By blaming immigration, Labour risks confusing voters further

Ed Balls was right to say that Labour was wrong about immigration, but we must be careful to stick t

The voice of Ed Balls is the latest addition to an ever-growing chorus within Labour commenting on the impact of immigration on the party's electoral fortunes. The emerging conclusion is Labour went too far with immigration.

Balls wrote an article for the Observer titled "We were wrong to allow so many eastern Europeans into Britain". The piece concludes:

There have been real economic gains from the arrival of young, hard-working migrants from eastern Europe over the past six years. But there has also been a direct impact on the wages, terms and conditions of too many people -- in communities ill-prepared to deal with the reality of globalisation, including the one I represent.

The result was, as many of us found in the election, our arguments on immigration were not good enough . . . In retrospect, Britain should not have rejected transitional controls on migration from the first wave of new EU member states in 2004, which we were legally entitled to impose.

Balls is right that Labour was wrong -- but the fault lies not with the decision to open our labour markets to the accession states. It is instead pretty much everything else preceding and following that decision which was wrong, including much of the subsequent analysis.

It's worth noting that, according to recent statistics, eastern Europeans account for roughly 1.5 per cent of the working-age population. The proposition that this tiny minority of the population had such a significant impact on the wages, terms and conditions of "too many people" just doesn't stand up.

Of course, immigration could, in theory, reduce wages and conditions by increasing the supply of labour. But the economy in reality has responded to immigration by increasing the demand for labour.

Benefits

The question of the impact of immigration on wages has been thoroughly researched. Though conclusions differ, the overall view can be summed up in the following terms: overall, immigration has not had statistically significant effects on wages or unemployment either one way or the other.

Factors such as education, trade, outsourcing, demographic change and outsourcing all affect wages and employment much more than immigration.

Where negative effects on wages have occurred, they tend to have been experienced by previous immigrants, especially those with limited English language skills; manual workers in jobs that do not require proficiency in English; individuals on benefits or those otherwise marginalised in the labour force.

However, these studies do not take into account that these very same workers have also benefited from low prices and low inflation. They have also gained employment through the relocation of companies on account of the easing of immigration restrictions more generally.

Consider, for example, the evidence from the Migration Advisory Committee that Japanese companies such as Hitachi, Honda and Mitsubishi would have had to scale back their operations significantly if they had been prevented from recruiting Japanese workers. On average, for every one Japanese national, these companies employ 73 UK residents.

This being the case, it seems clear that the imposition of transitional measures on movement by the first wave of EU member states would not have dealt with the problems encountered by the constituents to whom Balls alludes.

Nor, it seems, would a further extension of the current restrictions on Bulgarian and Romanian nationals.

On the other hand, however, better training and education, better provision of English language teaching, reforming the benefits system, enhancing and enforcing labour standards for all workers, and eliminating labour-market discrimination would.

Proxy issue

So, why the antagonistic electorate? It is correct that globalisation and rising immigration result in transformation of communities, and indeed challenge their very identity. It would also be fair to say that the arrival of eastern Europeans in numbers that by recent UK standards are large did generate these sorts of feelings among some parts of the electorate.

The job of government, however, is not to sit back and simply point out that this is a regrettable fact of life -- as Labour did -- but rather to prepare societies for these sorts of transitions.

In this respect, Labour's performance was no more than an abject failure. At no point did it engage the electorate on the issue. It never explained the kinds of transformations that could be expected to take place in communities up and down the UK. It did not address the national impacts. Nor did it ever in advance speak meaningfully about the numbers of people who might be involved.

Labour also failed to put in place effectively the necessary social infrastructure, or a contingency plan for one in the event that its predictions of the numbers involved were exceeded (as turned out to be the case).

Migrants are not simply units of production, but human beings with human needs -- including needs for public services. Given that immigration is a proxy in particular for issues such as public services, Labour's failure to invest here, particularly with regard to affordable housing, was entirely unhelpful.

Of course, the party's failure to communicate the multiple benefits that migration has brought the UK also represents a great failing. Where were the speeches about increased investment and trade, reduced inflation, benign fiscal benefits, plugging skills shortages and increases in GDP per capita?

This was coupled by Labour's failure more generally to explain coherently its system for immigration control and the various mechanisms that existed to prioritise the interests of nationals: for instance, the resident labour-market test, applicable to non-EU nationals, and limitations on access to the welfare state and public housing by non-nationals more generally.

Its token acknowledgement here and there of the benefits of migration was insufficient, drowned out by its rather louder tough talk about immigrants.

The void arising from this was rapidly filled by groups such as MigrationWatch and the right-wing press. These groups have been remarkably successful in grossly exaggerating the scale of immigration and downplaying the multiple positives of immigration while focusing purely on its negatives.

The result was the manufacturing of perceptions by the electorate about issues such as wages, employment and public services which are simply at variance with the evidence.

The true failing in all of this is not the decision to expand certain types of immigration to the UK, but rather the cack-handed way in which our politicians dealt with it. The Labour leadership contenders and the current government would do well to take note.

Hina Majid is director of policy at the Joint Council for the Welfare of Immigrants.

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What I learnt when my wife and I went to Brexit: the Musical

This week in the media, from laughing as the world order crumbles to what Tristram Hunt got wrong – and Leicester’s big fall.

As my wife and I watched Brexit: the Musical, performed in a tiny theatre above a pub in London’s Little Venice, I thought of the American novelist Lionel Shriver’s comment on Donald Trump’s inauguration: “A sense of humour is going to get us through better than indignation.” It is an entertaining, engaging and amusing show, which makes the point that none of the main actors in the Brexit drama – whether supporters of Leave or Remain – achieved quite what they had intended. The biggest laugh went to the actor playing Boris Johnson (James Sanderson), the wannabe Tory leader who blew his chance. The mere appearance of an overweight man of dishevelled appearance with a mop of blond hair is enough to have the audience rolling in the aisles.

The lesson we should take from Brexit and from Trump’s election is that politicians of all shades, including those who claim to be non-political insurgents, have zero control of events, whether we are talking about immigration, economic growth or the Middle East. We need to tweak Yeats’s lines: the best may lack all conviction but the worst are full not so much of passionate intensity – who knows what Trump or Johnson really believe? – as bumbling incompetence. The sun will still rise in the morning (as
Barack Obama observed when Trump’s win became evident), and multi­national capital will still rule the world. Meanwhile, we may as well enjoy the show.

 

Danger of Donald

Nevertheless, we shouldn’t deny the risks of having incompetents in charge. The biggest concerns Trump’s geopolitical strategy, or rather his lack of one. Great power relations since 1945 have been based on mutual understanding of what each country wants to achieve, of its red lines and national ambitions. The scariest moments come when one leader miscalculates how another will react. Of all figures in recent history, the Soviet leader Nikita Khrushchev, with his flamboyant manner and erratic temperament, was probably the most similar to Trump. In 1962, he thought President Kennedy, inexperienced and idealistic, would tolerate Soviet missiles in Cuba. He was wrong and the world only narrowly avoided nuclear war.

How would Trump respond to a Russian invasion of the Baltic states? Will he recognise Taiwan as an independent country? Will he scrap Obama’s deal with Iran and support a pre-emptive strike against its nuclear ambitions? Nobody knows, probably not even Trump. He seems to think that keeping your options open and your adversaries guessing leads to “great deals”. That may work in business, in which the worst that can happen is that one of your companies goes bankrupt – an outcome of which Americans take a relaxed view. In international relations, the stakes are higher.

 

Right job, wrong time

I rather like Tristram Hunt, who started contributing to the New Statesman during my editorship. He may be the son of a life peer and a protégé of Peter Mandelson, but he is an all-too-rare example of a politician with a hinterland, having written a biography of Engels and a study of the English Civil War and presented successful TV documentaries. In a parallel universe, he could have made an inspirational Labour leader,
a more thoughtful and trustworthy version of Tony Blair.

No doubt, having resigned his Stoke-on-Trent Central seat, he will make a success of his new job as director of the Victoria and Albert Museum. If nothing else, he will learn a little about the arts of management and leadership. But isn’t this the wrong way round? Wouldn’t it be better if people first ran museums or other cultural and public institutions and then carried such experience into parliament and government?

 

Pointless palace

When the Palace of Westminster was largely destroyed by fire in 1834, thousands gathered to enjoy the spectacle. Thomas Carlyle noted that the crowd “whew’d and whistled when the breeze came as if to encourage it” and that “a man sorry I did not anywhere see”.

Now, with MPs reportedly refusing to move out to allow vital renovation work from 2023, we can expect a repeat performance. Given the unpopularity of politicians, public enthusiasm may be even greater than it was two centuries ago. Yet what is going through MPs’ minds is anyone’s guess. Since Theresa May refuses them a vote on Brexit, prefers the Foreign Office’s Lancaster House as the location to deliver her most important speech to date and intends to amend or replace Brussels-originated laws with ministerial orders under “Henry VIII powers”, perhaps they have concluded that there’s no longer much point to the place.

 

As good as it gets

What a difference a year makes. In January 2016, supporters of Leicester City, my home-town team, were beginning to contemplate the unthinkable: that they could win football’s Premier League. Now, five places off the bottom, they contemplate the equally unthinkable idea of relegation.

With the exception of one player, N’Golo Kanté (now at Chelsea), the team is identical to last season’s. So how can this be? The sophisticated, mathematical answer is “regression to the mean”. In a league where money, wages and performance are usually linked rigidly, a team that does much better than you’d predict one season is likely to do much worse the next. I’d suggest something else, though. For those who won last season’s title against such overwhelming odds, life can never be as good again. Anything short of winning the Champions League (in which Leicester have so far flourished) would seem an anti­climax. In the same way, the England cricket team that won the Ashes in 2005 – after the Australians had dominated for 16 years – fell apart almost as soon as its Trafalgar Square parade was over. Beating other international teams wouldn’t have delivered the same adrenalin surge.

Peter Wilby was editor of the Independent on Sunday from 1995 to 1996 and of the New Statesman from 1998 to 2005. He writes the weekly First Thoughts column for the NS.

This article first appeared in the 19 January 2017 issue of the New Statesman, The Trump era