Migration, housing, robots, lettuces… Time for some joined-up thinking

Some clear thinking on how post-Brexit Britain will function is urgently needed and it seems in rather short supply at the moment. On the one hand, arch-remoaner Lord Mandelson recently claimed that the electorate will change its mind about Brexit when levels of immigration fail to drop. His assumption is that it will not do so – an assumption which has already been contradicted by a survey from the Chartered Institute of Personnel, whose members are suggesting that there has been a drop in the number of workers from EU countries coming to the UK.  Quoting statistics from the Office of National Statistics, more than 60,000 EU workers came to the UK in each of the three quarters prior to the referendum. That number fell below 30,000 in the three months to the end of September. Furthermore, the most recent quarterly figures from the Office of National Statistics saw net migration fall by 49,000, with 23,000 fewer people arriving and 26,000 more departing. In other words, Mandelson’s claims have already been rebutted and we haven’t even triggered Article 50!

Indeed, ever since the referendum result, some EU citizens resident in the UK have been considering returning home. The Chartered Institute of Personnel report claims that up to a quarter of firms in their survey believed that some of the EU nationals they employ are possibly considering leaving the country in 2017.

David Davis recently told an audience in Estonia that the UK would not suddenly shut the door on low-skilled migration form the EU. The word “suddenly” is significant. If on Brexit day, all migration were to cease, it could cause labour shortages in several sectors, but fast forward a few years and the ability to control migration is likely to be a great blessing. Mr Davis said it will take “years and years” to persuade British workers to do jobs in the hospitality industry or agriculture that are currently carried out by EU migrants, arguing the economy needs continued immigration to maintain its success. This, however, is questionable. Will these jobs still be done by human beings, British or otherwise? As far back as November 2015, speaking to the Trades Union Congress, Andy Haldane of the Bank of England suggested that within  a decade, as many as 15 million jobs could be at risk of automation – in other words, replaced by robots. Although Mr Haldane didn’t mention migration, many of the jobs which he cited as vulnerable, such as “production tasks” are done by migrants.

The idea that we need migrants to fund our pensions unless we want to work into our 70s, as suggested by John Cridland, a director of the CBI, is therefore very debatable. Within 10-15 years, even if Mr Haldane’s figure of 15 million is a bit optimistic,  we could well be suffering from a surfeit of labour almost on a par with the 19th century when mechanization resulted in a massive fall in the number of farm labourers needed to work the land. Fortunately, at that time, industry was able to absorb the surplus labour, but in the early 21st century, few, if any, growth industries are labour intensive. What will we do with all the unemployed immigrants? Perhaps Mr Cridland would like to answer. One thing is sure, if their jobs have been displaced by robots, they will not be contributing to anyone’s pension.

The likely reduction in migration on Brexit should therefore be welcomed as an incentive to develop artificial intelligence. As far back as July 2013, Fraser Nelson of the Spectator  wrote “We have to wean the country off the drug of immigration.” In Japan, the robotics revolution is already under way.  Fukoku Mutual Life Insurance is laying off 34 employees and replacing them with an artificial intelligence system. Besides saving on salaries, the company reckons that the new machine will be more productive as it can calculate policyholder payouts at a much faster rate than humans.

Japan has never been keen on encouraging immigration and even with a falling population, the electorate would rather encourage more women back into the labour force or else increase the number of older retirement-age workers. While the well-entrenched Japanese preference for cultural homogeneity and very little immigration has attracted much criticism, in the age of robotics, contrary to received wisdom, it may well prove a blessing.

Certainly, as a result of its opposition to large-scale immigration Japan has been spared some of the problems which the UK is facing. In many parts of our country, groups are forming to oppose large-scale housebuilding on green field sites. In places like the Cotswolds and East Kent for example, there is widespread anger at the prospect of large, unsightly developments. Were it not for immigration, the UK population would be more or less static and there would be no need to concrete over the countryside.

And the problems of removing land from agricultural use has been highlighted recently by the sharp increases in the costs of vegetables such as lettuces and courgettes. Poor weather conditions in southern Europe, including flooding in Spain and cold weather in Italy, where many winter vegetables are grown, has been the cause.  Why not, then, grow more produce in this country? This is what some MPs are proposing and it makes a lot of sense as we are only 77% self-sufficient for food. However, a growing population fuelled by immigration, leading to less available agricultural land is only going to make things worse.

These challenging issues give the lie to claims that those who voted for Brexit out of a desire to reduce immigration were all motivated by racism. It is more a case of weighing up the alternatives and deciding that a cut in immigration is the better option. What is racist about the concern that if migration is not reduced, we will be vulnerable to food shortages? Or that we are likely to find ourselves stuck with possibly millions of unemployed immigrants once the artificial intelligence revolution really gets under way? From the Flemish weavers through to the Huguenots, immigration benefitted the UK in the past but things are different now.

Of course, those who have already settled in the UK should not be booted out on Brexit. Of course,  UK citizens should be free to marry a spouse from another country. Of course, the international nature of our academic institutions should be allowed to continue, but large scale migration is another matter. Weighed in the balance, it is likely to cause more problems, particularly in the longer term, than it solves.

The government therefore needs to engage in some joined-up thinking as it plans its post-Brexit immigration policy. Next year marks 70 years since the arrival of 492 Caribbean citizens on board MV Empire Windrush  – an event which marked the beginning of large-scale immigration to the UK. We needed those people then and they are to be admired for their tenacity in  staying put in the face of quite blatant hostility. 70 years on, however, the assumption that we will still need to bring people – particularly low-skilled workers – into this crowded little island is looking very questionable.

The UK’s low wage future inside the EU

We’re becoming the world’s first third-world economy in a cold climate.

(from Peter Hitchens (journalist and author) writes in his blog on 22nd March 2015)

Have you ever wondered why so many low wage, often part-time, jobs are being created in the United Kingdom while high income jobs are increasingly hard to find and people are not, in general, feeling (or getting) richer? Behind the more obvious effects, there are more subtle imperatives at work which the EU and our EU-supporting government are making worse.

Job creation in the private sector needs investment, risk taking and the availability of suitable resources. And most importantly, customers who can and want to buy the products on offer rather than other competing products.  Muck around with any of these and the only option is to create low wage jobs or not to bother at all. And after all, why try to create skilled, highly-paid jobs if you are stigmatised for doing so and ‘profit’ is considered a dirty word rather than essential for a successful, competitive future?

Thus the EU and our government are undermining the future success of many businesses through direct taxation, while their excessive bureaucracy and regulation further undermine competitiveness. By doing this, they are aggravating this country’s long-standing poor record of productivity improvement.

Obviously, where there is an abundant supply of poorly paid, unskilled labour it is tempting to create low wage jobs, in preference to high wage jobs. Less investment is required to make a reasonable profit – and why make a big profit if you will be heavily taxed?  Consequently, we can expect to find increasing openings for low wage work, through the expansion of existing businesses and the creation of new ones.  In turn, this draws in more low cost labour to fill these jobs. It is being made attractive for employers to create low wage jobs here and consequently, low skilled people come here because of the presence of many low paid jobs.

Furthermore, it is not attractive or even possible to create high value-adding or high investment businesses, partly because, as a result if this unimaginative approach to making a quick profit, the resources are not available. The financial investment and investment in brainpower (research, development, training etc. and/or the intellectual effort) required is greater, thus  making it less appealing to create high value jobs. Also there is a disincentive because it requires a greater risk to break even, leaving less of a margin for error.  It can also be made harder still because of a brain drain of our brightest and best to pastures greener.

Cycles or motion of economic effects, once established, tend to be self-reinforcing, leading to more of the same. The cycle arising from an abundant supply of low wage, low skilled labour leads to an upward or increasing spiral of low wage job creation and a downward spiral of wages (wage compression) which is only moderated by minimum wage legislation.  If the economy is effectively ‘geared up’ to producing low wage jobs, it is then difficult to start creating high wage jobs because the means to do so are increasingly absent as a result of EU and government action. If things do not change, we couild well lose the ability to create such jobs altogether.

Viewed from the perspective of a large business, the UK’s increasingly low wage economy offers some attractions. Low skilled, low wage operations can be set up and closed down much more easily here than in many other countries.  Given the principle of free movement of people, it is unsurprising that the management of such companies are calling for the UK to remain in the EU in order to maintain the supply of cheap labour.

In conclusion, without leaving the EU and thus being in a position to address positively the facilitators of high value job creation, including creating a favourable environment for free enterprise, the future does look increasingly grim – especially for the most vulnerable, who are likely to remain  stuck in poverty, dependent on benefits to top up their meagre wages and with little hope of finding better paid employment.

Photo by Images_of_Money

State aid – Redcar illustrates how the EU constrains us

THE PRESS OFFICE OF                                                           

The Lord Stoddart of Swindon (Independent Labour)  

News Release

1st October 2015

Redcar steelworks closure emphasises impotence of the Government and strengthens case for leaving the EU

Commenting on the closure of the Redcar Steelworks, the independent Labour Peer, Lord Stoddart of Swindon has highlighted the impotence of the Government in the face of strict EU rules on state aid and that being unable to help the steelworkers, who face losing their jobs, strengthens the case for leaving the EU.

Lord Stoddart said:  “The Government openly admits that EU rules on state aid for industry constrains their ability to provide financial support for the Redcar steel plant, to prevent its closure.  This is yet another example of EU membership leading to loss of jobs for British workers and further loss of manufacturing industry.  This must, surely, bolster support for leaving the EU, even among those in the Labour Party and some trade unions, who believe that the United Kingdom should remain in the EU, come what may.

“Sadly, it is a long established principle that our democratically elected Government must wade through a sea of EU red tape and go cap in hand to Brussels to beg for permission to help our own industries, from unelected bureaucrats at the European Commission.  Once again, it is quite clear who really governs Britain.”

 

rn the UK alone.

Millions of UK jobs NOT at risk from Brexit, says IEA report

The oft-repeated claim that 3m British jobs depend on Britain’s membership of the EU has been challenged in a new report by the Institute of Economic Affairs (IEA).

The report’s author, Ryan Bourne, calls on the public and commentators to challenge the assertion frequently made by pro-EU supporters.

“It can be said with certainty that three to four million jobs are not at risk in the event of a Brexit”, Bourne said.

He added “It’s high time that politicians and commentators stopped scaremongering, and recognised that jobs are associated with trade and not the membership of a political union” .

Trade is the crucial factor associated with jobs, not EU membership and it would be a mistake to think trade flows and volumes would be substantially hit by Brexit, according to the IEA.

The 3m jobs claim has a variety of sources, one of the more recent being based on Treasury estimates of the number of jobs linked to British exports flowing to the EU – still Britain’s single biggest trading partner. The figure was cited ad nauseam by Nick Clegg during his debate with Ukip leader Nigel Farage last year.

However, Bourne argues that it’s unrealistic in the extreme, even in a hypothetical worst case scenario where trade completely broke down, that these jobs would be lost.

Rather “import substitution” would help to offset some of the worst aspects of a breakdown in trade. If the Prime Minister of the day was unable to negotiate an EU-UK free trade deal, both the EU and the UK are still bound by the rules of the World Trade Organisation that imposition of massive tariffs.

While still a huge part of the UK’s export market, the EU controls many aspects of British trade policy. The UK government is unable to sign unilateral free trade agreements with other countries. Outside the EU, the IEA report suggests Britain could focus on getting a better deal with countries around the world.

It remains highly questionable whether the EU would want to start a de facto trade war with the UK after a Brexit, since the EU sells more to Britain than it buys. The IEA concedes that there would likely be a change in the UK’s trade patterns.

If no UK-EU free trade deal could be negotiated, some industries may find it more difficult to operate at their current level and may have to shed jobs as a result. One example could be the financial services sector, which, according to analysis by Open Europe, would be most in danger if Britain pulled out of the EU.

The report argues that the central factor determining whether or not the EU is a drag on or a boon to UK employment depends is kind of policies an independent Britain would pursue after Brexit.

If Britain goes for a low tax, de-regulated, free trade economy uninhibited by Brussels’ rules and hefty EU contributions, the IEA believe there is every reason to believe prosperity will be just as great or greater following Brexit.

(This article first appeared in City AM)

A spectacular future

If any backbench MP or minor businessman says that withdrawal from the EU would be a disaster, you can bet your life that their comments will be splashed all over the press the following day. However, a recent gathering of heavyweight academics, politicians and figures from industry sending out a very different message seems to have received precious little coverage in the media.

The Conservative MEP David Campbell Bannerman was the moving sprit behinds last week’s conference entitled “Alternatives to EU Membership: What are the UK’s options?” Among the speakers was Owen Paterson MP, the former Environment minister. He did not mince his words. “We have to leave”, he said, adding, “I see a huge optimistic vision for this country, a really spectacular future, but to do it and to get there, we have to leave.”

John Mills, a CIB Committee member and Chairman of the Labour Euro Safeguards Committee, delivered a stark warning to his party leader: “If Ed Miliband becomes Prime Minister in May and renegotiates without committing to a referendum, he will inevitably weaken the UK’s bargaining position. Minds in Brussels are much more likely to take renegotiation seriously if they know that there is a substantial risk that the UK will leave the EU if there is not a satisfactory deal on the table to persuade the UK to stay in”, he added.

Another Tory MP, Bill Cash, finally answered a question has kept many supporters of withdrawal guessing for years:- does he support withdrawal or not? We finally received the answer. “There is no alternative except moving to exit”, he told the gathering. “There is more nationalism now. There is chaos, less peace, less democracy. There are riots, protests, economic instability. Implosion is imminent, or the alternative is irresponsible coercion of the kind being imposed on the Greeks now.”

Another myth was shattered. Not all senior figures in the American political scene want us to stay in. Dr Nile Gardiner, a former aide to Margaret Thatcher who is now based at the Heritage Foundation think tank in Washington DC addressed the conference using a video link. “The biggest threat to the Special Relationship is the European project itself, exemplified by the grandiose dreams of a European super-state”, he said. “Nothing could be worse for America than a Britain that is unable to act independently, straight-jacketed by a forced common foreign and security policy.”

The same day as the conference was staged, a detailed rebuttal of the “three million jobs would be lost if we left” myth was published by Global Britain and the Democracy Movement. Far from worrying about job losses on independence, the report expressed concern about the jobs that would be lost by not leaving. Stuart Coster, the Democracy Movement’s campaign director said: “This report demolishes once and for all the EU lobby’s scaremongering about jobs should Britain choose to leave the EU and reveals reality as the opposite of their claims.” (The full report can be downloaded here)

Such a shame that a day of great hope for our country’s future was largely ignored by most of the daily papers. Apart from the Daily Express, from which some of this information was gleaned, the only other coverage of the Bannerman conference came in the shape of a rather sneering report in The Independent Well, let them sneer. The speakers at the conference were promising, in Mr Bannerman’s words, a “far better, freer and more prosperous future outside the EU”. Anyone who turns their noses up at such an exciting prospect and continues to support our country’s bondage to this club of failures is worthy only of contempt.

The final requiem for the “three milion jobs” myth?

European Union photoIt was always a myth. There was never any official report saying that three million British jobs would be lost if we withdrew from the European Union. The figure of three million jobs, or more exactly, 3.2 million jobs, which were linked to our membership of the EU, first appeared in a report produced by Dr. Martin Weale in 2000 for the National Institute for Economic and Social Research. However, the report actually said:-

Detailed estimates from input-output tables suggest that up to 3.2 million UK jobs are now associated directly with exports of goods and services to other EU countries. This has given rise to popular concern that some of these jobs might be at risk if Britain were to leave the Union. Opponents of membership on the other hand argue that many of the benefits flowing from the increasingly integrated European Economic Area might still be available even if the UK were to withdraw, particularly since the Uruguay Round Agreement has imposed significant limits on the trade barriers that the EU can place on non-members. In conjunction with the potential gains from withdrawing from the Common Agricultural Policy and no longer paying net fiscal contributions to the EU, there is a case that withdrawal from the EU might actually offer net economic benefits.

The report did not say that these jobs would be lost if we left the EU. Far from it. It suggested that withdrawal may actually be beneficial. It was the Britain in Europe cross-party group, which campaigned unsuccessfully for Britain to join the euro and which included such figures as Ken Clarke, Tony Blair, Michael Heseltine and Charles Kennedy, who started the scaremongering. Unsurprisingly, Dr. Weale was furious at this distortion of the findings of his research, describing it as “pure Goebbels” (a reference to Hitler’s Minister of Propaganda), and saying, “in many years of academic research I cannot recall such a wilful distortion of the facts.” However, it has been repeated over and over and over again, perhaps in the hope that if the lie is repeated enough it will become accepted as truth. Nick Clegg regurgitated it in January 2013 in the wake of David Cameron’s announcement of a referendum on our membership of the EU and John Prescott followed suit four months later. Danny Alexander, the Treasury minister, recycled this rubbish to an audience in Washington as recently as June 2014. It seems like some people never give up.

There is hope that at last, the final requiem for this nonsense may be only round the corner. It should have happened a long time ago. Professor Tim Congdon’s booklet Europe Doesn’t Work (Published by the Hampden Trust in 2013) proved from government data that EU membership had actually destroyed British jobs. Of course, given Professor Congdon’s involvement with UKIP, the Europhile establishment were not going to take one iota of notice in spite of his meticulous use of statistics. However, the coup de grâce may be about to come – and from an unlikely direction. The Open Europe think tank, which supports UK membership, put in a Freedom of Information request to the Treasury – Mr Alexander’s own department. The reply was most interesting. Open Europe’s blog highlighted the key statement, which was as follows:-

“As set out by the Chief Secretary to the Treasury, the Treasury estimate that 3.3 million jobs in the UK may be related to exports to other European Union countries. This figure is based on the assumption that the share of UK employment associated with UK exports to the EU is equal to the share of output that is exported to the EU, making allowance for the composition of the UK economy. It is not an estimate of the impact of EU membership on employment.”

In one sense, this isn’t anything more than Tim Congdon or many others have argued, but firstly, it is highly embarrassing for Danny Alexander to be contradicted by his own department. Secondly The Times has taken up the story. “Treasury wrecks Clegg’s EU jobs claim” it proclaimed, while the popular Huffington Post blog reported the story under the headlines “Treasury officials ruin Danny Alexander’s EU jobs warning.” (We are hoping to publish some further research on this subject on the CIB website shortly which will drive a further nail into the coffin of this unfounded allegation – watch this space!).

Of course, given the Lib Dems’ past track record it may yet be premature to write a requiem for the three million jobs myth, but surely now if they continue to peddle this nonsense they will come across as complete and utter fools. Mind you, given the party’s performances at the ballot box recently, it looks like most of the electorate already regard them as such anyway.

Photo by YanniKouts

 

Photo by YanniKouts

Photo by YanniKouts