EU - where did it go wrong?

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Gareth
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EU - where did it go wrong?

Postby Gareth » Sat Jun 25, 2016 7:33 pm

I've been making full use of hindsight in conjunction with a lack of historical knowledge ... It seems to me there are a number of issues that combined to lead us to where we are now.

One, I think, is that the EU doesn't seem to have a policy to handle large scale migration from accession countries.

For example, I read that over 2 million people left Poland between 2004 and 2008, mainly going to Germany, Sweden and the UK. Understandable that so many left their home country when there were much better opportunities elsewhere in the EU, but it ought to have been predictable given the state of the Polish economy compared to the richer countries in the EU, and maybe some thought should have been given to limiting the rate of internal migration. One benefit for Poland is that over the same period, unemployment fell from about 20% to under 10%. Another has been that many Polish people working abroad sent money back to their families. Both of these seem to have had a significant benefit to the Polish economy. I expect it hasn't been wildly different when other poorer countries have joined the EU.

Two, I gather, is that sometimes the accession rules with respect to economic convergence don't seem to have been properly applied, some might say they have been fudged, perhaps leading to countries joining the EU before they were strictly ready, possibly leading to more internal migration than would otherwise have been the case. It's probable I'm on shaky ground here, but this is my impression of the situation.

A third issue might be the extent of in-work benefits provided by the UK welfare system. If this was a problem, and if the UK wasn't to discriminate against EU nationals working here, it needed to move towards higher minimum wages while reducing tax credits and other benefits. Unfortunately government policy was moving the other direction at the time of the 2004 enlargement. Did this make the UK disproportionately attractive?

A fourth issue was then undeclared/denied UK government policy to encourage unlimited immigration from other EU countries over the same period.

Other issues seem to derive from these. For example, extra workers coming to the UK from poorer countries seems to have kept salaries low for the poorest in the UK. Even immigrants have reported this, according to articles I've read in the (online) Guardian newspaper. Another example is that successive UK governments seem to have been behind the curve in expanding infrastructure support needed to for a rapidly growing population.

I wonder if there is another factor - was the EU trying to move to quickly towards integration? Would people across the EU have been less worried about losing national identity if the direction wasn't being hurried along?
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Mr Cholmondeley-Warner
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Re: EU - where did it go wrong?

Postby Mr Cholmondeley-Warner » Sat Jun 25, 2016 7:44 pm

Cracking questions, Gareth. Let's hope there's someone around with a degree in EU history, cos I haven't really got a clue.

A friend of mine posted something on social media today written by a young person ranting about how it doesn't matter where people come from, and railing against the phrase "stealing our jobs". While the humanist aspect of this - that people are equal, is commendable, it completely ignores the reason those people are here in the first place - something in our economy (and as you mention, Germany's, Sweden's or other relatively prosperous nations) attracted them here. Which, inevitably, leads to higher unemployment, and bigger benefits bills, unless our workers migrate elsewhere in search of jobs in their turn. But of course, there's not much incentive for them to do that.
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StressedDave
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Re: EU - where did it go wrong?

Postby StressedDave » Sat Jun 25, 2016 8:09 pm

Gareth wrote:One, I think, is that the EU doesn't seem to have a policy to handle large scale migration from accession countries.

It doesn't need one - it's free movement after all.

Gareth wrote:Two, I gather, is that sometimes the accession rules with respect to economic convergence don't seem to have been properly applied, some might say they have been fudged, perhaps leading to countries joining the EU before they were strictly ready, possibly leading to more internal migration than would otherwise have been the case. It's probable I'm on shaky ground here, but this is my impression of the situation.

Not so much fudged as downright lied about while those responsible for oversight whistled tunelessly. Greece was a true case in point.

Gareth wrote:A third issue might be the extent of in-work benefits provided by the UK welfare system. If this was a problem, and if the UK wasn't to discriminate against EU nationals working here, it needed to move towards higher minimum wages while reducing tax credits and other benefits. Unfortunately government policy was moving the other direction at the time of the 2004 enlargement. Did this make the UK disproportionately attractive?

Free movement and not allowed to discriminate against those from any other country. The only thing we could possibly try and control was extra-EU immigration.

Gareth wrote:A fourth issue was then undeclared/denied UK government policy to encourage unlimited immigration from other EU countries over the same period.

Free movement innit... When you have a nice chunk of those who can't be bothered to work and jobs that need doing, you've got to fill the gaps somehow.

So, in short, it's all them immigrants innit. But we're an immigrant nation (way more so than most of our European neighbours) and always have been. Every time we've had a massive influx of cheap labour there have been issues like this. Perhaps the only difference is that this time we've not necessarily need to import that labour in the first place.
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Gareth
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Re: EU - where did it go wrong?

Postby Gareth » Sat Jun 25, 2016 10:06 pm

StressedDave wrote:So, in short, it's all them immigrants innit.

In one sense, I think the rapid influx is the problem but, really, I see that as a result of earlier failures, both in the UK and within the EU.

StressedDave wrote:Perhaps the only difference is that this time we've not necessarily need to import that labour in the first place.

I think we can handle large numbers providing it's spread out over a number of years. Large numbers over a short period puts pressure on accommodation - house prices and rents will be higher - and it takes time to build more.
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Re: EU - where did it go wrong?

Postby waremark » Sun Jun 26, 2016 1:28 am

Great post from Gareth. However, I think the vote would have been quite different if the campaign and the build up to it had been handled differently. And Cameron deserves to go, he is responsible for most of this.

He should never have pretended there was any chance of reducing net immigration. Hilton confirms he knew he couldn't do it. More recently pretending less than 100k was an ambition rather than a target was a further mistake. He should have been prepared to stand up and justify immigration.

He should never have suggested pre negotiation that if we didn't get what we wanted we would be fine outside the EU. He should never have pretended his negotiation was successful (indeed, he should have done a better job of persuading the EU that he needed a better deal to keep the UK in the EU). And during the campaign he should have focused more on the benefits of the EU than on Project Fear, demonstrating that where it has exercised sovereignty it has been more a benefit rather than a problem.

Of course Corbyn was just as bad, but there must be a suspicion that he got the result he wanted,

Did Boris? I am not sure! He wants to be PM but might have preferred to get the job as a glorious runner up!

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jont-
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Re: EU - where did it go wrong?

Postby jont- » Sun Jun 26, 2016 5:48 am

Gareth wrote:Large numbers over a short period puts pressure on accommodation - house prices and rents will be higher - and it takes time to build more.

It certainly does when you've all but stopped building :roll:
http://www.bbc.co.uk/news/uk-14380936
http://www.lse.ac.uk/socialPolicy/Resea ... y-size.pdf
Couple that with a sense of entitlement from the middle classes that the value of their houses will continue to rise way beyond the rate of inflation (and therefore any measure that might cause house prices to fall/stop rising so fast is a "bad thing"), and a NIMBY approach to planning and you get a serious problem.

A later graph in the LSE paper shows that average household size is also falling - so even without immigration there would be pressure on housing.

You can also look at the failure of many pension schemes (and removal of final salary schemes) to cause many to turn to BtL investment as an alternative approach to pension planning, which again removes housing stock from potential owners who think a house should be somewhere to live, not an investment.

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StressedDave
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Re: EU - where did it go wrong?

Postby StressedDave » Sun Jun 26, 2016 3:27 pm

Given that my workload has tripled since the start of the year, I would beg to differ that we've stopped building, quite the reverse. We do currently have an issue with profitability when it comes to house building. The price of land has gone through the roof, so you have to build fewer, bigger houses (thus not triggering the 'affordable' clause in the National Planning Police Framework) to try and create some profit. Then there are the raw material shortages. When the recession hit, a lot of manufacturers downsized their production facilities. Today, the big builders have taken all the stock of things like bricks and blocks and the smaller builders can't get any and the costs of building are being driven up.

I won't go on about planning - I attended a hearing on Tuesday when the Council's planning consultant didn't have the first idea of one of the key parts of the Council's refusal. Forget nimbyism, replace with utter, utter incompetence. Mind you this is mainly driven by all the talented and experienced Council planners jumping ship because they can earn 25-50% more money on the side of the builders.

House ownership shouldn't be the be-all and end-all. I can remember the time before Right to Buy when nobody owned their own house where I grew up. House ownership in many EU countries is quite a lot less than it is here.
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Re: EU - where did it go wrong?

Postby Gareth » Sun Jun 26, 2016 3:51 pm

StressedDave wrote:House ownership shouldn't be the be-all and end-all.

Agreed, but pressure on housing pushes rents up as well, hitting the worst off hardest.
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mainbeam
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Re: EU - where did it go wrong?

Postby mainbeam » Sun Jun 26, 2016 6:07 pm

Mr Cholmondeley-Warner wrote:..Which, inevitably, leads to higher unemployment, and bigger benefits bills, unless our workers migrate elsewhere in search of jobs in their turn.


Neither inevitable nor particularly correct.

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Re: EU - where did it go wrong?

Postby Gareth » Sun Jun 26, 2016 6:31 pm

mainbeam wrote:
Mr Cholmondeley-Warner wrote:..Which, inevitably, leads to higher unemployment, and bigger benefits bills, unless our workers migrate elsewhere in search of jobs in their turn.

Neither inevitable or particularly correct.

I was wondering why you think this. Are you suggesting that people coming to work in the UK only take jobs which otherwise wouldn't get done?

In an item published on the Guardian website, the idea is put forward that large numbers of people coming to the UK who are willing to work for wages that are considered low in the UK have put pressure on that segment of the job market where the competition for work is most fierce, resulting in wages being kept low or pushed lower, suggesting there are more people looking for work than there are jobs to fill.
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