The Labour Party’s free movement dilemma

Owen Parker - Associate Fellow, SPERI, & Senior Lecturer in Politics, University of Sheffield

Perception versus reality

But is a reconciliation of the ‘human’ and ‘social’ really utopian in the particular context of the free movement of EU citizens in the UK? Is the progressive’s dilemma real in this case?

Much depends on what we mean by ‘real’. To the extent that many people believe the dilemma is real, it can become real in political terms. In the UK, growing inward migration from the EU has, since the late-2000s, broadly correlated with government austerity, growing employment precarity and decreasing labour standards and many certainly believe – and, indeed, have been repeatedly told by a hostile media and UKIP – that the former is an important cause of the latter.

The basis for such a position is not, however, borne out in the evidence. EU migration is not a cause of the hardship many have genuinely been experiencing; in this case, correlation is not causation. In fact, such migration has brought significant overall net economic benefits and there is no evidence of widespread ‘benefit tourism’. Assertions that labour market competition is a problem are also untrue and based on the ‘lump of labour fallacy’; the erroneous notion that there is a fixed amount of work in an economy and increasing the supply of labour reduces the cost. In fact, the economic activity of new migrants also increases the amount of work in an economy or the demand for labour. Thus, in the UK context, evidence points to no general effects on pay or employment rates; even at the lower end of the wage scale such effects are negligible.

Notably, Daniel Korski, a senior advisor to David Cameron acknowledged this reality in the aftermath of the Brexit referendum, stating that,

‘… we failed to find any evidence of communities under pressure … [I]t was clear that immigration is at best just one of several factors that are putting pressure on public services, along with globalization, deindustrialization, automation and aging populations.’

This assertion aligns with expert opinion that points to the far more significant effects on jobs and social settlements of the Great Recession – and the austerity that followed – and suggests that immigration may actually have offset those effects to some extent.

A lack of macro-level causal evidence is not to suggest there has been no tangible effects on public services in certain locales at certain moments in time since 2004 and, as Corbyn suggested at the time of the referendum (and in the 2017 manifesto), the migration impact funds – abolished by the coalition government in 2010 – could and should be reintroduced. Alongside such moves, more substantive policies aimed at improving social and labour rights could be introduced without touching the right to free movement (though critical engagement with EU rules on free movement of services and posted workers should continue from a progressive perspective).

Overall then, the evidence suggests that the logic of the progressive’s dilemma could and should be rejected. Certainly in the context of free movement in the UK the ‘human’ and ‘social’ are not necessarily at odds and could be compatible.

Towards a policy reversal

As a matter of principle then Labour should reverse its current position on free movement. To not do so renders empty and hollow its manifesto commitment (P.28) to, ‘not scapegoat migrants nor blame them for economic failures’.

Party strategists would undoubtedly respond that on this issue pragmatism must trump principle; that the party has to be seen to respond to the widespread hostility to free movement (whether it is justified or not); and that the success of this strategy was borne out in the Leave support that Labour successfully captured in 2017 (without apparent cost in terms of its support from Remain voters). The spectre of a stirring Nigel Farage is certainly a legitimate worry for any Labour strategist.

But a pragmatist should, as Matt Bishop has convincingly argued, be far more concerned about the retention of single market membership that is likely to require something close to the status quo on free movement.. Without the economic benefits of such membership – or extremely preferential market access – Labour’s anti-austerity high-tax, high-spend manifesto looks unrealisable. (And, contrary to the fears of some ‘Lexiteers’ (a theme also discussed by Simon Wren-Lewis), maintaining the UK’s single market membership would not significantly scupper Labour’s manifesto public ownership plans).

Given the show of unity from the ‘EU-27’ to date, maintaining the UK’s single market membership or something close to it increasingly looks like it will only be achieved with a policy reversal on free movement. Minor concessions from the EU might be possible; perhaps something like Cameron’s now long-forgotten ‘emergency brake’ on access to in-work benefits could be revived. But in a context where prevailing EU law in any case permits far more restrictions than are usually recognised in the UK and European Court of Justice jurisprudence has recently tightened access to benefits, further major concessions are highly unlikely. The Labour leadership remain unwilling (publically at least) to acknowledge this reality.

The public though may have moved on from the misinformation of the referendum campaign and be waking up to the importance of this policy linkage. Recent surveys suggest that not only Remainers, but also an increasing and substantial proportion of Leavers would now be willing to substantially compromise on free movement to ensure the maintenance of the various benefits of single market membership. This position is likely to be galvanised as the economic effects of an imminent Brexit are felt (Leavers paying £205 for their 200€ holiday money at the airport this summer – as I recently did – might focus minds!). In short, the fear of losing Leave voters in the context of a policy reversal may be overplayed.

Given its success in the recent election it is understandable that Labour is maintaining for now its position of ‘strategic ambiguity’ on Brexit: a position that incoherently encompasses a hard line on free movement, a soft rhetoric on migrants and high aspirations on single market access. But this position will not be sustainable if it takes office – now a very real possibility. At that point in time, if not before, the ambiguity will have to end. The party could and should – for pragmatic and principled reasons – reverse its position on the free movement of EU citizens.