by Atul Hatwal
Shrinking violet is a term not normally associated with Ed Balls. But in the three months that he’s been shadow home secretary, something strange has happened. He’s been quiet. On one of the core issues for his brief, one of his flagship themes during the Labour leadership election – immigration – he has maintained near-trappist levels of silence.
Before Friday’s ruling that the government’s temporary cap was unlawful, he had only made one major intervention on the topic. When drawn on the government’s policy, Ed’s line was that 80% of immigration was from east European members of the EU and therefore the cap wouldn’t work. It was a good line.
Shame it wasn’t true.
The net number of people coming into the UK in 2009 from new EU member states was 5000, only 2.6% of total net arrivals last year. Just because Mrs.Duffy said it, doesn’t make it so. Ed Balls was lucky. The competition for column inches on Labour’s problems meant he got off lightly.
Even on Friday’s ruling, while his response hit the Tories for being in a state of chaos, it didn’t give any sense of a Labour alternative. Politics doesn’t like vacuums any more than does nature, and a direction of travel is needed.
But since Labour’s first XI were in government seven months ago, the immigration debate has moved on.
When immigration went front page in the late 1990s, the discussion was about asylum. While the media focussed on scary foreigners, the politics was about government incompetence in managing the asylum system.
From 32,500 applications for asylum in 1997, the figure rose to over 84,000 in 2002. Tony Blair’s response was a flurry of activity to reshape the system. He pushed through five separate acts of Parliament on immigration and asylum, more than any other social policy area during the Labour government.
The changes implemented meant that in the year since September 2009 there were less than 20,000 people seeking asylum in the UK. There’s still some backwash in the media, but, for the moment, it’s done. When searching for a policy to break the silence on immigration, it won’t be found by being even tougher on asylum.
In 2004 the debate shifted to east European migration. These were the Duffy years: a time when the UK got to grips with YouTube, Facebook and builders who turned up on time.
At the end of 2004, the net number of people coming from eastern Europe was just over 40,000 per year. By 2007 this had risen to over 100,000. A large rise, but this was a time of full employment and the new arrivals were here to work and pay taxes, doing the jobs others didn’t want to do. Even in 2009, unemployment among this group was substantially lower than the national average (five percent as opposed to 7.8%), while they used public services 60% less than UK nationals. Whatever else might be said, British public finances did well out of the eastern Europeans.
And then came the crash. By 2009, net migration from eastern Europe had fallen over 90%. Summer 2010 might have been when Labour’s leadership contenders came to the topic, but unless the new team is going to look into deporting east Europeans for being east Europeans, there’s not much in the way of policy available there either.
So where are we today? Last year, the net number coming into the UK was 196,000. Of this total, 93% were economic migrants from outside the EU. In the short term many are here because they bring skills needed in the economy. In the medium term, they bring a much bigger opportunity.
The prism through which the debate has been viewed until now has been of huddled masses coming to the land of milk and honey. But the new migrants are neither tired nor poor and certainly aren’t looking for Ellis Island. They’re coming because their companies are sending them.
Non-EU companies, that is, doing business in the UK and looking to expand in Europe. Companies from places like India, where the economy is booming, with 9% growth and exports the imperative. Almost 100,000 migrants came to the UK via this route last year.
As their companies’ European operations grow, so investment into the UK will too. These migrants aren’t taking people’s jobs, they’re bringing them. The new immigration debate won’t be about compassion for refugees or cheaper conservatories for middle England. It will be about the foreign investment that these arrivals could bring.
But the emphasis is on “could”. Global multi-nationals like Tata and Reliance won’t invest if they can’t bring their staff. Imagine having the discussion with Nissan in the 1980s about investing in Sunderland: “Yeah, we’d love your car plant, and all those lovely jobs, but you can only bring half of the managers and trainers in your plan… cap says no”.
On his recent visit to India, the marquee announcement by President Obama was of 50,000 new jobs being created in the US by Indian corporate investment. The adverse criticism was why so few?
India is the second largest foreign investor in the UK, after the USA. In 2009 it leapfrogged Germany, Japan and France, but this investment still accounts for less than 10,000 jobs here. It could be so much more. China is investing hundreds of billions of dollars across the world, but largely absent from the UK – in 2009 its investment accounted for less than 1000 jobs.
The opportunity here is immense. On his visit to India earlier this year, David Cameron understood the potential. But he is bound by the Tory right and the Liberals are bound by the Tories. The open ground isn’t out to the right but in the pro-business centre. It’s where the CBI is, where most economic commentators are and where there’s a chance to build a powerful new partnership. Grasping it will mean thousands of new migrants from outside the EU, but tens of thousands of new UK jobs from foreign investment.
In the leadership election, Ed Balls was the only candidate to grasp the centrality of the economic argument. While others mouthed warm words on general values, he made the hard case on the economy. He tackled the prevailing deficit orthodoxy head on.
The orthodoxy on immigration is established. But the facts on the ground have changed. Balls has a chance to take the open territory, bolster Labour’s economic flank and redefine the party’s internationalism.
The silence can’t last forever. Labour needs to have a policy. The opportunity is waiting.
Atul Hatwal is a community and social affairs consultant
Tags: Atul Hatwal, Ed Balls, immigration
Classy post.
The facts are our friends.