The Bain of Bremain

We wrote a month ago of the likelihood, it appeared then, of the UK voting to remain as part of the EU.

Over the last few weeks however, the mood has shifted to favouring an exit and one issue in particular appears to have been central to this.

Immigration

One of the central tenets of EU membership is that member countries allow free movement of citizens between states. This was not seen as an issue in earlier days as the initial members were the wealthier Northern countries such as France, Italy, Belgium, Holland and Germany.

It has however increasingly become a concern as the EU has expanded East, to include the likes of Bulgaria, Albania, Croatia and Romania.

The difference in average earnings is stark; a Bulgarian at home earns around €10,000 p.a. compared to a German or French worker who receives circa €42,000.

There is an easily understandable and powerful argument to make for those advocating a BREXIT.

  1. You, the British workers are having your jobs taken (or salaries reduced) by cheap Eastern European labour
  2. People are increasingly coming to the UK from these poorer countries who take advantage of the social security system, free schooling and the NHS; to the detriment of UK nationals
  3. Longer term the EU plans to expand further by allowing the likes of Turkey to join, and that embroils us further into the political and religious issues of the East as well as creating additional (and possibly massive) immigration issues

Alternative view

There are of course many counter arguments to those made above.

The simplest being that the service levels and low costs we enjoy in the UK are a factor of immigrant workers being prepared to work longer for less than UK citizens. In comparison with their homeland opportunities the pay and conditions are much more attractive to them.

Economies need plentiful and flexible labour markets, and to restrict these will cause lower productivity and higher costs for UK PLC.

Whilst there are plainly abuses of the social security system and these are gleefully seized upon by the newspapers as evidence of a systemic outrage, these are in fact relatively minor if taken as a whole. The usefulness in aggregate of migrant workers in the UK (also with a country such as Germany) is positive to the performance of the economy and the wealth of the nation, not withstanding the difficulties they create.

Single issue elections

The reality for anyone trying to weigh up all the myriad factors relevant to this vote is that some key factors are so opaque and unprovable, that it becomes for most ultimately less about the facts and more about how they feel.

Intelligently evaluating the longer term implication of choices however, is to recognise that winning is measured in aggregate or as an average and not as an absolute. It is often a truth hard learned that a course chosen out of strong emotion is one regretted in retrospect; some itches being far better left unscratched.

There needs to be an acceptance in any functioning relationship, be it business or personal, that one party should not get all that they want all of the time. There is a skill to identifying what matters most and to be firm in those areas, but equally to allow the views of others and the greater good to be pursued at personal cost if appropriate.

That being said, it’s not how most (if any) elections work.

The majority in the moment will be swayed in their view and their vote by the single issue that creates in them the greatest emotion, either positive or negative (something to move towards or to retreat from).

In this election that appears to be the fear of uncontrolled (by us alone) immigration and that’s why the BREXIT vote is rising.

Note: This is written in a personal capacity and reflects the view of the author. The post has been checked and approved to ensure that it is both accurate and not misleading. However, this is a blog and the reader should accept that by its very nature many of the points are subjective and opinions of the author. Individuals wishing to buy any product or service as a result of this blog must seek advice or carry out their own research before making any decision, the author will not be held liable for decisions made as a result of this blog (particularly where no advice has been sought). Investors should also note that past performance is not a guide to future performance and investments can fall as well as rise.

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