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Wednesday, 11 September 2024

Letter from pre Brexit Britain

I stumbled onto this article in my drafts folder. It dates back to 2016, the year of the Brexit referendum, and was abandoned because, as a FCA staffer, I was ultra conscious of publishing (UK) politically charged material. I literally asked for permission to publish it and was denied. I have no doubt many of my colleagues, not to mention others in the civil service proper, sat on similar statements in order to defend their organisations' impartiality.

I'm long gone from the FCA and even the UK itself, so perhaps now is a good time to share. I have not changed the content of the post and have not even checked for link rot.

Enjoy.

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It has come to it at last. 

This blog will campaign for Britain to remain in the European Union - forever as sceptics and reformers, but also as eager members of a single market and committed citizens of the Union. 

What I believe

I believe in personal liberty, in free movement and free trade. I want as much of Europe, indeed as much of the world, as possible to be a place where British people can come, go, trade, settle and enjoy their rights as easily as though they were natives. And I want as many Europeans, indeed as many people, as possible to have the chance to do the same here in the UK. It's hard to achieve this without some level of harmonisation, reciprocity and arbitration. Europe aims to provide all of these things. That it doesn't always do so as well as it could is a reason to invest in the project - not to abandon it for one that does not even try to deliver on the same goals.  

I believe in democracy - and it hurts me that the European institutions can be so opaque, distant and insular, and indeed so unaccountable - not just to British people, but to anyone that doesn't work in the Brussels bubble. It hurts me that Westminster and Whitehall can be no less opaque, distant and insular, and occasionally as unaccountable, to everyone outside the small politics/policy bubble in which I work. The struggle against these evils is the same, and its tools are the same, wherever on the map the battle lines are drawn. Just as, say, the Scots were right to remain in the UK and stick with 'distant' Westminster, so will the Brits be wise to remain in the EU. 

I believe in sovereignty. Whatever happens I'll never regret the fact that the British people got to vote on continued EU membership - and I thought the same of Scotland's referendum. The question of how the people should decide matters of sovereignty is of a higher order than the question of which course they should choose. But sovereignty is tempered by the realities of power and influence: no country can punch above their weight without pooling sovereignty with others. A trade agreement limits a country's power over its terms of trade, so long as its partners reciprocate; a defence agreement binds it to the decisions of its allies, and vice versa.  

There is no tension between Euroscepticism and the Remain vote in my mind. The EU institutions are state institutions and hold power over us - they would continue to do so in many ways even post-Brexit. To question them is natural. To demand transparency and accountability to the European people(s); to hold them to standards of fiscal discipline or good regulation; to demand that they respect the principle of subsidiarity by devolving policy to the local level unless absolutely necessary; all of these are only natural. All of the Quitters should have joined in this work of reform, lent their energy and (in some cases) expertise to it; their error is not that they criticise the EU but that so many of them opted for exit over voice from the start. We needed you, Quitters, and you abandoned us. 

And here's the last thing I believe in. Europeans are not alien peoples living inscrutable lives in a different world - they are our people. Not in the racist sense of being predominantly white people of a Christian background, but in the real sense of having the same points of historic, cultural and political reference. They know, as we do, the glories and follies of colonial power; the lessons of classical Rome or Greece; the trauma and shame of the World Wars; the dream, however misguided, of a welfare state that can shield the people from want and squalor; and that of a free press and an independent judiciary; the joint task of rebuilding what was destroyed by the Socialist experiment; the journey, sometimes incomplete, to a secular state;  the struggle for equality and tolerance; and the traveller's joy at blurred borders. None of the up-and-coming powers of the world share all of these things with us in quite the same way. Some of them we don't even share with the Americans.  

What the referendum is really about

Britain can cease to be a member of the EU, but it can't physically leave Europe. Nor is it any side's intention for Britain to stop trading with European nations, or to prevent their nationals from visiting at all.  Skilled EU migrants will still be welcome - with Visas, but welcome nonetheless. And the proximity of Britain, physical, cultural and linguistic, will lead them here as long as our economy is growing.

Whatever the outcome of the referendum, Europe will always be our back yard in a way that the Americas or Asia or Africa will not be. For some, including myself, it will also always be our home. We should all want it to work well because if it doesn't we too will share in the consequences. Their politics, their wars, their financial crises will always spill over to us and vice versa. But Brexit can only reduce our influence in Europe, in return for, let's face it, only four freedoms, in descending order of value to me:
  • the freedom to change our mind about laws passed in the past, even if the rest of Europe hasn't caught up yet. (Where do I sign?)
  • the freedom to occasionally hold the least extroverted of the UK's businesses to more appropriate, more flexible standards (Why not?)
  • the freedom to hold UK governments to more flexible standards when it comes to respecting the rights of UK residents or subsidising UK businesses (Wait what?)
  • the freedom to discriminate against more of our fellow men and women because of their place of birth or residence. (WTF?)
Brexit is not some heroic sortie, sticking two fingers up to a dictatorial creeping super-state. It is walking away from the broadest, most profitable foothold Britain has ever had on the world with free, willing partners on the other side.  Never before have we shared so comprehensively in the wealth of other nations without holding a gun to their heads.

Nor is Brexit a broad popular movement against the bloodless, joyless talking heads of the Establishment. It is a cynical bargain between those who fear or resent globalisation, and those of a more libertarian bent that would unshackle themselves from a continent with a long tradition of meddlesome socialism in favour of a new globalisation. The former bring their sheer numbers and a good helping of political cunning; the latter bring the intellectual muscle and gravitas. So the Leave campaign can shapeshift to speak as one group of the other - until the day after the referendum when it becomes clear that they can't both claim a popular mandate.

Who I stand with
I stand with the majority of British businesses who don't want to be torn out of the Single Market. I stand with younger people and degree-educated people through the UK, who each favour staying in the EU by a large majority, and particularly with the one third of British people who don't feel they have to choose between feeling European and feeling BritishIn short, I stand with the people and businesses most likely to be net contributors to Britain's fiscal and trade balance; the ones who will pay both the price for Europe and the price for non-Europe. And I stand with the majority of Britain's MPs, the actual lawmakers that Brexit will supposedly return power to, who want us to remain in the EU.  
I don't stand against any of my fellow British citizens who, with their country's best interests at heart, have weighed what evidence they could and chosen Brexit. I wish they'd see my side of this argument. I do stand against cynical Quitter politicians who insult their own followers with unholy alliances brokered in the back rooms of a Russia Today studio, or attention-whores who treat Britain's future relationship with Europe as a lesser concern than their own careers and simply must decide their position at the last moment, over dinner with a media mogul oligarch. 

I do stand against those who peddle outright lies, knowing that it takes much more work to repair the damage of a false meme than it does to spread one; those who play dog whistle politics, depicting EU citizens as criminals, terrorists or rapists; those who denounce all 'experts' as though anything but expertise stands between us and an early grave; those who promise, with an eye to focus groups, to shower 'our NHS' with money snatched back from Brussels while also promising, depending on the audience, to rob it of many of its most-needed professionals or dismantle it outright. 

What's in it for you
  • If you're talented, hardworking or financially comfortable, the EU is a diversification policy. It ensures that you can move your life and business to any Member State virtually overnight if you wish to - porting over your employment rights, your qualifications, your pension savings and social security entitlements, with little fear of discrimination and limited bureaucratic obstacles. As with diversified savings, diversifying your citizenship away from one country dramatically improves your position by smoothing out (some of) the idiosyncratic risk that comes with being tied to the UK. Why would you need this insurance policy? Who knows? Maybe your specialism will become saturated in Britain; maybe the country will find itself in another long recession; maybe you'll need a change of scenery. Hell, maybe you'll fall for an attractive stranger on holiday. It can happen to you, Quitters. Even Nigel Farage fell for a German, you know.
  • The EU is probably the world's most ambitious and most rigorously enforced free trade project. It's one of the few places in the world where governments' powers to indefinitely prop up failing industries, restrict free trade and beggar their neighbours regularly meet a powerful, proactive challenge in the form of state aid and competition rules. Britain can negotiate all the free trade treaties in the world, but the level of enforcement we can expect will always be lower if there's a powerful country on the other side. 
  • The European courts are a valuable line of defense against abuses of power in the UK. Government and Parliament can always choose to make laws that restrict your freedom, and the absence of a constitution gives them a little more leeway for doing so. The Courts may in vanishingly rare occasions ban Britain from sending foreign-born persons into exile, but they also protect the rights of British people against an occasionally trigger-happy government. If you are 100% happy to trust, say your online privacy to GCHQ, this line of defence is useless. But you're not, and Brexiters are least happy of all.
  • If you feel that the global reach of the English language in business and official procedure is valuable to the UK, a kind of human capital built for the British at no expense of their own, consider that the EU is practically a sales machine for the English language. The dominance of English in the Institutions (by no means a foregone conclusion in the 80s or 90s) will be that much easier to challenge if Britain itself leaves.
  • The EU is probably the biggest driver of regionalism in the UK at the moment - and will probably remain so as long as a tight fiscal policy prioritises central control over local initiative. EU funding works in terms of regions more often than it does in terms of member-states, driving the creation of regional competence and control. If you are invested in reversing regional disparities, or if you believe (as I do) that decentralising fiscal policy leads to better, more accountable spending, the EU is on your side in a way that Whitehall and Westminster cannot currently match. 
  • The EU is probably the most effective means Britain has of keeping the dominance of its social elite in check. The one thing you can count on 'faceless Brussels bureaucrats' not to do is give a toss which school a senior lobbyist went to all of forty years ago, or which family they married into. They will be lobbied and often they will be corrupted, for such is the way of all government; but the vehicle for this is much more likely to be the sheer power and presence of corporations of sovereigns, leaving behind huge tell-tale pawprints; as opposed to the pixie-dust trail of tribal in-groups.
  • The EU is a protection against arbitrage. If you're worried that the British high street is disappearing in favour of online retailers based in low-tax Luxembourg, the amount of leverage Britain alone has on them is tiny. Europe on the other hand has substantial leverage.   

Who we EU migrants are

Many people have no idea what happens in the Brussels bubble and have no interest in lofty discussions about the sovereignty of Parliaments or compliance with EU Directives. But they do have an interest in money, in public services, and in fairness. To engage them, Eurosceptics have exploited resentment against European immigrants who they believed were flocking to the UK to take 'our jobs' and, paradoxically, to also take advantage of the benefits system.


Now migration in the UK is far from 'uncontrolled'. In fact, a simple look at the government's regular 'statements of changes to immigration rules' will convince you that they spend a lot of time working on controlling immigration - this is also obvious to anyone outside the country. But Britain cannot limit immigration of workers from Europe because freedom of movement (for workers) is a fundamental element of the project - written into its DNA from the Treaty of Rome onwards (and prior to this in a more limited form). Europe did not over-reach into freedom of movement. It really was something Britain signed up for when it joined. Tactically questioning the rules of the game after it's started is precisely the sort of thing that Brits disapprove of in other spheres of life.   

Very few EU migrants come to the UK for any reason that doesn't involve contributing to the country in one way or another. ONS estimates that about two thirds (67%) of EU migrants coming to the UK for a long-term stay do so in order to work, and just under two-thirds (62%) of those already have a job offer when they arrive. The rest presumably find one fairly quickly because 78% of all EU nationals in the UK in 2014 were in employment. The unemployment rates of British and non-British EU nationals were identical in 2014.

But wait! What of the other one third of Europeans who don't come here to work and the 22% who are subsequently not in employment? Well, another fifth-ish (19%) of all EU migrants come here in order to study, collectively paying our Universities, Colleges and landlords a fortune for the privilege. Anti-migration lobbyists estimated the pre-crisis contribution of EU students at ca. £1.35billion per year - about as big as, say, the UK's trade deficit with India at the time

Only about 8% of these EU students tend to be unemployed a mere six months after graduation, and they are as likely to go back to Europe to work as they are to get a job in the UK.

Unlike neighbouring Ireland, Britain has no collective memory of mass emigration - of British people leaving the island in droves to find work elsewhere out of necessity. Long may this continue. But it does mean our perception of who emigrates is desperately skewed. Ask around in Europe and their name for what we here call 'uncontrolled migration' is 'brain drain.' They do not cheer their compatriots who come here as cunning euro-foragers. They regret their loss, knowing that the most marketable workers are first to leave. Cynically, David Cameron invoked EU countries' fear of a brain drain when negotiating his 'new deal' for Britain. 

..And we don't come here for the (limited) benefits

This leaves the one in six Europeans who come here for family or other reasons, and whom the Quitter campaign still tries to demonise as motivated primarily by benefits.

Even the Prime Minister danced to their tune, commissioning a flawed ad-hoc study (available here and with some commentary here) that, to avoid embarrassment, had to be published in a highly irregular manner that the UK statistics authority openly criticised. Crucially, the government's calculations lumped tax credits to working people on very low wages (which EU migrants are more likely to receive) in with benefits paid to people not in work; which EU migrants are less likely to receive than native Brits. Overall, EU migrants' share of benefits spending is half their share of the working-age population, which really tells you something about their actual impact on the public purse. 

The majority of EU migrants coming to the UK for non-work and non-educational purposes come to join their partners (hence the rising relative number) and are very unlikely to be gaming the benefit system. How do I know that? Because it's easy to look at the timing of the Welfare Reform Act 2012, which substantially cut the benefits they might expect, and its impact on migration by different motivations. Even if all correlation implies causation in this case, it would suggest that only 4% of pre-2011 EU migration was elastic to welfare benefits, and that further benefits cuts since 2012 have not affected it.

This should surprise no-one; we know benefits uptake among new EU migrants has, over successive waves of EU enlargement, been generally lower than that of UK natives (see here and here). We also know that the correlation between benefits generosity and the number of EU migrants is not significant, although the (negative) correlation between generosity and the employability of migrants might be.


Which brings me to the main point. The UK isn't an overly-generous country when it comes to benefits. Many Brits see ours as the most generous welfare state in the world but in the Continent Britain is seen overwhelmingly as Margaret Thatcher's country, an America-light with a deregulated labour market and a devil-take-the-hindmost attitude to the poor. The fact that its welfare has never been very generous has traditionally meant it tended to get more educated and employable European migrants in the first place (see here). Once adjusting for the cost of living here, the UK is on a par with Italy, and substantially less generous that Norway, Denmark, Luxembourg, France, or Germany. You can see this for yourselves here (and as I illustrate in the graph below). Anyone willing to move just to claim benefits would be better off elsewhere. The UK is comparatively even less generous when it comes to unemployment and disability benefits, even after adjusting for a lower unemployment rate. 

Why am I counting Norway in the group of comparator countries? Because it, too, abides by the EU's freedom of movement rules. Even though it's not an EU country. Because it's in its national interest to do so. Even though it's got a much more generous welfare state. Do you get it? Good.

The one type of benefits with which Britain is more generous is housing - which makes sense since the UK is an expensive place in which to both rent and buy property. Specifically on this, we've known since at least 2014, and the research by Battiston et al (2014), that claims of preferential access to social housing by immigrants are actually false. Comparing like for like, immigrants are less likely than natives to receive social housing, and EEA immigrants even less so. This 'immigrant penalty' has fallen over the years but not reversed. Immigrants are substantially more likely to rent from private landlords and it takes 15 years in the country for a European immigrant to have the same chances, other things being equal, as a native-born UK citizen at getting social housing.

So Britain's real draw is not a generous benefits system but rather the fact that it generates jobs, has a number of successful universities and a language that is dead-easy to learn and widely spoken; all of which is important to people who (you guessed it!) intend to work or study here and much less so to ghettoised benefits scroungers, whoever they are.  

To assist MPs seeking clarity on the issues being brought up by constituents, the Library of Parliament produced an excellent briefing last year on what benefits foreigners, including EU citizens, can claim in the UK. Broadly speaking, EU citizens aren't automatically eligible for benefits in the same way as UK citizens - they need to have the 'right to reside' in the country, which is conditional on having first been in work or otherwise able to support oneself without benefits for three months. No one can simply turn up and claim benefits in the way that some Quitters imagine. In fact the poor folks at the LoP have also been forced to issue a briefing to debunk viral emails that made wild claims about what asylum seekers and refugees were costing the UK, among a long catalogue or related publications. Principled Quitters could have helped to at least stem the tide of misinformation - almost all of which came from their side - but they never lifted a finger.


Declaration of interests 

I have, since 2013, been a UK citizen, and proudly so. I was born and raised in Greece and am still actively involved in the politics of my birthplace. As an EU citizen, I did not have to naturalise and my right to remain and work in the UK was never in doubt. I did it because I genuinely felt (and feel) that I belong here, and that my life and fortunes depend on the UK’s prosperity. I also made this choice because, having been close to the policy industry all my working life, I felt it was appropriate to be a voter in this country. My wife is an EU citizen but has not naturalised.

I have never had any income from the EU institutions, or any contractual ties to them. I was however briefly a registered expert for the Commission, which meant my employer at the time was reimbursed for two Eurostar round-trips. In a different employment, in the first two years of my career (2006-8), my employer received EU (ESF) funding, which paid for half of one of the (exclusively UK-focused) projects I was working on. Finally, my current employer (whom my views do not represent or bind in any way) works in an environment heavily influenced by EU regulation; I work within this framework daily, although I have not interacted with the EU institutions in this employment. I have friends working for the European Parliament, the European Investment Bank and the Commission.

I am fortunate in many ways in this life, and I pay all the tax one would expect based on my income. I did the same before I naturalised. Last year, according to HMRC's personalised annual tax summary, I paid £15,100 worth of tax towards welfare, pensions, education, and health alone. The year before, I paid £11,655. That's not all of the tax I pay - just the part that goes into the broader welfare state. I also pay my share of the UK's contributions to the EU budget. A colossal £128 this year, up from £127 a year earlier. That's about the same amount I pay for broadband; and less than a TV licence.

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