Guardian/Toynbee: Immigration and the housing market

Gerrard Winstanley office at
Sun Aug 13 14:19:01 BST 2006,,1842149,00.html

Immigration is now making the rich richer and the poor poorer

Equal rights for all workers and a proper inspectorate would make
exploitation of migrants much more difficult

Polly Toynbee
Friday August 11, 2006
The Guardian

It was one of those now-you-see-it, now-you-don't policy moments. John
Reid appeared on BBC television to pre-announce a speech he was about
to make on the fraught subject of immigration. He said he wanted to
limit immigration to balance "enhancing the economy of this country
commensurate with our social stability". That is indeed the dilemma -
more GDP v social justice for the low paid.

Soon the EU will decide on admitting Bulgaria and Romania. If they
join the union, will Britain again be one of the few to let their
citizens work here immediately? And what of Turkey next?

The "Reid on immigration" story was sold hard by his special adviser
ringing round the press, who duly reported it. But when it came to the
speech the immigration message had all but vanished. What silenced his
genuinely thoughtful words on this dynamite subject was a deep divide
between government departments: Labour is as conflicted on this as the

The unexpectedly high influx of eastern Europeans, mainly Poles (John
Denham, the Labour MP for Southampton Itchen, estimates that the true
number is closer to 1 million than the official 400,000), has brought
benefits. They bring desperately needed skills, from dentistry to
plumbing, compensating for Britain's historic failure in vocational
training. But their arrival also takes the urgency out of upskilling
our own undertrained workforce. (Wouldn't rapidly trained Newham
apprentices be building the Olympic venues if the Poles weren't?)

The Institute for Public Policy Studies says migrants are profitable:
for every £100 in taxes paid by the average British-born person, the
average new immigrant pays £112. Migrants make up only 8.7% of the
UK's population but pay 10.2% of its income tax. Since many are the
enterprising young and fit who anyway can't claim housing or benefits
here, that's not surprising. They have few costs and many are willing
to sleep on floors to save money. This ideally flexible labour force
does indeed grow GDP, but it is also often grossly exploited while
depressing the wages of all. The minimum wage is some £2 an hour below
a survivable living wage.

So it's no surprise that the CBI and chambers of commerce strongly
support immigration, as do US neocons. Economists puzzle over why a
10-year unbroken burst of growth has not resulted in pay inflation.
Near-full employment should mean pay rises - but cheap imported labour
helps keep it low. Studies purporting to prove immigration has had no
such effect simply don't capture this invisible power. Denham says the
arrival of 14,000 Poles in Southampton has cut rates for building
workers by half.

Even if GDP grows, migration can make the rich richer and the poor
poorer. London, where migration is greatest, also has the highest
unemployment, especially among British-born ethnic minorities. Poor
families in this most expensive city can't pay for childcare, and
compete for jobs with single migrants willing to take less than a
living wage. But the rich prosper: restaurants, cleaners and all other
services are cheaper because wages are low. It is one of the gross
dysfunctions of such an unequal society that the very concept of "GDP
per capita" is a meaningless average that often disguises the filling
of pockets at the top while those at the bottom are emptied.

The Tories are torn between Little England anti-foreigner tendencies
and neocon cheap-labour enthusiasm. Labour are the traditional
celebrators of cultural diversity, and the Treasury gleefully supports
wealth-creating migration. But what if it creates wealth only for the
wealthy, while threatening Labour's social-justice goals? Social
democracy needs enough social cohesion to persuade people that
everyone benefits when resources are more fairly distributed. But
people will resent paying taxes towards others if they feel national
borders are porous to the whole world.

A combination of employer pressure, fear of old Powellite racism
(though Poles are as white as can be) and Home Office hopelessness has
led to a kind of defeatism on all this: nothing can be done,
globalisation means populations move unstoppably. With cheap travel,
mass tourism and students overstaying, no migration can be stopped.
This is nonsense. Social democrats believe in the power of government
- and that requires a government that believes in it too.

First strip away any confusion with refugees and asylum - another
matter altogether. The government has done well in regularising that,
though there will always be intermittent flows from war-torn
countries. Forget terror and crime deportations: that too is a
completely different policy question.

Just consider migration for work. Legal migration is a matter for
political decision-making. The door can be shut on illegals by
protecting all employees from exploitation and low wages. Taking on
new migrants would be less attractive to employers if they had to be
treated equally.

Here the government has turned a blind eye, half deliberately, half
ineptly. Labour helped scupper the EU agency directive to protect
temporary workers. A good gangmasters law still leaves open gigantic
abuse of agency staff, mostly new migrants. But if agency workers had
the right to equal pay and conditions after four weeks' work it would
stop their exploitation and stop other workers being undercut.

Jack Dromey, TGWU organiser of some of the most exploited, finds food
factories such as chicken farms where within the last five years as
many as half the staff have been substituted with migrant agency
workers paid less, without sick pay or pensions. It forces better
employers to copy the worst to stay competitive, without fair laws
strictly enforced to keep a level playing field.

Most EU countries have a proper work inspectorate, but not here. A new
force of inspectors could be privately run, like parking attendants
paid by results to track down rogue employers hiring illegals or
exploiting their staff in any other way. With a clearer work-permit
system, employing illegals should attract heavy fines. Supermarkets or
others at the end of long production chains should be fined for buying
supplies from companies that exploit. Sending back illegal workers and
fining employers harshly would abruptly cut off the supply of illegal
jobs, deterring new arrivals. With a better system of inspection, an
amnesty for illegals already here for years would contribute an
estimated extra £1bn in taxes.

Key players won't be quoted on the record, but official opinion is
shifting sharply away from Britain letting in Bulgarian and Romanian
workers any time soon. (Denham reports that 20% of Moldovans have
secretly obtained Romanian passports). John Salt of University College
London measures the pull factor: there is a precise correlation
between the number of people migrating and the difference between
wages at home and wages in their destination country. In these poor
countries the pull would be very strong - and the 80 million Turks are
even poorer.

It would be a disaster for the EU to refuse entry altogether to
countries that need help to grow, especially Turkey, a Muslim nation
we need to include. But, until they reach a reasonable level of GDP,
that should not mean letting people migrate to work yet. The French
non in the constitution referendum was partly a public revolt over the
"Polish plumber" fear. Another big migration could imperil the EU itself.

polly.toynbee at

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