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February 21, 2020

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georgesdelatour

@Soreko

Just a side-note to your post. I think the word “austerity”, like “neoliberal”, is used in too many different, conflicting ways. Most of the time I assume people mean something like “benefit cuts”, but it’s not always obvious.

During the 2015 General Election I heard Nicola Sturgeon arguing for Hollyrood to be given the power to set Scotland’s business taxes separate from the rUK, so that it could lower them to Irish rates and persuade some English companies to relocate to Scotland. She described Westminster’s refusal to devolve that power as enforcing “austerity” on Scotland.

I suppose you could call that obstruction of supply-side tax cuts as “austerity”. But it’s not what, say, Mark Blyth means by the term.

Paul

@ Soreko.
"Perhaps some very clever economist can explain to stupid-old-me that if the mass immigration we have seen is good for our economy, and that our public services are currently stretched, then how is it that government expenditure as a percentage of GDP is at a multi-decade high?"

It isn't. Look a few posts back. Myself and Pete W both made that clear.

aragon

https://www.migrationwatchuk.org/key-topics/economics

"Summary

30. There is no convincing economic case for mass immigration on the present scale. While a small amount of immigration into high-skilled work may be beneficial to UK GDP per capita and productivity, most migrants (about 70%) were working in low and medium-skilled roles in 2016 – MAC, August 2017, p.11. This helps to explain why immigration has been and continues to be a significant fiscal cost for the UK. And over and above this, one must also take into account the other negative impacts and loss of amenity that can result from an excessively expanding population.

Updated 2 September, 2019"

Dipper

@ Paul.

"It isn't. Look a few posts back. Myself and Pete W both made that clear". As I said above, the figure I should have taken is the tax take as a percentage of GDP. Which is at a multi-decade high.

Soreko

Aragon, I would be wary of going to Migration watch for evidence. Also they use information led by Christian Dustman, yes the man who misled the Blair Government by saying there would be negligible movement after eastern EU expansion. Odd choice. Chris (Dillow) there is nothing "clear" about the evidence. And this is David Card's point. The US in the 20s (a time of rapid industrialisation and large international pent up post WWI demand) and Israel (in a permanent state of militarisation and a desire to replace low skilled Palestinian workers) are not good examples and there is probably not a 'typical' example. For example there are cases where mass economic immigration may contribute to productivity: after a major war for example when a country has lost half its working age men, but where institutions exist to mobilise resources efficiently.

In many cases the only case for immigration is compassionate and humanitarian (eg Merkel during the Syrian crisis.)

Paul

@Dipper.
I know you corrected yourself. Soreko was still quoting gov expenditure as a percentage of GDP.
Ref the tax take. This is a very different stat. More reflective of circumstances beyond governments direct control. It is more erratic than exp' as a percentage of gdp and has frequently been as high as it was in 2017. e.g. in early and mid 80s and mid 70s. To stress this the FT said back in 2018:

"Mr Chote (OBR) suggested that this had not been a considered plan by the government, but a rather chaotic approach whereby the NHS funding boost had been set well before anyone in 10 Downing Street or Mr Hammond’s office knew the money to pay for it would fall into the chancellor’s lap.

Mr Chote said the government had spent its windfall “before it knew it was coming”."

That highly positive prospective outlook has since been reversed somewhat as Brexit uncertainties and slower world trade growth more or less wiped out Hammonds supposed unexpected windfall.

So you'd be hard pushed to look at tax revenue as somehow a counter argument to real austerity as opposed to gov expenditure v GDP or departmental spending so I'm not sure why you'd think that weakens the case that the Gov has been imposing restrictive budgets on health, education and local authority spending these last 10 years.

Dipper

@ Paul

hang on ..."a counter argument to real austerity as opposed to gov expenditure v GDP ... Gov has been imposing restrictive budgets on health, education and local authority spending these last 10 years."

but surely your argument is that immigration of the sort we have seen should boost tax receipts more than it requires further government expenditure? The notion that immigration more than pays for itself provided the government borrows large amounts of money to fund public services doesn't seem a particularly compelling one.

aragon

@Soreko

https://theconversation.com/yes-eu-immigrants-do-have-a-positive-impact-on-public-finances-33815

https://www.ucl.ac.uk/economics/about-department/fiscal-effects-immigration-uk

The criticism of Christian Dustman et al, by colleagues at the UCL, is that the results are sensitive to under estimates of the cost of migration. The risk is Dustman/Frattini overstate the benefits.

https://www.economicshelp.org/blog/6399/economics/impact-of-immigration-on-uk-economy/

See comments by Louis Walker/Martin Grubb

Migration watch addresses this.

https://www.migrationwatchuk.org/key-topics/economics

See point 3

https://www.migrationwatchuk.org/briefing-paper/347/response-to-ucl-paper-on-the-fiscal-effects-of-immigration-to-the-uk

"25. However, even taking these robustness checks at face-value, they are in the context of reported findings of a total £25bn positive contribution by recent migrants. Each individual robustness check reduces this by at least half and one by as much as 90%. Robustness checks that reduce the reported values to this extent, suggest that the headline results are not in fact robust at all. It is also noteworthy that each alternative revenue scenario reduces the fiscal contribution of each recent migrant group. Thus clearly suggesting that, not only are the headline results not robust, but that they are still highly likely to be overestimates and that the degree of overestimation could still be considerable."

No-one misled the Blair Government:

https://www.telegraph.co.uk/news/uknews/law-and-order/6418456/Labour-wanted-mass-immigration-to-make-UK-more-multicultural-says-former-adviser.html

"The huge increases in migrants over the last decade were partly due to a politically motivated attempt by ministers to radically change the country and "rub the Right's nose in diversity", according to Andrew Neather, a former adviser to Tony Blair, Jack Straw and David Blunkett.

He said Labour's relaxation of controls was a deliberate plan to "open up the UK to mass migration" but that ministers were nervous and reluctant to discuss such a move publicly for fear it would alienate its "core working class vote"."

As a result, the public argument for immigration concentrated instead on the economic benefits and need for more migrants."

https://theconversation.com/how-new-labour-made-britain-into-a-migration-state-85472

"Under Blair’s Labour government, Britain’s economic immigration policy went from a highly restrictive approach to one of the most expansive in Europe"

[...]

"Labour claimed there was simply no alternative to globalisation."

Soreko: "In many cases the only case for immigration is compassionate and humanitarian"

https://edition.cnn.com/2018/07/06/europe/angela-merkel-migration-germany-intl/

'The refugee chancellor doesn't exist'

While Merkel has never publicly said she regrets her actions in late summer 2015, she has repeatedly pledged to drastically reduce the number of refugees arriving in Germany, replacing her infamous refrain of those weeks -- "we can do it" -- with another: "The events of 2015 must not be repeated."


Sweden
https://www.gatestoneinstitute.org/15558/sweden-victimized-children

"Last year there were 257 reports of explosions -- including attempted explosions -- an increase of 59% compared to 2018, according to SVT Nyheter. Yet, only seven people have been convicted for any of those 257 crimes.

"For the first time now, more crimes -- in absolute terms -- are committed by persons of foreign background than by persons of Swedish origin... The most crime-prone population subgroup are people born [in Sweden] to two foreign-born parents". — Report by Det Goda Samhället ("The Good Society"), summer of 2019."

Other negative impacts? Understatement?

Jim

"So you'd be hard pushed to look at tax revenue as somehow a counter argument to real austerity as opposed to gov expenditure v GDP or departmental spending so I'm not sure why you'd think that weakens the case that the Gov has been imposing restrictive budgets on health, education and local authority spending these last 10 years."

It seems pretty obvious to me that two things are happening - mass immigration is growing the overall size of the economy, but the nature of that growth means that tax revenue is not growing as fast as one would expect, or keeping up with demand for welfare and services.

If lots of people come to the UK and take low paid jobs that would otherwise not have been done by UK citizens, then the economy grows in overall size. But if each of those immigrants is (on average) a net drain on the public purse, one would expect that while tax revenue would grow (as they will pay some income tax, NI and VAT etc) the demand for State welfare and services would grow faster. Hence austerity.Which is, I would argue, what we have seen.

Think about it, if the average immigrant was a net contributor to the Exchequer, then given mass immigration, constant tax rates and a growing overall economy, then revenue should be rising faster than spending. It isn't because we still have budget deficits, despite mass immigration for 20+ years.

'Immigration is good for the UK' and 'We have grinding austerity' are mutually exclusive, all things being equal, ie tax rates staying largely the same.

Paul

@ Dipper.
"but surely your argument is that immigration of the sort we have seen should boost tax receipts more than it requires further government expenditure?"

Rising population both from inward migration and greater longevity imposes greater demand on health services. Combined with health inflation rate higher than the rest of the economy due to new treatments etc. This demand wasn't met. Simples.

Cuts were made to education budgets. Big cuts made in local authority funding. That was a political choice. Fiscal policy was contractionary post 2010. Some taxes were cut at same time as schools and health budgets were squeezed.

So regardless of any small fiscal positive from inward migration, econpmic policy was fiscally contractionary.

The fallout from that fiscal squeeze was seized upon as a chance to blame mass migration for hospital and gp surgery delays and schools shortages.

Your suggestion that I've argued that 'immigration pays if gov increases deficits' is nonsensical.
You meanwhile have argued that tax revenue has been on a roll but seem to think austerity never happened.
Even less compelling?

Paul

@Jim "think about it"
I've thought about it. Even if there is some small fiscal positive from migrants (no one claims it is that large) and almost all the evidence suggests there is, were the government to decide on trying to accelerate the elimination of the deficit by substantial cuts in real terms per head of population in health, education and local authority funding to the extent the economy flatlines then the deficit might well resist elimination despite increases in tax revenues. Fiscal policy was contractionary. Simples.

https://www.google.com/amp/s/amp.theguardian.com/education/2019/sep/19/education-spending-fall-from-2010-to-now-was-worst-since-1970s-ifs

aragon

Political Islam.

https://foreignpolicy.com/2020/02/24/emmanuel-macrons-war-on-islamism-is-europes-future/

"Yet now, throughout Europe, the debate over Islamism is taking place with increasing openness and nuance. A 2018 report by the security services of North Rhine-Westphalia, Germany’s most populous state, encapsulated these new debates by arguing that “in the long run, the threat posed by legalistic Islamism to the liberal democratic system is greater than that of jihadism … They aspire to an Islamist order, but are prepared to allow certain democratic elements within that framework. For this reason, their extremism is often barely recognizable at first glance.”

These concerns are not new, but what is noteworthy is that they are no longer expressed almost exclusively by those on the right of the political spectrum but, much more frequently than in the past, by politicians and commentators of all political persuasions—not to mention security services."

https://www.gatestoneinstitute.org/15376/eu-integration-report

"The Six Country Immigrant Integration Comparative Survey... conducted 9,000 telephone interviews in Germany, France, Netherlands, Austria, Belgium and Sweden. The respondents were Turkish and Moroccan immigrants. Two thirds of the Muslims interviewed said that religious rules were more important to them than the laws of the country in which they lived."

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