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Defending free movement

14 July 2014 By Hugo Dixon

If the UK leaves the European Union, the main reason will probably be because people fear immigrants are overrunning the country. The best way of assuaging these concerns is to show how free movement of people within the EU benefits the economy and society overall, while acknowledging that some groups may be harmed and working hard to improve their lot.

So far, David Cameron’s Conservative-led coalition party has not done this effectively. The field has therefore been left open to the UK Independence Party, which wants to pull Britain out of the EU and which has cleverly fanned and exploited the native population’s fears about immigration.

There are multiple concerns. One is that immigrants are taking British jobs. Another is that they are “scroungers,” coming to live off benefits. Other fears are that they are depressing wages (especially among the low-skilled), are responsible for a crime wave, make it harder for the native population to find homes, and are overloading schools, hospitals and other public services.

Most of these concerns are untrue or exaggerated when looking at the country as a whole, as the government’s Migration Advisory Committee (MAC) made clear in a report published last week. It focused on low-skilled immigration because that has been much more controversial than high-skilled migration.

Take jobs. The number of UK-born people in low-skilled employment fell by 1.1 million between 1997 and 2013. That is matched by a 1.1 million rise in the number of people in low-skilled employment born outside the UK (not just in other EU countries).

If one looked at just those statistics, one might think foreigners are taking British jobs. But the number of jobs isn’t fixed. In fact, it has grown sharply by 3.3 million over the period – mainly because a higher population generates more demand for goods and services.

What’s more, the growth has occurred in high-skilled jobs. Although the number of native people in low-skilled ones fell by 1.1 million, the number in high-skilled ones rose by 2.2 million. That is generally a good thing.

The MAC report judged that the UK’s “flexible labour market has mainly served us well.” It also concluded that nationwide there was little impact from immigration on welfare claims, crime or use of education or health services.

This complements other studies which have shown among other things that: the number of so-called welfare tourists is vanishingly small; and EU immigrants pay more in tax than the value of public goods and services they receive (unlike the native population).

However, while the overall picture is positive, the new report highlights four specific problems.

First, the UK is not equipping its less academically gifted young adults well to compete in the jobs market. That’s partly because of government educational targets, which focus on pushing up average attainments and so miss out those at the bottom of the class where basic numeracy and literacy skills are low.

It’s also because many young Brits don’t score well on “soft skills” such as flexibility, reliability, teamwork, a desire for continuous improvement and confidence. Employers often prefer foreign migrants.

What’s more, the welfare system discourages Brits from taking temporary or seasonal work as well as from moving around the country.

For all these reasons, there are too many young people who are “NEETs” – not in education, employment or training – and who aren’t otherwise available for work (say if they are looking after their own children). Britain has around 600,000 of these, the vast majority of whom have low educational attainments.

Second, Britain is not doing nearly enough to enforce its employment legislation. Since 2007, there have been only nine prosecutions for not paying the minimum wage.

Immigrant workers, who sometimes don’t know their rights, are the main victims of this enforcement failure. But low-skilled natives also suffer indirectly because employers are more willing to turn to immigrants on the grounds that they are easier to exploit.

Third, the UK is not building enough new homes. The shortage is particularly acute at the bottom of the market. Although EU immigrants do not use publicly funded housing nearly as intensively as natives, they still make it harder for locals to find such homes.

Finally, migrants are not evenly spread around the country. They are concentrated in a few areas, especially London, and this can create pinch points in the provision of local services such as education and healthcare.

What’s striking about this list of problems is that the government could go a long way to solving them all if it applied itself effectively. It could get schools to focus on basic maths and literacy skills for the less academically gifted; it could put more resources into enforcing the minimum wage; it could do much more to increase the supply of homes; and it could give money to local authorities where there are particular concentrations of immigrants so that they can maintain the quality of services, something the previous government started doing but this one stopped.

If the UK continues to fail to do these things, the backlash against immigration in parts of the country may continue to rise. And the government will be partly to blame if the people ultimately vote to quit the EU.

 

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