Miscellaneous

The Brexiteers vs The Establishment: a very tall tale

And so, with less than a week to go before the EU Referendum scheduled of the 23 June 2016, the Leave (or Brexit for British Exit) campaign took a lead in the opinion polls for the first time, quickly followed by other polls showing that everything is to play for. Such polls are not an exact science: they have not known for their accuracy in the UK. In the last referendum they were predicting that Scotland would choose to divorce from the UK. More recently they did not predict a majority for the Conservatives in the last General Election. Still something is happening which might result in the unimaginable: Britain could soon find itself heading out of the European Union (EU).

A theme which becomes more and more apparent in recent polling is that a shift has occurred and it is connected with particular social groups representing the working population pushing for Brexit. The reason has probably little to do with the EU itself, which is generally not that well known (in itself is an on-going problem and not just in the UK). Rather this seems to reflect be a groundswell of concerns, anxieties and fear which go beyond EU immigration:

“… the EU referendum debate has opened up a Pandora’s box of working-class anger and frustration… I would argue that the referendum debate within working-class communities is not about immigration, despite the rhetoric. It is about precarity and fear … For them, talking about immigration and being afraid of immigration is about the precarity of being working class, when people’s basic needs are no longer secure and they want change. The referendum has opened up a chasm of inequality in the UK and the monsters of a deeply divided and unfair society are crawling out. They will not easily go away no matter what the referendum result.”

This analysis rings true to me and hence my fear that the EU Referendum could swinging towards Brexit, whatever the merits of the Remain case. The Leave campaign has detected and tapped into this sentiment, and is now milk it for all it is worth. By contrast, the utter failure of the Remain campaign to articulate a strong case for remaining, as opposed sketching gloom and doom Brexit scenarios, has an alarmist and thus false ring to it.

Instead, the Brexiteers have positioned themselves to pander to these fears and anxieties, while at the same time offering them a golden opportunity to giving a bloody nose to the toffs representing the British Establishment / Elites that would preserve the status quo (i.e. remain in the EU) at all costs and against the best interests of ordinary Britons.

Austerity has  undoubtedly intensified the sense of precarity in British society and this is being exploited by the Brexiteers. However, the issue is what exactly is the motivation of the leading Brexiteers and their backers? Should Brexit occur, would they prioritise dealing with these legitimate concerns upon Brexit or are the Brexiteers spinning a very long tale?

The Noes

The “Noes” camp is led by Boris Johnson and his band of merry men such as Michael Gove, Iain Duncan Smith, Priti Patel, etc. (all Conservatives). Nigel Farage (UKIP) is ploughing his own furrow. The others consider him to be “toxic” to the Brexit because of his focus on the issue of EU immigration,  most recently demonstrated in UKIP´s intemperate use of the refugee crisis, though in reality the immigration theme is one which the rest of the leading Brexiteers have increasingly latched on to.

They are joined by those well-known supporters of democracy and transparency who only wish Britain well for the future, such as Marine Le Pen, Vladimir Putin and Donald Trump. All are encouraging Britons to Brexit, thus freeing the UK from the clutches, if not shackles, of the EU.

They all stress the need to regain control of the borders (i.e. stop EU immigration), stop EU benefit tourism, stop EU heath tourism, stop housing being taken up by EU foreigners, stop school places being taken-up by EU migrants´ children,  stop the loss of British sovereignty, stop EU enlargement, stop payments flowing to the EU, etc. (follow the links for an alternative analysis of the causes and the solutions). The grand plan is to stop anything and everything emanating from the EU because it is self-evident (to them) that all of Britain’s problems stem from being in the EU. This has the simplistic ring of pure populism and we all know what that has led to in the past.

The Brexiteers have few ideas about what they would do upon Brexit. The plan is basically to stop the EU, regain full sovereignty, regain control of the borders, reduce immigration through an Austria style points system, sign-up new trade deals and plough Britain´s EU financial contribution into public services. Britain will soon thrive upon Brexit. Apparently.

The possibility that most of the key problems in Britain (housing, health, education, low productivity, infrastructure, massive public and private sector debt, etc.) are the direct result of Britain´s own systemic policy failures and would cost a few zillion pounds more that the EU annual contribution seemingly does not cross their mind.

The EU is to blame for everything and the British Establishment / Elites (i.e. pretty much anyone daring to challenge the Leave arguments, especially experts) with it.

The Ayes

On the other side of the fence is a very long list of those calling for Britain to Remain in the EU because it is in Britain´s present and future interest to do so, including:

  • The majority of the Conservative Party, including the Prime Minister and Chancellor:
  • The majority of the Labour Party, including the leader of the opposition (officially);
  • The Social Democrats;
  • The Scottish National Party;
  • The Greens;
  • Barack Obama and Hillary Clinton;
  • The Treasury;
  • The Institute of Fiscal Affairs;
  • The Federal Reserve;
  • The World Bank;
  • The World Trade Organisation (WTO);
  • The Organisation for Economic Cooperation and Development (OECD);
  • The International Monetary Fund (IMF);
  • The other 27 EU nations;
  • The trades unions;
  • The great majority of established businesses;
  • The great majority of health professionals, NGOs and similar;
  • Almost all economists (since there are almost as many differences of opinion as there are economists, the fact that about 600 have united behind Remain is remarkable).

This is an overwhelming group of institutions that favour Remaining in the EU.

Such an incredible array of opinion would normally sway public opinion.

But the reality is that they are cutting little or no ice with the social groups previously discussed.

Instead, the Brexiteers have gained momentum and could well win the day.

The Anti Establishment Band?

The Brexiteers are putting-up a fight – an increasingly bitter one at that (as was the previous Brexit referendum in 1975).

They stress that they are fighting the British Establishment / Elite, pointedly alluding to the wealthy toffs such as David Cameron and George Osborne.

They emphasise that the Establishment prefers the status quo, rather than what is right for Britain.

They maintain that the Establishment from abroad (USA, Japan, Germany, France, Italy, Canada, Australia, etc.) should butt-off and allow Britons to get on it, as if we are not all interconnected in this globalised world where whatever Britons decided affects all other EU national, as well other countries.

They dismiss international organisations for being stuffed full of overpaid and under-taxed bureaucrats that simply trot out what the EU and the Establishment wants to hear. They do the same with any other experts, Britons or not, for all being in the EU´s pocket.

Since the economic and trade case for Brexit is non-existent, except in their own imagination, they increasingly contrast themselves with the Elites / Establishment, while they uphold the interests of ordinary working class Britons by braving political correctness and speaking out against current EU immigration as well as immigration from future accession countries such as Turkey and Albania.

They point out that, unlike them, the Establishment has lost contact with ordinary, working class voters, who are suffering from the consequences of the EU.

And they insist that they are not racists, they are not nativists, they are not isolationists and they are not Little Englanders. They just want what is in the best long-term best interests of the UK.

There is an element of truth in some of the above; there has to be a veneer of it in order to connect with people.

But there is a very tall tale at the core of it too, which is what I would like to emphasis in this post.

Question: when is the Establishment not the Establishment?

Answer: when you belong to the leading Band of Brexiteers

Maybe it is possible that all the British and other institutions previously listed are not in cahoots in a someMachiavellian national, European and global  conspiracy to get Britons to vote for something that would be detrimental to their own future.

Maybe ending EU membership will not miraculously cure Britain´s structural problems, which are the main reason that the key British public services are in their current state.

Maybe Britain´s austerity, which has nothing to do with the EU, is the driver of all the angst.

Maybe Brexit might actually accentuate the problems, not least the massive and growing public sector deficit, in the short, medium and long-term.

And maybe, just maybe, the Brexiteers are themselves deeply embedded in the very bedrock of the Establishment / Elite which they are so dismissive of.

Consider the following:

  • Boris Johnson: Eton, Oxford University, ex-Mayor of London, Cabinet Member;
  • Michael Gove: Robert Gordon´s School, Oxford University, Cabinet Member
  • Iain Duncan Smith: St. Peter´s RC Secondary School, Sandhurst Royal Military Academy, ex-Cabinet Member;
  • Nigel Farage: Dulwich College, ex-city trader, Member of European Parliament.

Put in these terms, and not even alluding to their likely personal wealth, the band of leading Brexiteers dismissing everyone else for being the British Establishment / Elite could be construed as a good case of “the pot calling the kettle black,” to use a quaint but fitting British saying.

The most prominent Brexiteers did not exactly grow-up in a council housing estate, attend a public school, let alone go around waving a flag of St George or driving a white van, to use some of the usual terminology which the media and politicians now use to denote the white, working class social groups in England (Scotland, Wales, Northern Ireland remain solidly for staying in the EU).

I doubt that Boris Johnson and his band of merry Brexiteers are to be regularly found at the local pub, quaffing a celebratory pint of ale after a football match to wash down their bacon butties (unless TV crews are present, of course). I exaggerate, but the point is that all the leading figures of the vote Leave campaign appear to have done rather well out of being an integral part of the British Establishment /Elite. You can be confident that their children and grandchildren are likely to do well out of being part of the same social group.

Therefore, for this set of people to be tapping into the palpable angst among working class Britons in order to further their own political ambitions grates with me. They are seeking to mobilise working class sentiment to achieve an ideological objective which, in the long-term, may very well work against those same voters while, at the same time, propelling BoJo and his band of merry Brexiteers ever further up the greasy pole of British politics and Establishment positions.

The fact is that the leading Brexiteers are not exactly committed to protecting the average person.

In a recent televised debate, Boris Johnson said that the Leave side is determined to protect the workers after Nicola Sturgeon quoted something he once wrote: “The weight of employment regulation is backbreaking. We should get rid of the collective redundancies directive, the workers’ directive, the working time directive and 1,000 more.”

Yet these are the very things which are protecting British employees from having their rights undermined by such British developments as “zero hour contracts”.

Nigel Farage has been widely reported for calling for a move away from a state-funded NHS.

Gove is the architect of educational academies that is not only flawed but may well be damaging education while also increasing inequality.

Iain Duncan Smith is the author-in-chief of the austerity drive which has cut out billions from the welfare state, thus impoverishing the lives of the non-working population of the UK, while also dismantling various parts of social security safety net for low income workers.

The sad fact is that the leading Brexiteers and Brexit, which is definitely on the cards likely, may actually accentuate the fear, insecurity and precarity that is driving the recent trends in voting intentions in relation to the forthcoming EU referendum. When they no longer need to take the EU into consideration, further deregulation and labour market flexibility will lead to even more winners and losers. Your guess about who is likely to be on the losing side is as good as mine: the very people that might vote for Brexit as the outlet of their frustration and anxieties?

The EU Bashers

The band of Brexiteers is far from being alone in the aggressive fight for Brexit.

There is a strong anti-EU bias at the core of the British Establishment. A recent study by the Reuters Institute for the Study of Journalism found that the British press coverage of the EU Referendum is “heavily skewed in favour of Brexit”. It is not just any newspapers that are anti “Europe” but specifically the ones which just happen to be most influential in terms of the social groups turning towards Brexit, as well as having massive circulation compared with the pro-remain newspapers, as illustrated below.

Pro Leave Circulation Pro Remain Circulation
Sun 1.800,000 Mirror 809,000
Mail 1.700,000 Financial Times 198,000
Telegraph 472,000 Guardian 164,000
Express 408,000 Independent 55,000
Times 404,000
Total 4,784,000 Total 1,226,000

 

In other words, much of the British reporting (printed and online coverage) has a strong anti-EU spin and they are not particularly concerned about such trivialities as balanced argument and truthful reporting. The fact is that the Brexiteers are not exactly in their own: they are strongly and systematically aided and abetted by the most influential newspapers in terms of circulation and readership by social groups which are turning against remaining in the EU. The “drip drip” effect clearly works.

Billionaire Brexit Backers (BBB)

The Brexit backers are not restricted to a few billionaire newspaper tycoons such as Rupert Murdoch, Barclay Brothers, Lord Rothermere, Richard Desmond, etc. A simple internet search of the backers of the UKIP / Leave campaigns reveals that quite a few multi-millionaires / billionaires are bankrolling Brexit. These are mainly financiers of various sorts, as well as property tycoons, ICT and retail magnets.

This is not to suggest that the Remain campaign does not have über-wealthy supporters but to illustrate the sort of people that are funding the Brexit campaigns. If these über-wealthy individuals are not, like the leading Brexiteers, and much of the British media, not part and parcel of the very essence of Elite / Establishment, then I do not know who is. If these sorts of individuals not extremely well-placed to take advantage of the opportunities that might arise post-Brexit, not least from the turmoil that might be caused in the property and financial markets, then I do not know who is.

These are not the sort of individuals who are likely to take much notice of the concerns of working people in relation to jobs, wages, housing, social services, etc. It is a safe bet to suggest that protecting British workers´ rights upon Brexit and thus counteracting the drivers of the recent referendum polling trends is not likely to be at the top of their post-Brexit agenda. Take an illustrative quotation from one of the billionaires bankrolling Brexit. Peter Hargreaves has acknowledged the insecurity that would result from Brexit and stressed that: “It would be the biggest stimulus to get our butts in gear that we have ever had” … “We will get out there and we will be become incredibly successful because we will be insecure again. And insecurity is fantastic.” Maybe a billionaire stockbroker truly believes this but I doubt that the average Briton will see perceive insecurity in quite the same manner. This very insecurity is what is driving part of the trend in the possible Brexit vote.

Picking-up on the earlier quotation, for once BoJo is correct: the fact is that millions of the currently working-class people are actually protected by the common rules applied throughout the EU designed to create a single market. The protections include:

  • Anti-discrimination rights;
  • Written terms and conditions;
  • Maximum 48 hour working week, rest periods/breaks;
  • Paid annual leave;
  • Improved health and safety protection;
  • Maternity rights;
  • Parental leave rights;
  • Equal pay for equal work between men and women;
  • Fair treatment of part time, fixed term and agency workers;
  • Rights for outsourced workers;
  • Collective rights such as human rights, collective bargaining, information and consultation, etc.

Source: UK employment rights and the EU

These are not the sort of things to give-up lightly… unless you are so well-off that you do not need them. The people that are feeling the consequences of austerity most certainly do benefit from these labour market protections.

Wolves in Sheep´s Clothing?

 

Don´t be fooled by the über-rich advocating for Brexit on behalf of the ordinary working (and non-working) class British citizen. The great majority of the journalists / media advocating for Brexit stem from the same privately educated, Oxbridge elites. Whatever they may imply, protecting the average working (and non-working) person in Britain from the angst that plagues many of them is not their beer.

What many of them seek is a future where Britain can continue unimpeded down the path of deregulation and maximum labour market “flexibility” such as zero hour contracts.

A lot of Britons are anxious and angry. They have seen a few do very well indeed while austerity and the poor economic performance since 2007 has taken a chunk off their disposable. They know that we are certainly “not all in it together”. They have seen politicians such as David Cameron saying one thing to them and doing another himself. They have seen public services steadily deteriorating and that the future for people that depend on them is anything but rosy. This the result of decades of lack of investment in public services due to lack of political prioritisation. But during the EU Referendum the media and the Brexiteers point to the EU and EU immigrants and ordinary Britons fear that there will be even greater competition for a perceived smaller share of the social and economic pie.

But Britons are nothing if not fair and sensible: they know that when things appear to be too good or too simple to be true, they usually are. They know that pointing to the EU and EU immigrants (and who else post-Brexit?) is a simplistic solution to a complex set of British problems which will not be solved overnight and may well be accentuated by Brexit, especially if the economy takes a turn for the worse. The EU budget will not make much of a dent on the needs.

I grew-up in a council housing state in inner London.

I went to a low achieving secondary school and I was in the tiny minority that lucky enough to get to university.

I worked my way up my profession without the benefit of old boy networks.

I stumbled into an international career which has taken me throughout the EU member countries, as well as all the Candidate Countries knocking at the EU door.

My friends and family count among the people that are suffering from the angst that afflicts Britons.

So I feel able to say this: by tapping into the anxieties and frustrations of ordinary working Britons, the leading Brexiteers, their Oxbridge educated journalist buddies and their billionaire backers are spinning a very tall tale so as to tap into the legitimate concerns of ordinary Britons.

They are doing this knowingly, manipulatively and without the least intention of doing something about those concerns, should Brexit occur. Quite the opposite: their privileges and advantages are likely to be reinforced once they no longer have to look over their shoulder or deal with the bright glare of the other 27 countries of the EU.

Brexit will undoubtedly lead to winners and losers.

You can be certain of which side the leading Brexiteers, their über-wealthy and well-connected friends funding the campaigns and writing the misleading newspaper articles will be on.

But can you be so certain that your employment rights, wage levels, social benefits, etc. will be protected, let alone improved, upon Brexit?

I´m not. Not in the least.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


The crisis in school places: is Brexit the quick fix?

With about a month to go before the EU referendum scheduled to take place on 23 June 2016, high-profile Brexiteers keep pushing the line or argument that it is because of the European Union´s (EU) freedom of movement of people that Britain has major problems with its public services, not least health (EU health tourism), housing (being priced out by EU migrants), benefits (EU benefit tourism), education (too few places due to EU immigrant families), etc.

I have already discussed some of the arguments (see links above), so now attention turns to another major public policy concern in the Brexit: education. If it true that the education system is under pressure specifically because of immigration from the EU, then this could be a reason for considering leaving Brexit from the EU.

On the other hand, if the pressures for educational places predate 2004, when the EU immigration to the UK started in earnest, or if EU migration is only one factor among others that are causing the particular problem of pressures for school places, then it is also reasonable to discuss those other issues, thus putting EU immigration in context.

After all, everyone knows that government has ultimate responsibility for securing public goods which the market cannot deliver on its own: where an important public policy gap is diagnosed, it is for government to devote the necessary public funds to correct the market failure. No one is suggesting that Brussels is responsible for education (or housing construction, funding hospitals and clinics, etc.), not even the Brexiteers.

My kingdom for a school place!

In a clear echo of their diagnosis of the nature of the crisis in the health sector (i.e. the NHS is at breaking point because of EU health tourism and similar), the Brexiteers they are once again pressing the crisis button and pointing in the direction of Brussels: the school system is under “huge and unsustainable pressure” from a dramatic rise in the number of children from European migrants’ families. Ms Priti Patel, the pro Leave Employment Minister, echoing her now familiar anti-EU immigration refrain, keeps making comments such as: „These figures show how the EU’s open borders policies, and the uncontrolled immigration that stems from that, is leading to huge and unsustainable pressures on our schools.“

This possibility is deeply troubling for the average British family, so let us try to unpack this issue.

First of all, it is clear that Ms Patel and her bedfellows are not making allegations about the performance of the school system. There, it is clear that educational performance is a long running concern that cannot be pinned on the EU: Britain is responsible for the national curriculum, the schools and the teachers, not the EU. In any case, Britain has a long and proud history of accepting children whose mother tongue is not English and turning them into integrated citizens. Furthermore, the experience of EU migrant’s children has generally been positive in pushing up standards, especially in the urban areas where EU and other migrants tend to concentrate. So instead, the Brexiteers are focusing on the issue of insufficient school places (i.e. the unsustainable pressure bit) and pointing to EU immigration as the reason for the crisis.

So the central question to be asked is: are there sufficient places for school age children in the UK?

The answer is a clear and unequivocal “yes”. At the national level there is a notable surplus of both primary and secondary school places.

While Ms Patel and other Brexiteers are pointing the accusing finger of blame in the direction of EU immigrants, even Migration Watch, an initiative that maintains that immigration is neither properly managed nor sustainable and thus has an impeccable Brexit pedigree, says otherwise:

“There are currently 4.416 million primary school places in England and 4.011 million pupils on school rolls which means there are 434,000 unfilled places. At the moment the number of unfilled places as a percentage of total places is 9.8%…  The current number of secondary school places in England is 3.637 million while the current number of pupils is 3.191 million. This means that there are over 450,000 places currently unfilled. The number of unfilled place as a percentage of total places is currently 12.9%.” (emphasis added, 2014 data).

The real issue is that Britain’s fertility rate combined with immigration has resulted in a projected increase in school age children, which will feed into the school system from 2018 to 2020, as illustrated in the chart below.

So the point is not that there are currently unsustainable pressures but that in the future there might be unsustainable pressures if the British government fails to act. Perhaps this is what Ms Patel actually means, as opposed to what she and the rest of the Leave campaign are implying. Either way, the effect on the average voter can be imagined.

Responding to present or future school place demand is categorically not the responsibility of the EU or of EU citizens who choose lo live in Britain, as is their right to do.

It would be absurd to blame the large numbers of Britons living in France and Spain for causing unsustainable health / housing / education, etc. pressures there. Relatively little of the projected increase in demand for UK school places can possibly be attributed to EU immigrants. Generally speaking, they tend to be younger, better educated and single, factors which tend not to be correlated with large families and thus disproportionate number of school age children. As far as I can tell Britons, including Ms Priti Patel and Mr Nigel Farage, as well non-EU migrants who make-up the majority of the annual immigration to the UK, also find the time to make babies. British children clearly and unequivocally make-up vast majority of the children taking-up places in the schools.

When it comes to forecasts about future school places, it is the responsibility of Ms Priti Patel, Mr Boris Johnson, Mr Michael Gove (former Secretary of State for Education (2010-2014) and previously Shadow Secretary of State for Children, Schools and Families (2007 – 2010)), Mr David Cameron, Mr David Osborne, etc. to ensure that resources are allocated to meet those needs. Since politicians keep on about our children being our future, one would expect them to get on with funding the necessary school places, so as to avoid any future unsustainable pressure from a well-documented surge in school age children. Is this too much to expect of a responsible government and its leading ministers?

Bread today, not tomorrow

It would not be appropriate to suggest that the problem of school places is only about the future: it is also about today. The point is that demand for school places varies from location to location. Some schools are much more attractive than others for the simple reason that some perform much better academically than others. Most parents want to send their children not just to the nearest local school but to the best performing nearest school, since this is likely to affect their educational performance and thus their chances of getting to university and land a good job. That is a perfectly rational desire on their part.

But the result is that in high demand locations/schools, the parents’ first choice of school may or may not work out. The issue is thus not one of not getting a school place, whatever the Brexiteers may imply (though it may come to that in the future), but of getting a place in the school that the parents would prefer their child to attend. The better schools will always attract more demand for school places than they can possibly satisfy. In this context, available primary and secondary school places may not match demand for specific schools in particular parts of the country, especially in urban areas. In some places, it is possible that simply not enough school places are available to cope with demand.

None of this is new, unusual or driven by EU immigration.

Since demand and supply vary across time and space, it is up to central and local government to meet that future demand (based on population projections), as well as current demand in hot spots. This is at the core of governance, which includes taking into account the fact that EU migration not only happens, but has been happening since even before the UK joined in 1973. Nothing new there, though the scale of EU immigration has increased since 2004.  That is nothing new either, so the responsible individuals have had more than enough time to factor it into their planning.

It is up to each local authority not only to ensure that there are sufficient school places, but also to promote parental choice, diversity and fair access.

If there are access hot spots in particular locations, would you blame the parents for choosing to live in those parts of the country or wanting to send their kids to be best possible schools? If there are particular areas with insufficient school places, would you blame people for still wanting and expecting their children to get a school place? If there are problems, I would point to central and local government for failing to act according to the population forecasts and patterns of demand. There is absolutely no rocket science and there are no sudden unexpected factors involved. The nationality of the children or parents involved is irrelevant, except if some choose to make a political issue out of it.

The Department for Education is tasked with making capital funding available to establish new schools and maintain existing ones. For their part, local authorities argue that they cannot cope with the funding pressures: in 2014, 3 out of 4 claimed that capital funding for new places was insufficient. The National Union of Teachers argues that where there is a school places crisis, it is caused by the curtailment of local authorities’ powers and the centralisation of decisions over where to build new schools.

I can see that a problem exists in the policy nexus between the Department of Education, local authorities and the National Union of Teachers. What I fail to see is how Ms Priti Patel can attribute blame to EU immigrants when she and her fellow Brexiteers, such as Mr Gove, have systematically failed to perform their day job. It is British politicians and ministers who are paid to assess, plan and fund school places (and housing and health services and infrastructure and all the rest of public goods that only government policy can deliver) according to changing patterns of national, regional, local and micro demand. This applies equally to all public services.

Surely Ms Patel and Mr Gove can understand this point and their own role in the future availability or otherwise of primary and secondary school places? But fear not, it is not too late. There are still a few years before the looming school place crisis hits the school system (see chart above), so they may as well just get on with building the necessary schools, rather than blaming all and sundry for national and local politicians’ own policy failings. It is not just a bit too convenient to push the blame for public policy failures to someone else?

Scapegoating immigrants is never a pretty sight and can be downright dangerous.

With her background, Ms Priti Patel should understand this point much better than most even if the EU referendum, so dear to her ideological heart, may be at stake. I acknowledge that for someone with an immigration background in theReferendum Party and now the Conservative Party, talking tough about EU immigration may be some sort of mark of distinction, but she has to be  fair and reasonable in apportioning blame for the problem. As far as I am concerned, that particular bar is set even higher for senior members of the British government with constant access to the media. With power should come at least a sense of proportion, if not responsibility. The longer the Brexit debate goes on and the more the polls shift slowly towards Remaining, the more shrill the Brexit case become. The same could be said about the Remain campaign to some extent, though the focus is different.

One is tenuous and based on the premise that EU immigrants are to blame for almost all the public policy problems (housing, education, health, etc.). The other talks principally about the economic consequences of leaving on taxes, wages, pensions, house prices, jobs, etc.  This claim and counter claims muddy the waters and confuse the public prior to what will undoubtedly be the most important vote for a generation. However, this decision cannot possibly be reduced to just the issue of EU immigration, no matter how emotive it may be. Apart from anything else, British people returning home to the UK, together with non-EU immigration, constitute a larger portion of annual net migration than does EU immigration.

Returning to the issues of school places, let us keep things simple: any way you choose to look at it, Brexit cannot possibly be a quick fix for the forthcoming crisis in school places at primary and secondary school level. The surge in school age children is coming because of fertility rates: that means first and foremost Britons, as well as non-EU immigrants and EU immigrants. Why single out the least important contributing factor that is dwarfed by the impact of Britons themselves? Leaving the EU will change little in this respect, not least because EU migrants are attracted by work, are younger, are better educated and are more mobile, all of which tend to reduce fertility levels compared to the UK average.

Neither will Brexit affect well-established and long-standing local patterns of demand for the better performing schools. That is, unless Brexit is to be combined with forcing non-native Britons back to the other EU-27 countries. This is something which has been ruled out by everyone, even UKIP, since it would prompt a retaliatory reverse flow of almost as many Britons back to the UK. Apart from unleashing unpredictable forces in Europe (there are enough of those around at the moment) for very little gain, it would be one heck of a mess to sort out.

Blaming is easy, solving is not

So if Brexit is not the answer to the coming surge in school age children, as well as the high local demand for certain schools in particular locations, what would improve matters? There no prizes for guessing the answers:

  • The UK government (Department of Education and Chancellor of the Exchequer) should take its responsibility seriously and allocate the capital funding today in order to create the necessary new school places tomorrow and relieve localised pressure for school places.
  • Local government should ensure that public funds result in schools being built in the right locations, especially in high demand urban areas, while also ensuring fair access in demand hot spots so as to avoid accentuating social segregation.
  • Ms Priti Patel and the rest of the Brexiteers, not least Mr Michael Gove, should acquire a bit of humility and refrain from pinning their and their fellow British politicians’ own long-standing public policy failings (e.g. housing provision, NHS funding, capital funding for school, etc.) on the EU and scapegoating EU immigrants at the same time.

Now that would be a nice start in actually trying to solve at least one of Britain´s public policy challenges.

Will it happen? Fat chance.

It is much easier and politically rewarding to keep pointing the finger at EU immigrants. In the past, that finger was pointed at any old immigrant. These days, in the lead-up to the EU referendum, it is no coincidence that it is EU immigrants that are singled out.

And what happens after the 23rd of June 2016, when it has become normal and acceptable to blame Britain´s long-standing public policy ills (e.g. access to housing, access to education, access to health, benefits abuse, etc.) on foreigners, rather than the Britons who are responsible for policy-making, planning and funding? Will Britons wake-up and find that those public services have miraculously improved? Scapegoating is far too easy; trying to understand the problems and then solving them is much, much harder.

“It’s too easy to criticize a man when he’s out of favour, and to make him shoulder the blame for everybody else’s mistakes.” ― Leo Tolstoy, War and Peace

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


Britain’s Productivity Puzzle and Brexit

Britain has a huge challenge. In the fractious lead-up to the Brexit referendum on the 23rd of June 2016, almost everything imaginable is being use for or against the European Union (EU), but on this occasion I am not referring to the EU challenge. I am alluding to the title of this post, namely the productivity of the UK, as this has direct implications for economic growth, wages and ultimately living standards. Given its importance, it should be the No 1 issue in the debate about the future of the UK, except that it is barely touched upon. This is a mistake.

The Theory

Productivity refers to how efficiently inputs (i.e. capital and labour) are used to produce outputs (i.e. goods and services), the best measure of productivity being output per hour. In theory productivity matters a good deal: Britain’s capacity to raise its standards of living over time depends almost entirely on its ability to increase its output per worker.

Productivity is also crucial in determining the long-term growth rates of the economy; stronger productivity growth leads directly to faster GDP growth. If this happens, tax revenues increase and budget deficits decrease. Governments have more to spend on public services such as health, housing, school places, GP / hospital capacity, infrastructure, etc. all of which are at the centre of the Brexit discussion. Naturally, the reverse also holds true: with lower productivity. And if Britain’s productivity is lower than its competitors, such as other EU nations, its relative standard of living decreases over time.

Productivity matters a great deal. The Nobel Prize winning economist Paul Krugman is reported to have said that: “Productivity isn’t everything, but it’s nearly everything”. What is the situation in Britain?

Productivity Puzzle

British labour productivity has traditionally grown at around 2% per year since the 1970s. That is not at all bad but the point is that since the global recession began in 2007, Britain´s productivity stagnated and continues to do so almost a decade later. Official reports stress that: “… such a prolonged period of essentially flat productivity is unprecedented in the post-war era”. The Chart below illustrates the trend.

Chart UK Productivity and GDP

Although economic growth has resumed quite strongly since 2013, this is mainly the result of an increase in the total number of hours worked in the UK, rather than rising productivity. What this means is that Britons are working harder to produce the same amount of goods and services than was the case prior to 2007, and much harder than if productivity growth had continued at its 2% annual trend rate. The feeble productivity level leads directly to the stagnation in UK wages and living standards. This is already having significant effects in terms of the on-going package of austerity in Britain, which is being felt across the whole country and is, if anything intensifying. People´s economic pain is much more a consequence of low productivity than of the costs of the EU or the freedom of movement of people (EU immigration).

If Britain’s productivity does not bounce up to the 2% trend, the implications for the economy, public finances and future living standards will be even more severe than is already the case.

International comparisons illustrate just why this is the No. 1 challenge.

Chart International Productivity Comparison

Based on real GDP per hour worked in 2014, the UK was ranked sixth among the Group of Seven (G7) countries, with Germany top and Japan bottom (the Chart below illustrates the issue). UK productivity was 18 percentage points below the average of the other G7 countries, the widest productivity gap since at least 1991. To illustrate the point further, it was 10 percentage points lower than Italy (which is hard for Britons to swallow), 30 percentage points lower than Italy and 36 percentage points lower than Germany. On the basis of output per worker, UK productivity was 19 percentage points below the average for the rest of the G7 in 2014.

The resumed economic growth and low unemployment rate combined with stagnant productivity has led people to talk of the UK’s “productivity puzzle”, as Britain loses ground to its major competitors.

Pumping-up Productivity: Brexit implications

Unlike Eurozone economies, Britain has its own currency and is fully in charge of its monetary policy. Blaming the EU and European immigrants for all its ills is far too easy and convenient. Instead, Britons should take a good, hard look at their own economy and what is required in order to increase productivity not just back to 2%, but ideally above this threshold.

What kinds of solutions are available to Britain in order for it to rise to the productivity challenge? The good news is that there is broad agreement about the main policy options. The bad news is that none of them are quick fixes and most of them will almost certainly not be improved by leaving the EU. The possible solutions include the following:

  • Raise the skills and qualifications of the labour force: the education system has to produce a better educated labour force and employers need to invest more in skills via training, apprenticeships, etc. These are known to increase labour productivity, however, the evidence is that this is not happening sufficiently. This may be part of the reason why Britain has been attracting ready-made, educated and trained migrants from the EU and non-EU countries (academia, R&D, industry, health service, financial sector, etc.). It is doubtful that the UK can immediately raise skills and qualifications to substitute what comes through the EU (the EU labour force is more highly educated in terms of average levels of human capital), thus productivity levels are unlikely to be enhanced by Brexit in the short to medium term. It takes time, investment and planning to systematically build-up the human capital base.
  • Increase investment in technology: the adoption of new technology is a key factor in improving productivity, as illustrated by the advent of computers and the internet in the recent past. A strong focus on generation of innovative products, services and processes would translate into high productivity levels. However, exiting the EU may either slow down this process or increase the investment cost. This is not just because of the potential loss of international collaborative innovation and R&D networks across European countries, which the EU funds. Brexit would also result in uncertainty about trade in the short-term and almost certainly less favourable trade agreements with the remaining EU trade block of 27 countries. This is likely to translate into increased import and export costs for Britain, including of equipment and technology. By opting out of the EU and its 50+ trade agreements, less favourable trade agreements will eventually be negotiated with 120+ countries. If investment in technology becomes more costly, firms may delay or avoid it, so it is unclear if the UK’s productivity levels will be enhanced by Brexit.
  • Increase substitution of capital for labour: if labour becomes cheaper and more freely available, firms may have fewer incentives to invest and may choose to use labour intensive methods, rather than capital-intensive ones. This would result in lower levels of productivity, though jobs and incomes would be maintained, at least for a certain period of time. A surge in productivity would require a reverse in the trend of underinvestment in plant and machinery, as well as physical infrastructure. If Brexit means much less availability and/or more expensive skilled capital, this could spur greater levels of substitution of capital for labour, thus stimulating productivity. At the same time, this might have implications for employment.
  • Improve the morale of workers: during recessions or periods of industrial unrest and low worker morale, productivity tends to fall. By contrast, if workers are motivated and happy, productivity is likely to be higher. The morale of employees can be affected by numerous variables, including but not only wages, bonuses and other monetary incentives. It is also affected by issues such as state of industrial relations, sense of having a stake in the company and enjoyment of the job. These are specific to each nation and enterprise. But to the extent that morale is affected by other factors such as nature of the labour contracts, hours worked, leave of various sorts, etc. Brexit is unlikely to affect morale positively, since many of those factors are influenced by EU rules and regulations (see below) affecting all 28 countries.
  • Minimise rules and regulations: regulations should not impose excessive costs on enterprises and a balance has to be struck between say being able to get rid of poor or disruptive employees and having lax labour market regulations which exploit employees and results in high turnover and demotivation. EU regulations affect health and safety standards, discrimination at work, hours worked, paternity/maternity periods, minimum breaks, minimum paid holiday periods, etc. Brexit might well be good for British employers if regulations are scrapped and labour market flexibility is increased, but would almost certainly come at the expense of employees. Many other regulations are the solely the purview of the British government. Britain has already spawned zero hour contracts which maximise employer flexibility over almost a million employees. It widely acknowledged that Britain already has one of the most deregulated business environments around – some have argued that there is excessive deregulation, for example in the financial sector. Further deregulation would be possible upon Brexit, but it is questionable whether this would necessarily be desirable. It might undermine labour gains, for example, if rules and regulations concerning discrimination, maximum work hours, health and safety, etc. are undermined. These would reduce job security, employer costs and possibly spur productivity, but much would come at the expense of employees.
  • Maximise capacity utilisation: during economic booms, firms tend to squeeze more output out of existing capacity by encouraging people to work overtime, thus increasing labour productivity. In recessions, they may hold on to workers, rather than releasing them even if they are working below capacity, resulting in labour productivity falls. There is some evidence of “labour hoarding” (firms cutting output but keeping labour in reserve for the recovery), which is part of the reason for the productivity puzzle previously discussed. It seems unlikely that leaving the EU will increase capacity utilisation. Britain´s trade balance is already poor, it exports 44% of its goods and services to the EU and Brexit would mean negotiating new, less favourable terms with the other 27 countries of the EU and 120+ countries that the EU has trade agreements with. Rather than maximising capacity utilisation, it is likely that the reverse will happen upon Brexit (less favourable trade agreements, more risk, higher costs, etc.), with negative implications for employment, wages and tax revenue.

The above does not represent a complete list of possible solutions to the British productivity puzzle. Other factors could be considered, such as seeking to rebalance the economy away from services (about 75% of GDP) towards manufacturing (about 10% of GDP).

In 2015, the Government published its productivity plan (Fixing the foundations: Creating a more prosperous nation), covering issues such as improve transport and digital infrastructure, increase investment, enhance workforce skills, build more houses, move people off welfare and into work, encourage exports, rebalance economy away from London, etc. The 15 point plan is illustrated in the Chart below.

Chart 15 Point Productivity Plan

The productivity plan seems worthwhile implementing but none of it is a quick fix to Britain´s fundamental problem and, on balance, Brexit would not unleash an immediate gain in productivity.

To conclude, the cause of austerity, low productivity and stagnating wages in the UK are first and foremost to do with the UK, not the EU or Europe more generally. The number one priority for the country is to raise the productivity levels, regardless of whether Britain remains in the EU or not. If this happens, the wages, the public expenditure and the standards of living take care of themselves. But it is hard to see just how the UK’s productivity puzzle could be eased by Brexit.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


Is British Sovereignty undermined by the EU?

The single most important criticism made by the Vote Leave campaign in the current European Union (EU) referendum is that Britons should vote for their politicians who in turn should decide their own laws, rather than politicians from other nations. This boils down to a matter of British sovereignty and whether the UK is being drawn into accepting legislation that is emanating from the European Commission (EC) and European Parliament (EP), rather than from the British Parliament. If Britain has become a “captive” state and EU-imposed competences are out of kilter with those of the nation state, in this case the House of Commons and House of Lords, then democracy is undermined. 

If this simple but powerful argument is correct, then I too would be fearful of the overweening power of “Europe” as opposed to those who are elected by us to represent us. So it is worthwhile examining the potential loss of sovereignty in more detail.

In, Out…

The UK to keep out of what has now become the EU from the point when it was established in 1952 (European Coal and Steel Community). Its membership was then vetoed by the French (1963 and 1967) until 1973 when Britain joined the European Economic Community (EEC). It took over a decade of determination on the part of the UK to join the EU. Britain did not join on a whim but on the basis of a hard-nosed calculation of the balance of benefits that the UK would gain from joining. In 1975, a majority (67%) of British voters chose to remain in the EU, following a hard-fought first EU Brexit referendum. Britain joined and chose the remain in the EU fully cognisant that as a result it would be voluntarily and willingly pooling some aspects of UK national sovereignty with what was then the EEC. This was nothing new or unusual: all nations do this to some degree where they see the benefits of doing something which is cannot be achieved on their own. Classic examples, apart from joining the EU, are the United Nations (UN), the World Trade Organisation (WTO), North Atlantic Treaty Organisation (NATO), etc. These agreements amplify the UK’s power and influence at the global level.

UK vs EU sovereignty

There is a pervasive viewpoint in Britain that it thought it was joining a trade agreement, rather than a political one. All commentators agree that the EU has always been first and foremost about avoiding future wars in Europe, something which the EU has done very successfully.  So much so that it, rightly, received the Nobel Peace Prize in 2012 for six decades of advancement of peace, reconciliation, democracy and human rights in Europe. There is no diagreement about the fact that it was always a political project which went beyond trade, indeed trade was not even a reason for the EU receiving the prize. If the politicians in the mid-1970s chose to highlight the trade angle to the nation during the lead-up to the EU Referendum, it was their choice (just as immigration is the topic of choice this time around). But this underestimates the broad and intense nature of the debate that took place in the mid-1970s. It was never just about trade so Britons were not sold a pig in a poke by their own politicians.

Also, it is frequently claimed that too much of the legislation comes from the EU. No one has been able to pin this down precisely but estimates vary from 7-70%. The  House of Commons Library has undertaken a comprehensive analysis how the extent of ‘EU influence’ in UK laws and concluded that: “it is possible to justify any measure between 15% and 50% or thereabouts”, depending on the approach. It noted that 15-17% of UK law is derived from EU membership, but about 50% of UK legislation with “significant economic impact” originates from the EU. It is up to each one to decide what is too much. But perhaps it is more enlightening not just to ask how much originates from the EU but to assess the degree to which such law is useful or not (see the Balance of Competences review below).

Another point to note is that all the EU directives, regulations, treaties, etc, take years to develop, which allow all nation states, Members of European Parliament and stakeholders to engage with the process of developing new laws and regulations within the competence of the EU. Each national parliament decides whether to accept or not and in recent times, national referendums have scuppered draft EU Treaties. The days of a “single speed” EU are long gone and nation states can opt out if they so desire and Britain regularly chooses this option. 

In joining the 8 other countries, now 28 following further enlargement, the UK is closely involved in the process of making the EU legislation. It is not simply a matter of fighting for the national interest, something which Britain as one of the big beasts of the EU is able to do. Compromise was and remains the name of the EU game. However, whenever push comes to shove and Britain bangs on the EU desk, it has got what it wants. This includes Margaret Thatcher’s rebate, the various opt outs such as from Schengen and now the EU special accommodation of Britain’s needs in advance of the EU referendum on the 23 June 2016 (see below).

It may have chosen to pool its sovereignty in the mid-1970s but the fact is that Britain can opt out of the EU at any point of its own choosing. The British government does not even need to hold a national referendum to leave. If the British government decided upon Brexit tomorrow, it could exit the EU simply by dissolving the European Communities Act of 1972. Permission would not be required from either voters or the EU.

On the basis of the preceding points, it is evident that the UK is a sovereign country that chooses to engage with the EU, that it can opt out of EU treaties and other legal instruments that it does not agreed with and that it can regain control of all the elements of its sovereignty that it currently chooses to pool authority with the EU in order to achieve goals that it would otherwise not be able to do on its own. This is the very essence of sovereignty.

… Shake it all about (or the Balance of Competences Review)

If Britain remains a sovereign country and is able to abolish the European Communities Act whenever it likes, which is after all the whole point of the forthcoming EU Referendum, what are the competences that it has chosen to pool with the EU and do these make sense?

At the end of the day, what really matters is not whether laws and regulations originate from the House of Commons or the EU but whether such laws contribute to our economic, social and environmental well-being or not. The public concern about a potential or actual loss of national sovereignty compared with a gain of “unelected” and “Eurocratic” powers is what led directly to the Review of the Balance of Competences between the UK and the EU which was initiated by the UK government in 2012 and completed in 2014.

The Treaty of Lisbon (2009) sets out the exact competences or the areas where Treaties give the EU competence to act, including giving EU institutions the power to legislate, to adopt non-legislative acts or to take any other action. The type of competences vary:

  • EU has exclusive competence: only the EU can act such as customs, competition, international agreements, etc.
  • Competences are shared between the EU and the member states: the member states can act only if the EU has chosen not to such as consumer protection, environment, transport, etc.
  • EU has competence to support, coordinate or supplement the actions of the member states: EU may not adopt legally binding acts that require the member states to harmonise their laws and regulations such as health, economy, employment, social policy, etc.

The UK government undertook an official review of a whole raft of EU competences, including the following 32 documents:

Report title Lead department / ministry
1 Single Market: Free Movement of Goods HM Revenue and Customs
2 Taxation HM Treasury
3 Animal Health and Welfare and Food Safety Department for Environment, Food and Rural Affairs
4 Health Department of Health
5 Development Cooperation and Humanitarian Aid Department for International Development
6 Foreign Policy Foreign and Commonwealth Office
7 Single Market: Free Movement of Goods HM Revenue and Customs
8 Asylum and Non-EU Migration Home Office
9 Trade and Investment Department for Business Innovation and Skills
10 Environment and Climate Change Department for Environment, Food and Rural Affairs
11 Transport Department for Transport
12 Research and Development Department for Business Innovation and Skills
13 Culture, Tourism and Sport Department for Culture, Media and Sport
14 Civil Judicial Cooperation Ministry of Justice
15 Single Market: Free Movement of Persons Home Office
16 Single Market: Free Movement of Services Department for Business, Innovation and Skills
17 Single Market: Financial Services and the Free Movement of Capital HM Treasury
18 EU Budget HM Treasury
19 Cohesion Department for Business, Innovation and Skills
20 Social And Employment Department for Business, Innovation and Skills
21 Agriculture Department for Environment, Food and Rural Affairs
22 Fisheries Department for Environment, Food and Rural Affairs
23 Competition and Consumer Policy Department for Business, Innovation and Skills
24 Energy Department of Energy and Climate Change
25 Fundamental Rights Ministry of Justice
26 Economic and Monetary Policy HM Treasury
27 Police and Criminal Justice Home Office, Ministry of Justice
28 Information Rights Ministry of Justice
29 Education, vocational training and youth Department for Education
30 Enlargement Foreign and Commonwealth Office
31 Voting, Consular and Statistics Cabinet Office, FCO, National Statistician’s Office
32 Subsidiarity and Proportionality Foreign and Commonwealth Office

The House of Lords, in its assessment of the review of competences, stated that: “The Review was an ambitious, indeed unprecedented, exercise. The production of the reports, broadly within the projected timetable, was a considerable achievement. We believe that, for the most part, the individual reports within the Review give a fair and neutral assessment of the balance of competences between the EU and the UK.” The House of Lords did express disappointment that: “… no consideration was given to the Justice and Home Affairs measures subject to the block opt-out decision” and the “… lack of balance in the Single Market: Free Movement of Persons, Animal Health and Welfare and Food Safety and Fisheries reports” as well as the lack of “… a final report that could reflect upon cross-cutting areas, such as inter-institutional agreements and flexible integration.

These are quibbles with what was a thorough, transparent and comprehensive process carried out by the British public authorities, experts and stakeholders. No one questions the overall conclusion of the balance of completeness review, which is that there is nothing fundamentally wrong with the balance of EU competences in the UK. Had this not been the case, you can be sure that the Leave Campaign would be using this treasure trove of information. 

What was prioritised by the UK for EU reform?

Now that the Government, the civil service and a multiplicity of stakeholders across all 32 reviews have had their say and overwhelmingly agreed that the balance of competences is broadly appropriate, what did the Government chosen to push for reform in the EU?

After a drawn-out period of public posturing, the British government set-out the government’s basis for renegotiating the terms of the UK’s membership ahead of the EU referendum in a letter to Donald Tusk in November 2015. The UK’s demands focused on four issues:

  • Eurozone: explicit recognition that the euro is not the only currency of the EU to ensure countries outside the Eurozone are not disadvantaged, including ensuring that deeper financial union cannot be imposed on non-Eurozone members and that they also UK do not have to contribute to future Eurozone bailouts;
  • Competitiveness: a target for reduction of excessive regulation and extension of the single market;
  • Immigration: restriction of access to in-work and out-of-work benefits to EU migrants until they have been resident for four years or an “emergency brake” to stop the payments for four years is being discussed as a compromise;
  • Sovereignty: allow the UK to opt out from the EU’s ambition to forge an “ever closer union” of the peoples of Europe so it will not be drawn into further political integration and giving national parliaments greater power to block EU legislation.

What has Britain got from the EU?

The EU has generally played ball with the UK’s requests – nothing would be worse to the EU than losing one of its key members, especially when the refugee and Eurozone crises continue to rumble on. The outcome is the following:

  • Emergency break: a four-year freeze on in-work benefits for EU citizens working in the UK but this will only apply for new EU migrants for a period of 7 years. Thereafter the emergency break cannot be extended;
  • Child benefit: instead of stopping all child benefit payments going to children living outside the UK, whose parents are working in the UK, child benefit will be indexed to the cost of living for children living outside the UK to new arrivals to the UK and to all workers from 2020;
  • Eurozone vs rest: the top item was safeguards to protect countries outside the eurozone against regulation made by those inside. The UK got its wish: any non-Euro country will be able to force a debate among EU leaders about ‘problem’ eurozone laws. No country has a veto but can discuss, amend or delay Eurozone laws.
  • Ever-closer union: the UK wanted a declaration that this would not apply and got this: “It is recognised that the United Kingdom … is not committed to further political integration in the European Union … References to ever-closer union do not apply to the United Kingdom.”

Given that the EU involves 28 countries with diverse needs and priorities, the UK did not receive as bad a deal as many Britons and segments of the media maintain. Many EU member states were not exactly ecstatic about what they perceive as yet another example of Britain threatening to throw its referendum dolls out of the EU pram if  its national interests are not accepted. When push comes to shove, each nation must do what it has to, while still rubbing along with the others around the negotiation table.

British sovereignty: our way or the Highway?

The UK remains a sovereign state. It can withdraw from the EU at any point that Parliament chooses to. It does not need a referendum or approval from the EU. This is the essence of sovereignty and Britain (and all other 27 EU nation states) retains it. Britain is involved in all treaties, directives and regulations. It can influence them and it can choose to accept them or opt out of them, a right that it regularly exercises, as do other nations. 

An estimated 15-17% of UK laws originate from the EU and an estimated 50% of its important economic laws originated from the EU. But the issue is not what percentage originates from the EU, a process that Britain is closely involved in. The real issue is whether such legislation is valuable or not: perhaps this is a point recognised by the Vote Leave campaign, which is why they have been strangely quiet on this issue. 

The UK has gone through the most comprehensive assessment of the competencies of the EU ever conducted involving 32 detailed reviews, extensive consultations with British stakeholders, including civil servants, professionals and other experts. The conclusion was that the balance of competences between the UK and the EU (arising from the EU legislation) is appropriate.

On the basis of the evidence, the British  government has sought a new EU deal for Britain, prior to the referendum, focusing on: Eurozone, competitiveness, immigration and sovereignty and the EU has agreed to various changes. These do not amount to a fundamental change in the relationship with the EU but are a considered response to Britain´s self-defined priorities for reform. Whatever the EU agrees to must be acceptable for all 28 nations and it was never feasible to find a compromise that could satisfy the Brexiteers.

  • Is the EU sovereign over the UK Parliament: EU legislation affects 15-17% of UK law and up to 50% of economic legislation according to the estimates that have been made.
  • Is British sovereignty compromised by EU competences: Britain is a key part of the process of making laws and regulations in the EU. Britain has secured-opt outs from EU treaties, directives, etc. The British government chooses to pool British sovereignty with 27 other countries in order to achieve what it cannot do on its own such as legislation affecting the environment, countering terrorims and the common market.
  • Should I vote to leave the EU because of lack of sovereignty / balance of EU/UK competences: Britain can choose to leave the EU whenever it chooses to. There is not need to hold a referendum. It has the ultimate decision-making power. The unprecedented EU review concluded that there is nothing fundamentally wrong with the balance of EU competences in the UK. The EU has responded to the British priorities for EU reform. As one of 28 countries, Britain cannot always get everything that it wants. Compromise is the essence of the EU game.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


How extensive is EU benefit tourism in the UK anyway?

A cursory reading of Britain’s most popular newspapers might leave the distinct impression that immigrants, especially from the European Union (EU), are beating a path to the UK specifically in order to take-up welfare benefits, live in social housing, avail themselves of the health system and generally live the high life on the back of the hard-working citizens of the UK (i.e. benefit tourism) who actually pay taxes and thus subsidise the lives of such EU citizens.

 Immigration generally is “the” issue of the forthcoming EU referendum and if the above characterisation of the situation remotely reflects the truth, I would be campaigning to leave the EU too. Not surprisingly this is one of the key arguments of Eurosceptics and Brexiteers in the debate over the future of the UK in the EU. So this post examines the extent to which the EU freedom of movement of people contributes to benefit tourism in the UK. 

EU migrants sponging off Britons?

There are four fundamental freedoms in the EU which are designed to create a common market in Europe, namely to: sell goods, sell services, invest and work anywhere in the EU. Britons have no issues with the first three freedoms but remain deeply concerned about the fourth. 

The first point to note, as discussed in the previous post on EU immigration, is that the freedom of movement of people is not possible for seven years upon joining the EU, unless a nation chooses to opt-out as the UK did (together with Ireland and Sweden) in 2004. So, for example, the Croats will not be able to work in the UK until 2020 unless a country, such as Germany, decides otherwise. This is to ensure that there is not a rush out of a country that joins the EU. The second point to note is that out of the 508 million people in the EU, only 2.2% of them chose to live in another country of the EU. There is clearly no mass exodus of people from one EU country to another. The third point is that though the UK is indeed a very attractive country to move to, it by no means the only one or even the main one in the EU.

In terms of net migration (those arriving minus those leaving), the countries with the largest net inflows of foreign nationals were Germany (452,000), UK (267,000), Italy (235,000) and France (71,000) in 2013. The reality is that the more economically dynamic a country is, the more it is likely to attract people looking for work or to improve their lives.

Turning specifically to the issue of benefit tourism, the evident suggests that EU citizens come to the UK to study, work or to join their families, rather than because of the allure of the UK’s social benefits. This is illustrated in the graphic below, which shows that family reunion used to be the dominant entry route. Student inflows became the main reason for entry, but this has fallen significantly in recent years, something which is connected with the Conservative government’s drive to cap net migration at 100,000 per annum. Most immigration from the EU is for work-related reasons, whereas most immigration from outside the EU is for study-related reasons.

Figure 1: Annual Inflows of Migrants by Reason

Figure 1 Annual Inflow of Migrants by Reason

 

 

 

 

 

 

 

 

 

 

Source: Immigration and the UK Labour Market, Jonathan Wadsworth, CEP, 2015

Furthermore, the same study shows that immigrants are better educated than their UK-born counterparts and that the educational gap is actually increasing over time over time. The “old” Europe or EU-15 migrants are twice as likely to be graduates and the “new” Europe or EU-8 migrants (the 8 Central and East European countries that joined the EU in 2004) are also more likely to be graduates than the UK-born, and most others have intermediate levels of education.

The conclusion of the research is unequivocal:

“There is still no evidence of an overall negative impact of immigration on jobs, wages, housing or the crowding out of public services. Any negative impacts on wages of less skilled groups are small. One of the largest impacts of immigration seems to be on public perception.” (2015, p.1).

But even if there is little or no evidence that EU immigrants to the UK reduce jobs and wages, housing or other public services (housing and health services are discussed in subsequent chapters), this cuts little ice with the Leave campaigners. They maintain the “benefit tourism” rhetoric in relation to EU migration, stressing that an unspecified proportion of EU migrants come to Britain specifically to take advantage of its generous welfare state.

To be fair, such belief is not unique to Britain. In Germany, similar pronouncements are regularly made by the CDU/CSU, the mainstream right of centre parties, as well as the Alternative für Deutschland (AfD), a fast growing populist party. The AfD is the equivalent of UKIP. It wants to leave the Euro, rather than the EU, while also stopping benefit tourism and the flow of refugees to Germany. Both parties are aided and abetted by segments of the media in driving a general notion that EU benefit tourism is pervasive, unfair and must be stopped forthwith.

What exactly is the scale of EU benefit tourism?

A detailed report (ICF GHK and Milieu Ltd, 2013) concluded that non-active EU migrants represent a very small share (0.7% – 1.0%) of the total population in EU Member States. The evidence is that non-contributory benefit payments to immigrants account for between 1% – 5% of all benefits paid in France, Sweden, the Netherlands, etc. and above 5% in Belgium and Ireland. However, the share of non-active EU migrants is very small, both in the UK (1.2%) and in Germany (1.1%).

Other research examining recent EU immigrants to the UK of working age who are not students, not in employment and not in receipt of state benefit, estimates that this group amounted to 39,000 people received any benefit, including child benefit. To put this in perspective, this is only 1% of all recent EU nationals in the UK who are of working age, not students, not in employment but in receipt of some kind of state benefit. Since non-EU immigrants typically cannot access benefits until they have been resident in the UK for five years, it is unlikely that they would migrate with the intention of accessing state benefits.

The latest official government information (February 2015) reinforces the previously mentioned studies:

  • 371,220 working-age claimants of UK benefits (7.2% of total claimants) were non-UK nationals. Of these 113,960 were EU nationals, representing 30.7% of non-UK claimants and only 2.2% of all claimants;
  • In terms of the people who are out of work and claiming benefits, 287,300 were non-UK nationals claiming out-of-work benefits or 7.4% of total claimants. Of these 91,700 or 2.4% of total claimants were EU nationals;
  • People born outside the UK comprised 16.2% of the working-age population but only 7.7% of working-age individuals receiving key out-of-work benefits were non-UK nationals;
  • 19,579 families had Child Benefit awarded for 32,408 children living in EEA states, around two-thirds of whom were in Poland. 7,026 families had Child Tax Credit granted in respect of 11,762 children in EEA member states.

The Government’s own authoritative Balances of Competences review on the Single Market Free Movement of Persons (2014, paragraph 2.55) observed that:

“… none of the evidence we received was able to point to specific research or analysis on the importance of access to social security benefits in the decision to migrate.”

Whatever the Leave EU faction and segments of the media may claim, EU benefit tourism, to the extent that it exists, is much lower than the native population’s own use of such benefits. This reinforces the point that EU nationals come to the UK to work, not to sponge off Britons. Benefit tourism is not worth getting worked-up about, unless it is for cynical political reasons.

A storm in an English tea-cup

People generally emigrate due to the prospect of employment and better wages, rather because of the lure of welfare benefits. The EU migrant population is younger and better educated than the average Briton; the unemployment rate among EU migrants is also lower than that of the average Briton. When the figures for both non-EU and EU migrants are analysed, it is hard to avoid the conclusion that the benefits tourism hysteria affects very people from the EU living in the UK. This is a storm in a tea-cup whipped-up by those that seek to pander to popular misconceptions rather than standing-up to them.

Benefit tourism, whether from the EU or elsewhere is largely a myth. It is not only that not many migrants are eligible to get benefits in the UK. It is that the great majority of EU migrants actually pay more than their share and take very little out in the form of benefits of any sort. EU migration is good for the tax man and for the welfare state in Britain.

  • Is the EU responsible for the level of benefit tourism in the UK: No. It only guarantees freedom of movement and equal treatment of all EU nationals.
  • Is the British government responsible for benefits eligibility in the UK: Yes. For UK and non-EU nationals; partly for EU nationals, but the recent renegotiation has resulted in a decision to tighten-up eligibility rules for EU nationals living in Britain.
  • Should I vote to leave the EU because of EU benefit tourism: No. The numbers of people involved are small and proportionately much lower than the native British population claiming benefits.

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU


To Brexit or not to Brexit: key issues for the EU Referendum

EU Referendum ahead

The British voter will soon be asked to decide on whether Britain will continue to have a future as part of the European Union (EU) or to exit it (i.e. Brexit or British Exist). The EU referendum’s date has not yet been fixed and must happen by 2017, but is widely speculated that it is going to be to be scheduled for mid-2016.

That question that will be put to the British voter is simple but fundamentally important, namely:

  • Should the United Kingdom remain a member of the European Union or leave the EU?

The options are either to:

  • Remain a member of the European Union or
  • Leave the European Union

This is a simple question with simple options, but it nevertheless is a historic referendum that will influence the future of the UK (and that of the EU itself) for generations to come.

Brexit the obvious solution?

I am a British citizen who lived, studied and worked in Britain. My parents, sibling and my closest friends remain in Britain. Nevertheless, during the last 20 years, I have lived and worked in numerous countries of the EU and elsewhere. I am married to a German and my business takes me regularly to different parts of the EU, potential future EU countries and beyond. I understand what the feeling is about the EU and that there is frustration with the way the EU is perceived to be interfering with British sovereignty and especially about the freedom of movement of people, which is widely seen to be adding to the social pressures in the country.

If I were about to cast a vote at the forthcoming EU referendum, I would feel apprehensive about it. If I were to believe what a hostile media and populist politicians stress, my gut reaction might be to vote for Brexit and leave the EU. I might not be greatly enamoured by the current state of the UK economy, the ongoing austerity, the decreasing wages and the job insecurity. I might well be hearing about the number of laws and regulations emanating from “Brussels”, which the shorthand for the EU, with the implication that Britain no longer controls its own borders and sovereignty. I might well be tempted to conclude that the EU is indeed to blame.

Furthermore, I might also be frustrated by my inability to get on to the first rang of the housing ladder while others point to migrants from the EU are taking up the supply of housing that I or my children want to make use of in our own country. This might lead me to concur with those that point to the “uncontrolled” borders and the EU migration caused by the freedom of movement of people. A similar argument is applied to the pressures in the health and education systems, and I might also be concerned about the “swarms” of EU migrants taking-up scarce resources that we are entitled to, since we are the ones who are actually paying the taxes while the others jump the queue and coin the market for social benefits.

In short, if I were to believe all of the above, I might be well disposed to giving “Europe” a bloody nose, just as populist politicians and the media are urging me to. I might vote to leave the EU: Britain was great on its own and can be once again.

The real issues

But the British voters are fair and reasonable. Rather than follow their gut reaction, they will want to balance both sides of the equation and be fair and dispassionate in making this historic decision. They will want answers to the following questions:

  • Is the negative portrayal of the EU and all the criticism connected with it correct?
  • Is it too simplistic to say that the EU is to blame for all the challenges in Britain?
  • Is Britain indeed so tied-up by the EU that it is no longer in charge of its own destiny?
  • Are there only costs to being one of 28 member of the EU?

If something sounds too simple to be true (it’s the EU, stupid!), then perhaps it is really is too good to be true. Simple solutions to complex problems are appealing but can the EU really be the fount of all of Britain’s ills and will the country really be better off immediately upon Brexit?

Looking at it through another lens, the fair-minded British voter might ask whether it is reasonable or not to only see “Europe”, “Brussels” and the “European Union” only in a negative light? Can it really be that Britain is only paying in but getting nought out of the EU? And, if things are not quite so black and white, what exactly are those positives that are so rare to hear about? Are the benefits so abstract that the ordinary voter simply cannot grasp them or related to them?

We all instinctively know that there are two sides to every story but the media and the loudest politicians do not excel at presenting the pros and cons. As a Brit with a foot on both camps, I hear a series of populist myths being peddled again and again. I often smell a red herring when I turn a newspaper pager. I often see the EU being used and abused by those who would attack a straw man.

So in making-up my mind about how to vote at the historic EU referendum, as a Brit, I would want to understand the costs as well as the benefits connected with the most important EU issues, namely:

EU costs
  • Is EU migration a good reason for Brexit?
  • Is EU benefit tourism a good reason for Brexit?
  • Is the housing crisis a good reason for Brexit?
  • Is EU health tourism a good reason for Brexit?
  • Are EU directives and regulations a good reason for Brexit?
  • Is the state of the education system a good reason for Brexit?
  • Is the EU the cause of austerity, low productivity and stagnating wages in the UK?
  • Is the UK paying more than its fair share and getting little out of the EU?
EU benefits
  • Is having the Euro (one currency in 19 countries out of 28) so bad?
  • Is being able to visit, study and work in 28 countries so bad?
  • Is being able to own a second home and retire in 28 countries so bad?
  • Is having common trade arrangements in 28 countries so bad?
  • Is having common environmental standards in 28 countries so bad?
  • Is having common consumer protection in 28 countries so bad?
  • Is reducing the time, stress, cost, etc. across 28 countries so bad?
  • Is the EU undemocratic, out of touch and beyond reform?
Key issues

 

  • Is Britain better or worse off within the EU?
  • Is the EU better or worse off with Britain in the EU?
  • Are you better off with Britain in the EU or not?

Questions and Answers

If I were the average voter, I would want an answer to these questions before casting my vote.

I would also want the answers to be simple, short and to the point but backed-up by evidence.

This is exactly what the AngloDeutsch Blog will seek to do from until the referendum.

This will be a challenge, given my professional and other commitments, but I shall do my best to cover as many of these topics as I can over the next few months, starting with the EU’s freedom of movement of people.

Dr Ricardo Pinto, AngloDeutsch™ Blog, www.AngloDeutsch.EU, 13 February 2016


The refugee backlash – pulling-up the European drawbridge

© Ricardo Pinto, 2016, AngloDeutsch™ Blog, www.AngloDeutsch.EU

2015 was another tumultuous year for Europe. Over a million refugees found their way into the European Union (EU), but already a new dynamic is evident in early 2016: the refugee backlash has begun and Europe is pulling-up the drawbridge on refugees and economic migrants. The broad contours of the dynamic evident can be summarised as follows:

  • The EU countries have accepted too many and cannot continue to absorb refugees at the same rate;
  • Germany was irresponsible in allowing so many refugees;
  • Without proper checks, the refugee will include a radical element that will pose a threat to the EU´s security, as illustrated by the terrifying Paris bombings in November 2015;
  • Once in Germany, or wherever, they will spread to other parts of the EU, so the freedom of movement of people principle may need to be looked at again;
  • Further sexual assaults on women and robberies by young men from “the African or North African region” are to be expected following the shameful New Year’s Eve experiences in Cologne, Hamburg and other cities;
  • The current levels of migration will destroy Europe as we know it; the borders must close, only legitimate applications up to a predetermined cap can be accepted and the rest sent back.

This all seems logical and it plays well as a populist theme. This certainly applies to parties such as the Alternative für Deutschland (AfD) in Germany and the UK Independence Party (UKIP), but it also goes down equally well with the mainstream political parties such as the Conservative Party in the UK and the CDU and especially CSU in Germany. This is without even mentioning the more radical right wing movements that exist throughout Europe. Not surprisingly, shrill criticism of the migration issue and the EU’s apparent inability to manage the situation is particularly evident in the UK, as it gears up for the forthcoming referendum (the exact date of which has not yet been announced) on whether to remain in the EU or not.

It is very difficult to unpack and analyse what is clearly a highly emotive theme, let alone have a sensible debate about it, which is the very reason why certain political parties are making hay with the refugee issue. Previously, their favourite theme was the Eurozone/Greece crisis, now it is migration but the overall gloom and doom narrative does not change very much.

I should stress that there are clearly legitimate public concerns throughout Europe about the migration issue, both within the EU and from outside. However, the use of scare tactics to gain political or other advantage is not something I enjoy witnessing so I aim to address a sub-set of issues, such as Germany’s alleged irresponsible behaviour, the argument that Europe simply cannot cope and the refugee backlash that is in full swing before the first month of 2016 is finished.

The blame game

I will start with Germany’s role in the European refugee crisis. There is certainly a messy situation, but did Germany act irresponsibly in 2015?

Any way you choose to cut it, Germany has played the key role in the refugee crisis. Germany accepted 1.1 million refugees in 2015, a number than could rise further on by the time the counting is official. Germany had in any case been experiencing significant flows of migrants, mainly from the EU. For the last few years this has been running at over 400,000 net migrants per year. Add this up and Germany received at least 1.5 million net migrants last year, which is an astonishing figure. Furthermore, under the German asylum law, refugees may be allowed to bring their family members, resulting in a significant and unquantifiable flow connected with 2015.

By any reasonable criteria Germany has been an incredibly good country to accept so many people. This is not just about the cost involved, which is undoubtedly significant albeit one which Germany is in a position to absorb. Being a good country is first and foremost about the willingness to recognise the human suffering cause by the migration crisis and to try to do something about it, rather than turning a blind eye to it all.

The contrast with many other EU countries could not be greater. Countries such as the UK have agreed to accept 5,000 Syrian refugees per year for the next five years. It has to be borne in mind that even this paltry number was only agreed to following a public outcry from British citizens appalled by their government’s hard heartedness, which bounced Parliament into agreeing to do more.

Germany is not alone in being a good country: about 90% of the refugees have been accepted by three countries out of 28 in the EU: Germany, Sweden and Austria. What about the response of the other 25 countries of the EU?  Following months of unedifying political squabbling, which continues to this day, the best they could come-up with was to agree to relocate 160,000 asylum seekers from Greece and Italy over the next two years: this is an average of 5,700 per country over two years, though very few of these transfers have actually occurred so far (less than 500 were achieved in 2015 and only 3 out of 10 “hot spots” have opened according to some estimates).

Is “pitiful” too strong a word to summarise the EU’s collective failure in the face of a mass humanitarian crisis? I don’t think so. It is not the first time that the EU has failed miserably to stand up to be counted and it will almost certainly not be the last. It is not as if the refugee crisis was some sudden, unexpected act of god; this is the result of steadily growing pressure and reaching its natural and inevitable conclusion. There was nothing about it that could not have been predicted by the civil servants of the European Commission or of the EU member states.

Germany’s decision to act more or less unilaterally in accepting 1.1 million refugees must be seen in the following context:

  1. This is the worst crisis since WW2: the number of forcibly displaced people, often due to wars, reached almost 60 million worldwide at the end of 2014, including over 14 million refugees. This was an increase of about 25% compared to the previous year and is mostly due civil war, violence and oppression in Syria, Eritrea, Afghanistan, Somalia, Iraq, etc. although other regions, including northern Africa and the Balkans, are also major sources of migrants (IMF, 2016 / The Refugee Surge in Europe: Economic Challenges). This is nothing short of a mass human tragedy, which Europe is neither immune to nor can afford to simply turn its back on. Globalisation entails many new developments, including the capacity of large numbers of people to move in the direction of Europe. It may take time, but sooner or later, it does reach Europe.
  2. This was not a crisis of Germany’s making: it did not chose to invade Iraq in 2003 and played little or no part in setting in chain a series of events which have destabilised parts of the Middle East, in an attempt to bring about democracy through regime change. Of all the European nations it is the UK, France and Italy (together with the USA) that bear the greatest responsibility for any resulting instability in the region. All are now conspicuous for their efforts to obfuscate causality and deny moral or other responsibility (if you break something, you should fix it) to deal with the resulting mess that they helped to set in chain.
  3. The EU failed spectacularly: the utter inability of the EU to find common ground in dealing with the huge volume of people heading towards Europe is what resulted in Germany’s more or less unilateral action. Just as in the Greek/Eurozone crises, it is proving extremely difficult for 28 countries to make decisions quickly and act in unison. This should not be in the least bit surprising. The EU is very far from being a United States of Europe; this simply reflects the fact that the nation-state is alive and well within the EU, despite exaggerated claims of its demise. Each nation retains the ability to follow its own mandate and block changes that it does not agree with. The Central European (Visegrad countries) and Western Balkans states have made their views crystal clear in respect to taking a share of the refugees, but they are not alone. Just as in the case of Greece and the Eurozone, finding a common solution to an unexpected large-scale problem is a slow, messy and costly process. In the end, to misquote slightly the famous words: Europeans Will Always Do the Right Thing — After Exhausting All the Alternatives. The 28 nation states plus the various Candidate Countries (i.e. Western Balkans including Turkey) will find an imperfect compromise and Germany will pay a disproportionate amount of the cost arising. Such is the iron rule of the EU. No other scenario is possible if 28+ nations are to continue to play broadly for the same team. How many other international agreements are you aware of that take a couple of weeks or months to resolve? Climate change agreements? International trade agreements? These things take years or decades, not weeks or months to sort out and are always and everywhere an uneasy compromise. 28+ countries finding a way to deal with the worst humanitarian crisis in 70 years takes time but in 2015, time was of the essence where people are involved, rather than just economics.

Cometh the hour, cometh the country: Germany chose not to sit on its hands but to act in alleviating the growing pressure along the Turkish-Greek-Balkan-Central European corridor.

Refugees in Miratovac, close to the border between Serbia and Macedonia. Photo by Djordje Savic / EPA

Refugees in Miratovac, close to the border between Serbia and Macedonia. Photo by Djordje Savic / EPA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You are free to form your own opinion about whether Germany has acted irresponsibly or not. I personally think that not only has Germany acted incredibly responsibly, but as tax payer and resident of the country, I am proud of living in such a country. No doubt, Germany has already changed as a result and ordinary Germans are deeply unsettled about the implications, an issue which I plan to write about in the future. This is a reflection, among other issues of the fact that the scale of the problem is so great that no country can possibly solve it all on its own – not even Germany.

Europe Cannot Cope! Really?

The next issue is whether Germany and/or Europe have relevant experience and if they can absorb the numbers of refugees.

For a start, I can distinctly remember (since I was part of it) a small, poor, broken European country of 8.5 million absorbing about 1 million people from its former colonies during the mid- to late-1970s. While there are major differences with the current situation (common language, culture, religion, etc.), Portugal was not part of the EU but absorbed those numbers and did not collapse despite its politically chaotic and economically precarious post-colonial situation at the time. In fact, it thrived as a result of the influx. Don’t get me wrong: I am not suggesting that Europe should fling open its doors to all and sundry with no questions asked, but I am saying that Europe is much more robust than many would seem to believe.

After a short-lived spike of international approval for its decision to take on the refugees, Germany has since reaped criticism, direct and indirect, most of which has been leveled at Angela Merkel, the Germany Chancellor. The gist of the argument is that she has gambled Germany’s long term interests for personal hubris: she wanted to cap her career with a Nobel Peace Prize and/or improve Germany’s international image after the Greek crisis. Others of a more analytical bent sought instead to justify Germany’s actions (and presumably the inaction of their own governments) by pointing to Germany’s ageing population structure. It seems to me that almost all 28 EU countries are suffering from the same problem, albeit to varying degrees. Did others facing the same demographic situation jump to take their share of refugees? I don’t think so.

It is certainly true that Germany and many EU countries have a rapidly ageing population structure (fertility of around 1.5, which is below the replacement rate of 2.1) that would greatly benefit from significant immigration of the scale that happened during 2015. But I take issue with the implication that the German authorities naively failed to foresee the likely stresses and strains that would be generated by taking so many refugees in one year (the estimate at the time was 800,000 – 1 million refugees). The reality is that Europe generally and Germany specifically have plenty of experience of large scale refugee crises and indeed of Muslims culture.

Firstly, Germany has a large number of Muslims. According to the 2011 Population Census, there are just under 6.2 million foreigners in Germany and Turks alone accounted for the largest group (1.5 million people or 24.4%). In all, some 2.5 million people are of Turkish origin. It is not as though Germany is not aware of the stresses and strains associated with the religion, gender, education, labour market and other dimensions connected with integrating populations, including Muslims. The same applies to many countries of the EU but unlike others, it still went ahead with what is often described by its critics as its “open door” policy.

Secondly, it was not so long ago that Germany had to respond to a refugee crisis of similar proportion. During the 1990s, a large number of asylum applications were lodged due to crisis in the ex-Yugoslavia, though the peak of that crisis in 1991 (around 700,000) has been exceeded in 2015 (see first Figure below). That said the second Figure below illustrates the point that the numbers were relatively low compared to those of the 1990s, though the diagram does not take the 2015 influx of over a million refugees into consideration. It is probably not a coincidence that then, as now, Germany absorbed the lion’s share of refugees.


IMF graphic 2016

Source: IMF, 2016, p.11

Thirdly, to put things in context, Europe had only absorbed 1 out of the 14 million refuges worldwide in 2014 and this increased to 2 million in 2015. Whoever believes that what has happened in 2015 is the end of the matter and that the EU can simply put-up the fences, close the borders and turn its back on the rest of the world is deluded. A proportion of the 12 million other displaced people are heading our way in 2016 and beyond: the current estimate is that another 1 million will aim for the EU this year and possibly more. The way to end this catastrophe is not by pulling-up the drawbridge to Fortress Europe; if the conflicts in the countries in question are ended and if this is combined with a major reconstruction programme, in time, the human tragedy and the migratory process will also abate. Putting-up fences and closing borders will restrict some of the flow, but will also add to the human desperation without actually dealing with the root cause.

To conclude, in my view Germany did not saunter into the current situation blithely and Mrs Merkel was right in saying “Wir schaffen das.” We can do it: I agree with her. Other, much smaller and poorer countries have in the part or are currently absorbing the same or higher numbers of refugees. Germany knew, more or less, the implications of opening its borders to about a million refugees, even if the general public could not have predicted the exact consequences, including the outrages in Cologne and other cities. It is most unlikely that Europe’s pre-eminent politician would not have sniffed the potential political, social, religious and cultural implications of undertaking such a radical step. The numbers absorbed by Europe are relatively small by comparison with the numbers being absorbed by other countries, including Turkey. If they can do it, so can Europe. Indeed, a cursory reading of European history proves that it has coped with wave after wave of migration.

Refugee backlash

To ask if the refugee backlash is coming would be to pose the wrong question: it is already here.

The mood in Germany and the rest of Europe started turning ugly long before the Paris terrorist attacks and the mass sexual and other crimes in Cologne and other German cities during the New Year’s Eve celebrations that went wrong. Pensioners are up in arms about the way they perceive their country is changing. Parents are concerned about their children’s education as gymnasia are requisitioned as temporary accommodation and class rooms begin to take the strain of absorbing the influx of non-German speakers. House prices and rent levels are being pushed up in an overheating housing market where affordable accommodation is scarce.  Region and local authorities remain deeply concerned about practical matters in addition to shelter, such as state benefits and labour market opportunities for refugees. The issue of integration and whether it is possible to achieve or not, is “the” topic of conversation. This applies to Germany and it applies equally to other EU countries.

Angela Merkel has gone from being Europe’s pre-eminent politician and practically politically unassailable in Germany, to being under siege. Make no mistake about it; she is fighting for her political future.  Yet despite the ratcheting of pressure, even today, she is refusing to put a cap of the number of refugees that will be accepted by Germany in future (the CSU is openly advocating a cap of 200,000 per annum, which itself puts the UK’s response in the shade). There are probably two reasons for this. Firstly, German asylum law is based on individual assessments so caps would not be workable without changing the law (but we know laws can be changed at the drop of a political hat). Secondly, the huge numbers of forcibly displaced people out there (14 million and counting) are desperate and there is no end to their travails in prospect. What would you do in their shoes? Which safe harbour would you try to reach, possibly at the cost of perishing on the way? A cap would be a meaningless promise without a workable EU arrangement.

Mrs Merkel is displaying the hallmark of true leadership: political courage and acknowledging moral duties beyond her nation’s borders. That is the essence of being responsible in a European and global sense, though I recognise fully that many would much rather put national and personal interest before anything else, including in Germany.

Merkel probably expected the rest of Europe, especially the largest countries, most of which have had more than a hand in the unfolding disaster in the Middle East, to take a much greater share of the humanitarian burden. Despite the lessons of Greece, she has miscalculated in relation to most of the EU and is now in the middle of the biggest political crisis that she has ever faced. She also appears to have greatly overestimated the Greek and Turkish capacity to manage their borders.

But she is nothing if not a pragmatic leader. She has recognised that the whirlwind is not just gathering, it is already blowing. A change has already been signaled that 2016 will not be the same as 2015. The scale of the challenge means that Germany cannot shoulder the burden mostly on its own for much longer. All three of the most generous countries have introduced border visa checks (three others have also and many more are threatening to do the same). A closure of national borders has so far been resisted by the EU, but this could change. Sweden has announced that 80,000 of the 160,000 refugees it accepted will be sent back because they are economic migrants, not refugees. The EU has reinforced the message by stating that 60% of the applicants are not refugees at all but economic migrants mainly from the Balkans and North African countries such as Morocco and Tunisia. It has also threatened to suspend Greece from Schengen for systematic failures in the migrant crisis. In turn Greece is pointing its finger at Turkey for allowing migrants to “swamp” their border and islands.  Reports are piling up that in addition to anti-refugee demonstrations and hostels being set on fire in Germany, violence is erupting in Sweden and other countries.

A common EU approach is the only way forward, combined with a serious and concerted effort to end the conflicts and reconstruct economies, since these are the drivers of mass population displacement. But just like the Greek and Eurozone crises, which are also far from over, it will not happen miraculously or overnight.

So, get ready for a much more hard-nosed European approach to the refugee crisis, with an emphasis on only accepting people from conflict zones (true refugees and asylum seekers) and rejecting all others (i.e. economic migrants). The EU drawbridge is being pulled-up. The wider societal backlash is already underway and those that are leading it will not be pausing to distinguish those that deserve to be helped from those that do not.


German Flags are Fluttering in Britain – Kloppmania in Liverpool

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

It’s not that common to see a Union Jack flag fluttering on British soil, except where the royal family is concerned. Seeing a European Union (EU) flag is as rare as spotting a dodo. But a seeing a German flag on British soil is something that I never thought I would witness, but that is exactly what happened yesterday. So what is the cause of this unexpected event? Is it the Brits getting the German reunification celebrations wrong by a few weeks? Is it perhaps celebrating the fact that Germany is doing them a favour by giving refuge to probably over 1 million refugees and asylum seekers to Britain’s 20,000 spread over five years? No, it is “Kloppmania”. Let me explain.

October 17, 2015 AFP PHOTO IAN KINGTON

October 17, 2015 AFP PHOTO IAN KINGTON

 

 

 

 

 

 

 

 

 

I have been a fan of Liverpool Football Club (LFC) since I first came to England in 1977. That was the year that Kevin Keegan left Liverpool for Hamburg SV, sparking off the German club’s revival and winning the Bundesliga in the 1978–79 season for the first time in nineteen years. But it was also the year when he was replaced by an even better player, namely Kenny Dalglish or simply King Kenny, as he is affectionately known at the club. They played glorious football, resulting in LFC retaining the European Cup and winning the European Super Cup (by beating a HSV team including Keegan). Domestically, they were runners-up in the league (to Nottingham Forest) and the Football League Cup. The team went on be the dominant team in England and in Europe, winning 5 of the titles in 1970s and six in the 1980s, as well as collecting 4 European Cups (now Champion’s League) along the way. However, the last league title was in the 1989-90 season, prior to the establishment of the Premier League. All good things come to an end and it has certainly been downhill more or less all the way since. Liverpool has not won the league titles for 25 years: a quarter of a decade!

Seven managers have come and gone in that time. Several have come close to winning the premier league (runners-up 4 times since 1989-90), most recently in the 2013-14, when the club played uninhibited, exhilarating, swashbuckling football, reminiscent of the dim and distant heyday. However, it was yet another false dawn and since the bitter disappointment of being runners-up there has been a season and a bit where all the hopes and aspirations of the fans have been crushed to the point where they could no longer recognise the team or the tactics.

Liverpool is a proud and historic city, but de-industrialisation has done it few favours. Reflecting the football, the city has experienced a period of decline. It may be one the poorest cities in the UK but it remains solidly working class the fans are as committed, vocal and passionate as ever, perhaps expressed most vividly in their support for the red half of the city (the other team, Everton, is the blue part) when they sing “You’ll never Walk Alone” (YNWA). They understand the game and expect their players to be committed and brave on the ball and to play in the Liverpool way. Intense is the word that best describes the cauldron of football called Anfield. The lack of fighting spirit against any team, especially fierce rivals such as Manchester Unite, is the single most unforgivable thing about recent performances, reflecting poorly on both the players and manager.

Not surprisingly, there was a growing wave of discontent in the stands, including regular booing their own team (but not the manager out of respect) in the last few games, and growing criticism in the media which features a remarkably large number of  ex-Liverpool pundits. The manager had to go – after all, they can hardly fire the whole team – and this is exactly what happened over a week ago. Although not exactly unexpected, it was still a shock the fans, the majority of whom are known for their loyalty to the club through thick and thin.

From the beginning there were two managers in the running according to the media, namely Carlo Ancelotti (ex-Real Madrid among a long list of top clubs) and Jürgen Klopp (ex-Dortmund and Mainz 05). Both are highly successful A-List managers, but the truth be told, I believe I was among the vast majority of fans (over 90% in my estimate) who could quite believe that either one would be appointed for three main reasons:

  • The club is no longer among the wealthiest in the country (5th after Manchester United, Chelsea, Arsenal and Manchester City) and cannot afford so-called “world class” players, unlike its rivals;
  • The club has not been regularly in the Champion’s League since the last, brief period of glory (winner in 2005 and runner-up in 2007) unlike many other equally illustrious clubs;
  • The burden of history of last winning the league 25 years ago, combined with the sheer scale of challenge involved in clawing up the league table and regaining the long-lost lustre does not appeal to many managers.

Wrong, double wrong and I am very happy to admit it.

I was flabbergasted and yet hugely excited when it became increasingly apparent that we would get Jürgen Klopp as our next manager, with him being unveiled by the club on 16 October 2015. Klopp’s decision to choose Liverpool over any of the leading clubs in the world, has galvanised the red half of the city, though I dare say many of the blue side (Everton FC supporters) are also secretly glad if not proud that he has chosen to come to their part of the NW (as opposed to Manchester) or London.

Now leaving aside the royal family, although there is respect, Germans are not generally held in high esteem in the UK. It is not simply a matter of two wars (which should not be underestimated, even today), it is the strongly held stereotypes which hold that Germans are unexciting and lack a sense of humour. None of this applied for a second to Klopp or “Kloppo” as he is affectionately known by fans. A little bit of research reveals a few consistent facts about the man, which goes to the heart of why football fans take to him and not just in Germany:

  • He is loyal: he is a one club ex-football player (Mainz 05), has managed two clubs (Mainz 05 and Dortmund), each for 7 years. This is increasingly an endangered species in football and one that fans automatically respect, not just Liverpool fans;
  • He gets working class clubs: Mainz, Dortmund and Liverpool have three things in common; all have a working class history, passionate fans whose “anthem” is YNWA and, of course, Klopp himself. He is clearly attracted by the passion and intensity of the fans and is something they take to him like a duck to water;
  • He is larger than life: not only is he is a tall and handsome fella, he has a semi-permanent wide grin and is extremely charismatic. He has his own style and is neither afraid to express his emotions or his opinions. This is something that all fans automatically connect with – managers who sit stony faced, take reams of notes or put up umbrellas are the opposite;
  • He excites all fans: he has his own variant of tactics, most clearly expressed in the hard running (counter pressing or “gegenpressing”) but it is intense, it is emotional and it is exciting football: it is dynamic football and fans all over the world can automatically relate to it. Unlike other managers who talk incessantly about their “philosophy”, Klopp’s approach can be boiled down to this: “So that’s it, it’s very emotional, very fast, very strong, not boring, no chess. Of course tactical, but tactical with big heart. Tactical things are so important, you cannot win without tactics, but the emotion makes the difference. Life in our game, that’s important.” This in turn can be reduced to two words which cannot be mistaken by any fan, regardless of language, culture or tradition: “full throttle” or “heavy metal” football is what is promised and I for one will gladly take that;
  • He knows there is no instant success: he has clearly not selected Liverpool because of mere romanticism, though this is undoubtedly a factor. Klopp has stressed that this was the only club that he has discussed, that he has come because of the players and that it will take time to achieve success with a team such as Liverpool. He says this often with memorable throw away one-liners such as: “I’m here to put things right at Liverpool FC – but don’t think I’m Jesus.” It is not by accident that there was an instant emotional connection. Elements of the great Bill Shankly, who set the club on its path to success, are evident. The world has come to admire the achievements of Dortmund over the German football colossus that is otherwise known as Bayern München. Under Klopp, Dortmund punched above its financial weight and reaped global acclaim for its approach in developing players rather than paying top dollar for ready-made talent. In this context, it struck a chord with the fans when Klopp said that everyone at Liverpool FC had to turn from “doubters to believers.”
  • He is not purely motivated by money: he will earn up to GBP 7 million per annum after bonuses. That is double what his predecessor earned, but he is by no means the best paid in Britain and could have earned more, if that was his sole motivation. Instead, he has accepted one of the biggest challenges in word football. To revive a team (and in the process, the city) with its fading glory and deep yearning for success in a major undertaking, compared to merely fine-tuning a well-oiled elite club with matching finances. This type of challenge is not what 99% of managers out there would go for. The level of expectation connected with such a task has crushed many before him and may well do the same to him (he is well awareness of the club’s history and has likened the weight of the past to carrying it around “like a 20 kg backpack”). He has clearly made his own calculation and let his heart as well as his head rule his decision, rather than the easy option or the bank account.

So what is the outcome?

It is that quite simply, he has gripped the city in “Kloppmania”, but he has excited everyone connected with football too. It is clear that if he is successful with his methods in Liverpool, it will impact the rest of the game and may change the tactics deployed in the UK. That prospect excites all fans. If he is able to change the money game where success if closely correlated with expenditure, as he successfully did at Dortmund, then he will not only affect Liverpool, he will galvanise all other clubs (apart from Man United, Man City and Chelsea) in the Premier League. In the process, he will also give hope to fans all over the world. The reset button will be pressed and the prevailing (largely accurate) view that money buys success on the field will be less dominant and football will get a shot in the arm.

So, it is not surprising that Kloppmania has taken over Liverpool in particular, though the effect is wider in my view, with many other fans hoping that Klopp achieves successful in England. Ex-Manchester United players and pundits such as Gary Neville are already urging caution about the runaway Kloppmania in Liverpool. To some extent, leaving footballing biases to one aside, ne is right to caution us. The first game yesterday showed that Klopp is no magician and certainly no Messiah. After 2 days of training his full squad and having to contend with a long injury list along his leading players, Liverpool played its first game against a team on top form and salvaged a draw against Tottenham Hotspurs. No win, but this team ran more, pressed more intensely, played more freely and defended much better than in three years; there are no complaints from Liverpool fans. We know we are back on the tight track. We feel that Klopp has the knowledge, experience and charisma to make our team better, more exciting and more successful. It is only a matter of time, which of course, is the very commodity which is increasingly disappearing from football.

We may have to wait a lot longer than 25 years to win the Premier League again, but at least we are free to dream once again. So pull out those German flags, wave them proudly and “Walk on, with hope in your heart.”


Elitism in Britain: unequal opportunities = unequal outcomes

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

In my previous post, I showed that, on the basis of their educational background (i.e. whether they attended an independent school and one of the top two universities), the UK cabinet is very much part of the Establishment or the elite of the country. In stark contrast to the German cabinet, there is an extreme concentration of people with such a background: a staggering 42.8% of the British cabinet, are doubly privileged, David Cameron and George Osborne included.

If that was not amazing enough, I would like to report some of the results of an official analysis by the Social Mobility and Child Poverty Commission called Elitist Britain (2014).

Secondary Education and Higher Education are the foundation for elitism

Whereas 89% of pupils attend comprehensive schools, 4% go to grammar schools and a further 7% to independent schools, the latter being independent in terms of finances as well as governance. The terms independent and private school are used synonymous in the UK and basically involve significant tuition charges which only the affluent can afford.

Whereas 62% of the UK adults do not attend university, 1 in 9 attend the so-called Russel Group Universities (the leading 24 higher education institutions in the UK, including Oxford and Cambridge or Oxbridge) but only 1 in 100 attend Oxbridge or 1% of the adult population, which is a classic definition of the elite.

Britain’s elite: formed on the playing fields of independent schools

To get a feel for the influence of the independent schools, consider the following statistics: 71% of senior judges, 62% of senior armed forces officers, 55% of Permanent Secretaries, 53% of senior diplomats, 50% of members of the House of Lords, 45% of public body chairs, 44% of the Sunday Times Rich List, 43% of newspaper columnists, 36% of the Cabinet, 35% of the national rugby team, 33% of MPs, 33% of the England cricket team, 26% of BBC executives and 22% of the Shadow Cabinet attended independent schools compared with 7% of the public as a whole. This means complete domination of the most powerful and influential positions in UK society by those that attend independent schools.

Britain’s elite: finished in Oxbridge

If that provides food for thought, than the influence of the top two universities in the UK is absolutely gobsmacking: 75% of senior judges, 59% of the Cabinet, 57% of Permanent Secretaries, 50% of diplomats, 47% of newspaper columnists, 44% of public body chairs, 38% of members of the House of Lords, 33% of BBC executives, 33% of the Shadow Cabinet, 24% of MPs and 12% of the Sunday Times Rich List attended Oxbridge, compared to less than 1% of the public as a whole. The influence of Oxford and Cambridge in respect to the top positions in Britain is extremely disproportionate, to put it mildly.

Oxford, R Pinto 2015

Oxford Trinity College, © R. Pinto, 2015

 

Sectors of entrenched elitism

The preceding analysis demonstrates the extent to which privilege is entrenched in Britain and this advantage tends to cumulate over time, since is generally passed-on from generation to generation. Since Britons generally take pride in living in a meritocratic society, it is worth delving a bit deeper into some sectors to illustrate what this form of elitism means in practice:

  • Parliament: the advantages are even more entrenched than suggested at first sight by the fact that 36% of the cabinet went to independent schools and 59% went to Oxbridge. Out of the 365 Members of Parliament (MPs) 33% went to independent schools (52% of Conservatives, 41% of Liberal Democrats and 10% of Labour) and 24% went to Oxbridge (32% of Conserves, 28% of Liberal Democrats and 17% of Labour). It should be noted that the MP data refer to 2014 and thus the previous Parliament, though there is no reason to assume this has changed dramatically in the current parliamentary intake. The situation is even more extreme in the case of the House of Lords or the Upper House. Half of the Lords attended independent schools (50%), which is seven times more than the UK population as a whole and over a third (38%) of the Lords attended Oxbridge.
  • Civil Service: over half (55%) of Whitehall permanent secretaries (the most senior civil servant charged with running government a department or ministry on a day-to-day basis) attended an independent school, as did 45% of Public body chairs and 34% of Public body CEOs. Public bodies are created to provide public services such as British Rail (BR) and the British Broadcasting Corporation (BBC). Unsurprisingly, more than half of the same Whitehall permanent secretaries are Oxbridge educated (57%), as are 44% of the Public body chairs and 26% of Public body CEOs.
  • Law: 71% of judges attended an independent school and a further 23% of judges attended a grammar school, which take 4% of the pupils. Thus independent/grammar schools account for a staggering 94% of all judges in Britain. Not only that, but one in seven judges (14%) went to just five independent schools: Eton, Westminster, Radley, Charterhouse and St Paul’s Boys. 75% of judges went to Oxbridge. Our judiciary is a highly self-selective group, it seems.
  • Order: the concentration in the army is almost as extreme as for judges and civil servants. Senior armed forces officers were also largely educated in independent schools (62%) and fewer than 1 in 10 (7%) went to comprehensives. But the equivalent in the police services are less concentrated; a mere 22% attended independent schools and 6% went to Oxbridge.
  • Business: Excluding those educated abroad, 41% of British-educated FTSE350 CEOs and six out of 10 of those in the Sunday Times Rich List (60%) were educated privately. Almost half of FTSE350 CEOs (43%) and over a quarter of those on the Sunday Times Rich List attended Russell Group universities (28%), of which 18% and 12% respectively attended Oxbridge.
  • Media: in terms of the other key set of people setting the agenda for the rest of the population, 54% of the Top 100 media professionals (newspaper editors, columnists and broadcasters) are drawn from independent schools and 45% attended Oxbridge. More than two in five newspaper columnists (43%) in the British press attended an independent school; and 47% graduated from Oxbridge. The situation is even more extreme if we add the independent and grammar school categories together (or 11% of the public): 89% of the Top 100 media professionals are from such schools. Looking specifically at the tabloids (a newspaper having pages half the size of those of a standard newspaper, typically popular in style and dominated by headlines, photographs and sensational stories such as The Sun, The Mirror, etc.) 38% of the columnists attended independent schools and 25% attended Oxbridge (and 49% went to a Russell Group institution). 45% of the broadsheet columnists (a newspaper with a large format regarded as more serious and less sensationalist than tabloids such as The Telegraph, The Independent and The Guardian) went to independent schools and 57% to Oxbridge. The 1% seems to have cornered the media market too.

Self-selection and group think to the fore

As I was writing this piece, I was reflecting on my long-held belief that British society is meritocratic – where the people holding power are selected on the basis of their ability. I still believe this to be the case. I do not doubt that the elite comprising the 7% or 1% is extremely well-educated or that they hold their powerful, prestigious and well-remunerated positions on the basis of their ability. But they are greatly aided by attending the top schools and facilities that money can buy and abetted by a self-selecting and entrenched Oxbridge network of their ilk. To suggest that there is equality of opportunity in Britain, but not necessarily equality of outcome is not only misleading, it is also plain wrong.

This situation may be broadly meritocratic but it is hardly the same as being fair, right or healthy for a democracy; only a small subset of the population has the resources, contacts and know-how to buy the entry ticket to an independent school (7%) which the gateway to securing a pass to one of the top two universities in the country (1%), which in turn results in access to the most influential, powerful and lucrative professions in Britain. The opportunities and the outcomes are systematically cornered, generation after generation, by the same elites.

The very fact that the report Elitist Britain (2014) was released at all demonstrates that the British Establishment is not too concerned about such information being released. Given how little it has been reported or impacted on policy-making (since they also control most of the levers), I guess they are right.

In any case, this fascinating report makes two further points worth noting. The first is that a lack of diversity in the people who are running the country is a problem in and of itself since certain professions should be representative of the public for reasons of legitimacy. This includes politicians, the media and judiciary.

Secondly, a narrow elite implies serious limits on adult social mobility and the sheer scale of the dominance of certain backgrounds raises questions about the degree to which the composition of the elite really reflects merit, as opposed to know-how combined with know-who.

These are serious concerns but the point that really caught my attention concerns the risk of “group think”:

“Where institutions rely on too narrow a range of people from too narrow a range of backgrounds with too narrow a range of experiences they risk behaving in ways and focussing on issues that are of salience only to a minority but not the majority in society. Our research shows it is entirely possible for politicians to rely on advisors to advise, civil servants to devise policy solutions and journalists to report on their actions having all studied the same courses at the same universities, having read the same books, heard the same lectures and even being taught by the same tutors.

The penny drops. I finally understand the reason why so many British politicians and journalists are so consistently and systematically (with some exceptions) pro-leaving “Europe” by which they mean the European Union (EU). Their entrenched group think has blinded them to the benefits of being part of the EU and they systematically underestimate the disadvantages of going it alone, thereby risking the country becoming an increasingly isolated Little Britain.

 

 

 


Elitism in Britain and Germany

© Ricardo Pinto, 2015, AngloDeutsch™ Blog, www.AngloDeutsch.EU

There has been a lot of discussion about elitism, the Establishment, the 1%, etc., partly driven by the seminal work on wealth and income inequality by the French economist Thomas Piketty (see Capital in the Twenty-First Century). This has been exacerbated recently by the on-going discussion about David Cameron and his Oxford days, including allegations about some of the initiation rituals involved (see #piggate). This post examines elitism in Britain and Germany by analysing the people who make-up the Cabinets in both governments, as a means of establishing the extent to which they form part of elite or not.

First it is important to be clear what we are referring to when we talk about the elite or the Establishment, as illustrated in the box below.

Elite

1. The choice or best of anything considered collectively, as of a group or class of persons.

2. Persons of the highest class: only the elite were there.

3. A group of persons exercising the major share of authority or influence within a larger group: the power elite of a major political party.

4. Representing the most choice or select; best: an elite group of authors.

(the) Establishment

1. The existing power structure in society; the dominant groups in society and their customs or institutions; institutional authority (usually preceded by the): the Establishment believes exploring outer space is worth any tax money spent.

2. The dominant group in a field of endeavour, organisation, etc.: the literary Establishment.

Source: Dictionary.com

 

The elite is thus a small group of people who control a disproportionate amount of wealth and/or power. It is not easy to ascertain people´s wealth but there are surrogates that can be used for privilege and power. The Prime Minister and the rest of the Cabinet are generally considered to be the single most powerful group of people in any nation. Therefore, in assessing the elites and the Establishment, it makes sense to begin with this particular group of people.

In assessing the issue of whether the people concerned are part of the elite / the Establishment / the 1%, I look at two indicators for which information is relatively objective and easily available:

  • Whether they were privately/independently educated in the form of a fee paying school education or not: Britain has a well-established tradition of independent, fee paying schools. Germany too has such schools though their origins and emphasis are different. In both countries the state school system is free but some choose to educate their children privately. Since these involve significant costs compared with state schools, it is generally the privileged that tend to attend such schools. In the case of the UK, 7% of the students go to such schools compared with 6% in Germany;
  • Whether they attended the elite (two top) universities in their respective country or not: in the case of Britain, this would be Oxford University and Cambridge University, often conflated as “Oxbridge.” In the case of Germany, only a couple of universities make it into the top 50 universities in the world, namely Heidelberg’s Ruprecht-Karls-University and Munich’s Ludwig-Maximilians-University. The barriers to attending the elite universities are normally much higher than the rest but the rewards associated with graduating from the top two universities are also disproportionate (the subject of the next post).

It goes without saying that those lucky enough to have both attended a private school and graduated from the top two universities of their respective country are bound to be rewarded with disproportionately higher life-chances compared with their fellow citizen without the benefit of such privileges.

In this post, I explore the issue using official information provided by the respective governments, supplemented with research on cabinet members who are coy about their educational background. The results of the analysis for Britain and Germany are presented in the Table below.

Table 1. Educational Background of the Cabinet in the UK and Germany (2015)

Cabinet_table

Note: the private/independent schools are as easy to identify in Germany as in Britain. Furthermore, it is not always possible to match-up government ministries / departments in the two countries. Sources: www.gov.ukwww.bundesregierung.eu and Wikipedia

So what does the above table tell us about the UK and Germany, based on the educational background of their respective cabinets?

  • Independent school: 9/21 UK vs 1/16 Germany: 42.8% of the UK cabinet attended independent schools compared with only 6.2% in Germany. There is an incredibly high level of concentration in the UK, given that only 7% of the adult population attends independent schools. The German cabinet simply reflects the national trend of 6% of pupils attending such schools;
  • Top 2 universities: 13/21 UK vs 1/16 Germany: an even greater proportion (61.9%) of the UK cabinet attended Britain´s top two universities. To put this in context, only 1% of the adult population of Britain attended Oxbridge. This also contrasts with only 6.2% of the cabinet in Germany attending its top two universities. An astounding 38% of the British cabinet attended Oxford alone. If you think this is something new or specific to the Conservative party, you’d be wrong; it is merely a matter of degree. Ed Miliband, Gordon Brown and Tony Blair are all Oxbridge educated, as were 12 of Ed Miliband’s shadow cabinet. Jeremy Corbyn, the new leader of the Labour party, was educated in an independent school but did not complete his higher education;
  • Independent school and top 2 universities: 9/21 UK : 0/16 Germany: whereas none of the German cabinet were privately educated and went to the country’s top two universities, a staggering 42.8% of their British counterparts did, David Cameron and George Osborne included, thus being doubly privileged.

Based on the indicators of private / independent education and/or attending Oxbridge, as well as being a member of the Cabinet, the elite or the Establishment is very much alive and in rude health in Britain. Independently educated pupils, especially those from the elite schools, disproportionately go to Oxbridge (taking 44% of the places at Oxford and 38% at Cambridge) and end-up in the Cabinet. Coincidence is not the main factor at play; layer upon layer of privilege and entitlement piled upon each other is closer to the truth.

By contrast, the German cabinet is positively plebeian. I shall leave it to the reader to determine which they prefer and why.

The recent and totally unexpected election of Jeremy Corbyn as the Leader of the Labour Party (who has not exactly grown-up in the proverbial social housing estate or attended an inner city state school) appears to be partly a reaction to the “more of the same” politics by the ruling elites. No such trend is evident in Germany.