Confusion

On 1st April, 2008, The House of Lords published a report entitled,"The Economic Impact of Immigration" ¹ . This was a valiant attempt to come to grips with the evolving impacts of immigration upon British society and, in this case, the economic impacts. The report is disappointing in so far as it reflects the complete abandonment on the part of government of sustaining any grip on an important aspect of Britain's human resources policy. Indeed, the report reflects the ad hoc nature of the government's approach to such a fundamental economic issue whilst raising the spectre of, yet again, political party fortunes being put ahead of those of the country (see "New Labour pursues Old Labour's proven strategy to gain votes").

The process used by the House of Lords was to gather evidence on what is known of the economic impact of immigration on the economy. The results, unfortunately, demonstrate that very little is known outside some theoretical economic arguments and the application of some common sense. But what is lacking is hard empirical evidence.

Enlargement was not what it seems

One major gap in the report is a more complete analysis of the reason for such large numbers of economic migrants from Central and East Europe. Now almost 20 years following the collapse of the Soviet system in 1989 it is too simplistic just to state that people in those countries have lower incomes. These pages missing from the report cause the British public to remain in the dark as to the degree to which national government policies in Central and Eastern Europe have proactively impoverished segments of their population since 1989. To exacerbate the situation the political agenda pushed by the European Union in the form of the European Commission proactively substituted rational economic planning with a long tick list of European legislation which each accession country was required to introduce and ratify. In preparation for this process some of the most serious upheavals in Central and Eastern Europe in human resources policy occurred with the privatizations of state assets creating a lost generation of workers. At the same time the process significantly enriched the Communist party operatives and politicians through selectivive privatizations and sales of state assets going to so-called "Young Communists" and who carried out the rebranding of the Communist party into "independent", "democratic" and "socialist" parties even with opposing factions. There was a serious marginalised the fastest growing segment of the population, largely in rural regions. It was this irresponsibility on the part of political parties not to come to grips with the human resources issues as well as the lack of initiative on the part of the European Union on the economic front which contributed to the scale of economic migration seen today. These issues were raised some time ago (see Failing Economies, the EBRD and Human Rights). Another measure of the distorted economic development could be seen in the inability of the European Union to deliver on the largely fanciful objectives of the economic agenda of the Lisbon Agenda.

The contribution of the British government

The British government, throughout this accession period, was under Labour party control. This government ran a shameful European policy agenda demonstrating a paranoia with respect to an imaginary prospect of a mass migration of Roma to the United Kingdom. This included the removal of Roma from aircraft boarding queues at Prague Airport in contravention to the European Convention on Human Rights. This same government, for domestic consumption, hypocrytically held up this Convention as the foundation of the Human Rights legislation in the United Kingdom. In addition the government demonstrated incompetence in its estimation of the likely numbers of economic migrants who might come to the United Kingdom. Communications sent by qualified British NGOs operating in Central Europe to the British government advising them of serious Human Rights abuse in Central European accession countries and of the serious economic implications were ignored.

Relevant models & decision analysis efforts

SEEL-Systems Engineering Economics Lab, a British applied research organization, set up an econometric model ² of the reasons for the shortfalls in economic performance using Hungary as an example showing up a shortfall of something in the region of €12 billion each year as a direct outcome of:

• inappropriate economic policies
• the breaking of European Laws
• the failure of the European Commission to act when advised of these facts in 1999
• the proactive hiding of the facts by the European Commission from the European Council throughout the accession periods

Field work undertaken in Central Europe by ECRE, the European Committee on Romani Emacipation, established the fact that the Roma had very little intent to participate in economic migration. SEEL, making use of ECRE's data estimated that the likely number of economic migrants would be largely from the so-called mainstream population, or non-Roma, and be of the order of 5 milllion over a ten years period following accesssion. The majority of such economic migrants would come from Poland as a direct function of its size relative to the other Central European countries.

SEEL is extending this work and will release a second generation econometric model (LESS-Labour Economic Simulation System) which links the evolving Central and Eastern European national economic dynamics to those of the British labour market. This system provides a means to play through different assumptions to support decision analysis for policy development. This model, like the previous work concerning European economy shortfalls, will be accessible on the Internet.