Immigration and the EU: Tory ministers play with fire

All parties know that open borders are required to stay in the single European market. But there is

Theresa May, the Home Secretary, has told the Daily Telegraph that contingency planning is under way to address the prospect of a surge in immigration from crisis-stricken countries (chiefly Greece) in the event that the single currency collapses or members are forced to leave.

EU states are not supposed to restrict movement of people within the  union (with some “transitional controls” applied to relatively new members). The single labour market is an essential component of the whole project to create a unified trading space. Some tightening of controls is permitted in “exceptional” circumstances and Britain is not a signatory to the Schengen accord that waives border checks between most continental EU members.

Still, a unilateral imposition of visas and other restrictions on Greek or Portuguese workers coming to the UK would be an irregular and, indeed, extraordinary contravention of the spirit of the European economic cooperation. That isn’t to say it wouldn’t be popular.

The role that the European single labour market plays in Britain’s constantly anxious debate about immigration is a peculiar one. It substantially limits the capacity of UK governments to pre-determine the number of foreign nationals working in the UK; it also offers British citizens many lucrative opportunities to live and work elsewhere in Europe. Indeed, that is the point – mutual advantage for all EU workers.

But politicians from all parties hate discussing the free movement of labour because they are all, in theory, signed up to the single market project. There has always been some nervousness in Westminster about broaching the subject for fear that wary and sceptical acceptance of Britain’s EU membership would drain away completely it were being portrayed as the engine of mass immigration. The consequence of this squeamishness is nonsensical policies and pronouncements around the whole immigration topic: Gordon Brown’s meaningless pledge of “British jobs for British workers”; the coalition’s immigration “cap” that only applies to non-EU nationals.

There are signs, as hostility and anxiety around the EU grow, that Conservatives are getting ready to be a little bit more explicit and aggressive on this subject. Employment minister Chris Grayling told an audience at an event run by the ConservativeHome website last week that the Tories should be more forthright in mobilising fear of immigration in their anti-Brussels message:

It’s much easier to explain to a voter that we are unhappy with what the EU is doing because, for example, it wants us to allow people to come here and settle and be able to access our benefit system without the safeguards that we have in place today. That’s something everyone can understand.

It is not a particularly attractive political proposition or even a very honest one given the parallel benefits that Britain gets from the single market. But it has the potential to be crudely, nastily effective.

Rafael Behr is political columnist at the Guardian and former political editor of the New Statesman

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Debunking Boris Johnson's claim that energy bills will be lower if we leave the EU

Why the Brexiteers' energy policy is less power to the people and more electric shock.

Boris Johnson and Michael Gove have promised that they will end VAT on domestic energy bills if the country votes to leave in the EU referendum. This would save Britain £2bn, or "over £60" per household, they claimed in The Sun this morning.

They are right that this is not something that could be done without leaving the Union. But is such a promise responsible? Might Brexit in fact cost us much more in increased energy bills than an end to VAT could ever hope to save? Quite probably.

Let’s do the maths...

In 2014, the latest year for which figures are available, the UK imported 46 per cent of our total energy supply. Over 20 other countries helped us keep our lights on, from Russian coal to Norwegian gas. And according to Energy Secretary Amber Rudd, this trend is only set to continue (regardless of the potential for domestic fracking), thanks to our declining reserves of North Sea gas and oil.


Click to enlarge.

The reliance on imports makes the UK highly vulnerable to fluctuations in the value of the pound: the lower its value, the more we have to pay for anything we import. This is a situation that could spell disaster in the case of a Brexit, with the Treasury estimating that a vote to leave could cause the pound to fall by 12 per cent.

So what does this mean for our energy bills? According to December’s figures from the Office of National Statistics, the average UK household spends £25.80 a week on gas, electricity and other fuels, which adds up to £35.7bn a year across the UK. And if roughly 45 per cent (£16.4bn) of that amount is based on imports, then a devaluation of the pound could cause their cost to rise 12 per cent – to £18.4bn.

This would represent a 5.6 per cent increase in our total spending on domestic energy, bringing the annual cost up to £37.7bn, and resulting in a £75 a year rise per average household. That’s £11 more than the Brexiteers have promised removing VAT would reduce bills by. 

This is a rough estimate – and adjustments would have to be made to account for the varying exchange rates of the countries we trade with, as well as the proportion of the energy imports that are allocated to domestic use – but it makes a start at holding Johnson and Gove’s latest figures to account.

Here are five other ways in which leaving the EU could risk soaring energy prices:

We would have less control over EU energy policy

A new report from Chatham House argues that the deeply integrated nature of the UK’s energy system means that we couldn’t simply switch-off the  relationship with the EU. “It would be neither possible nor desirable to ‘unplug’ the UK from Europe’s energy networks,” they argue. “A degree of continued adherence to EU market, environmental and governance rules would be inevitable.”

Exclusion from Europe’s Internal Energy Market could have a long-term negative impact

Secretary of State for Energy and Climate Change Amber Rudd said that a Brexit was likely to produce an “electric shock” for UK energy customers – with costs spiralling upwards “by at least half a billion pounds a year”. This claim was based on Vivid Economic’s report for the National Grid, which warned that if Britain was excluded from the IEM, the potential impact “could be up to £500m per year by the early 2020s”.

Brexit could make our energy supply less secure

Rudd has also stressed  the risks to energy security that a vote to Leave could entail. In a speech made last Thursday, she pointed her finger particularly in the direction of Vladamir Putin and his ability to bloc gas supplies to the UK: “As a bloc of 500 million people we have the power to force Putin’s hand. We can coordinate our response to a crisis.”

It could also choke investment into British energy infrastructure

£45bn was invested in Britain’s energy system from elsewhere in the EU in 2014. But the German industrial conglomerate Siemens, who makes hundreds of the turbines used the UK’s offshore windfarms, has warned that Brexit “could make the UK a less attractive place to do business”.

Petrol costs would also rise

The AA has warned that leaving the EU could cause petrol prices to rise by as much 19p a litre. That’s an extra £10 every time you fill up the family car. More cautious estimates, such as that from the RAC, still see pump prices rising by £2 per tank.

The EU is an invaluable ally in the fight against Climate Change

At a speech at a solar farm in Lincolnshire last Friday, Jeremy Corbyn argued that the need for co-orinated energy policy is now greater than ever “Climate change is one of the greatest fights of our generation and, at a time when the Government has scrapped funding for green projects, it is vital that we remain in the EU so we can keep accessing valuable funding streams to protect our environment.”

Corbyn’s statement builds upon those made by Green Party MEP, Keith Taylor, whose consultations with research groups have stressed the importance of maintaining the EU’s energy efficiency directive: “Outside the EU, the government’s zeal for deregulation will put a kibosh on the progress made on energy efficiency in Britain.”

India Bourke is the New Statesman's editorial assistant.