Why Ed Balls is wrong to say ‘we were wrong to allow so many eastern Europeans into Britain’
Ed Balls is absolutely right when he lambasts Governments in other parts of Europe for cutting public spending, and it is a pity that that part of his article has been swept aside in the coverage by the other element of his argument, that too many workers from Eastern Europe were allowed to work in Britain, where he is wrong.
First, as the IPPR’s Tim Finch argues, the claim that “there has also been a direct impact on the wages, terms and conditions of too many people” is overdone. All the evidence makes clear that real wages continued to rise as Eastern European migration peaked in the years after free movement was introduced. There may well have been individual cases of undercutting, which should indeed have been addressed, but Government policies like the National Minimum Wage helped prevent such individual cases being generalised as they were for instance in Germany (where €1 an hour jobs were common). And it is conceivable that real wages would have risen faster without migration, but that isn’t what I suspect most people would understand as undercutting. The best way to prevent undercutting is not to pull up the drawbridge, but to promote collective bargaining, or implement the spirit of the EU posted workers directive, rather than implementing the least the Government could get away with (Labour essentially relied only on the National Minimum Wage, whereas the posted workers directive could have been implemented in such a way as to make collectively agreed wage rates the floor below which wages could not fall).
Second, the suggestion that “free movement of goods and services works to our mutual advantage. But the free movement of labour is another matter entirely” is unhelpful . Free movement of goods and services – which the TUC certainly supports – without free movement of labour is a recipe for jobs flooding to where the labour is cheapest, reproducing the Wal-Martisation of the US. Instead, Governments should ensure that workers who migrate are treated the same as the workers in the country they migrate to, which over time raises the wage levels of the poorest countries in Europe rather than reducing them in the richest. And, similarly, the taxes generated by the new migrants should have been used to expand social housing and public services so that an increasing population did not compete for a shrinking housing stock or crowded public transport.
Finally, there is a certain amount of chutzpah in the claim that “as the GMB’s Paul Kenny and others have pointed out, the failure of our government to get agreement to implement the agency workers directive made matters worse.” It took years of campaigning by people like the GMB’s Paul Kenny to get the Government to stop resisting tooth and claw that agency workers directive. What Paul Kenny and the rest of the trade union movement argued all along – for over a decade – was that, with labour market regulation like the agency workers directive and the posted workers directive, migration would not set worker against worker, allow employers to undercut existing terms and conditions (regardless of the nationality of the victims), or lead to a downward spiral of wages.
And, as a postscript, the argument that “I am British before I am European” may sound rousingly patriotic, but wrongly implies that the two are opposites. I could as easily claim “I am Welsh before I am British”, but being both – given that the option is available – would be better all round!