Monthly Archives: November 2013

The argument for Scottish independence: it’s better to change stuff

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First Minister Alex Salmond

First Minister Alex Salmond (Photo credit: Wikipedia)

A brazen attempt to shape reality was made yesterday by Scottish First Minister Alex Salmond as he launched the white paper making the case for Scottish Independence.  He said, “If you’re in a political argument would you rather be on the positive side of the argument or the negative?  […]  The positive beats the negative.”  A number of other pro-secession spokespeople used the same language, painting the vision of an independent Scotland as the “positive” choice, with those who oppose it only concerned with the “negative” case of what might go wrong.

This is a remarkable line of argument.  If we are to take it seriously, it follows that any departure from the status quo is “good” and any caution or conservatism is “bad”.  Forget the intricacies of currency unions and shipbuilding jobs, what matters is that we’re changing… and that’s positive!  Isn’t it?

Imagine if our leaders had taken that line on joining the Euro or bombing Syria – both would have been “the positive side of the argument”.  Luckily, in each case enough MPs were prepared to be “negative” to spare us the potentially horrendous consequences of action.

You might think no one would be taken in by this kind of childish construction.  Yet Mr Salmond is an extraordinarily able politician, and he’s only too good at shaping the political reality of Scotland.  The power of this artificial positive/negative divide was demonstrated when, on the World at One, Britain’s anti-secession Secretary of State for Scotland, Alistair Carmichael, felt the need to respond by searching for possible new positive outcomes should Scotland remain part of the United Kingdom.

Scotland is contemplating a great leap into a radically different future.  Any responsible Scot deciding which way to vote should clearly weigh up the pros and cons of going it alone.  If they feel the cons outweigh the pros, that does not mean they are preaching “doom and gloom” and “negativity”, as Salmond would have it.  They are simply assessing the case for change.  Independence is not “the positive choice” for Scotland.  It’s just a choice.  Maybe it’s the right one; maybe it isn’t.  But the decision shouldn’t be influenced by such cheap reality-shaping tactics.

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What have the Romanians ever done for us?

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English: The UK Border at Heathrow Airport

UK Border at Heathrow Airport (Photo credit: Wikipedia)

A study entitled “The Fiscal Effects of Immigration to the UK” has just been published by University College London.  It argues that recent immigrants are less of a burden on the state than British natives, and indeed have made a more positive financial contribution to the UK than the average local.  Welcome news, especially given the hostility to immigrants in certain sectors of the media and British society.

However, this is a fiendishly complex subject and inevitably the headline changes dramatically if different factors are included in the calculation.

For example, most recent immigrants are of working age, and therefore are more likely to be in employment than all our retired natives.  If these immigrants remain in Britain as they age then the state will have to bear considerable future health and pension costs.  The study celebrates the taxes immigrants pay now without considering the later benefits they will justifiably claim if they settle here permanently.

A crude but common complaint against immigrants is that they “steal British jobs”.  Often they are better skilled or more diligent than their native rivals, and employers benefit accordingly, contributing to the UK economy through increased corporation tax, more competitive exports, or cheaper goods and services.  If this economic gain from high performance immigrant labour were factored in to the calculation, the net contribution of immigrants would look even rosier.  But the fact remains that many of the jobs filled by immigrants would otherwise have gone to British natives who must instead depend on the state.  The cost of their unemployment benefits and the loss of their income tax ought to be weighed against the tax contribution of the immigrants who have replaced them.

We should also consider what different workers do with their wages.  Recent immigrants are very likely to send remittances abroad, taking earnings out of the British economy.  The British workers they’ve replaced would have returned a greater proportion of their discretionary expenditure to British businesses (if only the local pub).  There is a multiplier effect whereby for every extra pound spent in the UK economy fractions of that pound will be spent and re-spent, with taxes paid to the state each time; similarly, a pound lost to the economy reduces total economic activity by considerably more than one pound.  Even if she never claims a penny of state welfare, a Pole who (quite reasonably) sends half of her income to her family in Poland is diminishing UK economic activity (and therefore UK tax receipts) if that income would otherwise have gone to a native worker.

This is a highly charged subject, and I should stress that I’m all for immigration into the UK.  We benefit beyond measure culturally, intellectually and creatively from all the energetic, skilled and enterprising people who devote their best years to this wet, grey island.  But putting immigrants on a set of financial weighing scales to prove their value is dangerous.  Too many different truths can be claimed by selectively including or omitting the various complicating factors discussed above.  Make the case for immigration on a purely fiscal basis, and you may well find your opponents come up with a more compelling calculation that tells a very different story.

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