Alan Alexander: Focus on migration, economy and UK sovereignty

The possibility was raised that a significant restriction on immigration might lead to shortages in labour. Picture: AFP/Getty Images
The possibility was raised that a significant restriction on immigration might lead to shortages in labour. Picture: AFP/Getty Images
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IN THE latest in our series on the EU debate, Alan Alexander of the Royal Society of Edinburgh reveals the topics that will decide the outcome of the vote

The Referendum on UK membership of the European Union on 23 June will define the future of the United Kingdom. In common with the referendum on Scottish independence, this will be one of the most important peacetime decisions facing the country.

Norway and Switzerland, though outside the EU, still make contributions to the EU budget to gain access to the single market

The Royal Society of Edinburgh (RSE) is contributing to ensuring that voters can make an informed decision through issuing a series of position papers and holding themed events seeking to enlighten the debate. We have engaged experts in the fields that will influence voters as they decide which future is best for the United Kingdom: in the European Union or out. Topics for discussion include: the economy; labour market issues; migration; welfare; environment & energy; human rights; and constitutional issues. All of the papers that we produce and reports of the events are being made publicly available on our website. Events have already been held in Edinburgh, Aberdeen and Inverness. Others will follow. The RSE itself remains strictly neutral.

Our events so far suggest that the three topics that will decide the Referendum will be the economic impact, migration and, to a lesser extent, sovereignty. This exactly reflects the political and media debate.

Our series of events began in February with a keynote speech by Professor Brigid Laffan, (director of the Robert Shuman Centre for Advanced Studies, Florence) who set out many of the challenges facing the European project including the Eurozone, potential Brexit, the refugee and migration crisis and relations with Russia. She proposed that for the European project to prosper from these challenges requires an economic programme to deal with the problems of the Eurozone and policies on borders and security, including those developed and managed by organisations such as Frontex and Europol.

At the same event, Ewen Stewart (director, Global Britain) proposed the case for Brexit on the basis of the Euro, debt and trade. He observed that in recent times the EU has seen low growth, with the Eurozone countries in particular struggling economically. He also suggested that because the UK economy is far stronger in services than in trading in goods, we would be better served by negotiating our own agreements, as our interests differ from those of many of our EU partners.

Professor Claire Wallace also observed that a commitment to unrestricted migration and free movement is a core principle of the European Union.

In late May we hosted a session on “The Economics of the Choice”. It was chaired by the leading economics journalist Peter Jones and was addressed by Anton Muscatelli, the principal of the University of Glasgow, and by Professor Charles Nolan and Professor Ronald MacDonald, both also of the University of Glasgow.

Professor Muscatelli argued that in macro-economic terms the Remain and Leave positions make the debate complex, particularly as it is not entirely clear what model of engagement with the EU would be in place in the case of a “Leave vote”. He said that as a proportion of Government expenditure the net UK contribution to the EU of between £8.2 and £9 billion is a small fraction of a total of around £750bn. He also observed that countries such as Norway and Switzerland, though outside the EU, still make contributions to the EU budget to gain access to the single market and to programmes such as Horizon 2020.

He recognised that membership of the EU did impose some constraints on how member countries could deal with aspects of taxation, although this came in parallel with the removal of trade tariffs. He observed that the UK has a trade deficit with the EU as a whole, while also noting that the EU is the biggest trading partner of the UK.

Prof Muscatelli posed the question of whether the UK could easily redirect its trading pattern away from Europe and towards other markets, whether traditional partners or fast growing economies such as China offer the best economic opportunities.

He explored the question of whether geography matters: is the UK likely to see Europe as its main trading partner irrespective of membership of the EU?

ProfMuscatelli structured his analysis around the arguments that the two sides have advanced to support their position on the key questions facing voters in the referendum. Inevitably, and properly in an event that sought to inform rather than to persuade, this was a forensic analysis that had a flavour of ‘on the one hand, and on the other.’

Prof MacDonald explored the relationship by which the UK may seek to trade with the rest of the world either through remaining a member of the EU or leaving. He identified that the EU has been most successful in trading in goods and financial services, less so in other services. He also posed the question of whether the UK would be able to negotiate similar preferential trade deals as the UK without the EU’s “heft” behind it.

During this event on the “Economics of the Choice”, Peter Jones asked the audience what their current voting intention was. Of those who raised their hands more than 80 per cent were in favour of Remain.

At the event that looked at labour markets, migration and social policy, Professor Christina Boswell noted that a recent poll indicated that 44 per cent of the population considers immigration as the most important issue facing Britain today, and more than three-quarters of UK residents wish to see a reduction in immigration.

She also observed that if the UK wished to retain access to the single market, either through a Norwegian or Swiss model, it would be likely that free movement of people would be a condition of such a deal.

Prof Boswell also noted that over half of net migration is from non-EU countries, and raised the question of whether a post-Brexit government would find it easier to limit EU immigration.

She raised the possibility that a significant restriction on immigration might lead to shortages in labour in sectors currently heavily reliant on foreign workers. She also observed that we need to understand the reasons why the UK labour market acts as a draw to EU immigrants, and (if this is seen to be a problem) how best to match the supply of labour and market demand.

At the same event, David Bell spoke to a paper that he had co-authored with Robert Elliott, which considered many of the issues raised by Prof Boswell.

Professors Bell and Elliott observed that the UK already has considerable autonomy in the regulation of the labour market, while recognising that currently the UK has little control over EU migration flows. They noted that in the short run, the net contribution of EU migrants in terms of revenues against public service costs is relatively small, but may provide longer term benefits to the economy in terms of productivity and competitiveness.

The last event in our series will take place tonight and will consider many of the constitutional and legal issues, including the impact on the Scottish independence debate and the implications for other EU countries with independence movements. It will also consider how human rights might be dealt with in the future. This is often mistakenly associated with the EU, but in most cases it is more related to the European Convention on Human Rights, which is not the responsibility of the EU.

The decision is momentous. It is one that people need to consider very carefully. The Royal Society of Edinburgh aims to contribute to the knowledge base that people have before voting on 23 June.

• Professor Alan Alexander is general secretary of The Royal Society of Edinburgh