There seem to be two strands of opinion which encourages people on
the left to vote Leave. The first is an intense dislike of what has
happened in the the Eurozone: see
Larry Elliott for example. The second is a wish to take seriously
working class concerns over immigration.
I share the intense dislike over what has happened in the Eurozone
(EZ). You only need to read, for example, what I have written
about Greece to see that. Yet I cannot see how UK exit from the EU
will change for the good how the EZ works. Crucially why should it
change the current politics of Germany that has been so important in
many of the bad decisions the EZ has made. As we are not part of the
EZ, it is difficult to see how UK exit will help its demise, if that
is what you want.
As we will be leaving the EU and not the EZ, the message Brexit sends
to Europe is not that the EZ is fundamentally flawed but rather that
the UK is incapable of being part of any cooperative agreement among
European countries. I am internationalist by nature so I do not want
that. The idea that Brexit will shock the EZ into mending its ways,
then thank us for showing them the light and invite us to rejoin
whatever is left is pure fantasy.
There is one way the EZ crisis has impacted on the UK, and that is
migration. It seems reasonable to assume that one reason immigration
into the UK from the EU is currently high is because of considerable
youth unemployment in many EZ countries. Which brings us to
immigration concerns.
Take this
from Kate Hoey for example. She seems to be arguing that free
movement in the EU is a means of keeping down the wages of the low
paid. The first point to make is if labour mobility keeps wages down
in the destination country, it should increase wages and/or reduce
unemployment in the country the migrant came from. As migrants move
from lower to higher wage countries, then migration tends to equalise
incomes. This should normally count as a plus from a left wing
perspective.
But does migration have this effect on the receiving country? There
are many reasons why it might not, and the evidence does not
point to strong negative effects on wages. But I think the case for
migration is stronger than that. A pretty robust finding is that
migration at the kind of levels we are now seeing does not do any
harm to GDP per head, and could improve it. Another robust finding is
that current migration benefits the public finances. This is both
important and pretty obvious..
Migrants tend to be young, healthy and working. They provide more in
terms of resources than they take out by using public services. I
remember having a conversation about this with someone who lived in
Spain. He said if anyone should be angry about free movement it is
Spain, in having to take lots non-productive British pensioners who
will be a burden on Spain’s health service. This was also one
reason why Merkel could be so open to refugees: Germany is really
worried about the implications of their aging population. [1]
If migration falls following Brexit (a big
if), and if we add in the other negative effects of Brexit, we will
have a large increase in the government’s budget deficit even at
full employment. Given government policy on how holes in the deficit
are to be filled, this NIESR analysis suggests
you are talking about large hits to the lower paid.
None of this is to deny real grievances about reduced public services
and lower pay. Once again I do not think I and many others could be
accused of keeping quiet about the stupidity of current austerity.
But just as the grievances are real, it is also important to
understand the real causes.
A consistent result in polls is that migration is a concern mainly in
areas where there is little of it. In this poll
only 19% of people say they believe immigration has had a
negative effect on them personally. (More believe they have
experienced positive effects.) Yet over 50% say it has had a negative
impact on the NHS. In reality the NHS is in crisis because of
government policy, not because of immigration. But to know that you
need to talk to the experts and look at the figures. Instead most
people will just have read the newspapers, many
of which have taken every opportunity to play up the ‘threat’ of
migration. As Paul Mason nicely puts
it, you can tell this is a fake working class revolt from looking at
those leading it.
This is part of a more general point on migration. Migration appears
to be at worst neutral and probably beneficial for medium term UK
prosperity, so if there are problems for some groups that can be
fixed. At which point those on the left say that is naive because it
will not happen. That is a reasonable point, but the same point
applies in spades to the immediate aftermath of Brexit, which will
amount to yet another shift to the right. The regulations that those
running the Leave campaign want to ‘free’ us from are those
protecting workers and the environment.
To make this clear, think of two realities (economists would call
them states of the world). One (the status quo) involves those
currently in charge remaining in charge. The second (left
renaissance) involves left wing governments coming to power in the UK
and elsewhere. It seems to me that if you stay in either one of these
two realities, Brexit is clearly bad. (For a similar argument, see
this
by Alex Andreou.)
Under the status quo, the EU is currently a moderating
influence on this right wing UK government. A post-Brexit Boris
Johnson government
would take away worker rights that the EU currently ensures and, as
the deficit deteriorates, cut welfare benefits including tax credits.
This alone will dwarf any benefit working people might get from less
immigration. Under a left renaissance migration benefits the economy
as a whole as well as those who migrate, and these gains could be
fairly distributed. My feeling is that some Brexit supporters on the
left move freely between these two realities in order to justify a
vote for Brexit.
[1] One fair point made in comments on earlier posts is that migrants
need to be housed, so resources are used to provide additional
housing. (More generally new labour needs new capital of various
kinds.) But housing also represents why migration can be beneficial
to everyone. We need to build more houses anyway, but according
to the industry we have an acute shortage of skilled construction
workers. Of course this is an indictment of UK training programmes,
but that cannot be turned around quickly. For those with construction
skills, it is surely better to be building houses where they are
really needed than being unemployed in places they are not.
