The problem with EU youth mobility scheme
It's great for graduates - less so for those who need good-paying jobs
Word is that Keir Starmer’s government is going to offer the EU a youth mobility scheme, where Brits under-25 could study in Europe - but all EU under-25s would also have the right to work here. I had two conflicting reactions: first, thinking how great it would be for every Brit to have the right to live and work in Europe. And next, remembering how that worked out for us last time - fuelling the welfare crisis and triggering Brexit.
This is, in part, a class issue. Middle England gets a ticket to ride for its sons and daughters (one in five gap-year students are financed by the Bank of Mum & Dad). But working-class Brits see a flood of competition for jobs that lack the pay or prospects they once did. Care homes get away with dismal pay. In general, the low-wage, low-security business model is perpetuated.
I was slow to realise this. My generation had grown up in the Cold War and suddenly found peace and prosperity. It was one of the developments that led me to become (and remain) a committed Europhile. So it was hard for me to accept that my dream had a side effect, especially on the lower-wage end of the labour market. Jon Cruddas, then a Labour MP, took me to Dagenham to meet BNP voters: his point was that their concerns were not racist but practical. Far more European nationals arrived than expected, public services for them had not been built. Employers loved the surge of cheap, well-qualified and motivated foreign workers and started to make less effors to hire and train locals. Entry level jobs were no longer the bottom rung of a ladder that might be climbed. My dad had made his way being a from milkman to an RAF officer, but the new entry-level workers were hired by agencies. Cleaning, shelf-stacking: contractors did this. And far more easily, given the fresh supply of immigrants. The wages of skilled workmen (plumbers, carpenters) started to stagnate.
Worse, the rules on mass immigration were set by those who did not properly understand the outcomes. We’d bleat on about it being a ‘net benefit’ without being willing to discuss the problem: the gains went to the rich, the headaches to the poor. When John Hutton was Minister for Work he told me just 2pc of the UK workforce were migrants. It was 10pc - and has doubled since.
The vote for Brexit was a vote to dial back a globalisation model that had over-reached: to restore the basic power of controlling migration numbers. And usher in a new, more cohesive economic model. I voted for Brexit with a heavy heart, realising the system that had worked so well for me and my fellow graduates was not working for others.
Youth mobility, to me, meant Euro-railing or working in bars around Europe; travelling to Stockholm to see my girlfriend and knowing I was as free to work in her country as she was in mine. I ended up with inlaws who spoke a language that was, when I grew up, that of a Cold War enemy. My European dream was very real.
For others it meant Bulgarians being bussed over so employers could skip the pain of trying to lure the long-term unemployed. One FTSE100 ceo told me how he’d pick up a phone to a workers’ agency in Gdansk and his warehouse staff would be over in a few days. Better than Brits who may not show up! Far better for employers, but meant the transformation of towns like Boston: the Eastern Europeans arrived and the well-paying, secure factory jobs left.
Reversing this, of seeking to, was very necessary for the cohesion of a nation-state economy: we did not realise how much our social contract depended on employers taking extra lengths to find workers.
That was why I voted for Brexit: it was a vote to build a more democratically-acceptable version of globalisation. You need to carry democratic consent. At first it worked: voters got what they wanted and concern about immigration collapsed. Then it turned out that the Tories bungled the new Brexit migration rules (especially on dependents) and rather than control migration we saw what’s now called the Boriswave. Net migration is now expected to settle higher than pre-Brexit levels
Now, eight years after the Brexit vote, Keir Starmer is seeking to get a closer relationship with Europe. I have no problem with that - but if it means rowing back on migration controls then I’m less relaxed. Because here is - to me - the No1 problem in the UK today: mass worklessness.
Mass immigration gave the UK the option of growing the economy without shrinking the pool of unemployment - and on a scale never seen before. Look at the effect it has had on our major cities: a quarter of Birmingham now on out of work benefits (and 11pc on sickness benefit). In Liverpool, Glasgow and Manchester it’s one in five.
The only way out of this mess is to repair the basic economic link between employers and those on out-of-work benefits. This is hard - and harder depending on how long they have been on benefits. To repair this social calamity it will be necessary to go cold turkey on the drug of cheap labour: that means end low-wage immigration. This will cause economic difficulty, but it will move more people back into the economy and society.
The danger is that Labour agrees a scheme intended for for jet-set graduates, but ends up opening the door to the low-waged casual labour that it needs to clamp down on if it doesn’t want to be annihilated by Reform UK at the next general election. And it’s cheered on by the graduate class, with no one modelling or correctly anticipating the effect on the low-waged economy.
Why Britain needs a great migration
The Nobel-winning economist Angus Deaton recently pointed out that tight US immigration controls in 1917 helped the ‘great migration’ of black from the south to the north. The northern factories, railroads, and meat-packing plants—already short of workers due to the WWI draft— were forced to mount aggressive recruiting drives in the South. Black newspapers printed train schedules and success stories; employment agencies offered free tickets north. The employers other industrial employers would have preferred those applying from Belarus etc but the federal government wanted a migration pause and cut European migration by three-quarters. Tighter migration laws did not cause the Great Migration - it had already been set in motion by deep southern push factors and wartime shocks. But it removed a key barrier: competition from newly-arrived European labor.
Britain needs something similar now: a ‘great migration’ from welfare into work. to help it along, employers need to be weaned off the drug of cheap migration - especially for the entry-level jobs typically taken by the young.
The side effect to my graduates’ playground was the erosion of the link between economic growth and the country - especially the places where jobs are needed. Brexit was a vote to repair that link and when the Tories failed they were thrown out. If Keir Starmer wants to avoid the same fate, he needs to be very careful: allowing a EU youth mobility scheme could be a big step in the wrong direction.