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EU Citizens Will Not Have to Leave the UK. It Is Not the Migrants' Fault

EU Citizens Will Not Have to Leave the UK. It Is Not the Migrants Fault.
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Britain will be better off when the migrants go home we've been told. Is this true? What are the economic truths? Dr Richard Wellings of the Institute of Economic Affairs in London answers this question in an interesting discussion that covers a wide range of economic and political questions about post-Brexit migrants in the UK and Brits in Europe.

Here are a few highlights of this discussion:

Does the UK economy benefit from having migrants compete with locals for jobs in the UK?

“I think if [employers] people have access to a larger labour pool, and also if there is access to public services like the NHS, then they can get a better match between people’s skills and those particular jobs that are needed. So that will in turn tend to increase productivity and improve living standards. …By bringing more people in, you can enjoy some of the economies of scale and clustering in some of the big cities that you wouldn’t get if you didn’t have migration. So there are actually huge economic benefits from it.”

The Brexit camp argued very clearly that migrants bring wages down, making it difficult for everybody. Do you buy that argument?

“I think there can be some short term effects like that, but let’s not forget that people on lower incomes are going to benefit from increased productivity and increased economic output in the long run, so the benefits will come back to those people who feel disadvantaged in the first place, so I think it is a questionable argument. I think where there is a more rigorous argument is on the potential effects on the welfare state of low skilled migrants. When migrants are young and they first arrive, they don’t put a particularly big strain on the system, but if they decide to have children and these children are in state schools costing £7000 a year, and they get child tax credits and potentially social housing and housing benefits etc., then potentially the cost to the taxpayer will outweigh the benefits coming from those emigrants.” 

Do migrants vote more for the conservatives or labour?

“Migrants who vote for labour came from Сommonwealth countries like India and Pakistan. It’s not clear that migrants from continental Europe have the same trajectory in terms of their political culture. …the skill culture is likely to be a lot higher from continental Europe, so they are a lot less likely to be on welfare benefits.”

Are countries that welcome migrants more likely to do well than countries which are closed?

“It is difficult to say because it is possible that the causation runs in the opposite direction. It is possible to say that if a country is doing well because of good policies, then it will tend to attract more migrants. …If you look at economies which have developed rapidly, then there are lots of examples where migration on a large scale has contributed to that, even migration from the countryside to the city during the industrial revolution in the UK can be seen as an example of this. Then the US; if we conveniently forget about the native Americans, and what happened to them… the US’s growth was based on huge migration. But then if we look at the East Asian Tigers, that wasn’t so much the case. There is lots of internal migration from the countryside to the cities, but countries like South Korea or Japan, they didn’t have a huge amount of international migration, but still took off and did really well.”

Is the welfare state the main problem, not migration?

“…if we look at the US in the 19th century and early 20th century, and of course the mass migration that predated the welfare state, in its current form, I think the welfare state is often the source of resentment in host countries. A typical far right message would be that the newcomers get the social housing before the people that have lived there for hundreds of years. …a lot of resentment is caused in high cost areas like central London where people who have lived in the country for decades can’t afford to live in those areas, that sort of thing causes a huge resentment. Obviously that is a fault of government policies rather than migration itself.”

Will Britain evict the 2.9 million EU citizens if it goes for ‘Hard Brexit’?

“I think that is pretty unlikely. Firstly, it would be very challenging in terms of negotiations with the rest of the EU, it would cause immense resentment in other European countries, and a good trading relationship with the rest of Europe is hugely important for the UK. …There will also be a lot of pressure from businesses that are pretty reliant on migrant labour. …It makes a lot of sense for the British government to bring in doctors from the rest of Europe instead of sending tens for thousands of pounds on training them in the UK. …I think some of the rhetoric coming out of government is not very helpful in that regard, clearly, particularly if some of these highly skilled people decide to leave early just in case they are going to face difficult circumstances ahead, then that would be hugely damaging for the UK economy. There needs to be a lot more clarity from the UK government.”

That means that the 1.3 million British citizens in Europe can maybe stop worrying? What about reciprocal health care services?

“We don’t know what will happen. If you look at some of the reciprocal health care arrangements, they actually go beyond the EU and include countries like Iceland and Norway. These agreements don’t have to be conducted on a precisely EU scale.”

Will the UK now fall more under the influence of America?

“I think the US was hugely disappointed by the UK’s decision to leave the EU because in a sense the EU is very much a US project, at least it was in its early years, it was a way of binding these countries to the West. …So in a way the UK will try to make amends by becoming closer to the US in the short term.”

Is the tendency to blame migrants for everything going to carry on?

“I think it will, it has been a major part of political debates for a long time, it’s always easier to blame other people than to look at one’s own domestic problems and bad policies like housing and the welfare system that caused the problems, and these problems get blamed on immigration…”

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