Flying South For The Winter

Faced with mounting public pressure (fuelled by biased hate-filled reporting from the likes of The Daily Mail, and The Sun) David Cameron pledged to cut net migration to the UK to “tens of thousands”, yet despite implementing a myriad of policy changes designed to make the UK a less attractive destination, migration to the UK continued unabated. As it turns out, all that was required was for the rest of the world to see the truth of the scale of an ugly, suppressed (or unconscious) bias of Britons against foreigners. The EU referendum campaign, with misleading pictures of refugees and countless depictions of migrants as “benefit tourists” taking advantage of the country, is considered to be the single most significant factor in determining why people would vote to leave.

Although the Lord Ashcroft poll taken shortly after the referendum result indicates that the main reason voters indicated their preference to leave was based on the principle that “decisions that affect the UK should be taken in the UK”, given that a separate study found that only 27% of Britons surveyed could correctly answer three basic questions about the EU, this answer seems an arbitrary, vague and convenient shield from the second reason cited – control of our borders.

Whether or not we do eventually change border policy, the damage appears to have been done, with net migration falling sharply. The unfortunate irony to all of this is that the UK never lost control of its borders. As a non-participant in Shengen, arrivals to the EU are unable to move freely from the EU to the UK. Attempts to set refugee quotas by the EU, in light of middle eastern instability, was resisted strongly by the UK, which negotiated an opt out, leaving the UK free to set its own refugee policy. Even migration by other EU citizens can legally be controlled within the EU framework – migrants who cannot sustain themselves financially, or find themselves work within three months of arrival can be returned to their country of origin.

A total of 6.6% of our national workforce is supplied by EU workers, and if businesses are not able to fill their vacancies then they will close. Schools and hospitals are already under desperate pressure to fill vacancies that are not being filled, even before the vote to leave.

Another factor that highlights how facile the Leave campaign rhetoric on migration was, is that migration from non-EU countries has long outstripped migration from countries in the EU. This, clearly, has nothing to do with EU policy, and is based solely on UK immigration policy. Given that migration from EU countries has now taken a sharp hit, in the wake of uncertainty (and a sense of unwelcome) created by the vote to leave the EU, what does this mean for the economy? A variety of studies have been performed on EEA and non EEA migrants in an attempt to determine the fiscal impact or benefit that they bring, and in fairness the findings are highly variable and depend very much on methodology and assumptions used. A report from Oxford University found that the directly attributable GDP benefit was probably in the region of less than 1%. This, however, does not tell the whole story.

In the studies performed, it was found that the migrant population consistently outperformed the domestic population. That is to say, that British citizens consume more public services per amount of revenue created, when compared to migrant population. Breaking this down further, migrants from EU member states significantly outperformed the value-add to migrants from outside the European Union. There is still more to this picture though; EU workers make up a significant portion of various key sectors in the UK:

  • ¬†EU nurses make up 5.5% of the NHS, and applications to work in the UK has plummeted by 96% since the vote to leave
  • 10% of the manufacturing sector
  • 13% of the accommodation and food service sector
  • 5% of the education sector

 

A total of 6.6% of our national workforce is supplied by EU workers, and if businesses are not able to fill their vacancies then they will close. Schools and hospitals are already under desperate pressure to fill vacancies that are not being filled, even before the vote to leave. Seasonal employers, such as fruit picking, will not have access to seasonal workers that they previously had, and will either go out of business or domestic grown produce will rocket in price.

Significantly, the demographics of migrants to the UK from the EU show that the vast majority of EU migrants are of employment age, and in fact, have a higher employment rate than UK citizens. Migrants from the EU have a 79.4% employment rate, compared with 73.5% of British nationals in the UK. On the other side of the coin, a large percentage of Brits who have chosen to emigrate from the UK are retirees – approximately one third of the 1.2 million UK expatriates in EU are of pensionable age. Although health care costs and pension provisions for this population are still provided, in most cases, by the UK through EU reciprocal arrangements, other associated service costs will be born by the country they are living in – where crucially they are not contributing any further revenue (other than perhaps local and value added taxation).

The final, and most significant, element that I wanted to highlight, and is topical given today’s announcement to increase the state pension retirement age, is that the influx of predominantly younger, working age, migrants to the UK on an ongoing basis creates a larger tax base on which to fund welfare and pensions. This means that if you eliminate EU migration and this is not replaced with a comparable workforce, then retirement ages will need to increase.

Significantly, the demographics of migrants to the UK from the EU show that the vast majority of EU migrants are of employment age, and in fact, have a higher employment rate than UK citizens. Migrants from the EU have a 79.4% employment rate, compared with 73.5% of British nationals in the UK.

In conclusion, the evidence shows that while direct fiscal contribution from EU migrants is difficult to quantify, they are at worst revenue neutral. However, given the ancillary benefits to industry, in terms of being able to fill vacancies and grow businesses, there is a secondary economic factor that is much more difficult to measure, but without doubt will suffer significantly if net migration reduces to unsustainable levels. Furthermore, voting to leave the EU for this reason demonstrates that the public at large did not understand the role the the EU plays in the UK migration scene overall, and is yet further evidence of a vicious minority elite keen to pursue their own agenda, regardless of the cost to the wider society.

 


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