A post-Brexit paradox

Don Flynn says Britain needs more incomers

What role, if any, will immigration play in a Britain which, to borrow the slogan of this year’s Conservative party conference, ‘works for everyone’? Theresa May and her home secretary, Amber Rudd, gave us one answer when they each set out in their separate speeches a vision that promised ‘not much’. According to their view, Britain has been using immigration across the past two decades as a crutch that has allowed the economy to hobble along on the basis of a low-skill, low-productivity Uber-style operation. Even firms operating in high skill, high innovation sectors tell some sort of a success story deserve a reprimand for making extensive use of immigration rather than training up UK residents for the jobs that need doing. The ‘hard Brexit’ that now seems to be shaping up as the government’s preferred, if not only, option will, according to the line that is emerging from Downing Street, deal with this by ending the free movement of workers and subjecting employers to much more rigorous tests as to whether they have done enough to find British workers to fill their staff vacancies. The result will be, or so we are told, the drop in net migration which May has been in search of since she took on the home secretary job herself back in 2010, but also a supposedly virtuous restructuring of industry and commerce which will deliver more high quality, well-paid jobs to people already living here.

 

Ironically

Ironically this is the one bit of the hardline Brexit deal which seems to recommend itself to Labourites in the evangelical ‘Bremain’ wing of the party. Post-referendum developments, triggered by the dramatic fall in the price of the pound, have confused their narrative which held that nothing other than economic and social disaster would come from a vote to leave the EU. What seems to be happening is that the much-needed currency devaluation is creating at least some of the conditions for a revival of the very export-orientated industries and services which support decent jobs and conditions of employment. With this in mind it is disappointing that the newly-appointed Labour front bench seem to think that this is the right moment to signal support for a rolling back of the free movement of workers. The Brexit spokesperson, Sir Keir Starmer, has made it clear that the referendum result makes this a bullet that has to be bitten and he is willing to sit down with government to see what aspects of the right to movement which wage earners currently enjoy can be ditched. This sits uneasily with Jeremy Corbyn’s view that the UK’s borders should remain open to, amongst others, people who are looking for jobs. There is obvious irony here, with Corbyn as a politician who could easily see the downside of participation in the EU single market (“I’ll give it 7 out of 10” as he explained to during a television interview during the referendum campaign) is prepared to stick his neck out and call for support for continuing freedom of migration, and the Parliamentary Party mainstream who seem to believe it can be negotiated away.

 

 

By 2020 the number of people aged 50 or over who are still active in employment will be close to 25 million out of a total labour force of 32 million.  With the best will in the world this is not a group of workers who are likely to be working at the cutting edge of innovation

 

 

Who is right in this debate? Part of the answer lies in trying to think what immigration controls might look like in a system which squares with the ambitions of a hard Brexit. Theresa May has already signalled their main features: tougher checks at all UK border crossing points; a requirement to get a visa prior to entry for anyone planning to stay in any capacity other than that of a short-term tourist; conditions imposed on the granting of these visas to be onerously high – restricted to highly skilled jobs where a labour market test has ruled out the possibility of finding a suitable British worker.

 

However, these are the very elements that amount to strictures on the operation of the UK labour market which will run the risk of choking of the opportunity to rebalance and rebuild the economy around high quality manufacturing and services. Some harsh facts about the current state of the British labour market will help establish the veracity of this claim. By 2020 the number of people aged 50 or over who are still active in employment will be close to 25 million out of a total labour force of 32 million. With the best will in the world this is not a group of workers who are likely to be working at the cutting edge of innovation in all the new technologies that will be driving competitiveness across the world. On the contrary, the older age groups are amongst those most likely to have been able to make the low-skilled ‘gig’ economy work best for them – mixing part-time work with income from pensions and rent from other assets. Frustration with this complacency is most keenly felt by younger workers who are looking for types of employment that make full use of their skill-sets and which provide a basis for progression across their lifetimes. A government keen to break-up the mesh of low productivity jobs and build the base for new manufacturing, as Theresa May claims hers is, would be keen to side with the ambitions of youth against the ‘just getting by’ mentality of age cohorts that have come to think their best days are behind them. But these young people are much scarcer in the UK than they need to be if they are to provide the critical mass that would truly support a revolution in the jobs market. This contrasts with the demographic profiles of developing countries, where the proportion of the population in younger age groups (i.e. aged 30 and below) is in the region of 50%-60% of the total.
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Increasingly well-educated

Moreover, the young people of the world are increasingly well-educated. During a remarkable period of progress since 1950, global illiteracy rates have fallen from around 65% to just over 14% today. At the higher levels of education attainment the evidence is similarly optimistic. By 2020 an estimated 850 million people will be educated to post-secondary school levels, with further increases to reach 1.6 billion people by 2050. The demographic argument in favour of immigration is generally limited to stressing the role of support ratios between young working age contributors and elderlys. This leaves it open to the objection that, since the young tax payers inevitably get older and become dependents, then the fix achieved through an inflow of migrants is temporary at best. Where the contribution of young people becomes significant once again is the more substantial and long-lasting gains that come from the innovation and productivity increases. These occur whenever well-educated young people are brought into play within economies where youth and skills have become increasingly scarce. This is what makes Mrs May’s repudiation of immigration so perverse: the sweeping modernisation of the UK economy, which she hopes will be ushered in by Brexit, will flounder if it does not find ready and waiting a dynamic workforce ambitious for the sort of progress which might just be possible in the period ahead.

 

Stifle the chance

What we are likely to see instead is a right wing government imposing a bureaucratic straightjacket on the movement of people. In generating even greater difficulties for growing businesses to find the workforces they need, and in imposing on those few fortunate to get in a burdensome regime that inhibits their capacity to make personal plans for their lifetime progression, the government will stifle the chance of achieving the much-need transformation of the UK economy. One would hope that the Labour party would be astute enough to have recognised these facts. In Scotland the SNP administration buzzes with a desire to achieving change through immigration policies which are not only broad in terms of the numbers they wish to see come into the country, but also generous with regard to the rights to be extended to the migrants themselves. The same argument is there to be made in the case of the rest of the UK. The Labour party needs to be to the forefront in making it.

 

 

Don Flynn is a long-time member of the CHARTIST editorial board