At the Royal George Hotel
It’s now almost March and I haven’t noticed ‘hordes’ of Romanians and Bulgarians on our streets, swamping our economy and culture. So perhaps now is a good time to take a more rational look at immigration in Scotland and the UK.
One of the most positive claims in the Scottish Government’s White Paper – ‘Scotland’s Future’ is that Scotland could adopt an immigration policy more appropriate to Scotland’s needs. It envisages an independent Scotland where immigration grows faster than elsewhere in the UK, but remains within the Common Travel Area (CTA). The methods include adopting post-study visas for graduates to stay in Scotland and creating a points-based system to encourage more skilled workers to stay.
The UK government analysis paper, ‘Borders and Citizenship’ argues that you can’t stay within the CTA and have a widely divergent immigration policy. That may be true, but the White Paper isn’t really proposing a widely divergent policy. I am therefore sceptical of the claim that border controls will spring up should we vote for independence.
The concern that UK immigration policy fails to take account of Scotland’s needs is not new. It was the driver behind Jack McConnell’s ‘Fresh Talent’ initiative and the methods proposed are not that radically different. As UNISON’s ‘Fairer Scotland – Devolution’ paper recommends, elements of immigration policy could even safely be devolved to Scotland.
Given the relentless diet of misinformation from much of the UK right-wing media, it’s hardly surprising that public concern over immigration has increased. However, as the recent Ipsos MORI review of polling data shows, there isn’t a simple link between the number of immigrants and public attitudes. This review also shows that people are massively wrong on many aspects of immigration. The public’s average guess on the proportion of immigrants was 31%, compared to 13% in the official statistics. Between 2002 and 2012 there were significant differences between social classes in their attitude to immigration, but that has recently narrowed again. It is still the case that older people are almost twice as concerned than the young. Interestingly, the views of immigrants themselves tend to come closer to the average, the longer they have been in the country.
Scottish attitudes to immigration have been more relaxed, although catching up with the rest of the UK. Attitudes tend to be driven more by the type of area you live in (inner city, rural etc.) than the nation within the UK.
What about that other myth – benefit tourism? As non-EU citizens have to wait five years this is only an issue for EU citizens who have the right to travel here. The statistics show that less than 5% of EU migrants are claiming jobseeker’s allowance, while less than 10% are claiming other working age benefits. A recent review of social security policies around the EU and their impacts on migration concluded: “No evidence shows that access to the specific special non-contributory benefit income-based jobseeker’s allowance could be considered a significant driver for EU migrants in the UK.”
While Nigel Farage believes that lower economic growth is a price worth paying for lower immigration, the rest of us are not in his income bracket. The economic impact of a cut in immigration was addressed in the NIESR discussion paper, ‘The Long Term Economic Impacts of Reducing Migration: the Case of the UK Migration Policy’. They modeled the impact of the current Tory migration target to reduce net migration. The results show that such a significant reduction in net migration has strong negative effects on the economy. The level of both GDP and GDP per person fell during the simulation period by 11.0% and 2.7% respectively. Moreover, this policy has a significant impact on public finances. To keep the government budget balanced, the income tax rate has to be increased by 2.2%. In essence, more cuts or higher taxes and we are all worse off.
The case for increased immigration is not just economic. Our culture has been greatly enhanced by immigration through sport, music, the arts and my own joy, food. When I was a child, most people had no idea what a curry was, and now it’s just about our national dish. My dad’s family migrated from Scotland and I migrated back, my school friends live and work across the world. None of us regret the experience.
I also can’t see a problem when people come to this country seeking a better life and new opportunities – often disparaging described as economic migrants. Some of the debate loses sight of the fact that we are talking about fellow human beings. We are all diminished if we lose our human compassion for others.
The case for immigration is not complex. Scotland has an ageing population and we can rebalance the population and generate the tax revenues to pay for demographic change through immigration. Migrants are mostly young, they invariably work and they pay their taxes. There may be an issue over the impact on wages at the lower end of the pay scale, but as Ed Miliband has said, the solution is to tackle exploitation in the workplace.
So by all means let’s have a debate about immigration. But in doing so let’s get the facts right, dispel the myths and understand the economic and cultural benefits. But above all, remember we are discussing fellow human beings who have as much right as we do to make a better life for their families.
Fiscal devolution is about more than just transferring powers from one parliament to another. It has to be part of a strategy to reduce inequality in Scotland.
That was the key message in my Sunday Times (£) column yesterday. I set out the options for fiscal devolution and my own preferred option as described in the Red Paper on Scotland and UNISON Scotland’s ‘Fairer Scotland – Devolution’ paper. This approach devolves all property-based and income taxes, including the power to vary the rate in each band. Business and consumption taxes are retained at UK level, because business tax competition simply leads to a race to the bottom.
I also took the opportunity to rebut some of the recent criticisms of fiscal devolution, including the impact on the Barnett formula and the risk that further devolution will lead to independence. Both in my view miss the point completely.
However, the main thrust of my column was that powers, including fiscal devolution, have to be for a purpose. That purpose is a fairer and more equal Scotland because more equal societies perform better on every measure.
The Yes campaign and the White Paper makes much of the OECD 2011 paper that appears to show the UK as the fourth most unequal society in the developed world. However, this selective use of the paper only deals with income inequality. The OECD paper actually emphasises the role of public services in reducing inequality. The paper says:
“But public services improved their impact on reducing inequality. Social spending in the UK relies more on public services (such as education, health etc.) than on cash transfers: spending on services amounts to over 15.4% of GDP while spending on cash transfers is some 10%. These services reduce inequality more than almost anywhere else, and this impact has increased over the 2000s.”
This is why the strongest argument for fiscal devolution is that Scotland is suffering from the financial consequences of English public service reform as the Tories shrink the state. Having the power to develop our own public service model is weakened if the financial rug is pulled from under it. University privatisation and NHS cuts are two recent examples. The IPPR ‘Devo More’ paper makes a similar point.
The OECD key policy recommendations are also noting:
- Employment is the most promising way of tackling inequality. The biggest challenge is creating more and better jobs that offer good career prospects and a real chance to people to escape poverty.
- Investing in human capital is key. This must begin from early childhood and be sustained through compulsory education. Once the transition from school to work has been accomplished, there must be sufficient incentives for workers and employers to invest in skills throughout the working life.
- Reforming tax and benefit policies is the most direct instrument for increasing redistributive effects. Large and persistent losses in low-income groups following recessions underline the importance of government transfers and well-conceived income-support policies.
- The growing share of income going to top earners means that this group now has a greater capacity to pay taxes. In this context governments may re-examine the redistributive role of taxation to ensure that wealthier individuals contribute their fair share of the tax burden.
- The provision of freely accessible and high-quality public services, such as education, health, and family care, is important.
The Yes campaign would of course argue that we could do all of this with independence. There is a certain irony that the SNP’s currency union could actually result in greater financial control from ‘London’ than fiscal devolution. The SNP (Stewart Hosie’s line in the last BBC debate) would still have us believe that Scandinavian levels of public services are possible on current tax rates. Scandamerica is simply not a credible proposition for anyone who is serious about tackling inequality.
All the polls make it clear that the majority of Scots want to see greater devolution short of outright independence. Scottish Labour has to go with that majority by arguing for the fiscal powers that can help deliver a vision of the fairer and more equal society. Anything short of that really would encourage a drift to independence.