Capping benefits for migrants could serve to drive down wages for all

Forcing migrants into whatever work's going will render exploitation a breeze.

From an economic point of view, it's difficult to assess David Cameron's proposal to limit the amount of social support migrants from the EU can receive. Migration is a nearly unqualified positive to a nation's economy, but those positives generally rely on the point that migrants are likely to be in work and a net contributor to the public purse – more likely, in fact, than native Britons. But the premise of the new policy is that it doesn't affect those "good" migrants. So what to think of it?

Firstly, the background. Immigration is a boon to society, and immigration from the EU is no different. A study by UCL's Centre for Research and Analysis of Migration finds that in 2008/9, workers from Eastern Europe contributed £1.37 in taxes for every £1 of services they used, while native Britons contributed 80p to the pound. Migrants represent about 13 per cent of all workers but only 7 per cent of all benefit claimants. Liberalising immigration worldwide could result in a 116 per cent increase in wages overnight.

But arguments in favour of Britain alone opening its borders tend to focus on one very specific benefit of migration. Almost by definition, the foreigners who arrive on our shores seeking work are among the most motivated, richest, and capable members of their nations; as a result, they tend to be a net bonus to the British economy. (Even if you control for characteristics like age, education, children and disability, the UCL study still found that Eastern European migrants were less likely to claim benefits).

But David Cameron's plan is to ban EU nationals "from claiming most benefits after six months in the UK unless they can prove they have been continuously looking for work over that period", according to the Guardian's Patrick Wintour. Since the vast majority of migrants don't claim benefits, and the advantage of migration is frequently attributed to the fact that migrants are more frequently in work, how could this backfire?

On the face of it, it couldn't, because it's largely an empty policy. Cracking down on issues which have a disproportionate public profile is the bread-and-butter of immigration politics. In this way, Cameron's idea follows in the tradition of Ed Miliband's requirement that public sector workers speak English (they overwhelmingly do, as do 99.73 per cent of people living in England and Wales) and Gordon Brown's decision to "suspend" low skilled migration in 2008 despite the fact that it had been practically suspended since 2004. A lot of fuss over something which "fixes" problems which people think they have about immigration.

But there will be effects nonetheless. Because while few migrants claim state aid, the social safety net has an effect on people in work as well. The harsher life is for an unemployed person, the more power employers have over employees. A crucial part of economic life is the ability to tell your employer to go shove it if they treat you badly, and go and find a better job. That keeps the employer/employee relationship more equitable than it might otherwise be, and ensures better treatment for all – even those who would never have the courage to walk out themselves.

There is some evidence that, at the lower levels of pay, migration does drive wages down. The best response to that is through redistribution, rather than a cap; if migration grows the economy by more than it drives wages down, then a redistributionist state can make everyone better off. But Cameron's cap will serve, at the margin, to drive wages for migrants lower still, by forcing them to take jobs at conditions that native workers, without the pressure of starvation after six months, might not do. And since everyone is competing for the same jobs, that will push wages for native workers lower too.

The macroeconomy of that policy might still end up being a positive, because exploitation of labourers is good for the bottom line. But it doesn't seem like the sort of economy which Cameron wants to run.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Nicola Sturgeon. Photo: Getty
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For the first time in decades, there is genuine dissent in Scottish Nationalist ranks

The First Minister is facing pressure to talk less about independence - and bring on new talent in her party.

She so recently seemed all-powerful, licensed to reign for as long as she chose, with the authority to pursue the return of our national sovereignty. We would then have the ability to strike our own deals on our own terms, a smaller, smarter, leaner nation freed from the stifling constraints of partnership with a much larger neighbour. There was, she repeatedly told us, nothing to be afraid of.

Now, suddenly, she is the victim of her own miscalculation: having misread the public mood, having raced too far ahead of moderate opinion, she finds herself at bay. The voters have delivered a public humiliation, while an opposition party until recently lampooned as unelectable is on the march. There is, suddenly, talk of her departure sooner rather than later.

Yes, this is a tough time to be Nicola Sturgeon…

Let’s not overstate it. The position of Scotland’s First Minister is considerably more secure than that of the UK’s Prime Minister. Theresa May wants out as soon as is feasible; Sturgeon, one suspects, will have to be dragged from Bute House. Sturgeon retains enough respect among the public and support among her colleagues to plough on for now. Nevertheless, things are not what they were before the general election and are unlikely ever to return to that happy state.

It’s all because of Scexit, of course. Sturgeon’s unseemly sprint for the indy finishing line left enough Scottish voters feeling… what? Mistreated, taken for granted, rushed, patronised, bullied… so much so that they effectively used June 8 to deliver a second No vote. With the idea of another referendum hanging around like a bad headache, the electorate decided to stage an intervention. In just two years, Sturgeon lost 40 per cent of her Westminster seats and displaced half a million votes. One could almost argue that, by comparison, Theresa May did relatively well.

For the first time in decades, there is genuine dissent in Nationalist ranks. Tommy Sheppard, a former Labour Party official who is now an influential left-wing SNP MP, published an article immediately after the general election calling on the First Minister to ‘park’ a second referendum until the Brexit negotiations are complete. There are others who believe the party should rediscover its talent for the long game: accept the public mood is unlikely to change much before the 2021 devolved elections, at which point, even if the Nats remain the single largest party, Holyrood might find itself with a unionist majority; concentrate on improving the public services, show what might be done with all the powers of an independent nation, and wait patiently until the numbers change.

There are others – not many, but some – who would go further. They believe that Sturgeon should take responsibility for the election result, and should be looking to hand over to a new generation before 2021. The old guard has had its shot and its time: a party with veterans such as Sturgeon, John Swinney and Mike Russell in the key jobs looks too much like it did 20 years ago. Even the new Westminster leader, Ian Blackford, has been on the scene for donkey’s. There are more who believe that the iron grip the First Minister and her husband, SNP chief executive Peter Murrell, have on the party is unhealthy – that Murrell should carry the can for the loss of 21 MPs, and that he certainly would have done so if he weren’t married to the boss.

The most likely outcome, given what we know about the First Minister’s nature, is that she will choose something like the Sheppard route: talk less about independence for the next 18 months, see what the Brexit deal looks like, keep an eye on the polls and if they seem favourable go for a referendum in autumn 2019. The question is, can a wearied and increasingly cynical public be won round by then? Will people be willing to pile risk upon risk?

As the hot takes about Jeremy Corbyn’s surprise election performance continue to flood in, there has been a lot of attention given to the role played by young Britons. The issues of intergenerational unfairness, prolonged austerity and hard Brexit, coupled with Corbyn’s optimistic campaigning style, saw a sharp rise in turnout among that demographic. Here, Scotland has been ahead of the curve. In the 2014 referendum, the Yes campaign and its can-do spirit of positivity inspired huge enthusiasm among younger Scots. Indeed, only a large and slightly panicked defensive response from over-65s saved the union.

That brush with calamity seems to have been close enough for many people: many of the seats taken from the Nats by the Scottish Tories at the general election were rural, well-to-do and relatively elderly. The modern electorate is a fickle thing, but it remains rational. The Corbynites, amid their plans for total world domination and their ongoing festival of revenge, might bear that in mind.

Chris Deerin is the New Statesman's contributing editor (Scotland). 

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