Tuesday, August 22, 2006

Lessons From Slough

Slough has always been a town of immigrants. I know because I was one.

In 1960, realising we weren't actually having it quite so good in low wage Devon, we Tylers got on our family bike and pedalled up to high wage "come friendly bombs" Slough. We simply followed the trail blazed by unemployed Welsh miners in the Thirties, blitzed Londoners and dispossessed Poles in the Forties, and dirt-poor Asians in the Fifties and Sixties.

All of us came for one reason, and one reason only. Money.

20 miles from London, and five from Heathrow, Slough was outward looking and the most dynamic economic hub in Britain. Its Trading Estate, built on a WW1 transport dump entirely by private enterprise, always attracted companies and entrepreneurs from right around the world. American Forrest Mars set himself up producing confectionary, Jewish refugees fleeing the Nazis established factories for the new man-made textiles, and companies such as Johnson & Johnson (US), Aspro Nicholas (Australian), and High Duty Alloys (UK) made sure Slough was locked into the research driven industries of the future.

Slough became the archetypal opportunity town, where enterprise and application mattered far more than colour, creed, or beard-style. And that wasn't a consequence of government diversity programmes, or "fairness for all" agenda: it was the win-win of the free market.

Made in Slough

OK, cut the commercial. Given this history, what exactly is the deal with Slough Council complaining about their latest wave of immigrants from Eastern Europe? Don't they understand it's those hungry young workers and entrepreneurs who've been the very foundation of Slough's prosperity?

Well, of course, they're not actually complaining about the 10,000-15,000 immigrants per se. The gripe is about the way local authority funding works (see here for the full Council case). An approximate 10% increase in population in two years means much more demand for council services, which costs money. But since 85% of council income is central government grant, and Council Tax is capped, they can only get extra money if Whitehall agrees.

Unfortunately, Whitehall's Revenue Support Grant distribution formula has always been a Morse mystery wrapped inside an enigma variation, and it's particularly bad at accomodating sudden lurches, like Slough's Eastern European population explosion. As of now, the official RSG figures reckon the Borough's population is actually shrinking- despite a host of contrary indicators on the ground, including the fact that the local Job Centre issued 6,000 new National Insurance numbers to foreign nationals in the eighteen months to October 2005. Indeed, ten minutes in Slough's new Tesco superstore (the world's largest) and you could be in Kracow.

Neither is it true- as the head of the Immigration Advisory Service ludicrously asserted- that these new immigrants are all young and single and don't consume services. Just two of Slough's primary schools have taken in 50 Polish children (and 60 Somalians) in one term alone!

So Lesson One is that Slough would be much better off running its own finances, setting its own taxes and managing its own spending. Fiscal centralisation- including central government snuffling those Business Rates- has left Slough's taxpayers, like those in most of the South East, BIG LOSERS.

Lesson Two, sadly, is that these new immigrants are threatening what Slough's Chief Executive describes as "social cohesion issues". Contrary to all that arm-waving government wibble about immigration's economic benefits, she's watching the consequences of the current explosion up close and personal. And her pitch for more money concludes with some chilling bullet points:

  • Possible increased community tensions between different ethnic groups
  • Unemployment and displacement at the low skill end of all communities but particularly in the Pakistani community and skilled tradesman in the white community
  • Employment rate of Pakistani community has dropped from around 71% in 2002 to 53.2% in 2005

An 18% fall in employment rate in three years!

For those who know Slough, that is very worrying. Despite its rainbow ethnic mix, Slough's different groups have always got on pretty well. But as in so many towns and cities, even after nearly half a century, the Pakistani community remains incredibly separate, occupying its own very specific areas (OK, the actual word is ghettos). And as everywhere, they are among the least successful groups in terms of employment.

So ironically, some of the people who are suffering most from these new immigrants are Slough's old immigrants. And unsurprisingly, they don't like it.

Even setting aside the obvious risks of civil commotion, that is likely to get very expensive. For better or worse, Britain's welfare state picks up the tab for citizens who don't make their own way. What Slough is telling us is that it isn't only the direct welfare costs of the new immigrants we need to worry about: it's the costs of supporting those whose jobs the immigrants take. Many of whom will be the low-wage immigrants we've already got.

Mass immigration to bid down wage levels (as promoted by Digby Jones and others) seems pretty attractive to the metro middle class. But they haven't seen the bill yet.

PS Today just carried an interview with Colin Yeo of the Immigration Advisory Service. He repeated his boss's nonsense that there "is no evidence" that Eastern European immigrants place burdens on our welfare services, because they're all young, fit, and childless. Colin, go to Slough and talk to the Council.


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