By Nicky Dempsey
The new coalition government in Britain has begun a process of attacking working class living standards through public spending cuts, slashing public services and reducing public sector pay, jobs and pensions. Meanwhile one of the dominant themes of the Labour leadership campaign is not an attack on this reactionary economic policy but a wholly ill-informed debate on immigration.
By blaming immigrants for the consequences of New Labour’s own economic failures, and completely distorting the real reasons for its defeat, two purposes are served. One is to forestall any proper debate about that defeat; the other is to set up immigrants in general, but especially poorer Eastern European and black and Asian immigrants, as the culprits within the widespread discontent about economic policy. For now, this is a narrative being created almost entirely by some of Labour’s leaders. But, as unrest grows at the consequences of the new government’s policies, it will no doubt be gratefully seized on to further channel working class anger towards reactionary rather than progressive solutions.
Any debate in Britain on immigration and its impacts is always in immediate danger of lapsing into ‘Little Englandism’, xenophobia or outright racism. It is often premised on the notion that Britain is a uniquely attractive magnet for immigration. Yet according to the United Nations, the number of people across the globe living in a country other than where they were born reached over 190 million in 2005. At that time the net proportion of the British population that was foreign-born stood at less than 5 million or 9.7% of the total population. This proportion puts Britain 15th out of 27 OECD economies surveyed, well behind 23.8% in Australia and Switzerland and 33.4% in Luxembourg, none of which are impoverished by immigration. Furthermore, in Britain in 2009 workers born overseas accounted for 12.8% of those in employment, or just under 4 million. This is exceeded by the numbers of British citizens currently working overseas of just under 5 million.
Crucially, immigration of all types provides a substantial net benefit to the British economy, which a Home Office report from the last government clearly demonstrates. Immigration is a bellwether of growth as well as reinforcing it. That is, the proportion of workers leaving the country will tend to increase when there is an economic downturn and the proportion of the workforce arriving from overseas will tend to decrease. The reverse is also true: net immigration increases when the economy prospers.
This is caused by a number of factors. But the most important related to the current discussion on immigration is that labour alone creates wealth. Immigration not only constitutes an increase in the productive capacity of the economy, it tends to do so disproportionately. That is, the immigrant population to most countries is disproportionately comprised of the able and adaptable of working age and thereby increases the ratio of productive workers to the non-working population, mainly children and the elderly. So, the proportion of working-age immigrants (16-64 year olds) from the new Eastern European members of the EU (the ‘E8 Accession States’) was 84%, an increase from 71% in 2004. This compares to just 65% for those of working age in the population as a whole.
As a result, the government’s own estimate is that immigrants provide a net benefit to public finances, estimated at £2.5bn in 2000. Since both the numbers of immigrants and their proportion of working age have significantly increased since then, the current net contribution is certain to be substantially higher. It further estimated that the net contribution to GDP was to add £6bn to annual growth in 2006. Over the long-term, the official Home Office publication endorses the finding that, “A 1% increase in the ratio of immigrants to natives would lead to an increase of between 0.3 per and 0.4 per cent increase in the average earnings for natives (p12).”
It is for this reason that most employers’ bodies have been in favour of free movement of labour. Indeed it is the necessary corollary to the free movement of capital. It is not because it produces lower wages. Far from driving British workers’ rates of pay down, over time there has been a convergence of pay rates between foreign and British workers, mainly to the detriment of the former. Since the end of 2001, ‘UK-born’ average weekly wages rose from £382 to £393, while those of ‘foreign-born’ workers fell from £458 to £419.
In countries like Japan, which like Britain has an ageing population, the refusal to accept all but fractional immigration condemns society to an ever-declining workforce as a proportion of the population, with severely negative economic and social consequences.
Among the many fallacies of the immigration debate fostered by reactionary outfits such as Migration Watch is the notion that somehow the government could control the size of the population. The idea that any government could ‘control’ the number of births and deaths in a society is a ludicrous one. But so too is the idea it could control the contribution of net migration to total population growth.
In the first instance, this would require government controls over the numbers of emigrants from Britain, in the manner of an autocratic state. Since 1991, there have been approximately 300,000 emigrants per year from Britain – presumably some of these would have to be blocked. Secondly, no government could control the number of immigrants to the country. Even the reactionary and unworkable ConDem annual ‘cap’ on immigration only applies to immigrants from outside the EU. It is a vile effort to comply with tabloid mythology that all non-EU immigrants have black or brown faces. In addition, freedom of movement within the EU rightly prevents restrictions on emigration between member states.
Instead, the population growth that accompanies net immigration is a positive economic factor, one which has the capacity to raise the material well-being of all citizens. Until the latest recession, this is precisely what happened, a rising proportion of immigrant workers was accompanied by a fall in unemployment, not a rise as the BNP, UKIP etc would have us believe.
Benefitting the whole of society
It follows that, if both emigration and immigration are significant trends, then an increasing proportion of the population will have been born overseas. And, given that a greater number of immigrants are of working-age than the general population it is also the case that an increasing proportion of the workforce will have been born overseas, and that now stands at 12.8%. London, the most prosperous part of the economy, now has a population of which 30% was born overseas. The cultural diversity produced is cherished by the overwhelming majority of Londoners.
Yet London also has pockets of some of the greatest deprivation in the whole country. Many of these are areas with high densities of both recent immigration and long-established black and Asian populations. It is clear therefore that the economic benefits of immigration have not been evenly distributed, and that many immigrant communities themselves have benefited least of all.
Left to market forces alone this would remain the case. Only government can ensure that all workers, and not just employers, benefit from immigration. In addition, there is a huge untapped potential from the impact of increased demand arising from immigration, in precisely those areas of recent economic collapse; in schools, healthcare, transport and above all housing. Government action could utilise the increased demand that immigration brings to initiate a large-scale programme of investment in these sectors, providing a benefit and employment across all communities.
Even on the narrowest electoral grounds, it is not true that Labour lost the election because it was ‘too soft’ on immigration. Polling research has shown that there were 8% of voters who considered voting Labour but didn’t. One striking feature of this group is that they were the least hostile of all groups to immigration, while Tory voter were the most hostile. (This same 8% group were also the most hostile to spending cuts and most in favour of tax increases).
In addition, the same research shows that the LibDems’ stated policy of an amnesty for the longest resident irregular migrants was the only policy where it outpolled Labour. This was a policy more progressive than Labour’s own points-based system, which may not have been known or understood by much of the electorate, whereas the LibDem’s policy was widely known.
Answering Mrs Duffy
It is economically regressive to attempt to hold back the trends in migration, which are a global phenomenon, and it will fail. It is also territory politically occupied by UKIP and the BNP. The more logical course is for government to leverage the economic benefits of migration for the whole population. This should be Labour’s policy.
Politically, it is disastrous to pretend to answer the ‘Mrs Duffy question’ with the lie that immigration from the EU, or from Eastern Europe will be curbed, and therefore that total immigration will be curbed. Only withdrawal from the EU could accomplish that. That would be then to chase the 1.5 million votes of UKIP and the BNP while repelling the 17.5 million Tory and LibDem voters – the majority of whom are not xenophobes, racists or fascists. Labour lost 5 million votes between 1997 and 2010, overwhelmingly on the failure to deliver improvement in living standards for all but a small minority of society. Other major losses were registered in reaction to the wars in Iraq and Afghanistan. The idea that Labour could regain office by attacking immigrants, who formed the core of its bedrock supports at the least election, is a complete fiction.
Instead, the appropriate economic answer and political answer are the same, using the prosperity generated by immigration it is possible build new homes and invest in schools, transport and healthcare and begin to reverse the reactionary tide engulfing immigrant and British-born workers alike.