I’d never previously heard of, called British Future, found that “[o]nly 12% [of the sample] want to cut the number of highly skilled workers migrating to Britain; nearly half (46%) would like to see an increase, with 42% saying that it should stay the same.”  Baffling.  Why exactly are we leaving the EU?

But, part way through my previous post, it became clear that a pure points-based system might not be what all the Brexiteers have in mind.  I quoted David Goodhart writing in Prospect magazine in favour of “guest citizenship”.  According to Goodhart, free movement has led to many EU citizens coming to the UK who “do not want or need to become British”, causing an “integration problem”.  He claims that “unnecessary resentment” has been created by “the lack of a distinction between full and guest citizenship”.  Utter poppycock.  The problem is the reverse.  Voters are afraid, so they tell us, of their communities being changed by immigration.  If they thought migrant workers were here only temporarily one might reasonably suppose they’d be less, not more, concerned.  In a Wonderland Alice-like leap of logic, Goodhart somehow argues that because many migrants don’t stay forever they should be prevented from doing so, ignoring the common-sense argument that people don’t usually make a decision to stay forever in advance.  Life is what happens when you’re busy making other plans.  Roots are put down over a long period of time.  Moss gathers only slowly on stones.  And so on.

To put my cards on the table, I find Goodhart’s views fairly, well, abhorrent is the word that comes to mind.  He notes in passing, for example, that “the right of people to bring in dependents should be reviewed.”  It seems to me that if you’re working somewhere, you should be able to make your life there.  Not every migrant worker will choose to do so, of course, and some jobs necessarily involve spending time away from one’s family, but settling where you work is the norm, and I don’t see what right the UK has to prevent it.  Doing so is exploitation, pure and simple, taking advantage of the weaker economic circumstances in some other parts of the world.

So I was a bit disappointed to read Alistair Campbell’s musings in The New European (“My memo to Mrs May…”, issue 2, July 15-21 2016) drifting towards Goodhart’s position:

“…in addition to discussing terms of exit, you would like [sic] to explore the possible terms on which we might stay, including another look at immigration… Might freedom of movement become freedom of labour, for example?”

No, Alistair, we should simply be asking for what the EU failed to accept first time round when Cameron asked, which is renewed transition controls with those countries from which there is a large net flow to the UK.  Clearly, 7 years has not proved to be anything like enough for the economies of Eastern Europe to converge with those in the West.  This would save the principle of free movement by amending the rules, rather than sacrificing the principle to rigid, ill-thought-out rules that were drafted on the basis of no experience whatsoever.

The bizarre situation we find ourselves in is that we’ve voted to leave the EU in part because of the number of migrants into rural areas – Boston, Lincolnshire, had the highest Brexit vote – but, judging by the frequent dire warnings from food producers, supposedly we are going to have to create (presumably time-limited) work-permit schemes to maintain the migrant work-force in those very same areas!  Yeap, we need temporary migrants to replace people who, according to David Goodhart, were treating “our national home… as a transit camp and a temporary inconvenience.”

We’ve got a big problem here.  On many levels, not just that of how society values different jobs, an aspect Peter Fleming emphasises.

According to the food producers, we have to produce as much food in the UK as possible.  Even though farming less intensively and leaving more land fallow would surely reduce soil depletion and enhance our ability to feed ourselves in the long-term.  Do we really think our national security is at risk if we have to buy cucumbers from Poland or Romania, rather than employ Poles and Romanians to pick cucumbers grown in East Anglia?  Of course it isn’t.

And apparently migrants on low wages are essential to our food production.  Yet those communities ultimately sustained by farming – Boston, Lincolnshire and its ilk – don’t want East European shops and voices on their high street. I guess Goodhart envisages migrant permits forcing workers to stay on the farm 24/7 – how else to prevent them shopping or speaking in Boston High Street? – and, I presume, traveling in blacked out vehicles to and from Stansted for their Wizzair flights.

But what bothers me most is the general attitude that it is acceptable for non-UK citizens to live in conditions that the locals aren’t expected to put up with.  The fact that only migrant workers will do certain jobs should not be a reason for ensuring a continual flow of migrant workers under schemes denying them rights to make a life in the UK.  Rather, it should be a warning that working conditions in those jobs are exploitative.  Pay – that is, the minimum wage – needs to be increased.  Only when British workers apply for such jobs should we employ migrant workers with a clear conscience.

And I seem to recollect that seasonal fruit-picking jobs were advertised in local newspapers back in the day (I’m talking ’70s and ’80s).  I read such ads as a kid and wondered if I could get some pocket-money that way.  Students, I recall, habitually supplemented their grants by helping bring in the harvest – grape-picking in France being the coolest gig.

The government should simply  face down the farming lobby.  Tell them they’ll simply have to pay more after Brexit.  Put the minimum wage up faster than currently planned to give them a clue as to what they should be paying.  Don’t give them an exploitative migrant-worker scheme.  And don’t give one either to any of the many other industries that are also no doubt lobbying ferociously behind the scenes.  If some jobs move overseas and we have to import cucumbers, so be it.  It makes no economic sense for the UK to do everything – the theory of comparative advantage and all that.

The tragic thing is that if we hadn’t accepted over the last decade that it was OK to employ migrants on lower pay than Brits would accept for the same work and conditions we might not be Brexiting in the first place.

 

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.

Blog at WordPress.com.