In Defence of Liberty

Driven by data; ridden with liberty.

Larger than the EU

Reading through Ed Miliband’s 2013 conference speech, it’s easy to impress that it was written in a similar fashion to Radiohead’s Kid A album: lyrical fragments, denude of context, fused into songs. The old theme, Labour’s slogan, ‘One Nation’ was said six times, whilst the new theme, the evangelist “Britain can do better than this” received seven choruses. ‘The race to the top’ – as opposed to David Cameron’s “global race” – had sixteen mentions. There was even a riff on “They are not satisfied, and they are right”. Perhaps a hyper-experimental alternative band will set Ed Miliband to electronica.

Does linking hiring to apprenticeships help "remake capitalism?" (Photo: Kate Peters)

Does linking hiring to apprenticeships help “remake capitalism”? (Photo: Kate Peters)

The main policy – the twenty month energy price freeze – has received much attention, but there were other policies announced by Miliband prior to his speech. On Twitter, Ed Miliband said: “My government will ensure any firm hiring a worker from outside the EU will also have to create an apprenticeship to train the next generation”. Christopher Snowdon, author and fellow for the Institute of Economic Affairs, retorted it was “one of the most ridiculous policies I’ve ever heard of”.

Increasing Costs

The ONS Labour Market Statistics show that, of the 29.7m employed in Britain, 4.4m are non-UK nationals and 2.75m are from outside the EU. Over the past year, the employment of non-EU nationals has risen by 116,000 – an increase of 4.4% of last year’s total. The Labour leader’s proposal would increase the cost of hiring an employee from outside the EU. This extra cost means fewer non-EU employees in Britain.

There are three possible consequences: these firms will cut their non-EU hiring and may instead choose to employ EU workers, these firms will simply move abroad, or apprenticeships will lose their value. This last possibility is extinguished by Chuka Umunna, the Shadow Business Secretary, who said in his conference speech: “we will change the system so all apprenticeships are Level Three qualifications and last a minimum of two years”.

There are multiple problems with this proposal that render it unworkable. The EU is, amongst other things, an integrated and non-discriminatory employment market, so an apprenticeship cannot be offered solely to British young people. This annihilates Miliband’s claim that this scheme would “train the next generation”. Questions of enforcement and the consequences of disobeying this new law, mean Labour are potentially proposing shutting down British businesses in order to encourage British apprenticeships. This would be the seen effects of this policy, but there are many unseen effects too: the loss of expertise and imagination from businessmen and businesswomen in the United States, Brazil, Australia, New Zealand, India and China would mean – in the long term – less products of lower quality made by fewer employees.

The world is much larger than the European Union.

The world is much larger than the European Union.

The world is much larger than the European Union. Britain benefits from the free and raucous trade in products, services, ideas and personnel, all across the planet. Internationalism does not stop at the Atlantic Ocean, nor the Mediterranean or the Black Sea. Miliband and Labour pose toughly on immigration, but this policy would make Britain and the EU more insular.

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This entry was posted on September 29, 2013 by in Economics and tagged , , .
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