Immigration in Budapest

I visited Budapest on 22nd September 2015 to take part in a debate at the Eotvos University on what were the costs and benefits of immigration.

I last visited Budapest in May before the immigration crisis became serious and, in fact, I used the Kaleti railway station three times and, although there were plenty of backpackers there, I did not see any obvious migrants at that time.

This time I did not visit Kaleti but I was told that, two weeks ago, it was indeed full of migrants sleeping there.

Yet, in central Budapest this time I never saw a single distressed migrant, despite the presence of literally thousands of Chinese, American, Australian and European tourists in the streets, in the restaurants and on the river Danube.

This brings home one important observation. There can be a major crisis going on in a country and, indeed, there are still major migration flows in and around the Hungarian borders, but the central district of politics, culture, fashion and money, can be quite serene. So, in the UK, suburbs of old industrial towns can be demographically transformed while Islington, Hampstead and Kensington are unaware of what’s going on. Thus the political and donor classes are often quite detached.

I had been briefed about the Hungarian character; that it was reclusive, cautious and undemonstrative, at least in politics. This has its roots in the disastrous result of the First World War when the Treaty of Trianon led to the loss of two-thirds of traditional Hungarian territory to Slovakia, Russia, Poland, Serbia and Croatia. It was reinforced by the fairly benign dictatorship of Admiral Horthy following a short-lived ‘Red’ Terror under the government of Bela Kun and Tibor Szamuely and the Arrow Cross-Nazi occupation of 1944/5. Disasters for the Hungarian army on the Eastern Front and the transportation of much of Hungarian Jewry to Auschwitz in 1944 followed.

Then came the Communist tyranny and, finally, the revolt of 1956, after which some 2,000 people were shot and 200,000 Hungarians left the country. All this is chillingly displayed at the ‘House of Terror’, a much visited building which housed the Gestapo and the NKVD and is a must-see for visitors.

Presently, the Hungarian government, led by Viktor Orban, is a nationalist conservative one but it is harried by Jobbik, which can be described as an ethnic nationalist party. Left wing views are still put forward but were, on the whole, muted at the university.

The content of the debate was interesting but hardly novel and was, of course, heavily influenced by the current migration crisis. I was paired with an excellent German Professor, Dr. Weede, who was highly critical of Mrs. Merkel and opposed by two Hungarian professors.

As everybody else on the platform was a professor I was also called professor and did not contradict those who used this term!

Yes, Hungarians in this audience were restrained, cautious and undemonstrative. They were concerned about immigration from Asia and Africa, although it was not visible to the casual observer. There was certainly no enthusiasm for the EU and Dr. Weede was scathing about the behaviour of Merkel, leaving the Eastern European states to carry much of the cost for her ‘virtue-signalling’.

Yet, like the other Eastern and Southern European states, the Hungarians do get benefits from the EU and they don’t want to lose the economic benefits of EU membership and the ability to travel and migrate for work offered by Schengen, (Hungary is not in the euro) and the EU Treaties.

However, there is no enthusiasm for the EU. It is a ‘transactional’ relationship. Few seem to want any migrants but most Hungarians have still not been confronted by the actuality of mass migration. Certainly, the real nature of EU membership is now being noticed.

Expat worries are mistaken

The pro-independence movement is excited by the prospect of withdrawal. However, to secure that all-important “out” vote, it will be necessary to win over a good many people for whom the terms of the debate so far has made them anything but excited about the thought of “Brexit”. One such group is the expatriate community. Some of our compatriots living abroad are very concerned indeed.

The root of the problem is the strong language that has been used in the debate about immigration. For a number of voters, a desire to limit the number of people coming to the UK is the most important reason they would give for supporting withdrawal from the EU. Some of these people may have genuine concerns, such as suffering an increase in waiting times at their local GP’s surgery due to large numbers of migrants, or finding themselves undercut by Eastern European tradesmen willing to work for a pittance. Others may be xenophobes in the worst sense. For all the variety of reasons different people may give for their concerns, the net result is that there is considerable political capital to be made in talking tough on immigration, whether from the EU or elsewhere.

However, this cuts both ways. A substantial number of UK citizens live abroad – some 8% of our population, in fact. Most countries boasting large numbers of expatriate Brits are, unsurprisingly, Anglophone nations such as Australia, Canada, New Zealand and the USA, but the prospect of a retirement in the sunnier climate of the Mediterranean has attracted large numbers of our fellow-countrymen too. Estimates vary, but it is possible that as many as 700,000 UK citizens are resident in Spain and 200-400,000 in France. Also growing in popularity is Bulgaria, which boasts a pleasant climate, incredibly cheap housing and, at least in the villages, a strong community spirit. At least 50,000 of our countrymen have chosen to relocate to this country whose own citizens are not exactly popular when they come over here. It’s not just retired people who have moved abroad. Berlin, hardly renowned for sea, sand and sunshine, was home to over 14,000 Brits at the end of 2012 – many of them young people attracted by a city that has developed a trendy image in recent years.

If freedom of movement of people were curtailed when we leave the EU, what would become of these people? As has already been pointed out on this website, misinformation stating that they would become “illegal immigrants” has been put about by no less an individual than Dominic Grieve, the former Attorney General. As we pointed out, people who have acquired rights of residence will still have those rights whatever form of exit might ensue. They simply can’t be booted out. However, our blog isn’t reaching the areas it should, for a recent report suggests that a number of expats are so concerned about withdrawal thay they looking at acquiring dual citizenship to ensure they won’t end up stateless. Likewise, as the Guardian reported recently a number of EU citizens resident in the UK are considering similar action.

It would be a tragedy for the “out” campaign if immigration was to become the most dominant issue. It would mean that we would lose, point blank, and the blame lying with wishful thinking. Given that the most seamless exit route from the EU is via the EEA and EFTA, whatever some people might desire, we would still initially remain subject to all four freedoms of the Single Market, including free movement of people, so compulsory repatriation of EU residents just isn’t going to happen. Within the EEA, we need not allow the dependents of migrant workers from the EU to join them and if we feel we are struggling to cope with the number of EU citizens arriving here, there is the possibility of applying a temporary brake, as Liechtenstein has done. That is all. Furthermore, any long-term arrangement replacing the EEA agreement would inevitably want to ensure the preservation of vested rights – a fundamental principle of international law – allowing long-term residents to remain where they are. It is, of course, possible that independence may well result in substantial numbers of people voluntarily returning to their own country. Some expats, disillusioned with recent politics in the UK, may feel that independence offers a chance to put the country right and come home. Some EU citizens currently resident in the UK may decide that they do not wish to reside outside of the EU, even if they would not be treated any differently in an independent UK. However, we cannot be sure what will happen. Others clearly like it here and will want to stay, come what may. It is therefore better for them and for our own expatriate community if ALL supporters of withdrawal keep the focus on what really counts – the re-establishment of UK sovereignty – rather than allowing free movement of people to dominate the forthcoming campaign. Those who are uncomfortable with the current level of immigration will vote to leave regardless. Their votes are already in the bag. We need to focus on winning the votes of people who have other concerns and alienating our expat community for no sensible reason will do our cause no good.

For further comment on the Guardian Article, we recommend the latest article in the EU Referendum blog.

Some Restriction on free movement of people is possible within the EEA agreement

Remaining in the single market as an interim option after leaving the EU does allow a country to place restrictions on immigration. The so-called “Norway Option” is being widely debated at the moment, but it has received a good deal of criticism from those whose prime reason for supporting withdrawal from the EU is their desire to see immigration reduced. Nevertheless, although this arrangement may not satisfy everyone seeking an “out” vote, not only it is the best way of ensuring we win a sufficient number of votes to leave the EU, but it does at least allow some restrictions on immigration, as Robert Oulds from the Bruges Group explains:-

It is possible to impose restrictions on immigration whilst remaining in the European Economic Area. Liechtenstein, an EEA member with less potential influence than Britain, continues to use clauses in the EEA agreement to restrict the movement of persons. Article 112(1) of the EEA Agreement reads: ‘If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113.’ The restrictions used by Liechtenstein are further reinforced by Protocol 15 (Article 5 – 7) of the EEA agreement. This allows Liechtenstein to keep specific restrictions on the free movement of people. These have been kept in place by what is known as the EEA Council.[1]

There will also be greater latitude to restrict non-British EU citizen’s access to benefits and to deny residency to those who are deemed to not have sufficient resources to support themselves. The current debate in Britain on immigration largely ignores the role of the European Court of Human Rights and the European Convention. Article 3 of the Convention (inhuman or degrading treatment or punishment) and Article 8 (private and family life, his home and his correspondence) would also be relevant to the issue of immigration. These two article are often taken together; especially in cases of repatriation.

EEA/EFTA states are outside of Article 6 of the EU’s Treaty on European Union which states; 2. The Union shall accede to the European Convention for the Protection of Human Rights and Fundamental Freedoms. Such accession shall not affect the Union’s competences as defined in the Treaties 3. Fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, shall constitute general principles of the Union’s law.

 There is already a great deal of flexibility in the EEA agreement. This goes beyond the ability to restrict immigration and opt-out of areas of EEA rules. Iceland even unilaterally imposed capital controls after its financial crash in 2008. This is permitted within the EEA safeguards Article 112.[2] There is also no enforcement mechanism to prevent this from happening even if such flexibility was not contained within the EEA. Whist this paper does not advocate such a policy it shows that radical steps that run contrary, even to the four freedoms of the EEA, can be implemented.

The EEA relevant rule relating to freedom of movement, Directive 2004/38, has qualifications, conditions and limitation. (10) Persons exercising their right of residence should not, however, become an unreasonable burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for Union citizens and their family members for periods in excess of three months should be subject to conditions. (12) For periods of residence of longer than three months, Member States should have the possibility to require Union citizens to register with the competent authorities in the place of residence, attested by a registration certificate issued to that effect. (22)

The Treaty allows restrictions to be placed on the right of free movement and residence on grounds of public policy, public security or public health. Article 7, 1 b) (b) have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State.[3] No right is absolute, and neither is freedom of movement within the EEA. What is more, EEA rules only apply to EFTA nations after they have assessed the relevant legislation and applied it according to their own interpretation of what freedom of movement means.

Footnotes:-
[1] EEA Council Decision No. 1/95, Official Journal of the European Communities, 20th April 1995, pages L 86/58 and 86/80
[2] Official Journal of the European Communities, 3rd January 1994, pages L/28, 176-8 and 562
[3] DIRECTIVE 2004/38/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004

History as pro-immigration propaganda

By Chris McGovern

The EU referendum promised for 2017, or sooner according to some reports, will coincide with the teaching of a new topic for GCSE history – migration to Britain. Given that this topic is, also, likely to have considerable prominence in the public debate it is instructive to consider what will be taught about it in the classroom.

Two of the three major exam boards have included ‘immigration’ in the new exam to be taught from 2016. Currently, the specifications are awaiting final approval by the exam regulator, Ofqual. The version to be offered by the OCR Board – “Immigration to Britain c1000 to 2010”- is illustrative.

The board is very clear about its aim for the new history exam:

“We have updated traditional and popular topics at GCSE and combined them with new and innovative options that aim to address comments in the wider historical community regarding the prevalence of white, male dominated history.

“One of the ways that we have are addressing this is by working with BASA [“The Black and Asian Studies Association”] on our new migration options in paper 2 and paper 3 (J410/08 and J410/11).”

The OCR Board then quotes an endorsement from BASA:

“This course will enable students to learn the long history of how the movement of people – European, African, Asian – to and from these islands has shaped the story of this nation for thousands of years. The history of migration is the story of Britain: in 1984 Peter Fryer wrote: ‘There were Africans in Britain before the English came’…We are delighted to be working with OCR to offer a course which will both open up an analysis of Britain’s place in the modern world and allow every student a personal connection with our shared history.”

A bold BASA ‘kitemark’ is firmly and prominently attached to the top of the syllabus itself.

As Education Secretary, Michael Gove called on schools to stop the trashing of our past. Disastrously, he lost his battle to require the teaching of the landmark personalities and events of British history as part of the national curriculum. Now, we can see that GCSE history, too, is being subverted to provide a vehicle for a politically correct views on history in general and on immigration, in particular.

This new syllabus will ensure that, at the same time as the EU referendum campaign and debates on border controls, pupils will be given some strong and seductive arguments in favour of seeing  current immigration as a natural evolution of a long historical process. According to campaigning think-tank MigrationWatch UK, however, current levels of immigration, resulting from ‘free movement’ within the EU, are at levels unprecedented in the history of Britain and are far from being a natural evolution:

“There have always been episodes of migration to Britain but…those episodes were small and demographically insignificant until the Second World War… In the late 1990s the pace and scale of migration increased to a level without historical precedent… This massive increase dwarfs the scale of any previous inflow in our history.”

This crucial numerical aspect of the immigration narrative is missing from the syllabus. The EU receives a passing ‘fag end’ reference at the end of the syllabus -“issues raised by EU ‘open borders’” – but there is no requirement specifically to consider the issue of numbers raised by MigrationWatch UK.
Pupils will hear a lot about a group of African soldiers stationed on Hadrian’s Wall but less, I suspect, about the enslavement of Britons by the African Emperor, Septimus Severus who died in Eboracum (York). The enslavement of Britons by an African, after all, does not fit the desired narrative of immigrants having a monopoly of being subjugated or maltreated.

19th century Irish ‘ immigration’ fits the subjugation idea much better and is specified for teaching. However, these Irish were born UK citizens as fully as those born in the home counties. The new syllabus veers towards equating deprivation with immigration.

For all its importance, immigration is a political minefield these days and not a straight-forward topic to teach. History GCSE should not be a vehicle for promoting particular viewpoints, such as that of the BASA. Equally, it should not be a vehicle for promoting racism or xenophobia. The OCR should not be in the business of boasting a ‘kitemark’ of political correctness, it should be focusing on a balanced presentation of the past that allows for the input of MigrationWatch UK as much as the Black and Asian Studies Association.

This article first appeared in Conservative Woman. Chris McGovern is Chairman of the Campaign for Real Education.  CIB will be organising an event to launch his recent booklet .A Genaration Betrayed, hopefully some time in June. More details to follow.

Photo by CircaSassy

More Tory embarrassment over Europe

Conservative LogoIn the space of less than 24 hours, the Conservatives have suffered two major embarrassments, both related to the European Union.

Firstly came the immigration statistics. The 2010 Conservative manifesto pledged to bring net immigration down to below 100,000 by the end of this Parliament. Immigration data for the year up to September 2014, published on 26th February, showed that no fewer than 624,000 people came to the UK but only 327,000 left it.  Net migration, in other words, amounted to almost three times the numbers the Conservatives promised and 98,000 more than the previous year.

This is not just an EU-related issue. Migration from outside the EU, over which the Government has some control, rose significantly, with 190,000 more people from the rest of the world arriving than leaving. However, the arrival of a further 108,000 EU citizens is something which David Cameron can do nothing about and he has been forced, in as many words, to admit it. His putative talks of trying to restrict freedom of movement as part of the proposed UK renegotiations were dismissed out of hand by other EU heads of state and the European Commission almost as soon as he raised the subject.

Meanwhile, the smoke and mirrors game played by George Osborne regarding the Government’s response to the £1.7 billion extra surcharge inflicted on the UK by the EU last year has been exposed by a Committee of MPs. There was never any chance that our spineless government would have told the EU to get stuffed, but Osborne told Parliament that he had succeeded in reducing it by half. However, the Treasury Select committee said: “The suggestion that the £1.7bn bill demanded by the European Union was halved is not supported by published information.” In other words, Mr Osborne has been telling porkie pies. That would certainly be a reasonable paraphrase of the comments made by Chris Leslie, the shadow Chief Secretary to the Treasury, who said, “He must now apologise to taxpayers for making this completely false claim.”

Some hope! However, at a time when opinion polls are pointing to a slender Tory lead and a decline in UKIP support, once again EU-related issues have flared up with a vengeance. The Conservatives’ failures over Europe have been laid bare once again and may well cost them dearly at the ballot box next May.

Migration, the deficit and the recovery

Anthony ScholefieldOne of the matters I raised at a meeting in the House of Commons on Tuesday 16th December was:

The effects of mass immigration are now so large
that they are impacting on the economy as a whole and, specifically,
on the deficit, the debt and the ‘recovery’

The ‘Recovery’ and the Deficit are linked

– The import of a large migrant workforce has inevitably added to total GDP so nearly one per cent of growth of total GDP p.a. can be put down to simply having more workers and consumers. Those enthusing over the ‘recovery’ should be aware of this.

It is standard economic theory that immigration transfers income from newly plentiful factors to newly scarce factors, that is, from labour to capital. What is not noticed, however, is that much capital in the UK is now foreign owned so the transfer also is in part from British workers to foreign capitalists. Foreign capitalists get dividends and capital gains tax free. Moreover, due to the tax regimes in Ireland and Juncker’s Luxembourg, a great deal of foreign corporations’ profits in the UK are, effectively, lost to the British tax system under ‘freedom of capital’.

– The way the tax system for workers is now set up means that low earners (and migrants are overwhelming so) pay little tax and actually get tax refunds. Additionally, of course, they place demand on the existing ‘public services’ such as schools, hospitals, etc.

– Further out there are plans and projects for more public capital spending on transport, housing, schools, etc., as well as, unseen, capital diversion to provide the private sector tools and assets that migrants require: factories, office blocks, shops, houses, etc.

It should be noted that there is a great difference between employing existing natives who already have their ‘social capital; in the form of housing, roads, dams, etc., and migrant workers who require equipping with appropriate capital items from the ground up. The capital both extra native and migrant workers need (and this need is common) is for ‘the tools of production’: factories, equipment, office buildings, etc.

– The electorate are aware, even if the political class is not, that migrants send much of their savings abroad. There is no proper counting of this; it all relies on Office of National Statistics (ONS) speculation and guesstimates as is admitted, but it is several billion pounds a year.

In any case annual savings by migrant workers or their employers are far too small to provide the capital they require to operate and live in the British economy (less than 1% p.a.). This phenomenon means that the capital to equip migrants has to be found mainly by natives either by taxation or by capital diversion.

– All of this means, therefore, there must be appropriation from the taxpayer to fund extra current expenditure and the extra capital requirements of the public sector. These expenditures count as GDP growth but, of course, do nothing for the incomes and wealth of native workers. Actually they reduce both.

– Therefore, the ‘recovery’ with high inward migration may mean a statistical increase in aggregate GDP but produces little tax revenue either from workers or capitalists and places extra demand on public sector investment and current spending on the public services. Migration also diverts capital investment from natives to equipping migrants by the process of capitalists re-ranking the profitability of investments as the economy changes shape. In this way capital intensification is reduced for native workers; therefore reducing their income. It is not just the political catchphrase, ‘pressure on the public services’, it is pressure on the private sector and on capital formation. Instead of capital intensification for natives, there is capital diversion to equip and supply migrants.

– By not taking strong steps to rein in migration, the government is making its task of reducing the deficit much harder to achieve and makes the ‘recovery’ a statistical mirage with little effect on native income. It also is deceiving itself, as much ‘capital investment’ adding to GDP statistics is simply a means of equipping more workers in the economy.

When considering the ‘recovery’, it is also worth noting that the GDP deflator has been rebased and effectively reduced since 2008. A reduction in the GDP deflator means that ‘real GDP’ is statistically increased. Thus a further part of the ‘recovery’ is also a statistical mirage.

Another point on the GDP deflator is that the fall in crude oil prices will, for about a year, mean a higher GDP deflator as price falls in imports add to the GDP deflator and, therefore, increase the statistical overall ‘growth’ or real GDP and the ‘recovery’.

The Debt

– In addition to the massive increase in government debt, the off balance sheet liabilities for state pensions and healthcare are mushrooming all the time and have not been recalculated since 2010. To enthuse over GDP growth, but not calculate off balance sheet liabilities, is living in a fool’s world.

Even the hoariest of all false factoids, that immigrants are needed to pay for British pensions, keeps returning. For example, in the New Statesman on 5th December 2014:

“There is a truth that no politician will utter: if Britain is to maintain a welfare state … its current economic model demands more immigration.”

Yet every study by the UN, OECD or the Home Office, has always come to the conclusion of Chris Shaw, the government actuary, writing in 2001:

The single reason why even large constant net migration flows would not prevent support rates from falling in the long term is that migrants grow old as well.”

The UN calculates that, to maintain the UK worker/dependant ratio, the UK would have to support 60 million immigrants by 2050 and, by then, migration would be running at 2.2 million per annum, and increasing.

This is a dead-end in thinking.

– The accumulated, to date, off balance sheet liabilities for state old age pensions (not including public sector retirement pensions) were last calculated in 2010. They had then increased from £1.3 trillion in 2005 to £3.5 trillion in 2010 according to the Department of Work and Pensions. With the guaranteed 2.5% increase in pensions per annum, even in times of low inflation, the off balance sheet liabilities since then are increasing alarmingly. The fall in interest rates may also have a massive effect as the ONS states, “For example, reducing the discount rate to 4 per cent leads to a 31% increase in total pension entitlements (by £1,174 billion)”.

In 2010 the ONS used, in alignment with Eurostat, a rate of 5 per cent (nominal) for its discount. The rate is based on high quality corporate bonds yield. Rough calculations are that discount rates for corporate bonds are now in the region of 3.5 per cent. This means that the off balance sheet liabilities for state pensions at 2010 have risen to the area of £5.3 trillion – and this does not make any provision for the rises since 2010 or those built into the Coalitions’ pension promises.

Quite evidently, pension promises are quite out of control. Adding more lower paid migrants is adding to the liabilities with little contribution to the costs.

The Future

One can therefore forecast that:

  •  Capital employed per head will be static or reduce
  • Native incomes will remain static at best.
  • The ‘recovery’ will only partially reduce the deficit.
  • Taxes on capital and labour will fall short of projections.
  • The deficit will persist.
  • Debt and off balance sheet liabilities will continue to mushroom.