#Brexit and the Left | Mainly Macro

Last Updated: June 22, 2016By


More excellent insight from Simon Wren-Lewis: Leaving the EU will show the UK is incapable of co-operating with other countries, and it will show we do not understand how migrant workers benefit our economy.

As I have pointed out that migrant workers bring £120 million a week into the UK treasury, this is not news to Vox Political. But it may be a surprise to others.

Please let them know, especially if they are preparing to make a huge mistake at the polls due to a lack of good information.

There seem to be two strands of opinion which encourages people on the left to vote Leave. The first is an intense dislike of what has happened in the the Eurozone: seeLarry Elliott for example. The second is a wish to take seriously working class concerns over immigration.

I share the intense dislike over what has happened in the Eurozone (EZ). You only need to read, for example, what I have writtenabout Greece to see that. Yet I cannot see how UK exit from the EU will change for the good how the EZ works. Crucially why should it change the current politics of Germany that has been so important in many of the bad decisions the EZ has made. As we are not part of the EZ, it is difficult to see how UK exit will help its demise, if that is what you want.

As we will be leaving the EU and not the EZ, the message Brexit sends to Europe is not that the EZ is fundamentally flawed but rather that the UK is incapable of being part of any cooperative agreement among European countries. I am internationalist by nature so I do not want that. The idea that Brexit will shock the EZ into mending its ways, then thank us for showing them the light and invite us to rejoin whatever is left is pure fantasy.

There is one way the EZ crisis has impacted on the UK, and that is migration. It seems reasonable to assume that one reason immigration into the UK from the EU is currently high is because of considerable youth unemployment in many EZ countries. Which brings us to immigration concerns.

A pretty robust finding is that migration at the kind of levels we are now seeing does not do any harm to GDP per head, and could improve it. Another robust finding is that current migration benefits the public finances. This is both important and pretty obvious.

If migration falls following Brexit (a bigif), and if we add in the other negative effects of Brexit, we will have a large increase in the government’s budget deficit even at full employment. Given government policy on how holes in the deficit are to be filled, this NIESR analysis suggestsyou are talking about large hits to the lower paid.

None of this is to deny real grievances about reduced public services and lower pay. Once again I do not think I and many others could be accused of keeping quiet about the stupidity of current austerity. But just as the grievances are real, it is also important to understand the real causes.

Source: mainly macro: Brexit and the Left


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  1. Mr David Penson June 22, 2016 at 11:18 am - Reply

    This is your opinion Mike , which is fair enough but me and most of my friends will be voting to Leave as if our lives depended on it, one gentleman living in Priestwood Bracknell is wheeling himself in his wheel chair a mile or more to the polling station despite having just come out of Hospital and being in a serious physical state .

    • Mike Sivier June 22, 2016 at 11:53 am - Reply

      In fact it is the opinion of an Oxford professor of Macroeconomics. I just happen to agree with it.

      I would strongly advise your friend in the wheelchair to read some of the articles on This Blog regarding the effect of Brexit on people with disabilities. If he still, really, wants to commit an act of immense self-harm, then by all means let him vote ‘Leave’.

      Having examined as much information as I’m able, it seems that the lives of people with disabilities depend on voting ‘Remain’ tomorrow.

      And I’m not saying that’s an “as if” – I mean their lives actually depend on a ‘Remain’ vote.

      Think about it.

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