Will Gordon Brown’s stimulus serve only to suck in more immigrants? The Prime Minister should ask himself this as he visits the London Olympic 2012 site – it’s a classic example of the problem. Sure, there have been plenty of jobs created by the construction. But which English borough registered the biggest increase in National Insurance numbers to foreign nationals last year? Newham – where the site is based. A full 21,510 of them (Fig6, pdf) – and this is in a constituency where there are 32,800 working-aged people on benefits. As I argued in the News of the World last October, most of these have been claiming for five years or more.
My point: you cannot understand the UK labour market without taking in immigration. In the 1970s you could argue that saving a British factory through subsidy would protect British business and British jobs. Different now that many factories are often foreign-owned and employ mostly immigrant labour. It’s hard to make this argument without sounding anti-immigrant, so can I make this clear. I’m in favour of immigration, but we have to recognise its impact on the economy and on the labour market. Refusal to recognise immigration has led Labour – unwittingly, in my view – to bypass the problem of UK worklessness. Brown bangs on about his new jobs, where four in five working-age jobs created since Labour came to power went to or were created by immigrants.
Now, we’re all Jock Tamson’s Bairns, as they say in my own motherland, and the UK economy has hugely benefited from having a wave of industrious workers. What I’m saying is that this changes the dynamics. The immigrants may leave Britain, rather than claim dole – so perhaps the economic models projecting the doubling of unemployment will be proved wrong. You need to ensure that a UK stimulus package intended to safeguard the economy doesn’t end up missing the intended target – the UK unemployed – in the way that the Olympic project has done. As Brown tours the site today, he should see it as a warning of how his stimulus could miss its domestic target.
P.S. I should make it clear that I believe Brown’s stimulus – or his squirt – to be an irrelevance on a macroeconomic level. But any micro attempt to create jobs, like the London Olympics, runs the risk of becoming an immigration magnet. Immigration means that policymakers can no longer solve British unemployment with a British job creation scheme – the two don’t map up now, as Newham spectacularly shows. The reasons for UK worklessness are complex, and closely linked to the dysfunctional welfare state. MPs of all parties have to take this into account.
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