Don't close our borders

Observations on immigration

Is Britain at last moving to adopt part of the social European model? With its decision to limit the rights of Romanians and Bulgarians to work here when their two countries join the European Union next January, Whitehall is lining up with Paris and Berlin in adopting protectionism as a new doctrine of managing labour markets.

The Confederation of British Industry has also adopted this neo-protectionist labour-market policy, leaving the TUC stranded in arguing that it is better to help European workers with language training and workplace inspections than to put up porous barriers in the hope they won't come here.

The new grande peur about too many foreigners in Britain has entered the heart of policy-making and marks a rupture with the image, carefully cultivated by Labour since 1997, of this being the European country most open to inward flows of ideas, investment, and foreigners willing to work and pay taxes. There are in fact more Poles working in Germany than in Britain, but they work illegally as a new generation of Auf Wiedersehen, Kochanie (Polish for "pet") workers. Unlike the Poles who come to Britain, they do not pay tax or National Insurance. Romanians and Bulgarians will still be able to travel to Britain to work in the black economy if they choose to. The restriction could end up increasing illegal working.

It is true that the number of Poles who came to Britain after 2004 exceeded estimates and, as someone who took part in the decision to let them in, I should 'fess up. The university study that ministers quoted at the time was based on all 15 EU member states opening their labour markets. But in the end only Britain, Ireland and Sweden did so. Moreover, Britain already had Europe's biggest Polish diaspora of 250,000 living here, with up to 100 planes and buses going to and from Poland every day. So the Poles came here, just as the Romanians will head for Spain, where there is a 400,000-strong Romanian community already in place.

Have the Poles been bad for Britain? In macroeconomic terms, they have enabled thousands of British firms to expand their output. Unlike their French and German counterparts who have endured wage cuts in recent years, British workers have enjoyed real-wage increases under Labour as the economy has expanded. This is thanks in part to European labour. For decades, protectionists have argued that a native worker's wages are depressed by allowing the Irish, or the Pakistanis, or, today, eastern Europeans to "undercut" pay for British-born employees. But what determines wages is the strength of the economy, legislation such as the minimum wage, and good trade unions, not whether an employee was born in Ireland or India, Bulgaria or Bangladesh.

Since 2004, Britain, Ireland and Sweden, the three open-market economies in the EU - have outperformed France, Italy and Germany, which are all more protectionist. A major study of the impact of foreign workers, published this year by the Catalan Savings Bank, showed 3.3 million non-Spanish workers arriving in Spain since 1995. This coincides with the best-ever decade for the Spanish economy, in which unemployment fell dramatically.

Britain should think carefully before urging new border controls on Europeans coming to visit, work, live, invest or study here. There are now more Brits making their lives elsewhere in the EU - 750,000 in Spain and 500,000 in France - than there are Europeans seeking to live permanently here. The Spanish and French authorities complain about Brits clogging up their healthcare system or fiddling benefits. Ten per cent of the population of Chamonix, the Alpine centre, are now Brits who demand, as EU citizens, that they be allowed to live and work there, even if it annoys French-born mountain guides, builders and restaurant owners.

Such "semigrant" Europeans occupy a halfway status, returning home regularly. Some of them will settle here, but as eastern Europe grows richer, most will return home. Is that so bad? Do we want protectionist politics to become the norm in Britain? If not, someone has to make the case for Britain staying an open economy and open society. If we close ourselves down, we Brits will be the first to suffer.

Denis MacShane is Labour MP for Rotherham and a former minister for Europe (2002-2005)

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