Hard Brexit? Only if it’s free

This post was contributed by Professor Eric Kaufmann from Birkbeck’s Department of Politics. It was originally published on the LSE’s British Politics and Policy blog.

Lowering immigration was the key motivation behind the Brexit vote, and how to achieve it dominates the current political debate. Drawing on new data, Eric Kaufmann analyses the propsects of support for a hard and a soft Brexit, based on how much Britons would be willing to pay to reduce the number of Europeans entering the UK.

A new survey shows most Britons are not willing to pursue hard Brexit if it will cost them personally. Thus far, the economic indicators post-Brexit don’t look bad. Consumer spending and investment are holding up well, despite a lower pound. But if the going gets tough, there is a two-thirds majority willing to accept current levels of EU migration to retain access to the single market.

The leading motivation for Leave voters was reducing immigration while Remain voters prioritised the economy. This hasn’t changed. According to my YouGov/Birkbeck/Policy Exchange survey data, two-thirds of British people want less immigration, including 47 percent of Remainers and over 91 percent of Leavers.

Hard Brexit is a good way to bring numbers down. However, some suggest that when Theresa May triggers Article 50, the EU will drive a hard bargain, inflicting pain on the British economy. With economistsclaiming entry to the single market is worth 4 percent of GDP by 2030, I asked how much the average Briton is willing to sacrifice to reduce European immigration in the event the doomsayers are right. The final deal between Britain and the EU over leaving will hinge on how much economic pain, in the form of reduced market access, Britain is prepared to absorb to restrict European immigration.

The survey, carried out by the polling firm YouGov, asked a sample of over 1500 people the following question: “Roughly 185,000 more people entered Britain last year from the EU than went the other way. Imagine there was a cost to reduce the inflow. How much would you be willing to pay to reduce the number of Europeans entering Britain?” The options ranged from “pay nothing” for no reduction to paying 5 percent of personal income to reduce numbers to zero. Each percent of income foregone reduced the influx by 35,000. The results are shown in figure 1.

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Source: YouGov survey, August 20, 2016.

Among those surveyed, and excluding those who didn’t know, 62 percent said they were unwilling to pay anything to reduce numbers, and would accept current levels of European immigration.

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Source: YouGov survey, August 20, 2016.

As figure 2 shows, even among those who said they voted to leave the European Union, 30 percentreported they would prefer the current inflow of 185,000 to paying any of their income to cut the inflow. In other words, there is a significant ‘soft’ component within the Leave vote.

On the other hand, there is a considerable core of Brexit voters willing to tighten their belts to reduce migration: over a third of Leave voters indicated they would contribute 5 percent of their income to cut European migration to zero. More than half of Brexiteers are willing to pay at least 3 percent of their income to reduce European net migration from the current 185,000 to under 80,000. The average person who voted Conservative in the 2015 General Election is willing to stump up 2.5 percent of their pay packet to reduce European immigration to half its current level.

This means that if the costs of Brexit mount in line with pessimistic predictions, most British people favour a deal that preserves market access even if this results in only limited reductions in European immigration. May’s Conservative voters will put up with more pain, but not if it costs more than 2 percent of GDP. This suggests a deal between Theresa May and her EU interlocutors based on significant market access in exchange for limited migration controls may be acceptable to the 45 per cent of voters who currently back her party. It certainly will pass muster with a majority of the electorate.

If the economy continues to hold steady, the question is moot and hard Brexit remains a strong option. But if pain is on the way after Article 50, Middle Britain will be inclined to prefer soft over hard Brexit.

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Why and how the EU’s Working Time Directive matters

This post was contributed by Dr Dionyssis G. Dimitrakopoulos, Senior Lecturer in the Department of Politics and Director of the MSc programme in European Politics and Policy. In this blog post he reports part of his ESRC-funded (grant RES-000-22-2510) research on the implementation of the Working Time Directive in Britain and France by governments of the Left and the Right.

The renewed attention to the European Union’s Working Time Directive in the UK is not undeserved. This directive exemplifies the conflict between a neo-liberal vision (of the UK and the EU as a whole) couched in unfettered markets and a centre-left alternative that acknowledges that effective rules and institutions are necessary if market power is to be harnessed for the benefit of the many.

The history of the regulation of working time is permeated by a struggle between those who initially sought to ‘humanize’ work or, later, regulate working time so as to boost employment by sharing the proceeds of productivity gains, and their opponents who have long argued that regulating time increases production costs and endangers jobs. In addition to the point of principle that, as François Mitterrand put it, ‘life is not a mere appendix to work’, those on the Left often point out the well-documented negative consequences of long working hours on health. They also argue that, since the distribution of bargaining power between employers and employees is unequal, especially in conditions of mass unemployment, governments and/or trade unions should strive to deal with it as a collective issue. Their neo-liberal opponents argue that it is a matter for ‘the market’, i.e. individual employees and their employers.

The European Union’s Working Time Directive was enacted in 1993 and it is part of the legislative measures that exemplify the determination of Jacques Delors (backed by several national governments) to add a social dimension to the single market, a strategic decision which played a major role in the British trade union movement’s pro-European turn in the late 1980s. The directive creates statutory rights that millions of workers now take for granted, including a limit to the amount of time an employee can be required to work (48 hours per week on average, including overtime, calculated usually over four months), weekly and daily rest periods, rest breaks and a right to four weeks’ paid annual leave that cannot be replaced by an allowance.

These were rather radical measures for an economy (such as the UK’s) that relied extensively on low pay and its sibling, i.e. a culture of very long working hours. In 1996 the Conservative government estimated that, prior to the introduction of the directive into UK law, some 2.1 million employees did not conform with the daily and weekly rest provisions, 2.7 million regularly worked more than 48 hours per week and about 200,000 exceeded the directive’s night work limit. Moreover, up to 3.8 million workers stood to benefit from the directive’s provisions on paid annual holidays since there was no statutory right to paid annual holidays in this country, until the introduction of directive into UK law by the New Labour government. In 1998 the New Labour government also estimated that 3.5 million night workers in Britain stood to benefit from the regular health checks stipulated by the directive.

The British Conservatives love to hate this directive though not because of its provenance. On the surface, their argument focuses on the need for flexibility. This ignores flexibility-promoting clauses such as (a) derogations that are possible if agreed by the two sides of industry but on condition of the provision of equivalent rest periods, (b) the exclusion of entire groups of workers (e.g., initially, doctors in training) but also (c) the famous opt-out clause which allows individual workers (not entire countries) to choose to exceed the 48-hour limit whilst complying with the remainder of the directive.  Given these clauses and the fact that this and several other EU directives in the socio-economic domain allow individual countries to pursue higher standards, one can conclude that Conservative politicians’ references to flexibility only mean one thing: the dilution of standards and a race to the bottom, i.e. the problem that directives such as this are meant to resolve.

When the New Labour government transposed this directive into UK legislation, it did so in a manner that clearly distinguished itself from the declared intentions of its Conservative predecessor that had fought and lost a legal battle to have the directive annulled by the European Court of Justice. The scope of the UK regulations is much broader, thus protecting more workers. The regulations also establish a shorter qualification period for paid annual leave, introduce more generous provisions in the agricultural sector and employ a more generous formula for the calculation of holiday pay than the method used even in the engineering industry where pay rates were not problematic, establish a longer in-work rest break and a mechanism so that ‘workforce agreements’ can be reached where there is no recognised independent trade union. However, the New Labour government also chose to transpose the opt-out clause in line with its ‘business-friendly’ image.

As regards the day-to-day implementation of the directive in the UK, evidence (such as the involvement – however imperfect – of the Health and Safety Executive) indicates that the New Labour government intended to make it work in practice but the effect of its efforts has been mitigated by the determination to remain as faithful as possible to its business-friendly profile. As a result, first, there is evidence of abuse of the opt-out by some unscrupulous employers in Britain’s flexible labour market, with individual workers being asked to sign up to the opt-out alongside their work contract, thus effectively turning the former into an (illegal) condition for the latter. This is one of the reasons why centre-left politicians across Europe have tried to abolish the opt-out clause but were defeated by a blocking coalition led by the New Labour government. Second, both in Britain and elsewhere, there are many more problems in sectors of the economy (such as catering, cleaning, restaurants, hotels) that are dominated by low skills, low pay and low levels of trade union membership.

The conflict between a neo-liberal vision (of the UK and the EU as a whole) and a centre-left alternative (regulated capitalism) is ongoing. That is the choice facing citizens across Europe today and one that makes a compelling case for participation in the European elections of May 2014.

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