14 June 2017

Oh Dear, Mrs May.

You must be very busy at the moment, but I wonder if you could clear up a few things which have been bothering me. I’ve asked my friends, but none of them seem able to enlighten me. Every time I ask my MP a question, somehow he manages to avoid answering it. To be honest, I don’t think he likes me, and would rather not respond at all. I realise that you will almost certainly not read this, but nevertheless it will be cathartic to write it. At heart, I’m an optimist. I live in hope.

I write more for my children, and their children, than for my own generation - which may be classified as old, and growing older. A twenty to forty year horizon is of far more relevance for the coming generations than it is for me. Politics, the economy, the finer points of democracy, and the need for a new social contract cease to matter when you’re dead. But all responsible parents want the best for their children.

1. The nation’s best interests.

My first and most fundamental concern is this: setting aside the somewhat surreal process through which we have reached the first day of Article 50 negotiations, a difficult and delicate point, do you truly believe that leaving the single market and the customs union is in our nation’s best interests? I ask because the City, its Lord Mayor, the Institute of Directors, the CBI, and business in general, think it isn’t. They must surely understand what’s best for commerce. And clearly they disagree with you.

In the past few days, the British Chambers of Commerce, the Confederation of British Industry, the EEF (the Manufacturers Organisation), the Federation of Small Business, and the Institute of Directors have jointly called for a “softer” Brexit. They seek minimal customs formalities, mutual recognition of standards and regulation, a flexible system for the movement of labour and skills, and for government to put the economy first in forthcoming negotiations. You are now in a position where all significant parts of UK business are challenging your approach to Brexit. Isn’t it time to pause and listen to those who direct, manage, and run business and commerce? After all, they are the custodians of our economic well-being.

If you had a totally free hand right now, and were not constrained by history, politics, the right wing of your party, the Murdoch press, Express Newspapers, and the Daily Mail, would you still believe that the UK’s best interests are served by leaving the EU in this way, or at all? No doubt, you will acknowledge that the single market is the most sophisticated and barrier free market in the world, strongly advocated and advanced by Margaret Thatcher, and developed principally by the British. And you must surely agree that the UK has prospered from membership.

In April 2016, you are reported as having said “I think the economic arguments are clear. I think that being part of a 500 million population trading bloc is significant for us. I think...that one of the issues is that a lot of people will invest here in the UK because it is the UK in Europe. If we were not in Europe, I think there would be firms and companies who would be looking to say, do they need to develop a mainland Europe presence rather than a UK presence? So I think there are definite benefits for us in economic terms."

You also said “So, if we do vote to leave the European Union, we risk bringing the development of the single market to a halt, we risk a loss of investors and businesses to remaining EU member states driven by discriminatory EU policies, and we risk going backwards when it comes to international trade. But the big question is whether, in the event of Brexit, we would be able to negotiate a new free trade agreement with the EU and on what terms."

Do you still believe these things, or have you undergone a Damascene conversion? If the latter, what convinced you that all will be well? I should like to drink from that same well, to see if its waters have the same transformational effect on me.

You will accept that Parliament’s primary duty is to act in the nation’s best interests, and that an advisory referendum is just that: advisory. Don’t you think that Parliament has tied itself in knots, trying to give effect to “the will of the people”, without ever having made sufficient enquiry, or gained sufficient information, to know what the will of the people actually is? After all, they were asked only one binary question. Hasn’t the general election result merely muddied the waters still further? At the very least, it was hardly a ringing endorsement of your Brexit policy, was it? Traditionally, the nation’s best interests have often equated to its best economic interests. A sound economy provides each of us with the best hope of personal security, prosperity, and a good standard of living. It also assures us of good public services. Your party used to boast about being the party of business; now is the time to prove it.

All projections I have seen suggest that a hard Brexit (and yes, there is such a thing as a hard Brexit – the argument that there isn’t is an exercise in semantics), particularly without a future trading agreement, will result in very serious economic consequences for the UK, with the prospect of our losing up to 50% of our exports to the EU in goods, and 60% in services. About 44% of our exports, or £240 billion [of £550 billion total exports] are to EU countries. Yet you have repeatedly said that no deal is better than a bad deal. Few people in business and commerce agree with you, so perhaps you could explain the rationale.

The Chancellor of the Exchequer is in no doubt that no deal would be “a very very bad deal” for the UK, adding “My clear view, and I believe the view of the majority of people in Britain, is we should prioritise protecting jobs, protecting economic growth and protecting prosperity as we enter those negotiations and taking them forward.” Unfortunately, Mr Hammond was side-lined during the election campaign, but perhaps you’re listening to him now.

Assuming no deal, and that something like those projected losses were to occur, how could they be made good from elsewhere? It takes a considerable time to negotiate a free trade agreement in goods, still less one in services. We are contemplating a timescale of several years, sometimes over a decade. The prospect of a comprehensive free trade in services with any country is somewhat remote. We will be seeking free trade deals at a time when global protectionism is the prevailing current. We shall be struggling against the tide. Is Liam Fox a particularly strong swimmer?

If we leave the single market and the customs union without a good free trade agreement with the EU, how long do you think it might take to negotiate a sufficient number of free trade agreements with other countries to compensate for the resulting decline in GDP? Do we want, say, a 7 year [or longer] interim agreement, where we continue to participate in the EU, either through EFTA, or on some other basis? In order for that to happen, you would need to adjust your red lines. Every negotiation demands some compromises, but the EU cannot compromise on its four freedoms. You must compromise if we are to traverse “a gradual Brexit slope”, rather than “falling off the cliff”. What is more important: your professed red lines and ideology, or the UK’s economy? It’s a no-brainer for me.

In the event of no deal, how well do you expect the UK economy to perform under WTO membership terms, with prospective tariffs and many local trade barriers to overcome? Given an inevitable decline in GDP, how will we afford an effective NHS, or fund public services in general? Game theory is all very well, but don’t you think that the EU will recognise it when it sees it, not least because its trade negotiators are very experienced (unlike ours) and clearly ready for the fray (unlike ours). And of course, it’s clear for the whole world to see that the EU has a much stronger negotiating position than we do. The clock is ticking, and that is all it needs to do. That is also why Article 50 should not have been triggered until the UK was truly ready. If you wanted to hold an election, it would surely have been far more sensible to hold it before triggering article 50.

Do you agree that in the event of no deal, there will be significant losses? Do you agree that there will be lesser but still significant losses even if there is a deal? If so, how much do you think the losses might be? How much more would they need to be in order for you, as Prime Minister, and MPs, as Parliament, to conclude, for the public good, that a rethink is required? Where is the tipping point? Perhaps there isn’t one, perhaps any price is worth paying. Certainly, some people think so, even if they are crazy. The people have spoken (they either said “leave” or “stay”), and if what they have said means jumping off a cliff, then it seems we must jump off a cliff. Like all good lemmings do. What do you think?

2. Controlling immigration is more important than protecting our economy. Or is it?

It seems that you have placed control of immigration above the success of our economy. How did you reach this conclusion? As recently as April 2017, Lord Ashcroft’s poll of people voting Leave found that being able to choose which EU nationals can live in the UK was of less importance than stopping payments to the EU, or being free of the jurisdiction of the European Court of Justice. In February 2017, a poll by Nielsen found that the British are more concerned about the economy than they are about immigration.

Whilst such polls are not conclusive and there are other contrary polls, it is true that people voted Leave for all manner of reasons. This suggests that controlling immigration is probably of lesser importance to the British public than the economy. But it appears to be of greater importance to you. Is that because you have determined that controlling immigration is in the nation’s best interests, but protecting the economy by ensuring we have access to the single market isn’t, or is of lesser importance? Which is it? Is your conclusion backed by any supporting data, or is it based on your own judgement, or perhaps influenced by the fact that you were unable to reduce immigration during 6 years at the Home Office.

Although 48,000 overseas students were wrongly deported, it appears that the number of illegal immigrants lawfully deported has reduced significantly over the past decade. Whilst at the Home Office, you had the opportunity to deport immigrants whose visas had expired – how many of them are still here? David Wood, the former head of Immigration Enforcement at the Home Office until 2015, states that more than 1.2 million illegal immigrants are currently living in Britain, and that most of them are people whose visas have expired.

3. Immigrants: do we need them?

As of April 2017, according to the Office for National Statistics, there were 31.95 million people in work, with an employment rate of 74.8%, the joint highest since records began. There were 1.35 million unemployed people, a reduction of 145,000 people on the previous year, and the unemployment rate stood at 4.6%, the joint lowest rate since records began. The inactivity rate (the proportion of people between 16 and 65 who were economically inactive) was also the joint lowest since records began. Does this suggest that immigrants are taking away jobs from UK citizens?

Over a 20 year period from 1997, the number of non UK nationals working in the UK increased from 928,000 to 3.55 million. Of those, workers from the EU account for 2.32 million. It is known that EU migrants come to the UK to work, with a higher participation rate, at around 78%, than UK nationals (67%). It is generally accepted that they contribute to the UK economy. Recent research by two leading migrant economists at UCL suggest that EU migrants contributed £20 billion to the UK economy between 2000 and 2011.

The UK has been particularly successful in attracting the most highly educated and best skilled migrants from the EU. Fitch, the ratings agency, downgraded the UK’s credit rating in 2016, and one of the factors it cited for the UK’s weakened economy was prospective reduction in immigration. The National Institute of Economic and Social Research has calculated that reducing immigration by two thirds would result in an eventual 9% shrinkage of the UK economy. In addition, as everyone knows, the UK faces future demographic problems with an increasingly ageing population relying on a proportionately reducing working population. How will your immigration policy help our future economy, and what are the main drivers of your policy?

About 10% of the UK’s construction industry is populated by non UK citizens, and the sector has warned that they will be unable to complete significant projects without access to skilled EU migrant labour. Mark Robinson, Scape Group chief executive, recently commented “The government must clarify as a matter of urgency what will happen to the EU construction workers in the UK, as they are currently filling the gap left by our skills crisis. We need to recruit a million workers into the industry by 2020, and putting EU migrants off coming here will only exacerbate this problem.”

Migrant EU labourers make up 30% of all workers in food manufacture. A report by the Resolution Foundation finds that migrant labour has some small effect on suppressing earnings at the lowest end, but reducing migration will not reverse the earnings squeeze. “Reducing the numbers of migrants allowed to enter the UK will pose a serious challenge in some low-paying sectors such as food manufacturing and domestic personnel, where over 30% of workers are migrants. Such sectors will need to adjust their business models with greater investment in skills and technology, have access to temporary workers, or shrink.”

Nearly one third of the UK food and drink manufacturing workforce, some 117,000 workers, is made up EU migrants supplied through agencies.

Agriculture depends significantly on migrants, many as seasonal workers. DEFRA data suggests that migrants account for around 22,500 people, or 20% of the workforce. The sector is already experiencing recruitment difficulties. Key reasons for this are a lack of interest in this kind of work, remote locations, unsocial hours, and the fact that many vacancies are seasonal in nature. How will agriculture find sufficient numbers of workers?

The hospitality sector employs 1.9 million people, representing around 7% of the working population. It seems to be the case that most migrants working in hospitality stay in our country for a limited time, before returning home. The British Hospitality Association has warned that it faces a shortfall of 60,000 workers if EU immigrants are too tightly controlled, post Brexit. 25% of workers in the sector are immigrants. A KPMG report states “The labour shortfall 10 years after Brexit would be 1 million if EU migration fell to zero from 2019”. This lends perspective to the size of the problem.

It is generally accepted that the NHS would face collapse without EU workers. 30% of doctors and 21% of nurses come from overseas. 57,000 NHS staff are citizens of other EU countries. It’s most unfortunate that government has removed bursaries for nurse training at the very time when there is a 96% reduction in applications to work in the UK from EU nurses. Sadly, they probably feel they are unwelcome in the UK.

Doesn’t all of this suggest that your stated aim of reducing immigration to tens of thousands is an illusory goal, which if achieved, would cause substantial harm to our economy?

It is estimated that overseas students contribute around £11.2 billion to the UK economy, and universities have warned that their finances would come under severe strain without them. They are included in immigration data at your behest.

The Office for Budget Responsibility's long term projections from 2016 suggest that low annual net migration to the UK economy would result in GDP growing less fast, tax revenues being weaker, and the public debt as a share of GDP being higher than it would otherwise be. Do you accept that this is the likely outcome?

As average population ages, so GDP decreases. Growth in worker population is a key driver of economic growth. In the UK, the median age has moved from 35 in 1985 to around 40 today. Between 1975 and 2015 the percentage of population aged 65 or over increased from 14.1% to 17.8%. It is projected that this will increase to 23.6% in 2035. (ONS) The Institute of Public Policy Research states that Brexit will “profoundly reshape the UK … painful trade-offs are almost certain. Growth is expected to be lower, investment rates worse, and the public finances weaker as a result of Brexit.”

The analysis, based on data from the OECD, the ONS, and numerous economists and researchers, forecasts a 30% increase in the number of over-65s in the population by 2030, and a doubling of the number of over-85s. The elderly and the very elderly will become a substantial burden for the working young to support, and the nation will surely be looking for every means, including immigration, to boost our working population. Healthcare costs, which are already becoming unaffordable, will become more so, and the concentration of expense on the old will threaten the viability of the entire system. These things are foreseeable.

A recent report by Global Future finds that the UK’s low productivity, ageing population and shortage of labour in key areas, such as the NHS, demonstrate a net migration annual requirement of 200,000. The report concludes that even with a later retirement age, Britain faces a demographic time bomb, and needs migration of 130,000 a year to maintain the working population at its current level. Its authors state: “Our analysis shows that the previous and current Government’s target of cutting net migration to the tens of thousands immediately or in the long-term is based on an outdated and backward looking view of policy in this area. It shows that making substantial cuts in immigration to these levels is not only very difficult but also overwhelmingly undesirable.”

Who knows, they might be wrong, but there is a wealth of data to suggest that curbing immigration to the degree you have suggested is likely to present our future economy and public services with problems they may be unable to solve. So, in what sense, can it be worth doing?

I realise that fervent Brexiteers will claim all of this is part of Project Fear, because that is their response to anything which challenges their ideology or supremacy, or is inconvenient, or fails to correspond to their world view. But now we are moving into negotiation mode, don’t you think it’s time to take on board the losses that are likely to afflict the UK from 2019?? Don’t you think that grounded realism will serve our nation better than ungrounded optimism?

4. The NHS

The NHS, is, of course, a national treasure and a sacred cow. Even so, as my MP knows because I have told him so many times, I am very worried about its continued viability. The best healthcare systems aren’t cheap to run, and it’s clear that in the past 6 years, the UK has not attempted to invest at the same level as other G7 countries. In terms of investment, it is ranked sixth of seven countries, ahead of Italy.

By common consent, the NHS is in crisis. Our demographics virtually guarantee a worsening of that crisis over the coming decade. A decline in GDP can only exacerbate the problem. What do you intend to do about it? With respect, government in general has an appalling record of introducing top down change, wasting money, promoting unaffordable finance in the form of PFIs, and generally interfering with the operation of the NHS without improving output or outcomes. How will you put this right in the post Brexit world? Why are political parties so reluctant to talk about a new deal for the NHS? What is the point of ignoring a problem that will not go away, and will only get worse? It is surely time to face up to it, and engage in a national consultation leading to a new agreement and a more viable basis for the new NHS. Fundamentally, if we want an excellent health system, we must pay for it.

In exchanges with my MP, I have predicted that the NHS may bring down the government. It is a disaster waiting to happen, given levels of funding, demographics, the escalating cost of treatments, and a growing intolerance, pitched against the dependence of the NHS on immigrant doctors and nurses. The tin lid is the removal of the nurses’ bursary, which can only be described as a master stroke in the current context, and a guarantee that future recruitment will be difficult.

In the unlikely event that you have read this, please forgive me for having almost detained you with these few thoughts and questions. You will have gathered that I have a strong attachment to the EU and the European project.

In 1948, Winston Churchill stated: ‘We cannot aim at anything less than the Union of Europe as a whole, and we look forward with confidence to the day when that Union will be achieved.’ In 1957, the preamble to the Treaty of Rome establishing the European community referred to being “Determined to lay the foundations of an ever closer union among the peoples of Europe …..”

Since the end of WW2, the idea of a close union in Europe has always been present, except in the minds of the British. The purpose of the EU is to build partnerships and relationships which will serve to avoid another war in a continent with a long and unfortunate history of warfare. The 20^th century was blighted by the loss of many millions of lives to war. There is every reason to take all reasonable steps to avoid a similar fate in the future. Good trading relationships foster mutual understanding and respect, and reduce the likelihood of war.

The European project is of enormous value for what it represents. That’s why I, and many others, feel a great sense of loss from our impending Brexit, and why we are unhappy about the aggressive approach to Brexit adopted by the UK. The benefits of EU membership have been considerable, not only in economic terms, to include inward investment, but also in relation to our universities, the environment, regional development, and consumer and employee protection. Of course, EU structures and corrupt practices need reform, and the UK has always been a prime mover for sensible reform. The EU is not a perfect organisation. As you have found, neither is democracy a perfect system of government. But both are better than all the alternatives, as the UK will undoubtedly discover over the coming decades.

I fear that our progressive liberalism and humanity have been abandoned in favour of a bellicose and small minded nationalism masquerading as a free trade crusade. I fear that the relentless anger and aggression of the right wing of your party has silenced the reason of the centre, albeit, at last, there are signs of the centre emerging from its slumbers. Having won the referendum, the right has derided and disregarded all those who do not share their views. Well considered and good natured debate is no longer practicable. I fear the unnecessary ridicule of and aggression towards the people with whom we must now negotiate represents a completely unnecessary and avoidable own goal. The current political agenda simply underscores the lines of division in our society, as does growing and unconscionable inequality. The lessons of history are quickly forgotten, and the UK approach has weakened a vital and noble project, as well as undermining its own future.

Our children will not forgive my generation or its leaders for a legacy they neither voted for, nor wanted. They deserved much better from all of us than what they will inherit. Our tolerant country is becoming intolerant, and it is little surprise to see the actions of xenophobic terrorists who mistakenly believe they are given legitimacy by an intolerant and irresponsible press.

Right now, I am ashamed of my own country. Of its narrow mindedness; of its growing intolerance and its hate crime; of its extreme inequality and the policies adopted which perpetuate it; of a prevailing inability to engage in intelligent but good natured debate; and of an apparent unwillingness in government to condemn inflammatory reporting, such as the description of our most senior judges as “enemies of the people”. The rule of law under our constitution is robust, but it needs guardians to speak up when it has been unfairly challenged. You and the Home Secretary should have condemned this headline immediately, but failed to do so. I never expected to feel this way about my own country. I know that any internet troll reading this will send inevitably send a stream of abuse in my direction. That is merely a symptom of the extent of the problem and the spread of the disease. It simply increases what is already a profound sense of loss.

Yours, in sadness,

Adrian Baskerville