Tag Archive: European Union

Brexit and Nationality: a case study

Yesterday, I was a Briton who was married to a German and living in the Hamburg area.

Yesterday, I felt AngloDeutsch: part British, part German (plus a few other bits thrown into the mix).

Today, I am truly AngloDeutsch.

I have been eligible for dual citizenship for many years. Initially, by virtue of having a German partner and latterly in my own right, for having lived in the country and paid taxes there for much longer than the qualifying period for citizenship.

Just like my partner, who had the right to British citizenship but never took it up, I never feel the need to become German.

Why would I; I have never felt like a second citizen here. Why would anyone choose to take-up a new nationality or give up one when there was absolutely no need for it under the European Union’s (EU) rules on freedom on people, goods, services and capital? I had exactly the same work, health, pension, tax etc. rights as any other German.

That is how many others in my position felt too, but the UK´s referendum in favour of Brexit changed everything.

My partner regrets not applying for British citizenship when the chance was there. I chose not to make the same mistake. As long as the UK remains part of the EU (currently until the end of March 2019), I was eligible to dual citizenship, so I decided to apply for it.

The decision to for dual citizenship was simple but not easy.

It was simple because I had a choice: either to allow all my rights as an EU citizen to be reduced to two countries, UK and Germany, by retaining my British citizen; or to retain all my rights as an EU citizen by becoming German while also remaining British. What to choose: keep the benefit of all 28 countries or see it reduced to 2 countries?

The choice was simple and in my shoes, you would probably have chosen the same. Like the British government policy stance, I went for the “have cake and eat it” strategy. The difference is that this is was a real option for me, whereas the British government continues to be deluded in thinking that it is be feasible to leave the EU and yet retain all the benefits of being a member of the EU, minus the “inconvenient” bits, such the EU membership fee and EU immigration (not to mention all the other things that the UK has opted out of in the past, such as Schengen, Euro, etc.). Today´s leaks once again show the British government´s inept stance on EU immigration.

The German application process was relatively simple. I had to fill in a 6-page residency form, which was detailed but not a monstrosity of 85 pages and 18 pages of guidance notes, as in the equivalent UK one. There was no unreasonable stuff, such as requiring a list all the international trips I made, as in the UK, or a sense of unreasonable potential obstacles being placed before me, such as proof of comprehensive sickness insurance for self-sufficient persons and students, as in the UK.

It was still a demanding form to complete and required various proofs, such as birth certificates and recent tax returns. Furthermore, it took a good six months to process which is a reflection of the demand for German citizenship, including a spike of Britons applying. The last estimate I read for the UK equivalent was several decades to process the current applications. The German procedure also included a thorough language test (whole day event), as well as a citizenship test (33 questions about national and regional history, culture, society, constitution, etc.), both of which are reasonable if you expect new citizens to integrate. Language is the basis for everything and a bit of knowledge of the country and its laws does no harm.

Those were the “easy”, procedural bits. The harder ones were about the implications for self-identity, as a result of choosing another nationality.

Naturally, this process would have been very different, if I had had to choose between British and Germany citizenship. To have given-up my British identity would have been a chastening exercise. There would have been a lot of emotional aspects connected with considering such a step, though I know Brits who have done so without apparent regrets. I have every reason to be happy and proud to be British, so I am not sure if I would have taken such a step.

I make no bones about the fact that I completely disagree with the way Britain has been changing prior to the EU referendum and rapidly post the Brexit decision. I fear for Britain, its economy and thus the future of my fellow Britons, my parents, brother and friends, both those that voted Leave and those that did not. I have friends and family on both sides of this yawning chasm which already defines Britain today and will continue to do so for at least a generation.

Brexit in itself would probably not have caused me to give up my British nationality. But I am fortunate; it was not a case of either one or the other since Germany allows dual citizenship for members of the EU.

I am fortunate to in this respect. German citizenship is an additive option, not a subtractive one. More is sometime more.

Some of the 1.2 million Britons living in other EU countries are not as lucky, even if they stay in those countries long enough to gain citizenship. Not many countries allow dual citizenship so the decision would be a lot tougher for them.

The Britons already living in an EU country that do not have the option of dual citizenship and choose not to give up their British citizenship will have their opportunities reduced to living and working in 2 countries instead of 28: the one they are living in and the UK. Less is most certainly significantly less in this case.

Everyone else, who is British and residing in Britain or a non-EU country, will have their options reduced from 28 to 1. Less is dramatically less for these Brits. The 52% of the voting electorate that voted Leave will get their just deserts. I feel deeply for all the others that voted Remain or did not or could not vote (myself included, due to the arbitrary 15-year rule).

Less is also a little bit less for EU citizens: their options will be reduced from 28 to 27 (except for the 3.5 million EU citizens living in the UK), though a lot is still to play for during the Brexit negotiations.

This massive asymmetry, involving Britons losing a hell of a lot more options than the EU citizens, has been largely kept from citizens by the politicians, both Labour and Conservative.

Almost criminally misleading claim have been made, such as that GBP 350 million per week will be spent on the NHS instead of the EU, that Britain can have its cake and eat it at the same time by leaving the EU and retaining all the benefits without EU migration and paying into the EU budget in the future, that there will be no “divorce bill”, that new trade deals will be easy for the UK to sign, that the EU has a lot more to lose than the UK from a lack of trade deal, that “Global Britain” can go it alone (surely an oxymoron) once unshackled from a sclerotic EU, that all the current social, health, safety, labour market, etc. rights will be retained by the British government post-Brexit, that net migration can be kept to under 100,000, that… well, you get the general idea. People can be and often are gullible, but not for ever and certainly not when reality starts to bite, which it is certainly doing, despite all the overtime being put into pouring oil on the stormy waters of Brexit by the Europhobic wing of the UK press.

After one year of the British government saying little more than “Brexit Means Brexit” and a lack of clear strategy for Brexit ( “constructive ambiguity” is the best that Mr David Davies can come up with as a fig leaf for the chaos and contradiction that he tries to pass-off as the “flexible and imaginative” British negotiating strategy). Britain clearly lacks the individuals (politicians and civil servants) and institutions with the skills and capacities to deliver a “frictionless Brexit”. Even if this were feasible, which everyone else but the UK government doubts, all the evidence so far is that negotiations with the EU are not going well for the UK and thus also for the EU. But the potential negative consequences for the UK are disproportionate compared with the likely effects on the EU-27.

The messy current and future reality of Brexit has become all too clear to British businesses and is rapidly becoming apparent to British citizens too. The politicians “in charge” (the hapless PM and her merry band of Brexiteers, Nigel Farage included) cannot postpone the inevitable.

The British economy has done extremely well in recent decades and this has been, to a significant extent, due to three critical champions that generate disproportionate wealth, employment, innovation and tax revenue such as the financial sector, the automotive industry and the university/research and development sector among others.  All three are currently in serious trouble. The first 12 months post-Brexit were a period of relative calm but since Article 50 was triggered by the UK, the implications rapidly began to dawn on the business managers in all three sectors, as well as most other parts of the economy.

There is trouble ahead, there are extra costs ahead, there are extra risks ahead, there is extra bureaucracy ahead, etc. The reduced or shelved investment plans are Britain´s loss. That applies to the investors that are already in Britain. New investors will not even seriously consider the UK in the future. The great majority of such investment will flow to the EU-27 countries instead, unless there is something very specific about the UK that will attracts such investment, despite the extra costs and bureaucracy outside the EU´s Customs Union.

Less investment = fewer jobs, lower incomes, lower tax revenue and thus lower public expenditure.

I lived through the late 1970s and early 1980s in the UK. I am not nostalgic about high levels of unemployment and a palpable sense of decline at all levels of the economy and society. It was not a pretty sight then and it would be equally disastrous in the future. The difference is that while economic misfortune was mostly not self-imposed then (Thatcherism most certainly accelerated the process), it would be now.

My joy at becoming German is tempered by my concern, as a Briton, for the future of the UK.

There is nothing inevitable about the current Brexit trajectory and the negative consequences that have already started to flow from it.

The current Brexit path is the result of inept political leadership, Europhobic ideology and Tory in-fighting. No more, no less.

But there is still time to adjust the Brexit choices being made.


Brexit: 4.7+ million lives at stake

Brexit will directly or indirectly influence 65 million people in the UK, but it will fundamentally affect the lives of 4.7 million people: the 3.5 million European Union (EU) citizens in the UK and the 1.2 million Britons in the 27 EU countries. This is more than the population of 9 of the 28 countries in the EU, namely Malta, Luxemburg, Cyprus, Estonia, Latvia, Slovenia, Lithuania, Croatia and Ireland. There are a lot of lives a stake. In fact, the numbers involved are much larger. For example, I am a Briton in Germany but my family are German, so do not count among the 4.7 million. There will be many cases of mixed nationalities, so the true number of lives affected is higher.

4.7+ million is a statistic. People´s families, hopes and futures are not. Brexit puts lives at stake.

The epitome of personal freedom: gone with the wind

These people migrated to the UK/EU in good faith. There are four fundamental rights at the heart of the EU. Of those, the freedom of movement of people to work, travel, study, retire, etc. anywhere within the 28 countries of the EU is fundamentally important. 4.7+ million EU/UK citizens migrated in good faith, created new lives for themselves and put down roots. In doing so, they automatically acquiring the same rights as their fellow citizens in the countries that they are living in.

It is the epitome of personal freedom across 28 nations. 508 million people currently have this right and nothing of the sort exists anywhere in the world. But a year ago, 52% of eligible British voters voted to unilaterally turn their back on this and the other fundamental freedoms of the EU (i.e. freedom of moment of goods, services and capital).  To be fair, only 37% of eligible voters voted Leave, which means that 63% of eligible voters did not vote to leave the EU. It is a pity that the government chose a simple majority, rather than setting a higher threshold for a decision with enormous implications. I was not one of the voters and many other adult Brits living in other EU countries were similarly denied a vote because of the so-called “15-year rule”. As I have previously written, “Britain has taken away my right to vote (and I want it back).”

Is it fair and reasonable to simply cut-off 4.7+ million from all the rights and benefits that they are currently entitled to because of a margin of 2% of the eligible British voters decided that they “wanted their country back” and were willing to play fast and loose with the rights that the EU confers? Can we reasonably expect people to simply pack-up and “go home”? What about the uncertainty, stress and distress involved for them, some of whom have been informed by the Home Office to prepare to go home at the same time as it makes it as difficult and complicated as possible to apply for UK citizenship?

We are talking about ordinary people who legally took-up their rights and who are now uncertain about their homes, jobs, education, pensions, health provision, families and indeed their futures.

Brexit before People

Small wonder then, that the EU has prioritised sorting out the future of these 4.7+ million people who are caught in the cross-fire of Britain´s decision to leave the EU supposedly in order to control their own border, laws and destiny.

Only, it is not just its own destiny that is affected by Brexit.

It is also the destiny of people who had no vote (both EU nationals in the UK and Britons like myself) and no say on their own future. A Conservative government called an unnecessary EU Referendum primarily in a calculated and cynical effort to save its political skin from the threat of the UK Independence Party (UKIP). Its gamble backfired, delivering political chaos and threatening the long-term economic decline of the UK. This humongous miscalculation has the potential to divide the Conservative party and consign it to the dustbin of history. It has already split the country asunder at multiple levels and a very uncertain future awaits the country as a result.

The EU has made it clear that it has three absolute priorities before it is anywhere near being ready to negotiate the only thing that really seems to matter to the UK government, namely a trade deal. These include the Brexit financial settlement, the Republic of Ireland / Northern Ireland border and the rights of EU/UK citizens. The EU Guidelines for Brexit Negotiations makes it clear that the rights of citizens matter above all else:

“The right for every EU citizen, and of his or her family members, to live, to work or to study in any EU Member State is a fundamental aspect of the European Union. Along with other rights provided under EU law, it has shaped the lives and choices of millions of people.  Agreeing reciprocal guarantees to safeguard the status and rights derived from EU law at the date of withdrawal of EU and UK citizens, and their families, affected by the United Kingdom’s withdrawal from the Union will be the first priority for the negotiations. Such guarantees must be effective, enforceable, non-discriminatory and comprehensive, including the right to acquire permanent residence after a continuous period of five years of legal residence. Citizens should be able to exercise their rights through smooth and simple administrative procedures.”

The nationalities most affected are Britons (about 1.2 million) and Poles (about 900,000). Needless-to-say, it should be the UK´s absolute priority to regulate the situation of so many British lives living in EU countries ASAP. Only it is not.

Theresa May and her merry band of Europhobic Brexiteers have chosen to play fast and loose with people´s lives. For over a year, they have made a point of perpetuating the uncertainties. They have chosen to play a coy game of waiting and seeing, using the lives of 4.7+ million people like so many pawns to be positioned and/or sacrificed in their callous and atrociously incompetent game of Brexit chess. Shameful is the word that readily springs to mind.

Interestingly, Mr George Osborne, the former Chancellor of the Exchequer and now Editor of the Evening Standard, has just alleged that, in fact, the former Prime Minister, David Cameron, had tried to settle the issue of EU citizens’ rights unilaterally immediately after the EU Referendum. However, this was vetoed by one member of the cabinet. This person was none other than the ex-Home Secretary, as it enhanced her prospects of becoming Prime Minister. We are, of course, talking about none other than Mrs Theresa May. If true, this indicates that she thought nothing of toying with people´s lives in order to better position herself to become Prime Minister. The list of wooden, robotic, crude, calculating, incompetent and downright cruel decisions keeps growing. At some point, bad luck or circumstance can no longer account for the black marks. They cast an increasingly unflattering light on her past, present and future legacy as a politician, if not as a person.

The official Brexit negotiations finally got going on the 19 June 2017, though the emphasis was on “talks about talks” and the UK´s wishful thinking was immediately exposed. On the 23 of June 2017, Mrs May travelled to an EU summit in Brussels and presented her opening offer on EU citizen rights, having let the issue hang for so long. What did she come-up with? Was it perhaps to do the simplest thing to put an end to the uncertainty for 4.7+ million lives by matching the EU offer? Not on your nelly. Why would the British government immediately end the uncertainties hanging over the future of 4.7+ million people, 25% of whom are Britons, in one fell swoop when it can continue to play politics with so many people´s lives?

Unfair and Unserious

Our beloved Maybot chose instead to continue to play the immigration card and prolong the uncertainty for short term political gain: at least she is strong and stable in this respect. She presented her vision of a “fair and serious” offer to protect EU citizen rights by offering them a new “UK settled status” for EU migrants who had lived in the UK for five years with rights to stay and access health, education and other unspecified benefits, subject to the EU27 states guaranteeing Britons the same rights. Rather than determining whether these would also apply to dependents and setting the date at which the 5 years qualifying starts, she chose to be vague about this (sometime between March 2017, when Article 50 was triggered and March 2019, when the 2-year period of Brexit ends), thereby creating another source of uncertainty for many people who have been in the country for less than the qualifying period. Furthermore, she circumvented the EU´s position that EU citizens´ rights be enforceable by the European Court of Justice, which is a sticking point among Europhobes.

This falls well short of the EU´s negotiating position which is basically that EU citizens living in the UK should retain all EU rights in perpetuity, with the same applying to Britons living in the EU27. This is a simple, transparent and fair position that people can relate to. This is what fair and serious looks like as compared a British government persisting in using EU citizen as bargaining chips in Brexit negotiations.

The EU was quick to point out that EU summits are not the place to initiate negotiations. The British Prime Minister does not appear to understand that two teams have been selected with the mandate to negotiate the terms of Brexit. Various EU, German and French politicians have stressed that the so-called fair and serious offer was “below expectation”, but a “good start” even if “no breakthrough” and that “there was a long way to go.” In other words, the offer was not taken to be either fair or serious and crashed like a lead balloon. It could have been predicted, had Mrs May and the Europhobes not been so isolated and deluded. The official UK offer will be presented on 26 June 2017; we all await it with bated breath.

Grown-up Politics Overdue

The Maybot and the Europhobes continue to try to be “bloody awkward”, rather to focus on normalising the lives of 4.7+ million people. So here are three questions for the UK government:

  • What is so difficult about understanding that millions of people are fearing for their homes, families, livelihoods, education, health arrangements, pensions, etc.?
  • Are you blind to the stress, frustration, disappointment, resentment and anger caused by the uncertainty?
  • Are you incapable of feeling empathy for such people 12 months after the Brexit vote?

4.7+ million lives are not so many bargaining chips to be used to try to extract EU concessions.

4.7+ million lives call for adult politics and truly fair and serious solutions.

Tomorrow, I expect my government to stop mucking about and sort it out.

By that, I do not mean begrudging, half-hearted solutions but the real deal.

We and our families are entitled for the rest of our lives to whatever rights existed before the EU Referendum unilaterally threatened to take them away from us.

We entitled to no more and certainly no less.

© Ricardo Pinto, 2017, AngloDeutsch™ Blog, www.AngloDeutsch.EU


Brexit means hard Brexit: the UK is running out of options

The 8th of June 2017 is a landmark that I shall always remember. Against all expectations, the British General Election delivered a hung Parliament as well as a bloody nose for the incumbent Conservative government. Their expectation of a 100+ majority in Parliament is in ruins and, with this unexpected development, the tide of history may have turned but it is far from clear. Perversely, it could well be that Brexit means Brexit has been superseded by Brexit means hard Brexit.

Since the EU Referendum on 23 June 2016, the Conservative government under the leadership of Prime Minister Theresa May has been marching remorselessly towards “hard” Brexit. This means not just leaving the European Union (EU), as required by the referendum outcome, but also exiting the European Single Market, the European Customs Union and the European Court of Justice to boot. By contrast, keeping all three yet still exiting the EU would be “soft” Brexit and would carry the least amount of risk for the UK and the EU-27 countries.

Although the option of hard Brexit was never part of the referendum (it was a straight “in” or “out” choice), this is exactly what a Conservative Government stuffed to the gills with Brexiteers such as Boris Johnson, David Davies, Liam Fox, etc. has been working towards. Mrs Theresa May, a former (albeit reluctant) Remainer, quickly became the conductor-in-chief of this process. A hard Brexit would have been difficult to achieve with a small majority in Parliament, so Mrs May decided to ask the country for a mandate for hard Brexit (having previously strenuously denied the need for another General Election), the terms of which was hardwired into the Conservative manifesto.

The expectation among the political establishment and media pundits alike, was that the Conservative Party would increase its working majority from 13 to possible as many as 100-200, some predicting the evisceration of Jeremy Corbyn´s Labour, the second largest party in the country. With a predicted crushing majority and thus a crystal-clear mandate from the electorate, hard Brexit would have been as good as guaranteed. Theresa May´s political calculation was that the House of Commons would no longer be an obstacle to the process and that the House of Lords would not dare to stand in the way of the will of the electorate. Traditionally, the Salisbury Doctrine/Convention dictates that the House of Lords does not oppose the second or third reading of any government legislation promised in an election manifesto. The previous General Election in 2015 had enshrined a commitment to hold an EU Referendum but given no guidance on the type of Brexit to follow, no doubt assuming that this just would not happen. Obviously, the Conservative government was not sufficiently convinced that it was capable of ramming the necessary Brexit legislation through Parliament, so it felt the need to go back to the country for a hard Brexit mandate.

But it turns out that the British electorate had other ideas and decided not to give any party any meaningful mandate at all. Instead of rubber-stamping a one-way ticket to hard Brexit, it delivered an enigma. A hung Parliament means that instead of a majority of 12, the Tories have no majority at all (317 seats, 13 fewer than before), even with its unexpected gains in Scotland, where the number of Conservative MPs increased from 1 to 13. Interestingly, since the Scots are extremely pro-Remain, these new Scottish Tories are unlikely to toe the party line and support hard Brexit. Indeed, it is conceivable that their leader, Ruth Davidson, could seek to defy the Conservative´s plans for a hard Brexit and even create a separate party.

If that was not bad enough, the only way the Tories can cobble together a slim majority in Parliament is via some sort of coalition with the Democratic Unionist Party (DUP) from Northern Ireland. The Eurosceptic DUP is willing to enter into a confidence and supply arrangement and Theresa May announced on 09 June 2017 her opportunistic intention to form a new government with support from the DUP, the potential King Makers.

There are only two flies in Theresa May´s DUP soup:

  • This goes against the grain of most Tories, since the DUP are considered to be a sectarian, nationalistic, militantly Protestant party which is known to be anti-same sex marriage, anti-abortion, in favour of creationist teaching at schools, etc. In other words, “taking back control” from Brussels apparently means passing it straight off to a bunch of swivel eyed-loons (as term applied by David Cameron, the former Conservative Prime Minister to Conservative activists) from Belfast. Moreover, the DUP will insist upon a soft border in Ireland, which effectively means that the Conservative mantra of hard Brexit/”no deal is better than a bad deal” is impossible to maintain with the DUP on-board. In any case, it is still far from clear that any sort of agreement can be reached between the two parties;
  • Everyone, except for the Mrs May and her new government, which is actually pretty much the old government except for the addition to the charming, dependable and loyal Mr Michael Gove, is warning that it is not credible for the Conservatives to enter into either a formal coalition or a confidence and supply arrangement without endangering the Good Friday Agreement. Under the terms of the latter, the UK government must demonstrate “rigorous impartiality” but, as has been pointed out by several people, including IRA representatives and various former Conservative Prime Ministers, it is far from clear how this could work if the Conservative government were to invited the DUP to prop it-up in gaining a working majority in Parliament. You can bet your bottom Euro, sorry Pound Sterling, that DUP support will come at the price of a pound of flesh (politically and financially) to the Conservative party. Undeterred, Mrs May(hem) ploughs on in her cynical determination to create the most shamefully incoherent British government that I can recall. It is far from clear that she will succeed, in which case she will (surely) have no choice but to resign post-haste.

Clearly, the general election result threw a huge spanner into the Brexit works.

With one fell swoop, all the certainties of the past year have been overturned, starting with whether there will be a working majority in Parliament, let alone a workable one with the new Scottish Tories and the DUP in a rudderless boat. Moreover, the certainty that the country was heading straight for hard Brexit has been blown out of the water. By far the most likely course correction to be set, assuming the Tories manage to cobble together a working government, is for the DUP and the new Scottish Tories (together with the majority of the rest of the Conservative MPs, Labour and the Lords) to push for a soft Brexit. Rather than the General Election eviscerating the Labour Party as a political force, it is a reinvigorated party, despite defeat. Instead the most likely bet is that adjusting the course from hard to soft Brexit will be the catalyst for a schism in the Conservative party.

Hallelujah; a deliberately engineered and catastrophic hard Brexit is off the cards.

But do not rejoice too soon.

None of this necessarily means that hard Brexit will not occur. The chances of a deliberately engineered hard Brexit may have gone but is still remains the most likely witting or unwitting outcome, rather than soft Brexit. The reason that hard Brexit will probably occur, regardless of a hung parliament and the new political dynamic, is not hard to divine.

The 2-year deadline post invocation of Article 50 is ticking away and the UK has just fritted away 3 months of it holding a totally unnecessary General Election that has delivered an outcome that has totally muddied the Brexit waters.

Even the 2-year period is not what it seems; all commentators agree that, in reality, only 14-18 months are available for “negotiations”, followed by at least 6-8 months of ratifications by 28 governments, as well as others, such as EU Parliament and regional governments.

Moreover, whereas the EU-27 have been ready for negotiations for months, the UK is not even close to being prepared for hard, soft or any other type of Brexit. So far, there has been little but empty bluster of the “Brexit means Brexit”, “Red, Blue and White Brexit” and “No deal is better than a bad deal” variety emanating from the British government. Even a General Election ostensibly about the biggest challenge facing the country since the Second World War, namely Brexit, brought precious little debate let alone any more clarity about the government´s intentions.

The EU´s Guidelines for Brexit Negotiations have been submitted to the UK, the UK has not yet reciprocated, though the “talks about talks” started on 19 June 2017. The only thing that exists is the UK´s official letter triggering Article 50, which is vague and is effectively superseded by the new reality since the General Election. Following the one-day talks about talks, the Brexit Minister, Mr David Davies, promptly caved in to the EU´s demands, for example to settle the broad terms of the “separation” (i.e. citizens’ rights, financial settlement and the Irish border) before trying to negotiate a future trade deal. The key plank of the UK´s negotiations has been removed before the real negotiations even start.

This reinforces the point that while the 27-EU countries have agreed a unified negotiating position in a relatively short period of time, the UK government has not been able to agree a negotiating position of any description one year since the EU referendum. This speaks volumes about the parlous state that Britain finds itself in as the negotiations starts. There is not a single good omen that bodes well for the UK. The best Brexit cards are firmly in the EU´s hands, starting with the fact that time is on their hands. All the waffle, bluster and wishful thinking will be remorselessly blown away by the more experienced EU team.

This parlous state of affairs is not in the least bit surprising. Although the Brexit game has been in play for a year, the only strategy there ever was, namely hard Brexit, has been scotched by the electorate. A coalition / supply and confidence arrangement has not yet been negotiated and may fail to materialise.

The Conservative party is in total disarray and is increasingly split. The Chancellor of the Exchequer, Mr Philip Hammond has recently stated the failure of talks would be “very, very bad” for Britain in direct contravention of what the Conservative party has been claiming (“no deal is better than a bad deal”) for the last year.  Whichever way the Brexit cookie crumbles, the mother of all internal wars will break-out within the Conservative ranks if they start back-pedalling towards soft Brexit.

To add fuel to the fire, the Grenfell Tower fire fall-out is occupying much of Theresa May´s attention and could lead to her downfall. If she came across as being wooden and robotic (the Maybot) during the General Election, she now comes across as callous and heartless on top. If Grenfell Tower does not do it, her own party will topple her sooner rather than later: May is not just damaged goods, she is toxic political goods. The steady stream of concessions since the General Elections will not save her. A downfall is only a matter of time for a leader who is patently neither a strong nor a stable leader. Everyone can see that the reality is in direct contravention of the facile PR.

What a mess for a country (previously) admired for its pragmatism to find itself in.

The real danger is not that the imminent implosion of the Conservative party. It is that the EU has been deprived of a meaningful negotiating counterpart, let alone one that can deliver whatever is negotiated and agreed. This is as far removed from a “strong and stable” leadership as it is possible to imagine and poses major risks for the UK as well as the EU-27.

One option is for the British government to withdraw Article 50, but this will not happen. Both leading parties are committed to some form of Brexit in response to the EU referendum. There is no way to close Pandora´s Box without holding another referendum and that is an option that neither major party is willing to countenance at the moment. Voter fatigue is palpable in the UK and a general election is in the air. At this rate, the UK is in danger or rivalling Italy and Greece for the title of re-elections champion. But even if this option were somehow to occur, it would still be to Britain´s disadvantage. Senior EU members are on record that nothing will ever be the same again for Britain, not least its generous EU rebate and the opt-outs that it now enjoys. There may be a way to row back from Brexit, an option left open by Germany and France, but it would come at a heavy political price in the UK, apart from the sheer humiliation of such a U-turn.

Another option is for the UK government to accept the Norway option (European Economic Area), which means leaving the EU yet being part of the common market, making a financial contribution to the EU and accepting freedom of movement of people. At the moment, it is hard to see how either the Conservatives or Labour could square this with the sentiment of the UK electorate, where the continuing desire to stop EU immigration remains a red line. It is interesting that here, too, Mr Hammond is querying Mrs May´s target of reducing new migration to the tens rather than hundreds of thousands by wondering whether post-Brexit immigration controls would apply to EU workers who are highly skilled and highly paid.

If it proves impossible to opt for a ready-made solution (e.g. withdraw from Brexit or Norway Option) and a fragmented government cannot negotiate an alternative within the 2-year timeline for Brexit, the UK will automatically crash out of everything connected with the EU. Unless the EU-27 unanimously agree to an extension of the 2-year separation period (assuming the UK requests it), the economy and much else will fall off the cliff and experience the most brutal possible form of hard Brexit.

No one seriously wants to witness the latter scenario, other than hard-core Eurosceptics. But at the moment, it appears not only that Brexit means Brexit, but that, actually, Brexit means hard Brexit.

© Ricardo Pinto, 2017, AngloDeutsch™ Blog, www.AngloDeutsch.EU


It´s the emotions, stupid! or the politics of emotions

James Carville will be remembered as the strategist during Bill Clinton’s 1992 presidential campaign that gave us what has become the political mantra: “It´s the economy, stupid!” as a reminder of what to focus on. But a generation later, as we enter a new political phase, facts (e.g. the unemployment rate, GDP growth, exports, contribution of immigration, etc.) are no longer so important. Furthermore, expertise, evidence, independent analysis, etc. do not seem to carry as much weight as subjective feelings or emotions. This is the politics of emotions and perhaps it is time for “It´s the emotions, stupid!” to enter the political lexicon.

Post-factual politics / politics of emotions

The Brexit Referendum was the first serious and persistent post-factual political campaign in Britain. This was not necessarily something new but rather a culmination of a process which has been evolving for some time. It was already at an advanced stage of development during the Scottish referendum in 2015, where the emphasis of the campaign was very much on tapping one particular emotion: fear. The campaign was unrelenting in its focus on the negative implications of Scotland leaving the UK.

The fear-based campaign, mainly by those seeking to retain the status quo, did not go entirely according to plan. Despite the British government milking the fear factor for all it was worth, it was not sufficient to persuade the Scottish electorate to remain in the Union. The polls were fairly consistent in showing that despite the unrelenting emphasis on the negative, the majority of adults in Scotland were still tending towards voting in favour of seceding from the UK. It was only in the last few days of the campaign that a shift towards remaining part of the UK occurred, coinciding with the British government changing tack and unashamedly bribing the voters with all manner of concessions. Even so, it just about managed to gain a majority for the Union to remain intact. The highest recorded turnout (85%) in the UK resulted in a narrow vote (55.3%) against Scottish independence.

The recent EU referendum Remain campaign, led by Mr David Cameron and his then heir apparent, Mr David Osborne, clearly failed to learn the lessons of that narrow, last-minute turnaround in the campaign. The key strategy devised by the Remain campaign leading to the ballot on the 23 June 2016 was more of the same, otherwise known as “Project Fear”. All the possible negatives, especially the economic ones, of voting to leave the EU were magnified and pushed for all they were worth by the Remain campaign. Vast amounts of data analysis and facts were deployed with the tradition emphasis on “it´s the economy, stupid!” These arguments were reinforced up by various statesmen, such as Barack Obama, as well as reputable institutions such as the OECD, World Bank, IMF, economists, etc.

George Osborne, the then Chancellor of the Exchequer (Minister of Finance) was tasked with carrying out the economic analysing and publicising the Treasury´s assessment of the implications of Brexit. The basic conclusion was that Brexit would tip the economy into recession, 500,000+ people would lose their jobs and wages would decline, as would house prices. In 15 years, the economy would be 6.2% smaller, resulting in a loss of £4,300 for every household. The expectation was that this would put the fear of god in people and deliver a government victory.

It was plausible, it was fact-based and it preyed on people´s worst economic fears. No effort was made at all to make a case for remaining in the EU; I cannot remember a single discussion or comment or a positive nature that was ever pushed by the Remain campaign. The result is well-known: 52% voted to leave, 48% voted to remain. It was undoubtedly the single most momentous political result of recent times and will affect Britain and the rest of the EU for the foreseeable future.

The lessons of the Scottish Referendum, combined with the post-factual approaches deployed by Donald Trump across the Big Pond, were clearly analysed much more carefully by the Leave Campaign than by the Remainers. They too decided to focus on people´s fears but from a very different angle. It was not based on sophisticated econometric models that almost no one understands to magic a 6.2% reduction in GDP and thus a loss of £4,300 in the next 15 years. The Brexiters’ approach was very simple – it was exaggerated, it was not fact-based and it pandered directly to people´s fears and concerns today. If Remain’s focus was characterised as “Project Fear”, the Brexiters´ approach can be summed up as “Project Lies”. It was underpinned by a determination to dismiss and discredit all government and/or independent analyses, facts and expertise as being somehow biased because they had to be benefiting from EU funds.

The Brexiters concentrated primarily but not exclusively on the fears of the non-working, working and lower middle classes in the UK. Fears of immigrants (from the EU, though they account for less than 50% of all immigration), fears of job losses (though the UK has almost full employment – 4.9%) and stagnating wages (though almost all studies suggest otherwise), fear of losing control over our lives (i.e. the EU / European Parliament / European Commission making laws and regulations instead of the UK Parliament), all combined with a hefty dose of resentment towards the elites (taking more than their fair share of the economic pie). This was all combined with arguments about the NHS (an exaggerated £350m-a-week currently going to the EU which would be ploughed into the NHS instead – not a penny has been redirected so far), the housing crisis (blamed on EU immigrants and wealthy foreigners, though Britain has failed to build adequate housing for many decades), etc.

Emotions / fears / concerns galore

History has shown over and again, that strong emotions / fears / concerns can be exploited by those who offer change in the form of simple but evocative messages; Donald Trump has demonstrated the power of simplistic but populist messages, using Twitter, regardless of grammar or facts. The reason why these emotion-laden messages are so powerful is that they are not at all abstract (such as the Treasury / OECD / IMF / World Bank models) but embedded in people´s biases and/or experiences.

There is plenty of evidence that for decades the non-working, working and lower middle classes in many Western countries have been lost economic ground, while the elites have prospered from the ongoing forces of globalisation, greatly accentuated recently by the austerity drives (see below). Inequality has grown, wages have stagnated, tax policies have favoured the better off, while those dependent on key elements of the welfare state, including the middle classes (child benefit, tax credit, etc.), have systematically lost out as the impact of austerity has spread out. This has not been helped by the privately educated/ elites controlling successive governments, yet failing to recognise or deal with the problems faced by normal individuals and their families.

Referendums may work quite well for specific issues, such as whether to allow abortion or same sex-marriage but they are not at all geared to answering complex issues, such as whether to remain in the EU in the form or a simple “yes / no” answer. So when the opportunity arose to give the government / elites a bloody nose, it was obviously just too good an opportunity to pass-up, despite (or partly because of) the messages being put out by Project Fear.

Having gone through with the referendum, the new Conservative government cannot simply backtrack from the outcome of the vote. Doing so would fatally undermine democracy in Britain and unleash potentially far worse than what we are currently witnessing in the form of the current wave of populism. This populism seeks to take advantage of the fact that many people are no longer interested in facts and figures or weighing-up the pros and cons of different arguments. They are much more minded to follow their instincts or biases, as vented by people such as Donald Trump, Nigel Farage, Marie le Pen and quite a few others in Italy, Poland, Hungary, etc.

Raw emotions as politics (according to Home Office figures, 1,000 Syrian refugees were resettled under the Vulnerable Persons Relocation scheme in 2015. 1+ million refugees were accepted by Germany)

This strain of post-factual politics of emotions is not predicated on the traditional political dividing lines of left (Socialism/Social Democracy) or right (Conservatism/Republicanism) – it is cross-cutting in nature. The trigger issues are broad and generic yet connected with emotional impulses strong enough to transcend traditional party lines and similar allegiances. This was evident in the Brexit campaign, it was seen in the US Presidential election and strains of it are evident in France and other European countries. It is here to stay.

The emotive themes of the post-factual politics of fear are fairly common, regardless of which country is in question. This includes fear of powerful elites (e.g. Brussels/Washington D.C.), foreigners (EU / Mexicans, refugees, etc.), globalisation (trade deals, China, etc.), terrorism (Al Qaida, IS, etc.), cultural change (Islam, immigrants, refugees, etc.), etc.

No amount of logic, analysis or expertise can counteract the emotional triggers that many people have to such themes. A clear example of this was the deliberate dismissal of “experts” during the Brexit debates. Michael Gove made the situation crystal clear whenever confronted with facts/figures/experts that did not align with the case he was making for Brexit with the following: “People in this country have had enough of experts.” Truth be told, that particular soundbite had the ring of truth about it. People would much rather trust their own experiences / emotions / prejudices than listen to what experts have to say, unless those views conform with their world view and preferably in easily digestible messages (not exactly something that experts excel at).

The main themes include the following:

  • Control of own borders
  • European Union
  • Patriotism/Nationalism
  • Immigration
  • Refugees/asylum
  • Muslim culture
  • Terrorism
  • Trade / Globalisation
  • Elitism / 1%
  • Lower real incomes.

Other themes could have been added to the list, such as same-sex marriage, transgender, abortion, global warming, etc. which are all highly emotive, but the list illustrates the general issues. In the case of Donald Trump, a whole new set of additional issues could have been added such as racism, xenophobia, bigotry, misogyny, narcissism, etc. One can only hope that Trump´s particular strain of post-factual populism is not the future of politics, though I fear it already is.

Variations on a theme

Almost all the themes are negative in nature; they instill anxieties and fears in people. The only exception is nationalism / patriotism which, generally leads to positive feelings such as pride in one´s country. History is replete with examples of how easily both positive and negative feelings can be manipulated, misused and abused. Patriotism is particularly strong in the US, with its melting pot but less so in Britain, with its former empire. The Germans, the culprits of two World Wars, are rather more interested in forging a European identity, though this is has been slowly changing in recent times.

There are clearly variations. The European Union (EU) does not figure large in people´s perceptions in the USA but is something that the UK has been in two minds about since the formation of the EEC in 1958: there has always been an ambivalent relationship involved. The opposite applies to Germany: it has traditionally had an unquestioning stance to the EU where traditionally the French have made the strategic decisions (Marie le Pen would call for a referendum to pull France out of both the EU and the Euro) and the Germans have paid for them. This started changing during Gerhard Schröder´s Chancellorship and accelerated with the Euro crisis, and the advent of the Alternative für Deutschland (AfD), which initially wanted out of the Euro but under new leadership has evolved into an anti-immigrant/refugee/Islam party and could eventually become anti-EU.

The perception in Germany was initially that it was paying for the economic and other economic mistakes of other EU countries, especially the Mediterranean ones. This evolved into concern over the dangers to the Euro risks for Germany itself, followed by a blistering critique of the European Central Bank´s policy of near zero interest rates and quantitative easing. The country is also experiencing angst about its capacity to absorb over 1 million mostly Muslim young men that the other EU countries (with the exception of Austria and Sweden) were completely unwilling to share. More recently, this has transmuted into concern about terrorism and attacks on German soil.

A clear trend is evident: the politics of emotions is tapping into fears and concerns about immigration generally and refugees and asylum seekers specifically. The key immigrants in the USA are the Mexicans, something that the US has a long history of, not all of it proud, such as the forcible deportation of 500,000 – 2 million people during 1929 to 1936. Trump milked this theme to the maximum extent possible with his talk of building a “big beautiful wall”, of making Mexico pay for it and of getting rid of illegal immigrants from day one of his Presidency. None of this was based on fact but it hardly dented his popularity among large segments of the population, including many of Hispanic descent.

The referendum debate on immigration in the UK has verged on the xenophobic and racist, despite the fact that EU immigration involves mostly white European migrants. Immigration was and remains the most vivid expression of people´s concerns. In this respect, Germany is different to other nations by virtue of its role in the past in respect to groups such as Jews, Roma, disabled, etc. For this reason, there is no indication at present of Germany reacting badly to EU migration (but see discussion below about recent influx of refugees), though it is happening on an unprecedented scale which dwarfs the immigration in countries such as the UK (1,13 million in 2015). This may change in time, though the ageing population structure of the country is a countervailing factor.

The ire of the Germans, particularly evident during 2015, was focused on the implications of Germany absorbing it 1.1 million asylum seekers and refugees and the still relatively large numbers expected in future (the forecast is 300,000 in 2016). It all started well, with Germans going out of their way to be welcoming but quickly deteriorated as the cultural and economic strains became apparent. To be fair, the wave of intense concern, particularly notable during the New Year period, has waned as the sheer numbers being received by the country have abated in 2016. A blip was still evident during the summer due to various terrorist and other incidents.

In the UK, known for its open racism during the 1950s to 1970s (recall private landlord adverts: No Blacks, No Dogs, No Irish), recent anger towards EU migration started initially with a focus on the Poles and then extend to the Romanians (especially Roma) and pretty much all EU immigrants have implicitly been targeted during and since the referendum in June 2016. Who knows if and when this feeling may be extended to all other migrants, regardless of origin or the length of time they have lived and worked in the UK. The populists of the post-factual era are sure to milk this particular negative sentiment, especially during the drawn-out period of Brexit negotiations that will last at least until 2019. This is all the more likely because the British government still has no plan for Brexit and the other EU nations are highly unlikely to offer Britain a good Brexit deal. The risk of other countries following suit is just too great for this to happen.

Pressing the sore spot

The next two themes are particularly emotive, namely fear of terrorism and the influence on Muslim culture on Western societies. This is a particularly rich vein for post-factual politics, since this is probably where the most intense fears reside. I have shown that people´s perception of the size of the Muslim population is totally out of proportion compared with the reality.  The following illustrates the data for the three countries in question:

Country        Muslim Population % of Population % 2030
Germany 4.1 million 5% 7.1%
UK 2.8 million 4.6% 8.2%
USA 2,6 million 0.8% 1.7%

 

These data refer to 2010 as I could not find more recent comparable information for the three countries. Since 2015, there would have been an increase of approximately 1.1 million Muslims in Germany alone (i.e. 6.3% of the population) and this will continue, albeit at a lower rare. Overall, the Muslim share of EU´s total population was 5% in 2010 and is expected to increase to 8% by 2030. The fact that the Muslim population remains relatively small seems to cut little ice with many people, especially the older age groups. There is intense concern about the possible loss of cultural identity, combined with strong doubts about the willingness of the Muslim communities to integrate. This is and will continue to be a powerful emotion to tap into; many are intent on exploiting it.

Fear of terrorist attacks is at least as powerful, if not more so. The reality is that the chances of dying in a terrorist attack while on a plane is 1 in 25 million and the overall average chances of dying in any kind of terrorist attack worldwide is 1 in 9.3 million. There were at least 155 Americans killed by police officers in the United States in 2011, which means that people are about 10 times more likely to be killed by a law enforcement officer than by a terrorist. Worldwide, people are 517 times more likely to be murdered, 500 times more likely to die in a car accident, 41 times more likely to die in natural disasters and 1.8 million times by more likely to die of heart disease that being killed in a terrorist attack. However, none of this matters because negative emotions Trump facts (pun intended) – every time.

But I am falling again into the trap of talking about data / statistics / evidence in the post-factual political age.

The combination of fear of cultural change as a result of the perceived “Islamification” of Europe and the clear association with terrorism is such a potent mix in people´s minds and there is little antidote to it, other than public education. Unfortunately, not only is this imperfect, it also takes a hell of a long time to permeate minds and influence public perceptions, time which the proponents of post-factual politics will put to use in the pursuit of a simplistic but emotionally charged agenda.

The last set of themes listed above concern an amalgam of globalisation/trade deals/deteriorating incomes/elitism. In this particular case, I can relate to the panoply of emotional pulls what populists in the post-factual era are latching on to.

There is increasing evidence produced by academics such as Thomas Pikkety, who argues that the rate of capital return in developed countries is persistently greater than the rate of economic growth and that this not only causes wealth inequality, but that inequality will also increase in the future unless redistribution occurs through a progressive global tax on wealth.

This is intensifying the “them and us” divide and connects with a range of themes relating to the stresses and strains caused by international trade and globalisation, combined with growing social polarisation / inequality. This is the discourse of the 1% / elites taking a disproportionate bite off the economic pie compared with the non-working/working population (globally speaking, anyone with an income of EUR 30,000 p.a. belongs to the 1%). The lower and middle-income groups have also experienced the brunt of the effects of austerity, combined with the increasing job insecurity, resulting in deteriorating real incomes and state benefits. This led to a pronounced backlash against the elites, including the political and financial professions. These trends more than compensate for the countervailing influence of the remarkably low levels of unemployment (4.9% in USA/UK and 6.1% in Germany, September 2016) which pertain today.

What of the future?

So what does the post-factual, feeling based politics mean for Britain, Germany, Europe and indeed the rest of the world?

It means that are all in for a roller coaster political ride for the foreseeable future.

And it also means that the democracies discussed in this post are in deep trouble, unless the global economy not only starts growing strongly soon, but the resulting economic benefits are much more equally distributed in the future.

But the chances of both happening any time soon are about as high as the likelihood of being caught in a terrorist attack.

 


What has the EU ever done for us anyway?

Britons will be voting on the EU referendum tomorrow. The vote will determine Brexit whether Brexit will happen or not. This is actually Britain´s second great Brexit debate, the first being the referendum of 1975, which the Remain side won comfortably. There is a different scenario now and the vote could go either way on the 23 June 2016. In this divisive and intemperate debate about whether to Remain or Leave, the emphasis has been on the negative. Fear is the name of the game: if we stay/leave, the UK will retain/lose x, therefore, vote to leave/remain. It is rare to read a positive set of reasons which connects up with people are interested in the things that affect our day-to-day lives.

This is the focus of this article. This one is written from the perspective of a citizen who happens to be British, has a German partner and has friends and family scattered all over Europe. It is the view of someone who has created a business in another EU country and who is active in EU nations as well as EU Candidate Countries and other nations.

The thing I love most of all is the freedom of movement of people. It is the greatest gift to be able to travel, work, live, study, au pair, retire, etc. wherever we like, whenever we like, as often as we like in any of 28 countries. This is the epitome of freedom and we lucky enough to have it.

If the climate in one country does not suit you, go to another. If the costs of living, such as housing, are too high, go somewhere else. If you cannot find a job in one place, try somewhere else. Britain is booming today but it might not tomorrow; this is when Britons will begin to appreciate it. Remember Norman Tebbit´s “on your bike Speech? If you can move freely within one country, to be able to do so in 28 / 508 million people is absolutely amazing.

And the beauty of it all, is that no one has the right to question or hinder you. You can study or work abroad, alone or taking your family, without applying for visas or other waiting at the borders for hours, paying any fees or being dependent on any bureaucrat´s whims. Once the freedom of movement of people is lost, life will never be the same again.

Not only that, the EU directives mean that I cannot be discriminated in any of the EU 28 countries on the basis of nationality, language, gender, religion, ethnicity, etc. This is priceless within the 28 countries, as well as between them all. This makes us the most advanced region in the planet – by far.

Despite the fears being put about by the Leave Campaign, only 5% of the 508 million EU citizens take-up the freedom of movement of people. Most people are quite happy to live where they are, but use the other benefits of the EU. What are those?

I love the fact that I can go on holiday whenever I like, wherever I like. I take for granted the fact that I can book a journey and set-off without delays due to visa requirements, border controls and other factors which transfer power from me, as a citizen, to others. The bureaucrats in 28 countries all have to apply the same rules to everyone from the EU. This increases transparency and freedom.

It also makes for cheaper, faster, more efficient travel. And since there is a group of 28 countries involved, it is much harder for telecom operators, travel agencies, airlines, commercial banks, etc. to divide and conquer customers, ripping us off by imposing the highest prices they can for no reason.

I now pay low mobile roaming charges and in 2017, I shall pay none because of the EU´s competition policy. I have an EU wide airline policy to ensure that I am compensated if my plane in unreasonably delayed, something that I have made use of. I can buy anything I like in other EU nations or via the internet and still have my consumer rights protected, regardless of where I live or which country I purchased something in – and I do not need to return to that country in order to make a claim. This is a great, even though I do not even think about it.

I particularly like the fact that if I fall ill in any of the EU countries, I shall be treated without having first bought a private insurance policy, thus saving me money, time and hassle. That is great when I am on business. When I am on holiday, especially with my family, this is wonderful. I don’t think about it anymore, but it is a saving and it is very welcome. Britons cannot benefit from this yet begrudge others of the same rights in Britain. Ask the British pensions living in Spain and France.

I am only too aware that the Eurozone, comprising 19 countries, is unfinished business, as the situation in Greece and other countries continues to show. On the other hand, even more countries are joining over time, which shows that others do not share the British newspapers´ Euroscepticism. They keep pronouncing the Euro dead: read the archives of any of the top journalists of the Mail, Sun and Telegraph and you will see how many times the Euro has been written off since 2007. Yet it is still here and is the world´s second reserve currency, not Sterling. Those journalists should occasionally re-read their previous articles and learn to a bit of humility.

I love the fact that I do not have to pay a provision to exchange money every time I go to another country and to pay again to change it back if I do not want have tons of useless coins and notes in a box somewhere. I transfer money between Germany and other countries freely or for a pittance, yet still pay through my nose to transfer money to and from Britain.

I can, if I wished to, buy a holiday / retirement home in any place I like, etc. If I fall ill and my health system forces me to wait years for an operation, I can just go to another EU country that can do it faster; it is up to the health systems to sort out the payment amongst themselves. I get treated faster and my quality of life improves immeasurably. I am empowered by the EU´s capacity to make this happen for 508 million citizens. Bureaucracies such as restrictive health systems lose. I gain.

I know my children can study anywhere they choose to at primary, secondary and university level. Mobility is increasing and Europe will be their oyster in terms of studying, living and working. Should they, like me, wish get married to someone from another European country, I know their spouse will not be disadvantaged and they can live and work where ever they desire. Families will not be split.

The EU regulations are often vilified. But the rights that they assign over 28 countries mean that my children will not be discriminated. Their health and safety will be protected. They will also have at least 1 day off a week, 20 minutes break if they work more than 6 hours, 11 hours´ rest from work each day, not work more than 48 hours per week if they don’t want to, get at least 4 weeks´ paid holiday a year, etc. They will get the minimum package across all 28 countries: this means that employers across 28 nations have the same basis deal and they cannot screw the employees in a race to the bottom. Why would anyone, other than unscrupulous employers or politicians, turn down a package that upholds human dignity and protects health and well-being?

There are other things that I love but which are harder to pin down.

I know the mankind is flirting with disaster unless we do something about climate change. 28 countries doing nothing or perhaps something about climate change is not the same as all EU doing it together: working in concert is the only way to tackled the “tragedy of the commons” across the whole of Europe. This applies to the water I drink, the rivers and beaches I enjoy, the air I breathe and the birds, animals and habitats that I interact with and depend upon. I know that Britain did not take these things all that seriously until it joined in 1973 but that the EU rules apply to all: this is the reason why fish stocks are being preserved and renewed and is the reason why British beaches have become clean. I am glad the EU steps-in because I know for sure that some countries would otherwise just ignore environmental issues. Not all government care equally about what we leave behind for future generations and one that does today may change its mind tomorrow.

But it also applies to other abstract issues. I remain stricken by Europe and NATO´s inability to deal with the collapse of the former Yugoslav Republic. The war may be over, but there are still issues festering in parts of the Balkans and now, the situation in Ukraine/Russia threatens to spill into the rest of Europe.

I have lived through a civil war and I am only too aware of its consequences, even if my fellow Britons may not be. So I say this: Britain may be an island but it is not immune to what happens beyond its coastline. Two World Wars should make that abundantly clear. Even when Britain won, Britain lost big time in people, trade, wealth, empire and much more. I would rather live with the EU´s flaws and cost (as a German tax payer I contribute more than any other nation) than with the unquantifiable cost of possible future conflicts in Europe.

Criminal and terrorist activities are nothing new to Britain (I remember plenty about the IRA´s previous campaigns), Germany and the rest of Europe, though the nature and origin have changed over time. A terrorist is a terrorist is a terrorist regardless of nationality, race, religion or gender. My safety is enhanced when 28 nations share information, coordinate activities and act in unison. Going it alone is not my view of how to deal with a globalising world that brings new threats to every nation and every doorstep. If asylum seekers can find their way into Britain, so can a determined criminal or a terrorist, even if Britain does not have open borders as the Leave campaign wrongly claims.

Working in concert, working with 27 other EU nations, carries a lot more weight in terms of health, environment, defence, counter terrorism, international relations, trade, crime prevention, fraud prevention, consumer protection, research and development, education, etc. etc. etc.

This is a small sub-set of the benefits of being in the EU, as I see them.

So, what has the EU ever done for Britons? Plenty since 1973, I would say.

Is it worth paying less than 1% of GDP into the EU budget for and pooling parts of our sovereignty with the EU? Yup! Every single time.

Is the EU, perfect? Hardly. But neither it the UK now, let alone when it is on its own.

Would I want to give up the above on the 23 June 2016? The answer is obvious.

So the question to my fellow Britons who are undecided is: why would you want to?

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


EU Enlargement: Lies, Damn Lies and Brexit

The European Union (EU) referendum to decide whether Britain will remain in the EU is less than a month away and the “Brexiteers” (those in favour of leaving or “British Exit”), complain that their opponents, the “Remain” campaign, are making every effort to scare the electorate (“Project Fear”) so as to get a vote to stay in the EU. The Brexiteers cannot complain, as far a I can tell, because they are busily bending the truth while also cranking-up the pressure (“Project Fear”) on the poor average British voter.

To illustrate this let us consider the way the future enlargement of the EU is being handled.

The Balkan Horde Cometh

Ms Theresa May, the Home Secretary, was the first to bring-up the issue of EU enlargement even though she is superficially in the Remain camp: “The states now negotiating to join the EU include Albania, Serbia and Turkey – countries with poor populations and serious problems with organised crime, corruption, and sometimes even terrorism.  We have to ask ourselves, is it really right that the EU should just continue to expand, conferring upon all new member states all the rights of membership?” (emphasis added)

Iain Duncan Smith formerly the Secretary of State for Work and Pensions and one of the leading Brexiteers, immediately jumped on the enlargement bashing bandwagon: “The Home Secretary is right to warn of the dangers of countries like Albania and Turkey being allowed to join the EU. If these countries are let into the EU’s open border system it will only increase the pressure on our NHS, schools and housing. It will also vastly increase the risk of crime and terrorism on British streets.” (emphasis added)

Boris Johnson, the former Mayor of London and the most prominent of the Brexiteers, was his usual self. He said whatever came to his mind that sounded vague humorous while paying scant regard for facts. He can be relied upon to say the exact opposite at a later point in time if it suits him and can help to position him to become the next Prime Minister.

The supposedly most intellectual of the leading Brexiteers, Mr Michael Gove, the Secretary of State for Justice, then capped it all in his widely reported article about possible future enlargement: “Albania is on course to join the European Union — alongside four other countries, Macedonia, Montenegro, Serbia and Turkey. The already unwieldy group of 28 is due to become a throng of 33” … When (they) join the EU, another 88 million people will soon be eligible for NHS care and school places for their children. And what will even more immigration from the EU mean for access to housing across the UK? … What will it mean for jobs and wages?” … “And allowing millions more people to come here from the Balkans and Turkey is too much.” (emphasis added)

Unusually for the Brexiteers, they went on to be very specific about the implications of a future EU enlargement connected with the five countries:

  • Turkey, Albania, Serbia, Montenegro and Macedonia could join the EU in 2020;
  • They forecast 3,1 to 5,2 million extra immigrants coming to the UK from the 5 countries;
  • Britain would face an influx the size of population of Scotland by 2030.

The Sun, Telegraph, Mail, Express and the other pro-Brexit newspapers widely reported the enlargement claims and forecasts. The image conjured up was one of 5,2 million extra immigrants (the population of Scotland) beating a path straight to the UK, bringing crime and terrorism to our streets, along with making all our public services unsustainable. Since the Brexiteers keep constantly suggesting that British public services are already at “breaking point” due to EU immigration, it is not hard to imagine what life would become like for the long-suffering Britons, once the Balkan hordes have descend upon the green and beautiful land in 15 years´ time. Thanks so much for the timely warning!

So I though you might be interested to read the perspective of someone who has worked in all the Central and South East European countries that are now part of the EU (e.g. Poland, Slovakia, Romania, Bulgaria and Croatia), as well as the five current EU accession countries.

I know that the mere fact that I have worked in all those countries, including the European Commission as a client, will mean for some that I am disqualified from commenting on the issue of EU Enlargement. They will automatically dismiss me as someone who is “benefitting from EU funding” with the implication that I must be totally biased and am somehow being paid to write something in favour of the EU. I notice this particular argument frequently emanating from the Brexit camp whenever someone has the temerity to call the case for Brexit into question. I can only say that if first hand experience of EU accession is not relevant to a debate about EU accession, then that is a bit of a Catch22, right? Perhaps it is those that know absolutely nothing about the countries or the process of enlargement that are best placed to comment (like some ministers I could mention)?

A little respect goes along way

The first point is that those countries are far from perfect. There are criminals, there is corruption, there is fraud, there is terrorism and there is much else besides such as imperfect democracies and questionable treatment of human rights in the EU accession countries. All true but if that were not the case, they would probably already be part of the EU. It could be argued that a similar litany of woes applies to Britain, Greece, Poland, Hungary… indeed all 28 EU countries; it is merely a matter of degree.

The whole point of trying to join the EU is to develop rules, regulations, policies, standards, norms, etc. through adoption of the EU´s body of rules (called the acquis communautaire) that will enable those countries to become more democratic, transparent, productive, competitive and wealthy and thus developer a higher quality of life. Yes, this does indeed happen by preparing to join and then being part of the EU: it happened in Ireland, it happened in Greece (their implosion was due to joining the EU, which is why the Greeks have absolutely no desire to leave the EU) and it happened in Britain for those that remember the country prior to joining in 1973. For the citizens of the EU accession countries, the EU remains a bright beacon of hope. As a consequence they are willingly going through a painful and drawn-out process of reform and change across all elements of laws, institutions and practices, so as to approximate the EU framework.

To then be singled out for misused in a British debate which tars them with the brush of all current British public fears, is an affront for people and countries that also have their national pride. Shame on you Brexiteers, for your smug, holier than thou attitude, as well as your lack of respect towards the people of those nations. 

Not only is it offensive to project a future EU enlargement far into the future and couple it with “crime, corruption and terrorism on British streets”, it is also a wilful and malign mischaracterisation of the nature of the people concerned. I have worked with and enjoyed the company and hospitality of Turks, Serbs, Macedonians, Albanians and Montenegrins (as well as Kosovars, Bosnians and others who aspire to join the EU). I feel privileged to consider many of them to be my colleagues and friends. My experiences have never been anything short of positive in those countries. (As an aside, it so happens that I am writing this post in Tirana; the UK Ministers in question will no doubt be relieved to find out that I have yet to be kidnapped, robbed or terrorised.) In contrast to the calculating Brexiteer portrayal of these people, I am reminded time and again of their warmth, friendliness and positivity in the face of their everyday challenges as they make the slow, painful transition towards alignment to the norms of the EU.

They are as European as the rest of the EU. They have the right to aspire to become part of the EU, as long they fulfil the extremely rigorous conditions connected with EU accession. That applies equally to Turkey, a small part of which is undeniably a geographical part of the Balkans and thus Europe. The EU is not forcing any country to join: those countries wish to be part of the EU and it would be wrong to deny them the opportunity, just as Charles de Gaulle was wrong in vetoing the UK´s efforts to join the EU, twice. The Balkans is undeniably the next, obvious phase of EU enlargement, even if the Turkey question remains highly politically charged.

Every European should be aware of the fractured history of the Balkans. It is totally indefensible for one Brexiteer after the other to chuck them all into one big basked and then proceed to attach to them the most negative stereotypes imaginable. As if the EU does not suffer from some of the same problems. There has always been more than enough crime, fraud and terrorism in the original EEC/EU6 and there still is in the enlarged EU28, as far a I can tell.

I doubt that the Brexiteers have been to the countries that they so disdainfully dismiss. For Europe to turn its back its Balkan neighbours (including Turkey) would be a mistake of epic proportions (let us not forget Europe twiddling its thumbs during the collapse of the ex-Yugoslav Republic and its aftermath) that would reverberate through decades to come. The EU understands this intrinsically, hence the process of Balkan enlargement. Ms May, Mr Gove, Mr Duncan Smith and Mr Johnson: your cheap political points are calculated to instil a dreaded fear of those countries, those people and the process of EU enlargement. In my eyes, all of you have forfeited your status of being serious, thoughtful and responsible politicians.

Playing a different tune, again

It is important to stress that Britain is now playing a very different tune in terms of its position on EU accession. For decades the UK was one of staunchest advocates of EU enlargement. In 2004, it allowed all new EU countries (Poland, Slovakia, etc.) to have access to the UK´s labour market a full seven years before it was required by EU transition provisions to do so. This is because the British economy was booming at the time. Many EU citizens responded to the UK´s invitation and came to the UK, thus maintaining the growth of the British economy. However, when the global economy faltered badly during 2007/8, the very same people which Britain had encouraged to come, who had paid their taxes and who had contributed to our wealth generation, were suddenly persona non grata.

First there was Labour´s “British Jobs for British Workers”, then UKIP´s swift rise shuffled the cards of British politics, leading directly to the decision to hold the EU referendum. The longer this debate has gone on, the more it has become divisive, resulting in a no holds barred onslaught on EU immigrants, emboldened by the Brexiteers insistence on overcoming the deadening hand of political correctness and determination to call a spade a spade. But the simple fact is that the persistent characterisation of EU immigrants coming to the UK for benefit tourism, for social housing, for health tourism and all the rest of the claims about public services such as shortages of school places (all distorted – follow the links) amounts to scapegoating people who are hard-working, contributing to the wealth creation of the country and perfectly within their rights as EU citizens. Blaming all of Britain´s long standing public service woes upon the EU and EU citizens, apart from being untrue, lacks class, is unfair and does not reflect the values that Britain and Britons have historically stood for.

British public services have been run down by decades´ worth of neglect, underfunding and lack of political will, which is the reason why housing, education, health, transport, etc. are in the state that they are. It has something to do with the recent levels net immigration, granted, but it is primarily to do with consistent and systemic public policy failures and insufficient funding, over a period of several decades. It is politicians such as Mr Gove, Mr Duncan Smith and others in Government who were responsible for those public services. The current situation reflects long-term political neglect combined with an unprecedented degree of austerity which is squeezing British citizens beyond the point where the pips squeak. The losers in this process are first and foremost the non-working population, followed by those on low incomes, followed by the middle-income population. All are feeling the pinch, but it is the EU and the EU citizens are feeling the fall-out.

It is hypocritical to invite EU immigrants with open arms (certainly during early to mid-2000) when all boats were rising, and then promptly turn our back on the same people, once the recession came along and life becomes harder for most. This is not for the first time. Think back to when the Afro-Caribbean population was similarly invited to keep the British economy ticking over and then made to feel somewhat less welcome in the 1970s and 1980s, when the economic tide turned (as it invariably does). History is repeating itself, though it is no longer a racial matter. Indeed, because they are being squeezed hard by the economic situation combined with the effects of austerity, some of the harshest critics are some of the non-EU immigrants: irony of ironies. But the fact is that by being part of the EU, the EU immigrants who are being derided by the Brexiteers have full and equal rights to be in this country. The very same rights as the very large number of Britons living throughout the other 27 EU countries have. The issue is how to deal with the public policy issues, none of which are new, not to scapegoat some people while blithely continuing to sit on our hands, rather than responding to changing patterns of demand and supply in public services, including housing.

Get your facts right

Coming back to the main point, Ms May, Mr Duncan Smith and Mr Gove and others have also got their facts wrong about EU accession.

The five candidate countries comprise an overall population of 88 million, of which Turkey makes up 75 million. Four out of the five are a mere drop in the ocean in the scale of things. If they were to join the EU, they would add 12 million or 2.3% to the population of the EU (currently 508 million). How adding four countries would turn 28 into a “throng” is up to Mr Gove to explain. The greatest concern would undoubtedly be the possibility of adding Turkey, set to become the most populous country in Europe (but see below), potentially adding 7% to the overall population of the EU at some point in the future.  But the issue of Turkey has little to do with population and a lot to do with religion. It is not by accident that Turkey has been has been an Associate Member of the EEC/EU since 1963 – it has been waiting in the EU´s antechamber for 53 years! How the Brexiteers can suggest that Turkey will suddenly become a full member of the EU by 2020 stretches credulity. But the Brexiteers´position undoubtedly has little to do with “Project Fear” or hounding Britons into voting for Brexit by suggesting that the Balkan horde cometh. 

The EU has learned from the accession process in 2004 and especially 2007, when Bulgaria and Romania joined. The progress (or lack of it) being made by all five existing Candidate Countries is regularly assessed and widely available for all to see in the EC website. A reading of the annual progress reports makes it clear that negotiations have only started with Montenegro, Serbia and Turkey, but not with Albania and Macedonia. It is clear that none of them is making particularly rapid progress and accession will take years, possibly decades, for them to be assessed as having made sufficient progress for the European Commission to recommend that they be accepted as new members of the EU.

The suggestion that they will all join the EU any time soon, such as 2020, is far-fetched, with the possible exception of Montenegro, a country of 600,000 inhabitants. Turkey´s ongoing struggles with the basics (democracy, human rights, media freedom, etc.) mean that it has an extremely long path ahead before it reaches the point of accession readiness: 2020 is completely out of the question at the current rate of progress. The suggestion that all of them, including two that have not even stated officially negotiating accession, could join the EU by 2020 is simply pie in the Brexit sky.

28 accession vetoes

The Brexiteers are ruthlessly stoking-up and exploiting people´s fears by projecting an unrealistic scenario 15 years from now. This calculated fearmongering is as manipulative as it is irresponsible for several reasons:

  1. None of the countries is making sufficient progress to be ready for accession by 2020;
  2. The European Commission has learned from previous rounds of accession and is monitoring progress much more careful than in previous rounds of EU accession;
  3. Two of the countries have not even started official negotiations;
  4. Each of the 28 EU member countries has a veto on EU enlargement (despite what Brexiteers, such as Ms Penny Mordaunt may wrongly claim);
  5. There has been a sea-change in public mood towards further enlargement, especially after Bulgaria and Romania, though Croatia´s accession is barely mentioned;
  6. Some EU counties have pledged to hold a referendum on enlargement connected with Turkey, thus adding a huge degree of further uncertainty about its future accession.

The Brexiteers´arguments are plain wrong and they are fully aware of this. The same goes for their diagnosis of the role of EU immigration in relation to the breakdown of British public services. The same applies to the claim that the EU costs Britain GBP 350 million per week. And yet the Brexiteers keep pushing the misleading buttons. They have run out of valid economic arguments and the only Joker left in the pack is the current and future EU immigration card.

7 year transition provision

The Brexiteers are wrong in their estimated scenarios of possible future immigration from the five EU accession countries. Because in addition to the arduous process of accession connected with the acquis communautaire, there is the small matter of getting 28 unanimous “yes” votes to accession, followed by the referendums that any of the 28 nations may choose to hold. These multiple barriers undermine the scaremongering.

Even if the EU accession countries, especially Turkey, get through all those hurdles, there is also the EU´s 7 year transition provision, which means that each new country that joins the EU, must wait up to 7 years before its population acquires the right to live and work in the rest of the EU countries.

Even in the extremely unlikely scenario that all five countries join the EU by 2020, it would be 2028 before any of them would have the right move, live and work in the UK, unless Britain chooses unilaterally to suspend the 7 year rule, as it did in 2004 but not in 2007. For 5,2 million additional EU immigrants to move wholesale from these five countries to the Britain is yet another stretch of the Brexiteers´ febrile imagination as the 23 of June 2016 approaches.

When it comes to EU enlargement, there are lies, damn lies and Brexit.

© 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


EU health tourism and the breakdown of the National Health Service (NHS)

In addition to other issues connected with the EU referendum (e.g. EU immigration, EU benefits tourism and housing crisis and the EU), Britain is currently hotly debating the crisis in the health system or the National Health Service (NHS). It is not unusual for segments of the British media to lead with headlines such as “Migrants are pushing NHS to breaking point,” claiming that the NHS has been left “on its knees” by “uncontrolled migration” from the EU which has merged with the theme of “health tourism” or the practice of travelling abroad in order to receive medical treatment.

Prominent members of the Leave EU campaign, such as Michael Howard and others in the Vote Leave campaign have said: “We will be talking a lot about the NHS in this campaign because we believe that a leave vote is vital if we are to protect the NHS for future generations.” Priti Patel, the Employment Minister, claims that the health service is under threat because of EU membership: “Current levels of migration are causing unsustainable pressures on our public services and we can see that the NHS is creaking under the strain.”

The implication is that EU migration / benefit tourism is at the root of the problems of the NHS. So this post addresses the nature of the UK health crisis and the extent to which it is attributable to the EU migration and health tourism.

Challenges every which way you look

The National Health Service (NHS) is the largest and oldest single-payer healthcare system in the world. It is primarily funded through the general taxation system that is overseen by the Department of Health. The NHS is built upon the principle of comprehensive health service provision based on clinical need, not ability to pay. The NHS provides healthcare to every legal resident of the UK, with most services free at the point of use.

When created after WW-II, the NHS was the pride and joy of the pioneering British welfare state and served as a model for many other countries. But the fact is that the NHS has been in crisis for decades going back to at least the 1980s. As Britons are well aware, wave upon wave of health reforms have sought to cure its ills yet the NHS remains as sick as ever. The starting point in the health debate is to acknowledge that the problems with the health system predate the influx of EU migrants to the UK which started in earnest in earnest 2004 and continues to this day. The NHS’ problems did not begin with EU immigrant and will not end if migration were suddenly to end, regardless of whether migrants originate from the EU (less than half of UK immigration) or elsewhere (Britons returning home, Commonwealth, students, etc. – more than half of the immigration).

The second point is to recognise that the challenges facing the NHS are many and varied, not least connected with an ageing population and the impact of modern diseases such as diabetes, obesity, cancer, etc., combined with escalating costs of procedures, medication and so on.

The health professionals are in the best position to assess the issues and whether those issues are connected with migration or not. In a recent publication “Challenges facing the NHS in England: a guide for MPs and Peers”, the NHS Confederation (representing over 500 NHS organisations that commission and provide health services, including hospitals, community and mental health providers, ambulance trusts and independent sector organisations providing NHS care) set out the main health challenges facing the health system. These are illustrated in the diagram below.

Chart 1 NHS Challenges

Neither immigration in general nor EU immigration specifically figures as a health challenge. There is no reference to NHS creaking / breaking / lack of sustainability due to migratory pressures. This is hardly surprising since all the evidence is that EU immigrants tending to be younger, better educated and in better health than the average Briton in the labour force. We tend to consume disproportionate amounts of health services as babies/children and as pensioners, especially after the age of 75. Young adults – the typical EU migrants – put relatively few pressures on the health system.

Rather, the Call for Action focuses on areas about which there is little controversy among the 500 health professionals in the NHS Confederation. They stress the need for stability if the NHS is to tackle its challenges (endless reforms); the need to increase staff (too few); the necessity for social care funding for people with long-term illnesses; the need to make mental health services available and accessible, etc. The most critical issue by far is the finance challenge; this is the underlying reason for the continuing problems faced by the NHS. The point to note is that the UK is exclusively responsible for the resources that it devotes (or not) to the NHS. No amount of finger-pointing in the general direction of the EU will alter this particular fact.

Furthermore, the NHS funding challenge is nothing new: it predates and supersedes other factors such as EU migration. This is the fundamental reason why the NHS has been gradually overtaken by other countries, as illustrated in comparative research among OECD countries highlighted in the Table below.

Chart 2 OECD health indicators 2015

Health Care Resources in OECD Countries (OECD, 2015)

The UK’s performance compared with OECD countries highlights the NHS’ fall from grace. The UK ranks:

  • 19th in terms of health expenditure per capita;
  • 24th in terms of doctors per capita;
  • 19th in terms of nurses per capita;
  • 26th in terms of hospital beds per capita;
  • 29th in terms of Magnetic Resonance Imaging (MRI) units per capita;
  • 30th in terms of Computer Tomography (CT) scanners per capita.

Some countries, such as Germany, have even higher levels of EU immigration than the UK yet it comfortably outperform the UK in terms of the selected health indicators. Money, or rather the lack of it, is clearly an important reason for why the NHS is in the state that it is.

The UK’s austerity measures, which have been in place since 2009, included severe budget constraints with zero growth in health spending per person in real terms. On a per capita basis and as a share of GDP, health spending in the UK is slightly below the OECD average. Lack of financial capacity is clearly not the issue. Rather the UK government chooses to prioritize other public expenditure, such as defence, over the heath system. Furthermore, the situation is set to deteriorate: the NHS Confederation estimates that the gap between increasing demand for care and the funding available will be at least £30 billion by 2020. The key point is that other economies choose to put more resources into their health systems than Britain. The state of the NHS, by and large, reflects this particular policy prioritisation. Transferring the entire net budget that Britain spent in 2015 on the EU into the NHS, namely £8.5 billion (2014) would not make that much of a difference in the projected NHS deficit of £30 billion in 2020 for England alone. The Vote Leave campaign misleads in suggesting that cancelling one (EU contribution) will solve the problem of the other (NHS crisis).

EU health tourism: where’s the beef?

Health provision is clearly a national issue – the EU has no direct powers in this area except to support the common market. The Government’s audit of EU powers (the so-called balance of competence review) also covered health area and its official report concluded that: “…the UK Government believes that the current balance of competence is broadly appropriate.” It also noted that: “Industry were generally very supportive of the current position regarding competence.” It concluded that: “Evidence suggested that free movement of persons brings benefits for the UK health sector and for patients, but not without risk.”

There are “risks” perceived in some quarters, such as the EU’s Working Time Directive (WTD), which limits work to a maximum 48-hour week and lays down minimum requirements for rest periods and annual leave. But can critics really sustain the argument that the health profession should work longer hours than other professions? Most people would not agree. When it comes to a critical matter of life and death, most people would want a doctor / nurse / surgeon who is neither exhausted nor overworked (we all recall UK health workers, especially junior doctors, having to work absurd and dangerous numbers of hours in the past) when attending to their health needs. The WTD applies to all 28 countries and all professions; I see no reason for making an exception for the UK or for the NHS, though this does not preclude the possibility of fine-tuning the WTD.

There is also freedom of movement of doctors and nurses from across the EU working in the health system in the UK. This is actually a very good thing for the NHS, as acknowledged by the government’s official report: “In terms of health professionals, there has been a very positive impact for the NHS as 10% of NHS staff are from European Economic Area (EEA) countries, without whom there could be staff shortages.” For example, the Royal College of Midwives, has stressed that Britain would be hard-pressed to find enough midwives and nurses trained in the UK to replace the 33,000 from other EU countries who currently work in the NHS.

It is not only an issue of the damage that staff shortages might cause in such a sensitive area as the heath sector. The issue which those interested in improving the health system should be focusing on is exactly why Britain continues to be completely incapable of training a sufficient number of its own health professionals. I recall nurses and midwives being sourced from Ireland before the EU and the rest of the world became the NHS’s recruitment pool for health workers. No open-minded individual can fail to see Britain’s gain in this form of EU migration. If anything, other nations might well criticise the NHS’s beggar-thy-neighbour recruitment strategy (i.e. a policy by which one country attempts to remedy its economic problems by means that tend to worsen the economic problems of other countries) which basically mops-up experienced doctors, nurses, midwives, surgeons, etc. which other countries have paid to educate and train.

There is also the Cross Border Healthcare Directive which allows individuals to purchase health care and treatment from a provider in another Member State. This is supported by the health industry in the UK since it offers them the prospect of widening the sources of income by attracting EU patients and using excess capacity in the health system, for example in specialist areas such as diagnosis and treatment of rare diseases. Furthermore, under the current NHS arrangements, patients in one location of the UK are not free to seek treatment in another part where waiting times/lists may be shorter. However, the Cross Border Healthcare Directive enables them to seek treatment in other EU countries if they wish. This is a good thing: it allows patients to control their own health needs. Something that puts power in people’s hands over vast bureaucracies, for that is exactly what the NHS is, must be a good thing.

EU-related health costs: Britain only recovers 23% of what it could claim back

There is limited reliable data on the use of health services by immigrants and visitors, making robust estimates difficult. That said, the available evidence suggests that use of health services by immigrants and visitors appears to be lower than that of native Britons, as previously discussed, not least because immigrants and visitors are, on average, younger.

In 2014 an official report (Quantitative Assessment of Visitor and Migrant Use of the NHS in England), showed that EU (27 countries) and EEA (3 other countries) visitors and non-permanent residents cost the NHS an estimated £305 million, of which £220m is recoverable by England under the European Health Insurance Card (EHIC) scheme. Every EEA country issues EHIC cards to their citizens, thus enabling them to receive healthcare whilst on a temporary visit to another EEA country on the same basis that is provided to its own residents. People go on holiday in the EU/EEA knowing that if they fall ill or have an accident they will be able to access health care without the need for separate insurance. This saves time, effort and money for all and is widely considered a good thing.

Department of Health data for 2012-13 show that only about £50m was recovered from the EEA countries compared with the £173m that the England pays for British visitors to EEA countries. This means that the NHS / Department of Health are not claiming as much of the money that they are eligible to receive from the EEA countries as they could.

Some forget that this is not a one way street; it is not only EU nationals that come to the UK and use health service here. Britons also make a good deal of use of the health services in other EEA countries and the costs more or less balance out: £220m worth of health services received by EEA people in England, compared with £173m worth of services received by people from England in EEA countries.

The low percentage of recovery (22.7%) is due to one reason and oner reason only: NHS inefficiency, which is an issue for the UK to rectify. Why should Britain need over a decade to set-up a working reciprocal health cost management system when the other 27 nations have long ago managed to do so? It has been argued that there is a lack of knowledge among NHS healthcare professionals as to who is eligible for free treatment. Can this really be so fiendishly complicated as to systematically defeat the British health care system with its new generation of sharp suited, MBA educated management? Surely it is not like expecting the NHS to crack the health equivalent of the Enigma Code.

Rather than voting to Leave the EU for a problem that can only be pinned on Britain itself, it might be more effective to set-up a system to check if an individual is from the EEA and train healthcare professionals to recoup the costs of EU patients, as Britain is fully entitled (but fails systematically) to do.

EU-related health costs: instead of 0.18% of the NHS budget in England, it costs 0.26%

Interestingly but not surprisingly the actual health costs of EEA migrants are very low, despite all the emotive talk of “EU migrants / freedom of movement pushing NHS to breaking point” and “NHS is creaking under the strain of immigrants” emanating from the Vote Leave EU group such as Priti Patel and others. The annual NHS budget in England was worth £116 billion in 2015/6, so EEA migrants used-up 0.26% of the annual NHS budget (£305 million). When the costs that could have been recovered from EEA countries are taken into consideration (on the assumption that the NHS ever gets its act together), the percentage would drop to 0.18% (£220 million). There would appear to be vastly bigger fish to fry when it comes to saving costs in the British health system.

When this analysis is extended from England to the UK, the same health competences report noted that in 2012/13 the UK paid a net £805 million to EEA countries to cover the healthcare costs of Britons, especially pensioners, living in other countries. This sum illustrates just how many UK citizens benefit from the EU health provisions.

The health competences report also stressed that: “… many more UK pensioners choose to live in other EEA countries than pensioners from those EEA countries who live here. Using Spain as an example, approximately 400,000 British pensioners reside there at any one time. For a great majority of these, the fact that the UK covers their healthcare is of great benefit. It should also be noted that, had those citizens remained in this country, the UK would be meeting the costs of their NHS care in the usual way and in some Member States the average cost of healthcare can be lower.”

In other words not only do more British pensioners benefit from the system than EU pensioners gain from using the NHS but it would cost the NHS more to provide health care to those 400,000 Britons currently living in Spain (and potentially many others, since there were about 1.4 million Britons living in the EU) if they came back. The Vote Leave EU campaign would find it hard to swallow the point that EU health provisions may actually be saving British taxpayers money (and/or that the savings are being recycled for the benefit of the health of the people in Britain).

It should be noted that the NHS (Charges to Overseas Visitors) Regulations Act of 2015 requires hospitals to charge overseas visitors (not ordinarily resident) for the NHS services that they provide in a hospital or provided outside by staff employed by a hospital. GP services and services provided outside hospitals are not chargeable. So it would appear that Britain is well on the way to meeting the public concerns about the costs of health for visitors, whether from the EU or elsewhere.

EU health tourism: much ado about very little

The UK’s competences review concluded that, on balance, the EU’s engagement in the health sphere is appropriate and noted the major advantages of EU health directives, including the IHIC card, the number of EU educated nurses and doctors working in the UK and the capacity to access European level health services. There are real benefits for health institutions and citizens across EU countries.

In terms of the major health challenges facing the UK in the future, the 500 NHS Consortium health institutions did not identify immigrants as an issue: money or rather the lack of it is the key issue in Britain. The evidence is that EU/EEA citizens use the NHS intensively less than native Britons. In any case, Britons make extensive of health services in EEA countries, especially those that retire in Spain, France and elsewhere.

The EU introduced health transfer arrangements to ensure that each EEA nation pays according to the health services absorbed by their nationals. This is fair but it is up to each country to introduce the necessary systems and procedures. After a decade, the NHS is still unable of charge its share, which means that instead of EU nationals costing the NHS 0.18% of its annual budget, it actually costs 0.26% in England.

Boris Johnson, Michael Gove and other Vote Leave campaigners may insist that the “billions spent on the UK’s EU budget contribution to be spent on the NHS.” That is fair enough but let us not pretend that this will solve the problems in the health system at a stroke. Even if the GBP 8.5 billion net EU contribution were poured in its entirety into the NHS tomorrow, nothing would change fundamentally because the financial need is much greater than this contribution. Can it realistically be argued that EU migration / health tourism is pushing the NHS to breaking point, especially when large numbers of Britons and British pensioners living in the EU are actually reducing the costs to the NHS since the costs of health provision in Spain and elsewhere are lower than they would have been in the UK?

I don’t think this is such a bad health deal for Britain and is not a sufficient reason for voting to leave the EU in the forthcoming referendum.

  • Is the EU responsible for the state of British health system: the EU ensures that all EU citizens have access to health services in all countries at no extra cost or hassle.
  • Is the British government responsible for the state of British heath system: the UK is 100% responsible for national health provision and the health budget. The UK chooses to invest a smaller amount on health than other countries and this is the root cause of the health problems. Pumping Britain’s entire EU annual contribution in the NHS will not change the fundamentals of the health system, though it would certainly be helpful.
  • Should I vote to leave the EU because of EU health tourism: EU nationals make less use of the NHS than do native Britons. Also, there are more retired Britons living in EU countries and making use of other EU health systems than there are EU nationals living in the UK. Both save the NHS money and/or allow resources to be focused on health services in Britain.

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


The British housing crisis: is EU migration also responsible?

Let us get down to brass tacks: Britain has a serious housing crisis. When demand for housing (people wanting to rent or buy) exceeds supply (the stock of housing) the effects are not good for society. House prices and rents rise, making it difficult for people to pay for their accommodation. This reduces the net income available for other things, makes people anxious and directly affects their quality of life.

If people migrate to the UK or wealthy foreigners invest in the housing market, this reduces the housing supply for the domestic population unless construction goes up. This drives-up house prices and the levels of frustration, especially when people have to share their homes with their parents/children, are priced out of living in their communities or see empty houses that are investments, rather than homes. This is especially so in Britain, a nation of home owners and this state of affairs leads some to conclude that the housing crisis is caused by the EU and its freedom of movement principle. It leads to a perception that perhaps EU mobility results in a lack of housing for the native population. This is powerful argument during the period leading up to the EU referendum in June 2016; it connects with the EU immigration and EU benefit tourism, topics I have previously written about, and is presented as another reason for Britons to vote to Leave the EU (i.e. Brexit). So it is important to address the nature of the British housing crisis and the EU’s role in it.

The first thing to be said is that there is no shortage of analysis of either the housing problems or the possible solutions, but the latter basically boil down to balancing housing demand and supply, together with the political will to solve the crisis.

My home is my castle: demand for housing

Numerous factors influence housing demand. A critical factor is price: at higher prices, real incomes fall and people will reduce their demand while alternatives to owning a property, such as renting, become more attractive. There is a multitude of other factors that are important, such as population dynamics (population size, migration, birth and death rates, age structure, etc.), incomes of households (some may shift from renting to buying, move to a bigger property, buy a second property, a holiday home, etc.), social and lifestyle trends (e.g. late marriages, divorce rates, decisions to remain single, etc. all increase single households and thus demand), availability of credit and interest rates (higher rates make ownership less affordable while lower ones achieve the opposite and restriction in the supply of credit reduces demand for housing and can lead to a fall in house prices) and other influences such as government incentives (to buy, to rent or to buy to rent) and expectations in terms of house /land price developments (speculation).

Since all the above influence housing demand, estimating future demand is a complex process. What is simple though is that immigration, whether from the EU or elsewhere, is only one factor among many others, the majority of which are more influential in terms of stimulating demand for housing in the UK.

Nevertheless, as far as the EU’s freedom of movement of people is concerned, there are two further issues to consider:

  • EU migrants are a sub-set of the migrants to the UK. In a separate post, I showed that of the 498,040 people who migrated to Britain in 2012, 80,196 or 16.1% were Brits returning home, 157,554 (31.6%) were from the EU and 260,290 (52.2%) were from the Commonwealth and other countries that Britain is entirely responsible for, rather than the EU;
  • EU migration is not a one way street and not all roads lead to London and the South East. In the same year, 321,000 people left the UK, a proportion of which migrated to other countries in the EU.

Consequently, even if EU migration was the only issue affecting demand for housing, which is clearly far from being the case, EU migrants do not constitute the majority of immigrants to the UK. Furthermore, the same process is happening in other EU countries that receive Britons.

A number of housing demand studies demonstrate the same trend in the UK: housing demand is increasing significantly and the government and the rest of the housing system, not least the planning system and the construction industry, need to respond in order to ensure that the supply covers the future demand. After all, it is not unusual for populations to increase and housing policy and system must respond in order to deliver affordable, quality housing. The public has the right to expect this irrespective of the particular set of factors that may drive housing demand (i.e. whether immigration is an issue or indeed whether it is from the EU or elsewhere) at a particular point in time.

A comprehensive estimate of housing need and demand in England was published by the Town and Country Planning Association. It estimated that England alone required 240,000 – 245,000 additional homes each year until 2031 in order to meet rising demand. Many similar projections have been made long before EU migration to the UK became an issue of debate post-2007.

Housing supply: decades of neglect = housing crisis

The issue then is how much housing is being built and is it sufficient to meet the demand for 245,000 new units per annum? The UK housing construction data (supply) are presented in the Table below.

Table 1 UK Housing Construction

Source: Gov.uk, Live tables on house building, Table 209

A few points are worth noting based on the Table:

  • Housing construction (permanent dwellings completed) in England have fluctuated between a peak of 170,610 in 2007/8 and 108,870 in 2011/11;
  • The point during which it was perceived that there was an acute housing crisis was around 2005 but since then, the trend in terms of housing supply, albeit fluctuating slightly, has actually been downwards;
  • By definition if the target for England is 245,000 new units per annum, the equivalent for the UK will be much higher. The last year of housing construction data (2014-5) shows a gap of 93,000 even against the lower target for England;
  • In a well-functioning housing market where the citizens, planning authorities, construction industry and the government jointly perceive a housing crisis, the normal response would be for housing supply to increase to reach the target of 245,000 new housing units per annum for England. If this does not happen, it adds to the affordability pressures experienced;
  • If here is such a systematic lack of construction, then surely the respective people in charge of housing policy, finance, planning, construction, etc. are responsible.

To Scapegoat or not to scapegoat (or holding a mirror to British policy makers)

A considerate British voter in the forthcoming EU referendum might reflect on the following issues:

  • The EU has no control in the housing sphere: this is exclusively the remit of national governments, in this case successive UK governments;
  • There are many factors affecting demand for housing, of which EU migration is only a secondary factor;
  • The EU related migration accounted for 31.6% of the migrants to the UK in 2012, but the UK also sent its migrants to EU countries – the EU freedom of movement cuts both ways;
  • The UK has systematically produced fewer housing units than it needs for a period of decades despite projections of massive unmet demand for housing ;
  • The UK, including its politicians, its construction industry and its planning system (local authorities) are responsible for ensuring that supply keeps-up with demand and that housing is affordable. This requires responding to changes in housing circumstances, regardless of what is driving them (e.g. prices, birth rates, speculation, constrained land release, immigration, interest rates, tax incentives, etc.);
  • Despite mounting pressure, regular public outcries, evidence of shortage and affordability problems, etc., the UK only managed to build a paltry 150,000 housing units in 2014-5. This is a damning indictment of Britain, not least its politicians, policy-makers and industry.

It is up to each individual to form their own opinion of where the blame for Britain’s chronic housing crisis should rest. Scapegoating EU migration (which took off from 2004) for problems which have been systematically neglected in the UK amounts to a disgraceful attempt to blame others for issues which Britons have failed to tackle over and over again and are still doing a miserably bad job with.

In this context, it is worth addressing two issues which policy-makers, politicians and the Leave the EU campaign will almost certainly raise in defence of the indefensible: the lack of adequate and affordable housing in the UK, which is a basic human right.

Clutching at straws 1: the crowded island myth

Many, if not most, Britons appear to be convinced that the UK is a very crowded island and that there is simply no space left for housing construction, let alone to accommodate migrants from the EU or anyone else. Certain segments of the media that are biased against the EU, as well as the general Leave campaign, including populist political parties, are keen to emphasize this argument, so let us examine the claim.

The most comprehensive analysis of this issue (UK National Ecosystem Assessment) concluded that only 6.8% of the total land area of the UK is urban (10.6% of England, 1.9% of Scotland, 3.6% of Northern Ireland and 4.1% of Wales). But being urban does not necessarily mean that it is built upon since such areas also contain gardens, lakes, etc. The most detailed analysis ever conducted found that only 2.3% of England is built upon, the rest is natural. Elsewhere in the UK, the figure is less than 1%. Contrary to popular misconception, only a tiny fraction of Britain has been concreted over. Britain is not a crowded island. It can and must build more housing for the benefit of its citizens.

Clutching at straws 2: EU preferential treatment in accessing social housing myth

Another common perception is that EU citizens are benefit tourists, and that they strain the welfare state by having a higher demand for social housing. But the data show that about 17% of UK-born and 18% of foreign-born individuals live in social housing. That means that foreigners are on par with native Britons when it comes to access to social housing. However, when it comes specifically to EU migrants, the popular perception is even more incorrect. Studies demonstrate that citizens of EU-8 countries who arrived in the UK after accession are 57% less likely to live in social housing than native residents. More recent studies indicate that over 90% of immigrants in the UK are in households that are eligible to apply for social housing (p.3) and confirm that EU (and EEA) citizens are less likely to be in social housing than Britons.  The research also shows that, once factors like the demographic structure, location and economic circumstances are taken into consideration, immigrant households are significantly less likely to be in social housing than equivalent native households. Another popular myth bites the dust.

Build, Build, Build

The housing crisis is fundamentally a matter of demand and supply and the policy choices each country makes about how to prioritize public investment and other policy decisions. For decades Britain has emphasized home ownership as the one and only housing policy priority. It has constrained social housing construction for ideological and financial reasons, while at the same time forcing social housing to be sold at discount. Its recent policies have stimulated a boom in buy-to-rent, which has increased private renting but also boosted house prices and exacerbated the affordability problem.  At the same time, policy makers have not stimulated the planning system to release sufficient land for housing construction, mainly due to the NIMBY (Not In My Back Yard) syndrome. In the meant time, the construction industry has shown much more readiness to speculate in order to accumulate, rather than increase construction efficiency, productivity and quality. None of this has stimulated housing supply greatly while housing affordability has declined.

Housing is a matter for each of the 28 nation states of the EU. Some countries, like Germany, build enough housing to meet the needs of their citizens whose quality of life is significantly improved by having sufficient, high quality, affordable homes to rent and/or buy (the recent refugee crisis could not have been planned for in advance. By definition, a surge of 1.1 million asylum seekers in 2015 was not part of the housing forecast). Others, like Britain, do not build enough housing. This is not because of insufficient land, EU freedom of movement of people or other handy excuses for systemic failures on the part of British politicians and their policies, the British planning system and the British construction industry. Any such interpretation amounts to the politics of scapegoating others for one’s own glaring failures and I, for one, will have no truck with it.

  • Is the EU responsible for the British housing crisis: The British housing crisis has been decades in the making. Strong EU immigration is a relatively recent phenomenon.
  • Is the British government responsible for the state of British housing: Its policies have focused almost entirely on housing ownership (tenure), rather than housing construction.
  • Should I vote to leave the EU because of the state of British housing: Britain alone is responsible for regulating demand and supply to deliver sufficient and affordable housing.

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