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22 September 2014

Ed Balls’ tough line on immigration only helps Ukip

Trouble for a future Labour government.

By Tim Wigmore

“We should have had tougher rules on immigration from Eastern Europe – it was a mistake not to have transitional controls in 2004.” So said Ed Balls in his speech to the Labour Party conference today, advocating “longer transitional controls for new countries” and “a longer time people have to work before they can get unemployment benefit.”

The motive for his comments is obvious enough: Balls considers Labour’s record on immigration to be a major impediment to his attempts to became Chancellor in less than eight months time. So reticent to apologise for Labour’s broader record in government, he is prepared to make an exception where immigration is concerned.

But Balls seems to ignore a fundamental truth. Had the Labour government acted as he now says they should have, it would have led to a toxic cocktail of higher taxes and lower spending – plus a higher national debt when Labour were booted out of office in 2010. Studies have repeatedly shown that immigrants bring in significantly more to the economy than they take out. The OECD last year found that the net fiscal impact of immigration was worth 0.46 per cent of GDP to UK PLC. A study by the Centre for Research and Analysis Migration found that those who immigrated since 2000 from the European Economic Area contributed 34 per cent more in taxes than they received from the state.

One reason is the Labour government’s decision to be one of three EU countries, along with Ireland and Sweden that did not impose transition controls on new countries entering the EU in 2004. This meant that the UK was ideally placed to attract the most skilled workers of the new members of the EU.

And the idea that EU migration is single-handedly responsible for reducing working-class wages is hogwash. The squeeze on working-class ages is about decades of technological change and globalisation, not whether Poles did not have to wait seven years before being free to work in the UK. The National Institute of Economic and Social Research have found that the 2004 influx to Britain depressed real wages over the long run by 0.36 per cent.

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Not that anyone watching Balls’ speech would have picked up upon any of these facts. He is focused only on reaching No 11 Downing Street next year, and cannot see how sticking up for immigrants would help him in that cause. Yet, by expediently peddling myths about the effects of immigration, Balls is serving up trouble for a future Labour government. By moving to the right on immigration, Labour is acquiescing in shifting the whole political discourse on immigration to the right. Ultimately this only benefits Ukip.

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