Letter to the Editor: Workers at the gates

From Mr Roland Rudd

LONDON -- Some members of the British media are up to their usual tricks. The prospect of further immigration to the U.K. once Bulgaria and Romania enter the European Union, as soon as next year, has prompted the customary scare mongering. Headlines about crime, corruption and drugs linked to immigrants have abounded in some of the U.K.'s more vociferous media titles.

These doomsday scenarios have of course been heard before. Ahead of the last enlargement in 2004, similar spook stories appeared. Particular venom was reserved for the Roma community. Headlines such as "Riot Fury Gypsies Head Here" reflected a surge of loud and bleak warnings about the impending "invasion." At the same time, the "Polish plumber" was depicted as a menace to Britons' jobs -- although this threat has certainly never achieved the political resonance here as it has across the Channel in France.

In the end, none of these dire warnings has actually materialized. The 2004 enlargement was not only one of the greatest achievements of the EU, marking the reconciliation between Eastern and Western Europe. It was also an unmitigated triumph for the U.K. economy. It has boosted economic growth and productivity, with immigrants fulfilling crucial roles in the British labor market. It is not only the Polish plumber who has become part of the fabric of British life. From hospitality and health care to construction and catering, their contribution has been immense. Rather than creating unemployment, these workers seem to be taking jobs locals no longer want to do. True, many more East Europeans came to the U.K. than the government had predicted. But this was not a trigger for economic doom -- even if it produced red faces for some at Whitehall.

The people who have come to the U.K. are typically hard workers and more than 80% of them are under 35. Contrary to the ugly caricature of the welfare-consuming immigrant, only 1.3% of the new migrants applied for unemployment benefits. Actually, many of them are working in the public sector, thus strengthening the National Health Service and other public services.

It is, though, disingenuous to solely concentrate on the benefits of migration without recognizing that there also costs. The influx of Poles to the U.K. in the last two years is the largest immigration of a national grouping in our nation's history. This has of course significant implications for the country's stretched public services, such as schools, hospitals and transport. Yet on many occasions the immigration debate seems to overemphasize the drawbacks and overlook the advantages.

The evidence that the East European influx has acted as a catalyst for economic growth is strong. The accounting firm Grant Thornton recently estimated that their arrival has boosted economic growth by as much as 1% in 2005 and will probably do so again this year, thereby allowing Chancellor of the Exchequer Gordon Brown to meet his growth forecasts. Earlier this year, the "Item Club," an economic forecasting group sponsored by Ernst & Young, concluded that the migration had "proved remarkably positive for the economy, keeping interest rates 0.5% lower than they would otherwise have been."

It is not only the U.K. that has been rewarded for embracing the spirit of enlargement. Sweden and Ireland were the only other countries to immediately open their labor markets for the new EU members, and their economies have benefited, too. The effect was most dramatic in Ireland, where as many as 85,000 workers have come to the country just in the year after enlargement. This has allowed the "Celtic tiger" to continue its high growth rate -- expected this year to reach 4.75%, or double the euro-zone average.

Other EU members are slowly recognizing the economic benefits of immigration. A further five have lifted restrictions on the 2004 accession countries; Italy last month became the latest to do so. The Catalan State and Savings Banks and the Autonomous University of Barcelona released a study last week saying that the influx of immigrants from Eastern Europe and Africa to Spain has helped the Spanish economy to grow by 2.6% on average over the last 10 years. Without large-scale immigration, per capita GDP would have actually fallen, according to the report.

If any group should be at the forefront of championing enlargement and immigration, it is the business community. It is no accident that London, the leading financial center in the world, has a work force comprising 189 nationalities. Business should stay faithful to the EU vision, first enunciated in the 1957 Treaty of Rome, of the free movement of workers. It is worth remembering that this is a two-way street. There are approximately 3,000 Britons in both the Czech Republic and Hungry, and the numbers are rising.

The British government should continue its open-door policy when Bulgaria and Romania enter the EU. Such a policy is not only right for the U.K. It also makes sense for the rest of Europe. The prospect of further migration from Eastern Europe, which is likely to fuel economic growth, is a cause for celebration, not cowardice.

Roland Rudd,
Chairman,
Business for New Europe,
London EC2P 2YS