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Showing posts with label remain. Show all posts
Showing posts with label remain. Show all posts

Tuesday 20 November 2018

In Britain’s boardrooms, Brexit is already here. And the warning is stark

For Westminster, leaving Europe is months away: for business, it’s the present. And our prospects are already dwindling writes Aditya Chakrabortty in The Guardian 

 
Part-built private housing development project on the outskirts of Llanelli, Wales, which was abandoned after the developer went bust. Photograph: Alamy


On the one hand, you have the self-inflating chaos at Westminster, the fever dreams of Jacob Rees-Mogg’s gang and the rehearsed rage of the Democratic Unionists. And on the other, you have the truth nailed by Philip K Dick. “Reality,” he wrote, “is that which, when you stop believing it, doesn’t go away.” So let’s remind ourselves of some reality.

While Tory MPs jostled over a replacement for Theresa May the head of the Confederation of British Industry, Carolyn Fairbairn, warned that millions of pounds were “flooding out” of business investment and into preparing for Britain crashing out of Europe with no deal. Food warehouses said they were running out of space. And auto-parts manufacturer Schaeffler announced that it would shut factories in Plymouth and Llanelli, leaving more than 600 workers facing the dole.


An entire rotten political-corporate regime is crumbling away – and its replacement threatens to be even worse

Even as politicians and the press fantasise about how Britain will leave Europe, big business is already at the departure gate. For Westminster, Brexit is months in the future; for boardrooms making plans, it is the present. Big carmakers have this year halved their investment in new models and factory machinery. The consultancy EY records a 31% slump in the number of foreign businesses setting up headquarters in Britain. Boris Johnson certainly makes good copy – but money talks much louder.

“The banks and insurers are moving, the big pharmaceutical firms are investing abroad,” says Paul Drechsler, who was CBI president until June and now chairs London First. “These trains are leaving the station, and when they leave, they won’t come back.” The country he describes is already shrinking, its job opportunities dwindling, its reputation abroad in eclipse.

This is the real national emergency. An entire rotten political-corporate regime is crumbling away – and its replacement threatens to be even worse. It will be worse, specifically, for those parts of the country, like Llanelli and Plymouth, that voted leave as the ultimate kick against the pricks of a hollow economy and a deaf government.

The succinct definition of our current model comes from the head of the Bank of England. The UK relies, said Mark Carney in 2016, on the “kindness of strangers”. The willingness of overseas investors to keep ploughing in their cash keeps us in the style to which we’ve grown accustomed. Out of all the 28 members of the European Union, the UK is second only to Ireland in its dependence on investment from abroad. Margaret Thatcher’s eagerness to sell off whatever she could get her hands on and her mandarins’ carelessness over ownership has turned us into one of the biggest foreign-capital junkies in the developed world. 

Those investors don’t come here out of charity. Our government competes with others around the world to lure in cash from overseas. But look what inducements we offer. Just weeks before the Brexit referendum, David Cameron’s government published its Invest in the UK brochure, promising “the most competitive” labour costs in western Europe, and “the least strict regulation in the EU.”. Why buy euros when you can have Poundland?

No other country does this. Analysis by Kevin Farnsworth at York University shows that, while all states assure investors they’re competitive locations, Sweden boasts of its “anti-corruption” and “good industrial relations”, while Germany highlights its “efficiency” and “training”. The UK, he writes, “uniquely competes for international capital by offering a package of a low-tax, low-cost, low regulatory business environment”.

Here, whether Conservative or Labour, successive governments have marketed us as the open-all-hours, bargain-basement landing strip off mainland Europe. Until, that is, Britons vote in a referendum to kick away two of the three legs of the post-Thatcherite economic model, namely openness and closeness to the continent. What’s left then is our cheapness – in taxes, in wages and in regulation.

This is Britain in 2018, paying the price for decades of underinvestment and cutprice competition. We have a highly skilled workforce, with almost half of Britain’s young people holding a university degree. And yet in 2014, Charlie Mayfield, former boss of John Lewis and then head of the UK Commission on Employment and Skills, pointed out that over one in five British jobs required only primary-school education. We have a world-class car-manufacturing industry, yet over half of the components in the cars that roll off the lines in Sunderland or Ellesmere Port come from abroad.

This is the point at which the kindness of strangers starts to get rather strained. In a survey this spring, well before the chaos of the past few weeks, EY found that 30% of foreign investors now expect to move money out of the UK after Brexit. The current value of foreign direct investment in the UK is estimated by the government to be over £1 trillion. If even a quarter of that were to move abroad, then £75 billion of assets are already at risk. No wonder the Welsh government is offering sweeteners to Ford to stay at Bridgend. No wonder when Nissan made noises about scaling back at Sunderland, May immediately opened the door of No 10 and offered some kind of deal – although precisely what, the voting public was never told.

You can expect a lot more of this over coming months and years: panicky politicians paying your tax money to grumpy-looking corporate executives. You can expect other countries to try to poach our businesses, just as after the 2016 vote Paris began advertising itself as the ideal post-Brexit corporate headquarters. Their posters read: “Tired of fog? Try the frogs”

You can also expect this government to press even harder the case that Britain is the low-tax, low-wage capital of the rich world. But ministers will get a disappointing response from businesses, believes EY’s chief economist in the UK, Mark Gregory. He thinks multinationals will shift away from using Britain as a stepping stone into Europe and the rest of the world – which is logical, given that any new trading arrangements will take years to settle and will almost certainly not be as smooth as the regime Britain currently has. Instead of building factories to make things to sell to the world, big businesses will instead put their money into storage and showrooms to sell things to Britons. The UK will become, Gregory says, “a warehouse economy: low skills, low productivity and low growth”.

That projection was already a reality for lots of people I met who plumped for Brexit in 2016. They were on minimum wage and had minimum rights and minimum prospects. If Brexit is to be radically changed now, it is those voters – the disenfranchised Labourites, the sod-them-all brigade – whose support is needed. A second referendum, in which well-meaning metropolitans offer those in the Rhondda the status quo, probably deserves to fail. Instead, any remain option will have to come with a worked-out argument about rebalancing power in this country. And that means reshaping the relationship between capital and the rest of us.

Friday 24 February 2017

Blair is right on Brexit: parliament must have a democratic debate

Anatole Kaletsky in The Guardian

Former UK prime minister Tony Blair’s recent call for voters to think again about leaving the EU, echoed in parliamentary debates ahead of the government’s official launch of the process in March, is an emperor’s new clothes moment. Although Blair is now an unpopular figure, his voice, like that of the child in Hans Christian Andersen’s story, is loud enough to carry above the cabal of flatterers assuring Theresa May that her naked gamble with Britain’s future is clad in democratic finery.

The importance of Blair’s speech can be gauged by the hysterical overreaction to his suggestion of reopening the Brexit debate, even from supposedly objective media: “It will be seen by some as a call to arms – Tony Blair’s Brexit insurrection,” according to the BBC.

Such is the tyranny of the majority in post-referendum Britain that a “remainer” proposal for rational debate and persuasion is considered an insurrection. And anyone questioning government policy on Brexit is routinely described as an “enemy of the people,” whose treachery will provoke “blood in the streets.”

What explains this sudden paranoia? After all, political opposition is a necessary condition for functioning democracy – and nobody would have been shocked if Eurosceptics continued to oppose Europe after losing the referendum, just as Scottish nationalists have continued campaigning for independence after their 10-point referendum defeat in 2014. And no one seriously expects US opponents of Donald Trump to stop protesting and unite with his supporters.

The difference with Brexit is that last June’s referendum subverted British democracy in two insidious ways. First, the leave vote was inspired mainly by resentments unconnected with Europe. Second, the government has exploited this confusion of issues to claim a mandate to do anything it wants.

Six months before the referendum, the EU did not even appear among the 10 most important issues facing Britain as mentioned by potential voters. Immigration did rank at the top, but, as Blair noted in his speech, anti-immigration sentiment was mainly against multicultural immigration, which had little or nothing to do with the EU. The leave campaign’s strategy was therefore to open a Pandora’s box of resentments over regional imbalances, economic inequality, social values and cultural change. The remain campaign completely failed to respond to this, because it concentrated on the question that was literally on the ballot, and addressed the costs and benefits of EU membership.

The fact that the referendum was such an amorphous but all-encompassing protest vote explains its second politically corrosive effect. Because the leave campaign successfully combined a multitude of different grievances, May now claims the referendum as an open-ended mandate. Instead of arguing for controversial Conservative policies – including corporate tax cuts, deregulation, unpopular infrastructure projects and social security reforms – on their merits, May now portrays such policies as necessary conditions for a “successful Brexit”. Anyone who disagrees is dismissed as an elitist “remoaner” showing contempt for ordinary voters.

Making matters worse, the obvious risks of Brexit have created a siege mentality. “Successful Brexit” has become a matter of national survival, turning even the mildest proposals to limit the government’s negotiating options – for example, parliamentary votes to guarantee rights for EU citizens already living in Britain – into acts of sabotage.

As in wartime, every criticism shades into treason. That is why the Labour party has collaborated in defeating all parliamentary efforts to moderate May’s hardline Brexit plans, even on such relatively uncontentious issues as visa-free travel, pharmaceutical testing or science funding. Likewise, more ambitious demands from Britain’s smaller opposition parties for a second referendum on the final exit deal have gained no traction, even among committed pro-Europeans, who are intimidated by the witch-hunting atmosphere against unrepentant remainers.

Sir Ivan Rogers, who was forced to resign last month as the UK’s permanent representative to the EU because he questioned May’s negotiating approach, predicted this week a “gory, bitter, and twisted” breakup between Britain and Europe. But this scenario is not inevitable. A more constructive possibility is now emerging along the lines suggested by Blair. Instead of vainly trying to influence May’s hardline stance in the negotiations, the new priority should be to restart a rational debate about Britain’s relationship with Europe and to convince the public that this debate is democratically legitimate.

This means challenging the idea that a referendum permanently outweighs all other mechanisms of democratic politics and persuading voters that a referendum mandate refers to a specific question in specific conditions, at a specific time. If the conditions change or the referendum question acquires a different meaning, voters should be allowed to change their minds.

The process of restoring a proper understanding of democracy could start within the next few weeks. The catalyst would be amendments to the Brexit legislation now passing through parliament. The goal would be to prevent any new relationship between Britain and the EU from taking effect unless approved by a parliamentary vote that allowed for the possibility of continuing EU membership. Such an amendment would make the status quo the default option if the government failed to satisfy parliament with the new arrangements negotiated over the next two years. It would avert the Hobson’s choice the government now proposes: either accept whatever deal we offer, or crash out of the EU with no agreed relationship at all.

Allowing parliament to decide about the new relationship with Europe, instead of leaving it entirely up to May, would restore the principle of parliamentary sovereignty. More important, it would legitimise a new political debate in Britain about the true costs and benefits of EU membership, possibly leading to a second referendum on the government’s Brexit plans.

This is precisely why May vehemently opposes giving parliament any meaningful voice on the outcome of the Brexit negotiations. Presumably, she will block any such requirement from being attached to the Brexit legislation in March. But that may not matter: if a genuine debate about Brexit gets restarted, democracy will prevent her from closing it down.

Saturday 12 March 2016

The non-EU workers who’ll be deported for earning less than £35,000

Despite having spent her adult life in London, Alyson Frazier could be sent back to the US under new income rules.
 Despite having spent her adult life in London, Alyson Frazier could be sent back to the US under new income rules. Photograph: Linda Nylind for the Guardian


Donna Ferguson in The Guardian


Alyson Frazier, a 25-year-old classical musician from Washington DC, is trying to describe how it feels when people ask her whether she wants to stay in Britain. “It’s like asking a fish: ‘How’s the water?’. London is my home. This is where I have built my adult life since the age of 19.”

Unfortunately Frazier – who has a first class MA from the Royal Academy of Music and is the co-founder of Play for Progress, a therapeutic music programme for refugee children – only earns £17,000 a year.

That’s less than half the salary she, her fellow-Americans and other non-EU migrants will soon need to stay in the country permanently, thanks to rules being introduced next month.

From 6 April all skilled workers from outside the EU who have been living here for less than 10 years will need to earn at least £35,000 a year to settle permanently in the UK. Some jobs, such as nurses, are exempt (see How the rules are changing, right) but Frazier’s is not. Unless she gets a higher-paid job, she will be deported in September.
“I’ve chosen to take a lower salary because I’m trying to improve the lives of unaccompanied child refugees and do good in the world through music and education,” she says. “How do you put that on paper in a visa application? How do you show the value of trying to make a child’s life better?”

A petition to scrap the £35,000 threshold has attracted more than 100,000 signatures from British citizens and was debated in parliament on Monday. “I started the petition because I don’t want to live in a Britain that will quietly usher thousands of people out of the country without raising a whisper of protest,” says Josh Harbord, the British citizen behind the Stop35k campaign which has attracted the support of SNP, Labour and Green MPs. “I don’t want to live in a country that values people’s incomes over people’s contributions to society.”

But the government is adamant that the policy is fair, and that individuals have had many years to prepare.

A Home Office spokesman said: “In the past it has been too easy for some businesses to bring in workers from overseas rather than to take the long-term decision to train our workforce here at home.

“We need to do more to change that, which means reducing the demand for migrant labour. That is why we commissioned the Migration Advisory Committee to provide advice on significantly reducing economic migration from outside the EU. These reforms will ensure that businesses are able to attract the skilled migrants they need, but we also want them to get far better at recruiting and training UK workers first.”

Home secretary Theresa May was criticised for failing to attend the debate in person, instead sending a junior minister with an unrelated portfolio – Richard Harrington, minister for Syrian refugees – to defend the policy.

In its own impact assessment, the Home Office estimates the new salary threshold will cost the British economy between £181m and £171m (PDF), while the other organisations have put the cost much higher, at £761m (PDF).

The word ‘bonkers’ springs to mind. If the so-called gain is a modest one, why inflict so much pain?Stuart McDonald, SNP MP

“These new rules will damage the British economy, our standing overseas, and our society as a whole,” says Ralph Buckle, co-founder of the Commonwealth Exchange. “We have already seen dramatic falls in Commonwealth migration to the UK due to existing restrictions and the salary restrictions will only make things worse.”

Latest Home Office statistics show there were just over 55,000 applications for skilled work visas in the year to March 2015. Americans were among the largest groups – 12% of applications – while Australians made up a further 4%.

The government’s own admission that the reforms will only make a “modest” contribution to its target of reducing net migration was repeatedly highlighted during the debate: “The word ‘bonkers’ springs to mind,” said Stuart McDonald, an SNP MP. “If the so-called gain is a modest one, why inflict so much pain?”

Gillian Brown, 26, is one of the Australians at the receiving end of that pain. Her entire family decided to emigrate to the UK when she was 18 but, due to her age, she could only enter the country on a student visa (while her younger brothers were classed as dependents and are now full British citizens). She graduated with a first class BA and an MA from The University of Sheffield, and currently earns £20,300 as an online marketing assistant after moving into a skilled workers’ Tier 2 visa in 2014.
The fact Gillian Brown’s family emigrated to the UK is not enough to prevent her having to return to Australia. Photograph: Martin Godwin for the Guardian

“Previously, I’d have been able to apply for permanent residence in the UK after five years, earning my current salary. Not any more,” says Brown. “It’s a constant worry. If I can’t convince a company to sponsor me again next year, I’ll be deported back to Australia after eight years in the UK, and separated from my parents and brothers. But the British government doesn’t care about separating families – they’ve made that very clear. ”

Australian migration specialists True Blue say the new rules have caused a spike in the number of British-based Aussies looking to head back home. In the last week of January, it saw a 50% increase in calls seeking advice on how to secure their British partners a visa in Australia.

Walkabout, the Australian bar chain, has already begun stepping up its recruitment strategies to try to deal with any fallout from the visa restrictions. “We have been losing Australian staff for some time,” says Nina Marshall, HR director. “Recruiting Australians is essential to the authenticity of our brand and this challenge is only going to become significantly more difficult.”

Jeffries Briginshaw, CEO of BritishAmerican Business, is also concerned: “American companies are deeply entrenched in the UK economy and American citizens are part of UK society, whether this is in business, schools or families. Any restriction to the Tier 2 visa scheme will have a negative impact on the way American businesses operate in the UK and how American citizens can be part of the UK.”

It’s not only business leaders who are against the change. “Migrant teachers make a significant contribution to the UK,” says Kevin Courtney of the National Union of Teachers. “It seems absurdly counterproductive to force schools to dismiss migrant teachers they’ve trained and invested in, and who are still very much needed, at a time when highly skilled, qualified teachers are in great demand. The policy urgently needs to be reconsidered.”

Jon Excell, editor of trade publication The Engineer, is equally worried about the impact on the UK’s engineering sectors, which he says are also facing an acute and worrying skills shortage. “If the UK wants to maintain its position as a world leader in key areas of engineering, international skills are essential. Not just to fill roles, but to help UK-based firms retain an international perspective and reap the economic rewards of a diverse workforce. Yet the average salary of a junior engineer is just £32,000.”

The Home Office insists that the £35,000 threshold is a fair reflection of skilled salaries in the UK. It adds: “We do not believe there should be an automatic link between coming to work in the UK temporarily and staying permanently. The £35,000 threshold was set following advice from the Migration Advisory Committee, an independent advisory body consisting of expert labour market economists, and was equivalent to the median pay of the UK population in skilled jobs.”

It points out that anyone entering the UK on a Tier 2 basis has been aware of the changes since 2011. “Those individuals were aware when they entered that new settlement rules would apply to them. Employers have had since 2011 to prepare for the possibility that their non-European Economic Area workers may not meet the required salary threshold to remain permanently.”

Following the debate in Parliament the Stop35k campaign is urging the government to reconsider the implementation of the new rules, and to give the Migration Advisory Committee an opportunity to complete an assessment of suitable pay thresholds across different jobs and regions in the UK.

It says it will continue to lobby MPs, regardless of whether or not the policy is implemented as planned.

How the rules are changing

To enter or stay in the UK as a skilled worker, non-EU migrants must have a Tier 2 visa. To qualify, you must have been offered a job in the UK and have held at least £945 in your bank account for 90 days.

The job you’re offered must pay at least £20,800, although the government is currently considering a recommendation to raise this to £30,000. Certain occupations do not have to meet this threshold.

You must also get a certificate of sponsorship from your employer (which involves a fee of between £536 and £1,476), pay £200 per year as a healthcare surcharge and be able to prove your knowledge of the English language.

Non-EU migrants are only permitted to remain in the UK on Tier 2 visas for a maximum of six years.

However, at the moment, skilled workers who have been living here on these visas for five years are able to apply for “indefinite leave to remain” in the UK.

It’s this that is about to change (PDF).

From 6 April, only those who earn £35,000 a year will be eligible to apply for “indefinite leave to remain” once they have lived here for five years.

Nurses are temporarily exempt from this threshold, along with PhD level jobs and anyone whose occupation has ever been on the official “shortage occupation list” at any point while they have been living here. The new rules also do not apply to anyone who entered the country on a Tier 2 visa on or before 5 April 2011.

In January the Migration Advisory Committee also recommended the government set a £1,000-a-year levy on companies employing skilled migrants from outside the EU, and raise the salary threshold for Tier 2 visas from £20,800 to £30,000. The Home Office has not yet outlined its response.

There is still one route to permanent UK residence for low-earning migrants, however. You can apply for “indefinite leave to remain” if you’ve been living in the UK legally for 10 continuous years. There is no salary threshold for this.

For example, if you entered the UK 10 years ago on a student visa and moved directly onto a skilled workers’ visa – without ever leaving for more than 180 days at a time or for 540 days in total – you would be eligible to apply to settle in the UK, no matter how little you earned at that point.

Applying for “indefinite leave to remain” costs up to £1,900 and applications can take six months to process.

The Home Office says anyone who is unsure whether they may be affected by the changes can call the general inquiries for immigration matters on 0300 123 2241.