With opinion polls showing the two sides in the referendum battle still virtually neck-and-neck the result may depend on which issue in the campaign is most in people’s minds when they turn out to vote.
Most commentators believe the Remain camp’s best hope is to focus attention on the economy and for the Leave side to highlight immigration. The two issues, of course, are related; what matters is which one exercises voters most. This week the Leave campaign has attacked David Cameron personally for his immigration policy and come up with a plan of its own. How viable is it and what would be its effect on the economy?
The Leave campaign made its intentions clear enough at the weekend when its two most senior Conservative figures, the Justice Secretary, Michael Gove, and the former London mayor and would-be Tory leader, Boris Johnson, wrote a letter to the Prime Minister attacking him for his failure to keep his promise to reduce annual net migration to Britain to the tens of thousands. Last week official figures showed it had reached 330,000, just short of the record. And EU countries were responsible for more than half.
Mr Gove and Mr Johnson wrote: ‘This promise is plainly not achievable as long as the UK is a member of the EU’. That is because the free movement of people to live and work anywhere in the EU is a principle fundamental to EU membership. The two Tory ‘Outers’ added that to make the promise while campaigning to remain in the EU was ‘corrosive of public trust’.
For good measure, one of their Tory colleagues in the Leave campaign, the employment minister, Priti Patel, suggested that the Prime Minister and the Chancellor, George Osborne, were ‘too rich’ and led lives too ‘insulated’ to understand the pressures immigration imposed on low-income families.
Now the Brexiteers have come up with their own plan for what they would do if Britain voted to leave the EU and they found themselves running the government. Central to their scheme is that from 2020 EU nationals would no longer have the right to come to work in Britain but would have to apply for visas which would be awarded on a points system similkar to the one operating in Australia.
Points would be awarded in relation to the skills applicants had (and to skills shortages in Britain) but irrespective of nationality. Immigrants’ right to work here would depend on their suitability for jobs and they would need to be able to speak English. Those EU migrants already here would be given indefinite leave to remain and the new rules would not apply to Irish citizens.
The authors of the plan, who also include the Labour MP Gisela Stuart, said: ‘We will welcome new citizens who wish to contribute to our society, as so many immigrants have done. And we will be able to remove those who abuse our hospitality’. They said the new system would be ‘fairer and more humane’ and added: ‘If we implement these principles, for the first time in a generation it will be possible for politicians to keep their promises on immigration.’
It has been estimated by the Migration Watch pressure group that if the same points-based criteria currently used to restrict the immigration of non-EU citizens were applied to EU citizens, the rate of immigration from EU countries to Britain would be cut by three quarters.
The plan was immediately attacked by the Prime Minister who said it would ‘trash the economy’. Central to his case is what the Remain campaign sees as the knock-on effect on the wider economy of the plan. The main issue here is what it would imply for the trading relationship between a post-Brexit Britain and our current partners in the EU’s single market, to which we sell 44% of our exports.
During the course of the campaign, the Leave side has flirted with various different options. Initially some Brexiteers said it would be easy to get a deal with our former partners because they sell more to us than we sell to them, so it would be a matter of cutting off their nose to spite their face if they didn’t quickly come to a trade deal. The Remain side pointed out, however, that though we may buy more of their goods than they do ours, the proportion of the other EU countries’ exports sold to us is tiny compared with the proportion of our exports sold to them, so they could afford to negotiate hard. What seems clear is that if they continued to allow Britain access to the single market, as they do other non-EU countries such as Norway and Switzerland, then they would insist on the continuing free movement of labour, so nullifying the Brexiteers’ new policy.
It is perhaps for this reason that Michael Gove acknowledged accepted that a post-Brexit Britain should not seek access to the single market. But that leaves open the question of what sort of trading relationship it should seek. Some have argued that Britain should simply negotiate a series of its own trade agreements with other countries, including the EU. Because of the size of the British economy, they argue, other countries would have an incentive for making such agreements.
But trade negotiations can take years to complete and there is a shortage of experienced British trade negotiators to do the work because the EU has done it on our behalf for the last forty years. And, as President Obama put it, there are a lot of other countries trying to do trade deals and Britain would have to join ‘the end of the queue’. The Remain camp argues that the uncertainty about the final outcome would be very damaging to the economy,.
The most radical suggestion from the Brexit camp has come from the veteran free-market economist, Professor Patrick Minford, of the group ‘Economists for Brexit’. He argues that Britain should simply ‘get rid of all the EU’s tariffs and trade barriers unilaterally’, in other words not bother too much about negotiations but open up our economy to cheaper imports even if other countries don’t open up theirs to ours. He argues that this would boost the economy by reducing costs to consumers and so increase demand.
He has also said that such a policy ‘would mostly eliminate manufacturing’ in Britain. This was seized on by the Business Secretary, Sajid Javid, who said it would involve ‘2.6m people’s jobs and livelihoods being casually swept away’ and argued that the result of having no trade deal with the rest of the EU would ‘inevitably mean higher prices, less investment and lower employment’.
So it is becoming clear where the battleground will lie in the remaining weeks of the referendum campaign. The Leave campaign will argue that net immigration simply cannot be reduced to the tens of thousands so long as Britain remains in the EU and that its plan, requiring withdrawal from the EU, offers a real chance of achieving that end. The Remain side will argue that the economic risk associated with this policy is simply too great to take because, in their view, the Leave campaign has not come up with a trade policy consistent with its immigration policy that does not threaten the economy.
What’s your view? Do you agree with the Leave campaign that net immigration cannot be reduced to tens of thousands while Britain stays in the EU? And do you accept their claim nthat a points system ould do the job? Or do you agree or not with David Cameron that the policy would ‘trash the economy’? Do you think the Leave campaign has a viable policy on Britain’s trade relations with the rest of the world after Brexit? Do you think the choice boils down to one between reducing immigration on one hand and promoting economic prosperity on the other? If you do, which do you think is more important?