On 23 June, the UK voted to leave the European Union on the back of a successful campaign from Vote Leave which emphasised taking back control and regaining sovereignty from the European Union. Indeed Vote Leave’s slogan was ‘Take Back Control’, and the likes of Boris Johnson and Michael Gove repeated this phrase endlessly throughout the campaign, it seemed to be the answer to every question posed of them.
Alas, when the UK judiciary did take back control last week, those on the Leave side of the debate were not best pleased.
Last week, High Court judges ruled that Parliament had to have a vote on the triggering of Article 50 of the Lisbon Treaty, the article which starts the process of withdrawing from the EU and which has to be triggered before any formal discussions can begin between the UK Government and the EU on a trade deal amongst other things. Theresa May and her Government felt that they should be able to choose when to trigger Article 50 themselves, and has such they have suggested that they will be appealing the High Court’s decision in the Supreme Court in due course.
The result of this court case led to huge anger from Leave campaigners like Nigel Farage, Iain Duncan-Smith, Suzanne Evans, and of couse The Daily Mail, all of whom cried (as they always seem to) that the ruling amounted to some sort of establishment stitch up.
However, wasn’t this exactly what they wanted?!
Their whole campaign to Leave the EU (which in economic terms was nonsensical) rested on the idea that the UK’s sovereignty was being impeded by the European Union. So you would think that there would be some pleasure in seeing UK Courts taking control of the situation.
But no, all we got was anger and even a suggestion from UKIP Leadership candidate Suzanne Evans that we should end the independence of the judiciary, with judges being elected to their positions — what a disaster that would likely turn out to be.
I suppose ‘Take Back Control So Long As The Decisions Made Are In Our Interest” wasn’t catchy enough for the big red battle bus.
What Leave voters need to understand (and very few of them seem to) is that the court case is not about stopping Brexit, indeed the vast majority of those who voted to Remain accept the result of the referendum. Full disclosure: I voted Remain myself, and was strongly in favour of remaining. Although I am still of the opinion that the referendum should never have been called it ultimately was, and I am willing to accept the result. However, just because the Leave campaign won, doesn’t mean that the views of the 48 percent who voted Remain should be completely ignored, we should be seeking some sort of consensus in order to unite the country. Equally, amongst the 52 percent who voted Leave, many voted for completely different things. Some voted to completely withdraw from Europe and all its institutions, some voted purely to retake Parliamentary sovereignty in terms of legislation, some voted purely to reduce immigration, many voted to leave the EU but still harboured a desire to remain inside the Single Market — including former Conservative MP Stephen Phillips who resigned on Friday.
Yes, the public have voted to Leave the European Union, but that does not mean we should just Leave straight away without the Government even thinking about it first. In my mind, there is surely no better way to do this than to put the issue to Parliament, to individuals who deal with complex legislation every day.
In addition, it is important for the electorate to now where the government stands on negotiating a deal with the European Union — where the government’s ‘red line’ is, so to speak. Given that Theresa May hasn’t been elected as Prime Minister, this is even more important. Yes, I know that technically we have a Parliamentary system where we don’t elect the Prime Minister, however I personally think that the vast majority of people cast their vote based in large part upon the party leaders who are the prospective Prime Ministers.
On this basis, it seems right that the government should call an early election in order to gauge public opinion about what sort of Brexit the electorate wants. For the government to go into negotiations in effect blind, means that there will definitely be a vast majority of UK citizens who feel disappointed with the results — likely including many who voted Leave on June 23.
As for those Leave campaigners who are still criticising the judges who made last week’s decision, they are playing a very dangerous game. As one of the more sensible Leave campaigners, journalist Iain Martin wrote in The Observer on Sunday: “we could try electing judges, or ordering judges to disregard and ignore the rule of law on the order of politicians, but the international historical precedents do not suggest it ever ends well.” Those Leave campaigners should stop to discredit and promote the illegitimacy of these judges. For them to continue to do so could be hugely harmful to the rule of law in this country.
They should remember that the decision is not a stitch up which aims to stop Brexit, but it is simply the court ensuring that Parliament plays its rightful role in the process, by providing a check to the government’s power.
Yesterday the surprise runner up in the Conservative Party leadership race, Andrea Leadsom, made her first major speech as the Secretary of State of Environment, Food, and Rural Affairs. Speaking to the Conservative Party conference, she set out her vision for post-Brexit Britain — whilst everyone breathed a sigh of relief that she didn’t become Prime Minister.
Leadsom began by bringing up the example of the person selling bottles of English countryside air, seemingly as her pick as our best rural export. Although there is indeed a company selling bottled countryside air for £80 a jar, they have estimated they only sell around three hundred jars per annum. So slightly baffling that Leadsom thought it sensible to mention in her speech. One would hope that her post-Brexit strategy for our rural exports is based on something better than this.
She then went on to talk to complain about how the lack of mobile phone signal in the countryside meant that she couldn’t play Pokemon Go. This was meant as evidence for her commitment to the rolling out of superfast broadband throughout rural areas of Britain, but surely she could have thought of a better example?!
Finally, she used the old Conservative Party Conference favourite of talking about how we export food to countries who have invented the food in question.
Leadsom said: “We’re selling coffee to Brazil, sparkling wine to France, and naan bread to India.’ Of course she tactfully failed to mention the amount which is coming the other way. But, nonetheless continuing the commitment to British produce held by her predecessor at DEFRA, Liz Truss. It was of course Truss who came up with the memorable line at the 2014 Conservative Party Conference: “We import two-thirds of our cheese. That. Is. A. Disgrace.” Needless to say, Truss’s speech was replayed many times other, and the same will undoubtedly occur with Leadsom’s this time around.
All this from Leadsom, without properly addressing the integral role that migrant labour plays in the functioning of the rural economy. According to her, the shortfall can be completely made up by employing British youths. Not likely. This simply went further towards proving her evangelical attitude towards Brexit. Clearly Leadsom, just like fellow Brexiteer Liam Fox, won’t accept any free movement of people, even if it is integral to the survival of UK businesses.
This speech just proved that Leadsom wasn’t in any way qualified to become Prime Minister. How she nearly managed to, is beyond me.
Examining the similarities between the rise of Donald Trump and Jeremy Corbyn.
On Wednesday, Jeremy Corbyn gave his keynote address at the 2016 Labour Party Conference. Generally it was quite well received, the consensus being that it was a stark improvement on the speech he gave this time last year. However, what struck me most was the similarities between Corbyn’s speech on Wednesday, and the speech given by Donald Trump after his acceptance of the Republican nomination at the Republican National Convention in Cleveland in July.
Given that Corbyn is ostensibly left-wing, and Trump ostensibly right-wing, this is rather weird. But, oddly it does seem to be the case, and just adds to the list of similarities between the two.
Take these two passages for example:
“…a conviction that the old way of running the economy and the country, isn’t delivering for more and more people.
It’s not about me of course, or unique to Britain but across Europe, North America and elsewhere, people are fed up with a so-called free market system, that has produced grotesque inequality stagnating living standards for the many calamitous foreign wars without end and a political stitch-up which leaves the vast majority of people shut out of power.”
“I have visited the laid-off factory workers, and the communities crushed by our horrible and unfair trade deals. These are the forgotten men and women of our country. People who work hard but no longer have a voice.
I AM YOUR VOICE.
I have embraced crying mothers who have lost their children because our politicians put their personal agendas before the national good. I have no patience for injustice, no tolerance for government incompetence, no sympathy for leaders who fail their citizens.”
Effectively, these two passages are pushing the same message: that the old way of doing things is no longer working for the common man, with the current system involving the privileged few making all the decisions and then sharing out the wealth between them. In short, the central message running through both extracts is something along the line of: “the world is broken”. This is how both Corbyn and Trump have gained most of their support, by using people’s mistrust of the political elite and capitalising on it, by putting themselves forward as a voice of those who are ignored by the political elite. Both push the message of inequality caused by the perceived inequities of the free-market economic system.
As well as this speech, there are a great many more shared characteristics between the pair.
Both rose to the helm of their respective parties against the wishes of most of the party grandees, doing so after their parties had electorally imploded.
Both have built their success upon a group of supporters which are more of a social movement than a political party.
Both rely upon populist sentiment.
Perhaps most similar, is the tendency of both to diagnose the problems faced by their respective nations, but to not put forward any real solutions.
Trump did this throughout his first presidential debate with Hillary Clinton on Monday, constantly talking about what was wrong with the economy, trade deals, and foreign policy; but not really putting forward any realistic policies with which to solve these problems. Despite this, Trump continues to garner huge support. His supporters don’t seem to care whether he offers any realistic policy.
The same is true of Corbyn and his supporters. Corbyn regularly talks about the problems with the policy of the current government, the previous Cameron government, and the policy of the Blair and Brown governments; but, he never really puts forward real solutions to the problems which he has identified. Despite this his supporters continue to support him, seemingly caring little about the electability (or lack of electability) of their party leader.
These similarities between Corbyn and Trump are evidence of a growing trend in politics all around the world, the trend for populist candidates who are seen to be speaking for the common man. We saw this properly begin with the election of Syriza in Greece, whilst the trend continued to manifest itself with many other events: Trump, Corbyn, Brexit, UKIP, Le Pen, Sanders, and many more. Whether on the left or the right, there is a trend for populist leaders who are seen to speak for the common man rather than corporate interests.
Ultimately, it is difficult to see many of these populist leaders winning elections outright. However, whether they win or lose, what is clear is that they are changing world politics exponentially. With the vote for Brexit we have already seen that these populist forces can shock the political establishment, and we may yet see it again with Trump, and with Corbyn (although this seems very unlikely to me).
Whatever the results in their respective elections, the similarities between Corbyn and Trump show just how much politics has changed in the years since the banking crisis, particularly in the last couple of years. With populism bedding itself in on both the left and right of the political spectrum, it seems unlikely to go away any time soon.
As soon as Theresa May became the last person standing in the Conservative leadership race and therefore the Prime Minister, the calls for her to call an early election began in earnest from opposition parties. The Labour Party, the Liberal Democrats, the Green Party, and Ukip all suggested that she had no real mandate and should therefore call an election in order to resolve this. However, May held firm and stated that with her as Prime Minister, there would not be an election until 2020. However, given the current circumstances, this would be misguided.
Currently the Conservative Party have a working majority of just seventeen in the House of Commons. However, in opinion polling they are far further ahead than this. In recent polling by YouGov, the Conservative Party held a lead of eleven percent over the Labour Party in terms of voting intention. When you factor in that Ukip are still polling at thirteen percent, and many Labour constituencies voted Leave in the EU Referendum, then the current situation looks perfectly poised for Theresa May to hugely increase her majority if an election was held in the near future.
In addition, polling has shown that the public do not believe that Jeremy Corbyn would be a viable Prime Minister. The recent Traingate fiasco has eroded public support for Corbyn even further, with polling showing that the public doubt Corbyn’s story regarding him being forced to sit on the floor by a margin of almost three-to-one. This incident has greatly damaged Corbyn’s desired image of authenticity. Proving that he likes to ‘spin’ just as much as any other politician, but he just happens to be rubbish at it. With the main opposition party being led by a leader who it can surely be agreed is unelectable, then it makes sense for Theresa May to attempt to increase her majority as soon as possible.
May should also attempt to hold an early election in order to gain a personal mandate to serve as Prime Minister. Technically, given that the UK has a Parliamentary system, there is no obligation upon May to hold a general election in order to gain a personal mandate. There have been five occasions since the Second World War where the Head of Government has changed mid-way through a Parliament. In 1957, Harold Macmillan succeeded Anthony Eden, and was then succeeded by Alec Douglas-Home in 1963. James Callaghan succeeded Harold Wilson in 1975; John Major succeeded Margaret Thatcher in 1990; and Gordon Brown succeeded Tony Blair in 2007. In none of these five cases was a general election held in order for the new Prime Minister to gain a fresh mandate. This is because in the UK we elect a Parliament and then the Government is formed from this Parliament, rather than the Prime Minister being directly elected.
However the increasing personalisation of politics, in part through the increased media coverage which comes with the 24-hour news cycle and the internet, means that although it is not constitutionally necessary to call an election, it may still be deemed necessary in the eyes of the public. In 2007, there were strong calls for Gordon Brown to call an election, with many people stating that he needed to gain a personal mandate. Interestingly, one such person was Theresa May who stated that Brown was, ‘running scared of the people’s verdict’. Ultimately, Brown chose not to call an election and served as an unelected Prime Minister until 2010. Although this was constitutionally allowed, the decision dogged him during the 2010 General Election campaign with continued assertions that he had served as Prime Minister against the will of the British people, having failed to seek their approval through the holding of an election.
Therefore, if May has any sense, she will attempt to call an early election soon in order to secure her personal mandate. This is the sensible option given the state of the opposition parties. The ongoing soap-opera in the Labour Party means that they will surely struggle to run an effective election campaign, and although Jeremy Corbyn is certain to defeat Owen Smith in September, who knows who will be leading the Labour Party come 2020. May should strike now, whilst she knows that she is guaranteed victory and an increased majority.
However, there are several difficulties inherent in the calling of an election at this time that mean May might decide against it.
The Fixed-term Parliaments Act 2011 means that the Prime Minister can no longer just dissolve Parliament when he or she chooses. The act set the date for the 2015 General Election as 7 May 2015, and then set an election every five years after. There are however, two ways to get around the act.
If two-thirds of the House of Commons vote for an early election to be held, then the Fixed-term Parliaments Act can be bypassed. Now, this may seem easy given that the leadership of most of the opposition parties sitting in the House of Commons have called for an early election. However, those calling for an early election in the Labour Party are those who still hold the misguided view that it is possible for Corbyn to win an election and become Prime Minister. The moderates who don’t support Corbyn will surely be loath to vote for an early general election as they will be worried about losing their seats due to the unpopularity of the party’s leadership. Similarly, although Nigel Farage called for an early general election, he has since resigned as the leader of Ukip. With Ukip poised to elect someone who nobody has ever heard of as leader, they may not be too keen on an early election either. At least until their new leader has settled in. The Green Party are in a similar situation of leadership flux, whilst the Liberal Democrat brand is surely not yet strong enough to fight another election. Seemingly, the only party who would be organised enough to fight an early general election would be the SNP. Therefore, it is difficult to see opposition parties voting in the House of Commons for an early general election to be held. It seems likely that the opposition leaders calling for an early general election after May succeeded David Cameron, were simply trying the give the new government a bit of a bloody nose.
The second way in which the Fixed-term Parliaments Act can be bypassed is through a vote of no-confidence in the government. This requires only a simple majority vote. Following a vote of no-confidence, there would then be a period of fourteen days where new governments MPs could attempt to form new governments and try to command the support of the House of Commons. May’s supporters would have to vote these proposals down in order to secure an early election. The danger of his option is firstly that the Prime Minister appears incompetent as a result of seemingly not being able to command the support of her own party following a vote of no-confidence. This would hardly be good for her electoral prospects. Secondly, in creating the situation for a vote of no-confidence, there would be the danger that Theresa May comes out of the process looking slightly Machiavellian. The public popularity of politicians and the Westminster elite remains very low, and therefore it would be hard to get them to buy into a scheme like this. Witness the unpopularity of Michael Gove after he stabbed Boris Johnson in the back in the race for the Conservative Leadership, as an example of the public’s dislike of Machiavellian politics. Therefore, a scheme like this wouldn’t do much for May’s popularity.
Therefore, there are serious difficulties inherent in the calling of an early general election, that make it somewhat unlikely that we will have an election before 2020. In addition to the constitutional difficulties, May’s original decision to say that she was ruling out an early election was likely to give the economy some sort of certainty following the repercussions which came as a result of the Brexit vote. It seems unlikely that May will want to increase this uncertainty.
Overall, it seems unlikely that an early election will be called. May seems content with the mandate earned by the Conservative Party in the 2015 General Election, whilst the constitutional requirements for calling an early election make it a very difficult task.
However, by not calling an early election, May is throwing away a golden opportunity. An opportunity to increase her Parliamentary majority hugely, and therefore guarantee the passing of her legislative agenda; whilst also potentially gaining a majority large enough to keep the Conservatives in power for many years.
But, although Theresa May should attempt to call an early general election, she probably won’t.
On Wednesday, David Cameron will take part in his last session of Prime Minister’s Questions before handing over the Prime Ministerial baton to Theresa May. Upon taking office May will almost certainly make significant changes to the existing Cabinet, with key allies such as Damian Green, Chris Grayling, and James Brokenshire potentially being promoted into big cabinet jobs.
One person who will be less sure of their position is George Osborne. Given Theresa May’s recent criticism of economic policy under the leadership of David Cameron and George Osborne, it seems likely that Osborne’s six year tenure as Chancellor of the Exchequer has come to an end. On Sunday May said:
For a Government that has overseen a lot of public service reforms in the last six years, it is striking that, by comparison, there has not been nearly as much deep economic reform. That needs to change.
This suggests that Theresa May intends to take a rather different strategy in terms of her economic policy, meaning that Osborne’s position as Chancellor is now untenable. You may think that this means the end of Osborne’s government career, and that he will be discarded from the cabinet to serve on the backbenches for the remainder of the Parliament. However, there is still a role that he could fill in Theresa May’s top team.
The overwhelming favourite to become the new Chancellor of the Exchequer is current Foreign Secretary Philip Hammond. Hammond has vast cabinet experience as Transport Secretary, Defence Secretary, and Foreign Secretary, and has also served as shadow Chief Secretary of the Treasury, making him ideally placed to take over as Chancellor. In addition, Hammond was a strong supporter of May during her ultimately short campaign for the Conservative party leadership. This leaves a vacancy at the Foreign Office which can be filled by Osborne.
Although there would likely be an outcry amongst the Conservative MPs who campaigned to leave the European Union that two supporters of the remain campaign are given the top jobs in the new government, the experience of Hammond and Osborne will be vital for the new government. The UK’s shortage of trade negotiators has been well publicised in recent weeks, with this shortage caused by the fact that it has been many years since the UK has been in a position of having to negotiate its own trade deals. Previously this was left to the relevant department of the European Union. With no potential cabinet members with experience of making trade deals, the international experience of Hammond and Osborne will be vital to the new government. Both have extensive experience of travelling abroad on government business, and both have cultivated strong relationships with their international counterparts. When it comes to negotiating international trade deals in the near future these relationships could be crucial. Although Theresa May has pledged to appoint a Secretary of State for Brexit (most likely Chris Grayling), Hammond and Osborne could be significant assets when it comes to negotiating with countries outside of Europe. Most importantly: Canada, China, India, and the United States.
Indeed, George Osborne is currently in the United States promoting closer US-UK relations, whilst he has also been promoting increased trade with the likes of China and India.
Given that Osborne has already begun to promote Britain’s cause around the world, he would seem an obvious choice to become the new Foreign Secretary. This is a move that David Cameron himself was strongly considering had he remained as Prime Minister following a win in the EU Referendum.
In addition, Osborne reserved strong praise for Theresa May after she became the presumptive Prime Minister, indicating that he was willing to put behind him their previous disagreements upon cuts to public spending, as well as his keenness to continue in the cabinet.
Therefore, despite the likely anger this will provoke amongst the Brexiteers (given that Osborne is hated for his prominent role in the remain campaign), Theresa May should make Osborne the new Foreign Secretary as his relationships with other world leaders will prove crucial in Britain being able to make strong trade deals in the years to come.
As for Philip Hammond, there are few individuals who are as qualified for the second highest office in the government. Hammond has frequently been described as boring. In January, The Times described him as ‘Mr Boring’, whilst in February The Guardian described him as ‘Dull Phil’. But, in this time of great upheaval, perhaps boring (and more importantly: competent) is exactly what is needed as Chancellor.
Overall, Hammond and Osborne should remain in the government when Theresa May announces her cabinet in the next few days. Although both backed the losing remain campaign (meaning that their appointment may prove divisive amongst those who backed Leave), they have significant experience in cultivating international relations and some continuity of personnel is exactly what is needed in this time of great uncertainty.
Immigration is good for the economy. This doesn’t seem to be something which you hear very often. What with Nigel Farage’s constant statements of how an ‘Australian-style points system’ would solve all our problems, and Donald Trump’s rhetoric around the dangers of immigration, the positive case for immigration seems to be made ever so rarely. I aim to debunk some of the myths surrounding immigration and reinforce why we should vote to remain a part of the European Union on 23 June, with the unrestricted immigration from EU countries which this brings with it being a good thing for the UK economy, and the country as a whole.
It is often said that immigration is bad for the economic. However, this is simply untrue. Basic theoretical economics suggests that immigration in fact increases economic growth.
In order to understand how immigration drives economic growth, only an understanding of very basic economics is required. The basic definition of economic growth is an increase in the output of an economy over a period of time, whilst economic growth can also be defined as an increase in an economy’s productive potential.
As a general rule, most immigrants who come to the UK, come to the UK to work. These people are employed in a variety of roles within the UK economy. It may be that they are working in financial services in the City of London, they may be working as a doctor or nurse in the NHS, or they may be working as a labourer on a construction site.
Growth in an economy’s work force, allows an economy to increase its potential output. When the level of immigration exceeds the level of emigration then this leads to an increase in the workforce. An increase in the workforce means that the economy’s productive potential increases as more workers means more output. Simple, right?
The best way to illustrate this effect is by using a Production Possibility Frontier (PPF) graph. This graph illustrates an economy’s production level of consumer goods and capital goods and how an increase in the workforce can change the level of production.
In this case, the purple curve represents the economy’s output level when only its original workforce is utilised. The yellow line shows how this level of output increases when new workers (in this case immigrant labour) are utilised and begin to contribute to the economy’s level of output.
As shown here, immigration is clearly a key driver of economic growth. As previously mentioned economic growth is effectively an increase in the production capacity of the economy. An increase in the workforce as a result of immigration is clearly something which achieves this. In fact, it is often said that the government would not get close to its economic growth targets if it were to meet its immigration targets.
Therefore, immigration clearly does not cause stagnation in economic growth. It is in fact extremely positive for economic growth.
Myth Two: immigrants are a drain on our public services.
It is regularly stated by campaigners for lower immigration that immigrants are a drain on our public services. In terms of the economic impact of immigration upon public services it is healthcare and education which are the most relevant public services to consider. It is often suggested that immigrants take advantage of the NHS and the UK’s state education system, whilst also claiming state benefits and therefore not paying tax. This would suggest that immigrants are a drain on our public services. It is often low-skilled immigrants from European Union countries who are particularly tarred with the brush of being a drain on public services.
However, studies have actually suggested that the opposite is true. In actual fact, immigrants are net contributors to the government’s finances. A studyby Christian Dustmann of University College London and Tommaso Frattini of the University of Milan into the impact of immigration on the provision of public services found that between 1995 and 2011, EU immigrants made a positive contribution of almost £4 billion. This can be contrasted with a negative contribution of £591 billion by native Britons. From these statistics it seems clear who is the real drain on public services.
As well as their net contribution to the public purse, it was also found that European immigrants were significantly less likely than native Britons to claim state benefits (eight percent less likely) and, less likely to live in social housing (three percent less likely). Therefore, from this standpoint as well, European immigrants are less of drain on public services than native Britons.
The effect on the provision of services such as healthcare should also be considered. Whilst it is true that an influx of immigrants means that there are a greater number of people for whom healthcare must be provided which makes healthcare more expensive, it is not as simple as this. Most immigrants pay tax and therefore pay into the UK’s healthcare system just as any native British taxpayer does. In addition, it has been found that there is a high likelihood that immigrants will return to their homeland following retirement. This means that the NHS does not bear the high cost of providing healthcare to many immigrants in old age. Therefore, for these two reasons, to suggest that healthcare is more expensive as a result of immigration, is clearly wrong.
It tends to be argued that immigrants lead to longer waiting times at hospitals and a less competent health service as a result. In actual fact the opposite has been found to be true. In a 2015 study by the University of Oxford’s Blavatnik School of Government, it was found that there was actually a correlation between increased immigration and lower waiting times. In Nottingham and Sheffield, cities characterised by high levels of immigration, hospital waiting times were among the lowest in the UK. Contrast this with Dorset and Herefordshire, both of which have very low immigration, where waiting times were around 50 percent longer. Therefore, the common perception that immigration increases waiting times at hospitals is clearly a myth.
Finally, without immigration, the NHS would not be properly staffed. More than a third of the doctors in the UK were trained abroad, and the same is true of many of the nurses working in the UK. If we were to significantly reduce immigration then the NHS would not have enough trained medical staff to operate properly. Of course most of those who support a radical reduction in immigration will answer that the solution is simple — train more doctors and nurses! However, it is hard to see how the UK will suddenly, magically be able to increase the number of medical staff that we train. Successive governments have failed to train a sufficient numbers of doctors and nurses, and it is hard to see how this will change in the short to medium term. Therefore, immigration is necessary in order to keep the NHS running to a high standard.
It seems clear that immigrants are not the drain on our public services that they are often made out to be. Therefore, we should not be using this as an excuse to reduce immigration.
Myth Three: immigrants drive down wages.
Basic economics would suggest that an increase in the workforce (in this case caused by immigration) would lead to a fall in average wages. This would mean an increase in the labour supply leading to a fall in the demand for labour, which would in turn lead to a fall in wages. This would look something like this:
In theory an increase in the labour supply leads to wage depression. As shown on this graph, the labour supply increases which causes a fall in demand for labour as previously available jobs are filled. This fall in demand for labour subsequently leads to wage depression.
However, this simple explanation fails to take into account the developed and dynamic nature of the UK’s economy. When immigrants come to the UK they increase the level of demand in the UK for a number of goods and services. This increase in demand for goods also leads to an increase in demand for labour through the creation of new jobs, which means that the wage level remains relatively unchanged. What actually happens looks something like this:
This graph shows how an increase in the labour supply leads to a subsequent increase in demand for labour, which keeps theoretically keeps wages at a stable level. Of course, this theory remains vulnerable to external shocks which can cause a wage decrease for the whole workforce as occurred as result of the recession. However, this is not something which is caused by immigration.
Therefore, immigration is not actually the most significant cause of wage depression.
Myth Four: immigrants caused the housing crisis.
A common theme throughout the immigration debate and the debate around the UK’s continued membership of the European Union has been the perception that immigrants caused the housing crisis. This stems from the view that the increased demand for housing from immigrants has caused the housing shortage that the UK faces today. This suggests that the problem is one of demand for housing being too high. However, this is fundamentally wrong. The problem is in fact, one of supply.
In 2004, the Barker Review of Housing Supply suggested that a quarter of a million homes needed to be built each year in order to guard against spiralling house prices and a shortage of homes. In 2007, this led to the UK government setting a target of building 240,000 homes a year until 2016. This target has not been met in any year since then, with the most successful housebuilding year being the 219,000 that were built in the year 2006–07. This lack of housing supply has been exacerbated significantly due the dramatic drop in new build property caused by the financial crisis. It is this legacy of the failure to build a suitable number of affordable homes that is hitting home now. It would be wrong to say that immigrants have no effect on the demand for homes, but their effect is negligible at best. This shortage in housing supply is likely to be exacerbated still further by the government’s extension of the ‘right to buy’ scheme which was announced in the Conservatives 2015 General Election manifesto. For right to buy to work properly the government must replace the social housing sold by building the same number of new houses. However, this does not happen. For example, government statistics show that 11,000 council houses in Cambridgeshire have been sold since 1980 under right to buy. Over this same timeframe, only 2,750 council houses have been built to replace them. The same is true all over the country.
Ultimately, the housing crisis is a problem of supply rather than demand. Immigrants are not responsible for the long-term failure to build a sufficient number of houses.
In addition, if immigration falls then the construction industry will be significantly harmed. All over the world the construction industry has always relied upon migrant labour, and the UK is no different. In the UK there are not enough Britons who are trained in construction, meaning that immigrant labour is required in order to fill the gap. Whatever your view on the causes of the housing crisis, there can be little argument that a strong construction industry will be vital to alleviating the problems with housing in this country. If immigration was capped, then the construction industry would be severely damaged and we may never properly recover from the housing crisis.
In summary, immigrants were clearly not responsible for the housing crisis and are in fact key to solving it.
There are many myths surrounding immigration, and immigrants from the European Union are routinely vilified as having a negative impact upon the UK economy and the country as a whole. However, this is not the case.
I hope that this article has succeeding in debunking some of the myths which surround the effect of European Union immigration to the UK, whilst also making the positive case for immigration.