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Migration Policy: Big State Britain Cannot Survive Laffer Lifestyles


The UK’s immigration statistics are full of surprises. It is not just the wholly unsustainable explosion in the numbers arriving (1.2m), but also the rapid growth in those leaving (0.6m).


And if we dig down deeper into who is coming and who is going, those trends become even more alarming. The departures lounge is full of doctors and millionaires, who are now leaving the UK in greater numbers than Russia!


On the immigration side of the ledger, things look even worse.  The fastest growing categories are direct asylum (up 57-fold), channel crossings (up twentyfold in four years), students and dependents.  While all these groups consume public services, none are likely to contribute much to our tax system. Of the 1.2m arrivals, just 2,768 came under the Global Talent Visa Scheme - the high end visa scheme for the likes of tech entrepreneurs and consultant surgeons. In other words, while those arriving could fill a city the size of Glasgow, those who are ready and able to make a meaningful economic contribution would barely fill a street.


Britain has become a tragic victim of the new world order. For the poor and those from the developing world, the UK is the great free lunch of globalisation. Study, work, marry or smuggle your way in and soon you are guaranteed a lifelong all-you-can-eat buffet for you and your extended family. Free healthcare, education, housing, elderly care, benefits, legal protections and access to one of the largest charitable sectors in the world. You do not need to contribute anything. In fact, the less you contribute the more you get!


At the same time, we cannot retain our ablest and richest. Why should they stay in crushingly bureaucratic jobs, suffering falling real wages and marginal tax rates as high as 77%? Myriad other countries now offer talented Brits tax rates of 0-20% and better working environments. Even old Europe has cottoned on; with countries like Portugal, Spain, Greece and Croatia offering wealthy Brits a place in the sun with minimal tax. Thanks to the explosion in remote working, schemes like this are growing exponentially. And there really is no downside. Should you get sick, retire or lose your job, you are just a plane ride away from Big State Britain’s welfare net.  

My wife is a doctor. Emigration is one of the main things she and her friends now talk about.  With house prices crashing, this is fast becoming the middle classes’ new dinner party staple.


The increasingly common pattern is to do your education and medical training in the UK, then spend a few years abroad, seeing the world and building a nest egg. When you’re ready to have kids, return to the UK and endure the NHS in order to access parental leave, healthcare, childcare and early years education. As the kids get older, head off again for a better life. Presumably, when those medics get really old, sick or broke, they can always return for a final binge at the big state buffet. 


You can see the problem here. The state pays for all the expensive bits of people’s lives. But when the time comes to paying it back, productive workers naturally prefer to head off for lower taxes and better jobs. Big states and revolving doors don’t mix.

It is important to appreciate this is not just doctors, bankers or IT workers.  Over half of us will end up in the top tax bracket at some point in our career.  For example, builders and truckers routinely earn £150k in a mining or construction boom. When we’re the ones doing the work, the sentiment invariably is, ‘Why should Jeremy Hunt get most of this?’


You really cannot blame people for behaving like this. It is legal, and it is entirely in keeping with the capitalist philosophy of putting you and your family’s interests first. It is a broken system that is the problem.  A system that none of our leaders has the courage, integrity or creativity to fix.


But enough of migration. For those already here, working less or not working at all are becoming the only worthwhile options. For those at the bottom end, the warped benefits system means it pays to work only a few hours or not at all.  For those at the top, tax rates are so steep that you can actually end up with less by putting in extra hours. No wonder part time working and early retirements have hit record levels. Most scandalous of all is the 5.3m working age people claiming benefits, thanks to an explosion in long term sick. You do not need to a be a doctor to understand that the longer those people sit at home, the sicker - and less capable of returning to work – they become. 

 

This is not just a UK problem, but a European problem. Europe accounts for 7% of the world population, but over half of welfare spending. No wonder Europe is swinging right. This is not down to a sudden loss (or gain) of morality. It is just facing up to reality.


In the social media age, I have a hashtag for the above: Laffer Lifestyles; after the famous economist Arthur Laffer. Laffer posited that people adjust their behaviour as taxes rise, leading to diminishing (and eventually negative) returns.


The UK is perfectly suited to Laffer Lifestyles. We are a multinational country and English is the closest thing to a world language. In spite of the scandals, our universities and training qualifications are well regarded. Moreover, successive governments have done everything possible to dismantle the ties that bind us: family, community and nation. Indeed, these very notions are seen as parochial and politically incorrect. Instead we are encouraged to be nebulous, globalist individuals.  


That transition is made easier thanks to the increasingly jaded and pessimistic view we have of our nation. According to a recent poll, less than half of Britons feel invested in the country and just 27% feel the country is invested in them. Given the endless scandals of waste and fraud in the public sector, is it any wonder people treat the British state with the same care that Paris rioters show for luxury boutiques? The ethos has been set by our leaders:  Go where you want and grab what you can.

There is a vicious cycle here. As the indigenous population ages, people get mentally and physically sicker, and ever more migrants come to tap Big State Britain, the burden on a shrinking base of productive contributors grows exponentially. The result is an upended pyramid.  


Few of us appreciate just how precarious that pyramid has become. The top 1% of earners pay an unprecedented 30% of income tax, while government debt is already well above what has been historically safe levels. If a football stadium’s worth of our wealthiest and most entrepreneurial swan off or give up, the UK faces the same fate as Greece In 2011.


This is the existential issue of our time.


The left’s answer is to keep the status quo going till the pyramid eventually collapses into chaos. For socialist hegemonies like the USSR, Greece or Venezuela, this is the ineluctable path of least resistance. And in the meantime, the left can at least be united in its vision of mutually assured destruction.


Unfortunately for the right, there are two diverging alternatives. And it is the battle between these two directions that now overshadows every debate. 


On the one hand you have the global capitalist model favoured by the likes of Hong Kong, Singapore, Monaco or the UAE. The outlook is international, taxes are low and the state is small. For the affluent, ambitious and fortunate, the rewards are rich. Services like healthcare and education are world class, but you do have to pay for them. Many people would find such urbanised glitz to be soulless. But in its place, life is rich with experiences. You might work a 60 hour week, but spend Sunday riding in a helicopter, skiing on a manmade mountain and dining on Michelin-starred street food. Beneath the glamour there is also real deprivation. There is a reason investment bankers tenderly refer to this sort of business model as ‘Eat what you kill’.


The alternative is the traditional conservative society where family, community and nationhood come first. This is the model being championed by the New Social Covenant Unit, led by Danny Kruger MP and Miriam Cates MP. Community and family ties are encouraged and rewarded. No matter how much big corporations squeal, borders are closed to all but the few who are demonstrably willing to integrate and make outsize social contributions. Instead, real effort is put in to making every citizen a contributing participant. This is the social system you invariably find in the worlds’ ‘Blue Zones’ – those tiny pockets of the globe where people enjoy extremely long lives and fine mental health. Think of small Japanese fishing ports or peaceful Italian villages; with their shared beliefs, unlocked doors and Sunday church. The pace of life is slower here. There is nothing like the wealth of Qatar. In place of neon lights or film premieres, there are neighbours and birdsong.


Both these paths are sustainable and prosperous. However, they are also divergent and contradictory. You cannot have both. Policies on every big issue like immigration, housing, healthcare, tax, education and culture are entirely dichotomous depending on which direction you choose.

That is why the Conservative’s paralysis and collapse will continue until it chooses one of these paths. Its refusal to do so is why everything in the meantime seems utterly pointless. It is why the leadership debates and revolving door of Prime Ministers feel so unsatisfactory. Boris Johnson lost all credibility by promising Singapore-on-Thames to big business and social conservatism to the Red Wall, and then delivering neither. Liz Truss craved the low-tax mass-migration globalist model but was not willing to slash the big state. Rishi Sunak, timorously playing the continuity candidate, is faring even worse than Truss. Desperately trying to straddle both ideologies, he has become a latter day Khrushchev: confused, out of touch and sinking.


The inevitable slew of by-election disasters must serve as the wake-up call. The Conservative Party needs to choose a path; and it needs to do it now. If that means a coup, a civil war, bitterness, recriminations or the end of Rishi Sunak, then so be it: because this is one of those existential battles that is not going to go away until it is settled.


Globalist Hotel or Conservative Nationhood.


The moment has come to pick a side.


It is a time for choosing.

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