Immigration and the EU

The first key point to make is that we are only talking about EU immigration – which is currently half the total. The other half – immigration into the UK from the rest of the World –is nothing to do with the current debate because it has nothing to do with the EU. The UK controls its own borders and makes its own policies on who it wants to let in and stay/work here from non-EU countries. Nothing in the EU referendum debate is going to affect that.

We are therefore only looking at the half that comes from the EU. If we left the EU (and the Single Market) then we would be able to independently set our policy on people coming from those countries to settle or work here. We could stop it completely, though there would be consequences and it is likely that the EU would do the same to British citizens. And since we already let in a substantial number of people in from outside the EU, it is hard to see that similar policies would reduce EU immigration to zero.

Say the UK left the EU and introduced new policies that reduced by two-thirds the number of EU immigrants that come to the UK. This would then only actually reduce current numbers by a third. I’m not saying that’s a good or a bad idea; just putting it in context. Immigration may be reduced by Brexit; but it is not going to affect the majority of it.

General Economic Impact of Immigration

Economics is fundamentally what drives immigration in the first place. Generally speaking, people move countries in search of work and a better life. Some settle for good, others come to earn some money and then return home. But they come because they can see there is economic advantage to them – i.e. there is a demand for workers. People do not, on the whole, dislocate their families and move across continents to places where they expect to be worse off. Economic demand for labour from a growing economy is the biggest (but not the only) pull and such labour benefits the economy by allowing it to increase its output.

It also benefits the economy in general – and companies in particular – by suppressing wages through increased competition. Now that’s good for companies; but bad for workers. A booming economy is usually a good time for workers who can see wages and conditions rise; but an influx of other workers can offset that advantage. As a consumer, though, we get cheaper goods made by the best person to do it – and that’s the best person out of a larger group so is likely to be better in general (see economy post).

So from an economic point of view, immigration is broadly good. It helps economy grow, provides increased profits and thus taxation, more workers and so taxation and keeps quality of goods and services up and prices down, which is good for the consumer. However, if you are one of those people who is now subject to more competition, having to raise quality, do more sometimes for less, then, for you, it’s harder. And the larger the immigration (of people competing for your job) the harder it is.

Impact on Services (NHS, Schools etc)

More people living and working in the UK means more demand on hospitals, schools, roads, everything. An unavoidable fact. And that has always been true. Every time the population of the UK has increased, there has been more demand and that has had to be addressed. But this isn’t the first time the UK population has increased. Far from it. From 50 million in 1951 just after the NHS was set up, it rose to 56 million in 1971 and then up to 63 million in 2011 (source: UK Census). So how did it cope then?

Public services coped because that increasing population – especially the baby boomer post war generation – worked and paid taxes (not just income tax; but NI, VAT etc). The increased population was productive and produced more resources and tax revenue to enable the expansion of the required services. In short, they paid their way.

So long as immigrants pay their way, then the economy benefits and they are not a drain. Since the people who emigrate to the UK are usually the most motivated and dynamic people – the risk takers, the hard workers – they usually add to the economy. They are also usually the young and the fit and so draw comparatively little on state services.

One of the best illustrations of this – not least because it has been used so much as an example of where the strain would be felt – is the NHS. Leave has repeatedly said that the NHS is already swamped and under strain because of immigrants. Well, there are two sides to this. Firstly, those who come and settle and work and pay taxes are adding to the UK’s tax revenues. The UK can cope with such growth in exactly the same way as we have when the population has grown since the NHS was founded. More people, more income, more doctors and nurses (some of whom will be from the EU).

Secondly, there are short term visitors under the European Health Insurance scheme (the E111 that we go on holiday with). This simply means that if you are not working or paying taxes in another Member State, you are entitled to use the Health Service there as if you were a local and they then bill your home state. The same obviously applies here and so anyone who visits and is treated in the UK (and isn’t paying their taxes here) is paid for by their home state. Likewise when we go on holiday and are treated there, the NHS picks up the tab.

So does the UK pay out a lot under this scheme? Yes, it does. Here is a graph of our payments net against claims that someone sent me on twitter.

Rembursement Graph

What I love about this graph (actually made by Vote Leave using Department of Health data) is that the person who sent it thought it was showing me how much we spend on people who come to the UK to use the NHS. In fact, that’s the little orange bit at the bottom. The big blue line is the amount the NHS has to spend on British Citizens abroad; but this makes sense when you think about it. Far more of us go to the Mediterranean for our holidays than Europeans come to the UK. Also, this covers the vast numbers of retired people settled in countries like Spain, who have more expensive healthcare needs that have to be settled by NHS. It shows that EU visitors are far from a burden on the public purse, mainly because most of them pay their way in taxes.

This is not to say the NHS isn’t under strain. I believe it is – though I am no expert in this. However, it is a simple fact of life that you need more medical attention as you get older and – as those baby boomers are now getting older – we have an aging population and it is more demanding. That isn’t a complaint, or attributing blame as someone once accused me, it’s just a fact. As is the fact that as a population our diet has deteriorated and this has led to more medical demands (and there are more medical treatments we can do nowadays). All of this means that the demands on the NHS are complicated and varied; but immigrants are a very small part of that – and affect it in a way the UK has dealt with before.

Having said that, huge influxes of any people into small local areas in a short space of time can have a dislocating effect. Changes can be managed – just as they have been in the past – but any such local difficulties need to be addressed. They are temporary issues, after all, as virtually every study has shown immigration to be an economic benefit.

Impacts of Immigration on Housing

In exactly the same way, an influx of people into any area, anywhere, is going to increase demand for a place to live. Again, that’s unavoidable. And so if a population goes up, people need places to live. All that is true; but it is hardly the whole picture. Two much bigger impacts on housing demand are the trend to smaller households in the UK (so the same number of people need more homes); and the planning restrictions that mean supply is restricted. Those two factors on their own drive most of the housing issue in the UK and account for house price increases. Immigration, though true, is a small part. And since leaving the EU could only reduce that by about third, it would be a small decrease on the smallest part of the problem.

Other Impacts of Immigration

The other aspect of Immigration is that it can change areas. People moving to a foreign country are more likely to band together for some comfort and so areas can become distinct. This can have an impact on the cultural as well as the economic state of an area. Now this is a sensitive area and such changes should be managed sensitively and productively.

The UK is and always was a hybrid nation. This is no bad thing – steel is far stronger than just pure iron after all – but it does need a mainstream which others can influence. We learn and are stronger from our exposure to other cultures and other views, we grow and become even more British – so long as there is an acceptance of the base culture, which can then be allowed to evolve.

Things change and always will. Towns develop, expand and contract. Industries rise, dominate and fade and things will never be like they used to be. That’s just a fact of life. And so it is with immigration. It can add to our cities and our British culture and it should; but this is dependent on an acceptance from people who have chosen to come here that they have entered a new country and need to accept those base values (and Brits abroad should do the same). If you can’t, then you shouldn’t have come.

Conclusion

Economically – and for consumers – immigration is mostly positive and should logically produce a net benefit (a fact borne out in virtually every study of it). However, at the sharp end, if it’s causing you personally more competition for jobs and suppressing wages, then it won’t feel like it. Voting with respect to what’s hitting you then makes perfect sense.

Housing is in short supply fundamentally because we don’t build enough and the way we live has changed. Changing immigration – reducing it by a third – will make a small dent; but not much. Building more is needed. That’s what we did when our population increased before and it’s the only long term solution now.

The NHS has many demands but immigration isn’t the cause. Virtually all of its issues are home grown – even if they now live abroad. Immigrants are paying their way, just as we would expect them to and when they’re just visiting, their home state picks up the bill.

So where does that leave us? If immigration is affecting you personally – or if you just don’t like the changing nature of your local area – then voting Leave to try and reduce that is a sensible way forward. However, whatever has happened has happened and no one is actually suggesting deporting people.  And we’re only looking at a reduction om immigration in the region of a third anyhow.

Other than that, the immigration argument simply doesn’t stack up. Economically positive (in general) but with challenges we’ve dealt with before. So to vote Leave on this basis would most likely hurt the economy and so us. Which – apart from those specific reasons above – makes it a poor argument.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *