Not the Economy Stupid. International Migration and the Decision to Leave the EU
Prof David Coleman First Published in Population and Development Review Vol 42 Dec 2016. To obtain full article, including charts and tables see this journal
As demographers we are used to the idea of expert opinion. In the absence of any reliable way of foretelling the twists and turns of future migration, for example, our own opinions may seem to be an option as good as any. In demography, the distribution of expert opinion about the future is often rather scattered. Not so expert opinion about choice between ‘leave’ and ‘remain’ in the referendum on the European Union held in the United Kingdom on June 23 2016.
An irresistible force
There, expert opinion pressed with near-unanimous and crushing weight upon those who might be tempted to vote to leave the EU (voting for ‘Brexit’). A glorious company of economists warned of the serious negative consequences – both short and long term – of leaving the EU after forty three years of integration into its benefits. 88% of 600 economic experts in an opinion poll on 28 May feared a long-term fall in GDP if the UK left the single market, and most expected a reduction in household income. On 19 June ten Nobel-prize winning economists weightily reinforced that view (Asthana 2016), seconded by the formidable Madame Lagarde of the IMF (Inman 2016), the OECD (2016a), Goldman Sachs, Mr George Soros and a goodly fellowship of lesser bodies. The British Chancellor of the Exchequer George Osborne (now ex-Chancellor of the Exchequer George Osborne) painted a particularly grim picture (HM Treasury 2016), warning of the immediate emergency measures that he would have to take to fend off economic collapse in the case of a ‘leave’ vote. All that was backed up by the near-unanimous view of a noble army of politicians: all the leaders of the EU countries, Mr Cameron and all but six of his cabinet, a majority of members of the UK Parliament, all living former UK Prime Ministers (and no doubt dead ones, especially Mr Edward Heath), thirteen former US Secretaries of State and the former head of the CIA. Five former heads of NATO, and most former security chiefs of the UK warned of weaker European security post – Brexit. Last but definitely not least, President Obama himself warned against Brexit in an address to the House of Commons, and the diminution of UK’s importance to the US. That, however, may have been counter-productive, being seen by many as intrusive, arrogant and threatening. Most of the broadsheet press; The Guardian, The Observer, The Times on most days, and business-oriented journals such as the Financial Times and The Economist, were solidly behind Remain.
Neither would intellectual and artistic life survive without damage. The Nobel Laureate Stephen Hawking and more than 150 Fellows of the Royal Society warned that leaving the European Union would be a “disaster for UK science…..and universities”, a view held by all heads of UK Universities themselves and fairly unanimously in the scientific community. Almost three hundred prominent actors and musicians saw serious damage to the arts. Some expressed themselves in forthright terms. ‘don’t **** my future’ tweeted the glamorous actress Keira Knightley, known to some readers as Elizabeth Bennett in the film ‘Pride and Prejudice’, in a less than decorous outburst. And who would argue with Daniel Craig? Deep rumblings about disinvestment from Japan and China added to the gloomy scene. This relentless bombardment, day after day, was termed ‘Project Fear’ by the Brexiteers, and not without reason. Like the onslaughts at the Somme and Verdun, it seemed impossible that it should not achieve its aim. Very likely it made the ’Remain’ vote higher than it deserved. But in the end it failed.
In view of all that it seems remarkably perverse for the British electorate to have voted for Brexit, in a clear but far from overwhelming majority of 51.5% to 48.5%; a majority of 1.3 million voters. The turnout was very high; 83%; much higher than the average turnout (63%) in the last four General Elections of 2001, 2005, 2010 and 2015. Even more perverse, those regions of the UK which have benefited most from EU funds – Northern rust-belt areas, poor rural areas in Cornwall, Wales and elsewhere are exactly those where the Brexit vote was highest. The five areas of the UK that receive the most funding from the European Union all voted “Leave,” while four of the five areas that receive the least voted “Remain.” This has been called ‘Brexiting yourself in the foot’. Of course residents are aware that these grants are only a fraction of what the UK transfers to the EU in the first place. But it suggests what the polls have underlined; that questions of sovereignty and control of borders trumped the economy.
The statistics of referendum – who voted which way, and why
Who voted which way? Several opinion polls give similar results. In Lord Ashcroft’s poll (2016, n=12,369), 70 percent of graduates voted to remain, 30% to leave. There was a similar preference (68%) on the part of professional and other non-manual workers. 75% of voters aged under 25 voted to remain, declining to 39 percent of those aged 65 and over. Remainers predominated in the professional and skilled non-manual occupations, and among persons with mortgages or renting privately. Those who owned their homes outright (mostly older), or were in social housing, voted to leave. Most people in work voted to remain, those without a job, or retired, to leave. Most with a university degree (57%) voted to remain, 64 per cent of those with a higher degree and 81 per cent of those still in full time education. A small majority of White voters voted to leave (53 per cent) while 67 per cent) of Asians (self-ascribed) and 73% of blacks voted to remain. ‘Leave’ predominated in the rust belt areas in the North and in rural areas. London, now almost a different country, was strong for Remain, as was Scotland, possibly on the way to becoming a genuinely different country.
Reasons for voting to remain or to leave
Remainers thought that remaining in the EU would be better for the economy, for prices, international investment, and for the UK’s global influence. Remaining would give the UK “the best of both worlds”, membership of the EU Single Market without Schengen or the euro. Many also feared that the UK would become more isolated, although only nine per cent claimed “a strong attachment to the EU.”. The Remain campaign (‘Britain Stronger in Europe’) had concentrated on the economic threat of departure, not the positive advantages of EU membership. Universalist ideals of ever-closer union, of a borderless and inclusive future in a common European citizenship were given little prominence. Indeed all the positive aspects of EU membership were given little emphasis. Many supported ‘Remain’ in a mood more resigned than enthusiastic. ‘Britain Stronger in Europe’ said nearly nothing on immigration and thus could not counter the strongest argument put forward by ‘Vote Leave’. Mr Cameron’s negotiations with the EU before the referendum had yielded no plausible concessions on limiting freedom of movement – the most decisive factor of the campaign.
For Leave supporters, sovereignty and autonomy emerged as the single most important consideration; permitting immigration to be controlled. Few saw economic advantage in leaving. An Ipsos Mori poll (n=4,000) of 10 May found that while the economy was still the top issue overall (57%); 55% of all voters, 95% of Leave voters and 20% of remain voters thought the government should control borders even at the cost of leaving the EU. So, rather importantly, did 60% of the undecided. 48% stated that the number of EU immigrants coming into the UK was an important factor. Britain’s ability to make its own laws was emphasised by 50%. Two-thirds (66%) believed that EU immigration to the UK would decrease if Britain left the EU. 44% even agreed that the government’s annual net migration target of ‘tens of thousands’ (widely regarded as climbing Mount Impossible) could be achieved given Brexit.
The vote was about more than the economy, or even migration, and even specifically English semi-detached resentments (Goodwin and Heath 2016, Pew Research Center 2016). It matched a mood shared with many industrial states; a disaffection with politics illustrated by falling turnouts and party membership, a dislike of rising inequality and insecurity and a distrust of a political elite disconnected from popular contact and opinion. Tombs (2016), citing the historian John Gillingham, notes that Europe is now being governed by neither its peoples nor its ideals, and that the EU has taken away national democratic authority and its legitimacy and replaced it with an intrusive bureaucracy which earns little affection or loyalty. An historian usually famous for the elegance of his writing observed that the British referendum offered the plebs a rare opportunity, independently of political party, to ‘kick the establishment up the backside’. Which they duly did. The 17,410,742 votes for ‘Leave’ were the largest number ever cast for any cause in any British election; in part, a ‘working class revolt’ (Harris 2016).
The demographic consequences of Mr Blair.
The rise of immigration, in numbers and in public concern, was crucial to the Brexit vote. Until the late 1990s there had been an uneasy political consensus to limit inflows. Although trending slightly upwards, annual net immigration was then about 40,000. As soon as elected in 1997 the Blair government began to dismantle that consensus. First, pleasing its minority voters by removing the ‘primary purpose rule’ intended to filter out fake marriage applications. A more fundamental revision followed in 2000. That was to welcome inflows now regarded, on slight evidence, as being essential to the UK economy, rescuing it from population ageing and increasing ethnic diversity, now regarded as an essential asset, not as a problem as hitherto. According to the Blair aide Andrew Nether (2009), one of the aims of the New Labour policy of opening up the UK to mass immigration was to ‘rub the Right’s nose in diversity’, promoting permanent ethnic change to the permanent advantage of Labour’s aims. In its first aim at least that policy has been highly successful, more so, it seems than its authors envisaged, according to Watt and Wintour (2015). The new policy provoked a rapid upsurge in migration which continues to reach record levels. 3.3 million immigrants came to the UK from 2001 to 2014. (Figure 1).
Figure 1. Annual net migration to the UK 1991-2014 (thousands).
Immigration, mostly then from outside the EU, had already reached record levels when in 2004 the Blair government, alone among the major economies of the West, allowed free entry for work to the eight new Eastern European EU accession countries (the ‘A8’) as soon as they joined the EU in 2004. The rapid increase in EU migration is apparent in Figure 1. 167,000 people born in the A8 lived in the UK in 2004. 988,000 in 2011. The Polish-born population increased from 95,000 to 643,000. By contrast the German population hardly changed. The A8 countries had a lower level of income (53%) and social and political development relative to the EU average at the time that they joined compared with earlier candidate countries such as Spain and Portugal (65%). The EU lowered the bar even further for Bulgaria and Romania in 2007 (29%). Everything known about migration pointed to a very large influx, but the government fatuously predicted that ’13,000 per year’ would enter. In fact 53,000 arrived in the first year and inflow peaked at 112,000 in 2007, estimates now known to be seriously under-counted. By 2013 1.24 million people born in Eastern Europe lived in the UK, compared with 170,000 in 2004; the biggest inflow in British history. No forward planning or provision whatever was made for this Blairite influx. Indeed it has been so great that it would have been difficult to make adequate provision. Hence many of the present problems in schools, housing, transport and the National Health Service (NHS).
Many problems of this growth, and resentment about it, arise straightforwardly from the pressure of numbers. UK population had nearly stabilised in the 1970s and 1980s. Birth and death rates were then in balance; in some years more migrants left than arrived. There were even very small falls in population from 1975-78 and in 1982. Annual growth in the 1980s was 0.02%. New Labour’s New Immigration changed all that. Between 2013 and 2014, UK population increased by nearly half a million (491,000) or 0.77% per year, one of the fastest rates of any industrial country. Net immigration contributed just over half (54%) of that growth, and to 58% of growth since 2001 (Figure 2).
Furthermore, women born overseas contributed 27.5% (192,227) to all live births in England and Wales in 2015, and 33% of births had at least one immigrant parent, more than doubled since the 1990s (ONS 2016a). Taking into account both net migration and the natural increase of the immigrant population, compared with the much smaller natural increase of the UK-born population, migration accounted overall for 85% of UK population growth from 2001-2012. Among mothers born outside the UK, Poles now rank first (22,928 live births), more than Pakistanis (17,342), Indians and others formerly at the top of the list. Romania is now fourth (7,552). The total fertility of many recent Eastern European migrant groups is much higher than the UK average and in the countries of origin (Dorman 2014). Much of that, however, may be a temporary adjustment to new and favourable conditions.
Why does all this matter? There are two chief objections to large-scale immigration in the British context, setting aside economic arguments. First that it is driving population growth and size to unsustainable levels, and second that it is rapidly changing the composition of the population in ways highly unpopular and damaging to the social structure.
One effect is upon housing. As with population, most of the increase in additional new households is driven by migration. Table 1 shows the percentage of the increase in households from 1996-2000 up to 2010-14 with a ‘household reference person’ (HRP, in effect the head of the household) born outside the UK. The last period was exceptional as fewer households were formed. While growth in households does not translate exactly into housing demand, these official data show the predominant effect of immigration on the housing situation. Most housebuilding demand is driven, mostly indirectly, by immigration, as immigrant populations grow mostly in urban areas and the non-immigrant population departs to the suburbs and the small towns beyond. For as long as immigration continues at a high level, that will continue. These facts are seldom raised when the housing crisis in the UK is discussed.
Table 1 Proportion of change in all households attributed to households with an overseas-born household reference person. 1996 – 2014.
Finally, immigration is making the most fundamental permanent change of all, in the composition of the population itself. In the 1991 census, the first to record self-ascribed ethnic origin, the non-white population, mostly of post-1960 immigrant origin, stood at three million or 6% of the total in England and Wales. By 2011 this had increased to nearly 8 million, or 14% of the total (Table 2). Those describing themselves as ‘White British’ comprised 88% of the total population in 2001 and 81% in 2011. Between the 2001 and 2011 census, the ‘White British’ population in England and Wales declined by four hundred thousand, the non-white population increased by over three million and the population describing itself white but not British (‘Other White’, many from Eastern Europe) increased by just over one million. All the four million addition to the total population of England and Wales between 2001 and 2011 arose from ethnic minority growth through immigration and natural increase. The 2011 Census showed that, for the first time, the ‘White British’ population of London accounted for less than half of its total population (44%). Compared with 2001, that population had fallen by nearly 620,000 or 14%, while the non-white population rose by 1.2 million or nearly 60%. The one million increase in the numbers ticking the ‘White non-British’ box are mostly from Eastern Europe (all these ethnic categories are self-assigned in the UK census and surveys). Transformation of the ethnic and cultural makeup of the population, not just in London but in smaller towns, has been very obvious, very rapid, and unpopular.
Table 2 Change in the ethnic composition of the population, England and Wales 1991 – 2011.
Future imperfect
The latest 2014-based projections from the Office of National Statistics (ONSb) assume that net migration will fall rapidly to a constant 185,000. A high variant assumes 250,000; a low variant 120,000. In the Principal Projection (PP) the UK population (now 65 million) exceeds 70 million in eleven years, reaches 77 million by 2050 and exceeds 80 million by 2060. Within the time-limits of the projection, population continues to grow without ceasing. In the high variant, growth is even more striking: 80 million is reached by 2050. These are huge increases, completely out of line with former population trends. In fact the projections seriously understate the implications of recent actual levels of immigration, which are much higher than the ONS estimates; 323,000 in the twelve months to September 2015, the latest available at the time of writing. About half was from the EU, half from outside it. ONS gives no reason for assuming why net migration should fall so quickly to scarcely half its current actual total.
Figure 3. UK population projections 2014 – 2064.
Note: The solid lines are official projections from ONS. The top line is a projection made for this paper using ONS assumptions about fertility and mortality, but actual migration as in 2014. The ONS variant projections do not extend beyond 2039.
Were the 2014 actual inflow to persist, UK population would exceed 80 million shortly after 2040, and ninety million shortly after 2060. Comparison with the zero migration variant makes it clear that almost all the projected increase in any of the variants arises from migration, of the post-2014 migrants themselves and their children born in the UK after 2014.
That has big implications for the ethnic future of the UK. A projection (Coleman 2010), based on the more modest net immigration of 2008 (180,000) yielded the results in Figure 4. The migration was subdivided between twelve ethnic groups including ‘Other White’. The birth rates of the different ethnic groups were assumed to converge, all groups were assumed to share the same declining mortality (the ONS itself does not make projections of ethnic groups).
Projections become progressively uncertain with time, and results depend on assumptions. But there would have to be major changes in the components of the projection to make any big difference, most particularly in migration. On the 2008 level of migration, much lower than at present, the minority population would increase to 23 million by mid-century while the ‘White British’ population fell slowly. Taking the projection further out, the ‘White British’ population would cease to be the majority in the UK the late 2060s. Should current high levels of immigration persist, that would happen much sooner. Britain would then become unrecognisable to its present inhabitants.
Figure 4. Percent of UK population in three major ethnic categories 2006-2056.
The effect of Brexit
What might Brexit do about all this? Migration from the EU used to be modest, never exceeding a net inflow of 30,000, in some years negative (Figure 1). Then, all EU member states had comparable economies and stable politics. EU expansion and the British government’s response to it, the 2008 crash and the problems of the Euro changed all that. Without intervention, there is little reason why migration from the A8 countries should fall soon. Big wage differentials, not welfare, are the main attraction drawing A8 nationals to Britain. Even at an optimistic 3% rate of convergence, those economies could not converge until about 2050.
The problems of the Southern Eurozone economies have added a new dimension of immigration from the EU. Youth unemployment has been kept high for years by the European Social Model which protects existing employment at the expense of job-seekers. As Figure 5 shows, it became markedly worse after the economic crisis of 2008, in Greece and Spain exceeding 50% for a short time. Except for France, recovery is evident from these extreme levels but economic forecasts are very uneven and the root cause – the Euro – will not go away. Although Eurozone economic indicators are edging upwards, most of these countries are still in the grip of severe and highly unpopular financial austerity measures imposed by the European Central Bank. Some believe that the EU inflow into the UK is partly responsible for the persistent high level of youth unemployment in the UK; 12% in 2004, 15% in 2015.
Figure 5. Youth unemployment trends (percent), selected countries 2004-15. Source: OECD.
Had the UK decided to stay in the EU further potential inflows would have developed. The relentless drive to the East by the EU Commission will activate further sources of migration to the richer EU countries as more poor countries are embraced. Croatia joined the EU in 2013 and its citizens will be free to seek work in 2020. Looking further to the future, citizens of new accession countries whose applications are in the pipeline will be eligible to look for work in the EU once joined. These are: Albania, Macedonia, Montenegro, Serbia and Turkey. Bosnia and Kosovo are in the wings as potential candidate countries. Ukraine’s candidacy has been discussed but is hardly on the cards at present, neither, now, is that of Turkey. Most of those mentioned are small, Turkey and Ukraine are large. Like the A8, they all share a much lower level of economic and political development that the EU15. The long-run migration potential from those countries is highly uncertain – estimates range from 2 – 4 per cent of their population up to 12 – 15 per cent. But it is likely to be large, at least in percentage terms, and certain to be heading westwards. In case these figures seem fanciful, recall that one third of the population of Albania is already estimated to be living in Western countries.
A further source of inflow will been averted by Brexit, once that is achieved probably in 2019, assuming limits on free movement. Once resident for a few years (between 6 and 8 years in Germany, 5 to 10 years in other countries) the million or more migrants who have entered Europe in 2014 and 2016, and those still to come, will potentially be eligible for citizenship of the EU countries in which they reside. As EU citizens, they would have been free to move to the UK had the UK had stayed in the EU.
Now that the UK has decided to quit the EU, what possibilities arise for limiting migration? For many voters that, after all, was the whole point of the exercise. At the time of writing the government has advanced no plan. Non-EU migrants are not directly affected, but business interests have suggested that immigration from non-EU countries should be increased to compensate for any reduction in EU migration. Some are also hoping for a compromise whereby good access, or even membership of the European Single Market could be retained outside the EU, as enjoyed by Norway or Switzerland. However the European Commission and the governments of EU countries are adamant that such membership would require freedom of movement, on which there can be no compromise. Even if it wanted to, the Conservative government could not go down that path without enraging most of its activists, and a good proportion of the voters, for whom the opportunity to limit migration was the most important element of the re-assertion of sovereignty for which they voted.
One proposal would impose work permit requirements on EU citizens wishing to work in the UK, ending the entitlement to enter to seek work. Work permits would be issued on similar criteria as now applies to labour migrants from outside the EU; that is, a graduate-level job with a salary of at least £20,800 per year. A quarter of all jobs in the UK are at that level. Oxford’s Migration Observatory (2016) states that 81% of the 2.2 million EU citizens currently employed in the UK, and over 90 percent of those in retail, restaurants and agriculture, would not meet those visa requirements. Only 12% of newly arrived workers from the EU since 2010 met that requirement.
The supply of low-skill workers from the EU, on which many employers have become dependent since 2004, would dry up. There is already pressure to re-introduce the Seasonal Agricultural Workers Scheme (SAWS) which permitted short-term seasonal recruitment of agricultural work. That scheme was abolished in 2004 when A8 access opened the door to the abundant unskilled labour of Eastern Europe. The migration research group Migrationwatch (2016) has proposed a mix of schemes for labour, with an annual limit of 30,000 for skilled workers combined with free access for tourism, genuine marriage and family reunion, retirement and investment. It calculates that 22% (273,000) of the 1.25 million EU workers who arrived after 2006 met the Tier 2 requirements. Of those, 46% are from the EU 14, 10% from the A8 and 20% from Bulgaria and Romania. That scheme would reduce net migration from the EU by about 100,000 per year, from its present 180,000.
Few doubt that the migration issue was crucial to the Brexit vote. Support for the United Kingdom Independence Party (UKIP), which campaigns for stricter immigration control and withdrawal from the EU, increased greatly as immigration surged in the years before the referendum (Curtice 2015, NatCen 2014). In part, Brexit is its victory. Mr Cameron’s failure to secure EU agreement on limits on overall EU migrant numbers is widely regarded as a key factor in voters’ rejection of his appeal to stay in the bloc. Brexit was his nemesis. And through his government’s role in promoting the surge in migration, especially after 2004, Brexit may come to be regarded as Mr Blair’s most notable achievement.
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