Journalists enjoy the prerogative of the harlot and rarely have to take responsibility for what they say and write. So it’s time to fess up: I was wrong about Brexit. I still believe it was daft to leave, but I was wrong about the economic impact.

For years, I’d been arguing that immigration doesn’t lower wages; that there’s no connection between low pay in sectors like social care, food processing, haulage and the availability of cheap, non-union labour coming from Eastern European countries like Romania and Bulgaria. We now know that there absolutely is.

There is a recruitment crisis across the entire UK and six out of 10 hiring hot spots are in Scotland. The crisis is most obvious in social care. Nine out of 10 employers in Scotland are reporting problems as a direct result of Brexit, according to the employers’ organisation Social Care.

Caring for the sick and elderly is one of the most important and valuable roles in society as we discovered during Covid. Yet for decades employers have paid dismal wages because they’ve been able to exploit – let’s not beat about the bush – poorly unionised employees from low-wage countries who often have a poor grasp of English and will often work for below minimum pay.

Well, not any more.

We will have to do now what we should have been doing for decades and pay social care workers a decent wage. Employers have tried to argue that the problem is do to with lack of professional recognition, low esteem etc. That was until the excellent Martin Geissler, one of the few Good Morning Scotland presenters who sounds as if they are actually awake, asked Karen Hedge of Scottish Care the obvious question: “don’t you just have to pay them more?”

Now, it is still dangerous to say this out loud let alone write a column about it. It is assumed on social media that anyone who talks about a connection between low pay and migrant labour is a racist. But if so, trade unionists are now becoming Powellites. Trade unionists like Adrian Jones of Unite are now saying openly that employers will need to stop “raiding other countries of their workers” and start paying people what they are worth. It doesn’t help race relations to ignore the exploitation of migrant workers.

Even the Remain-supporting Guardian has taken to reporting how Brexit has provoked a revolution in rising earnings for some of Britain’s lowest-paid workers. Wages have been rising so fast that it is far outrunning union pay demands. According to Reed Recruitment, pay this year has increased 18% in hospitality, 10% in retail and 4% overall. After a decade of stagnant wage growth, this is good news. And it’s not going back.

Lorry drivers are arriving for work and finding that they’re suddenly being offered up £6 or £7 an hour extra. Tesco is offering bounties of £1,000 to attract workers to haulage,e which has traditionally been a very poorly paid and demanding job.

Why? The road hauliers are at least honest enough to admit that all those Eastern European workers who used to do it for £11 an hour have all gone home and aren’t coming back.

So, Nando’s is finding it can’t get its cheap chickens, McDonald’s can’t get its milkshakes. Meat processors are having to employ prisoners because they can’t plug their gaps by drafting in migrant workers. This is actually a good thing.

We should not have been paying miserable wages to agricultural workers and the people who manufacture, package and serve our food.

Many employers said British workers were too lazy to do many menial jobs – Boris Johnson has written as much. This was always a slander on working people. The problem was not that they wouldn’t work but that they couldn’t work in jobs that have never paid enough to support a family.

They have been competing against workers imported from countries where the minimum wage is worth much more than it is here. Migrant labourers put up with poor working conditions ,often living in squalid dormitories, so that they can send money home.

Of course, Covid has also played a part in Britain’s recruitment crisis. Many Eastern European workers went home to spend time with their families during furlough – but the point is that they will not be coming back to do the low-paid jobs they did before. Britain can no longer be a low-wage country. It is tragic that it took Brexit, and severing relations with Europe, to fully expose this scandal.

So why did people like me ignore the reality of this exploitation and provide intellectual excuses for low pay?

Well, for years research groups like the Rowntree Foundation, the Institute for Fiscal Studies and even the Migration Advisory Committee have argued that while immigration may have had a “marginal” impact on wages at the bottom of the labour market, this has been compensated by increases further up the income ladder that result from a more buoyant economy. In other words, the economy is seen to benefit, as a totality, when there is a cheap pool of workers at the bottom.

But this is actually a bogus argument. Profits and pay may be increased for the better off, but paying poverty wages does not benefit the economy. For a start, taxpayers have had to step in to supplement the incomes of millions of families on low pay.

Also, demand in the high streets is suppressed by low pay, which depresses the economy. Finally, because they can rely on cheap imported labour, employers do not invest in labour-saving equipment, which is why productivity has been so feeble in the UK.

The truth is that British working people have accepted mass immigration, and the changes in their culture, with remarkable good grace. To accuse them of racism for defending their jobs is profoundly offensive.

To repeat: justifying poverty pay does not help immigrants and does not improve race relations. Trade unionists did not help their members by condoning the importation of cheap labour by employers.

Above all, this omerta on low pay has distorted the debate about Brexit. Leave voters in provincial English towns were wrongly accused of being xenophobic narrow nationalists. They knew what they were doing. As The Guardian’s economics editor Larry Elliott put it last week: “For those who have nothing to fear from open borders, labour shortages are evidence Brexit is flawed. For those not so fortunate, it is doing what it was supposed to do.”

 

  • A previous version of this column claimed that Professor Jonathan Portes “accuses anyone who makes the obvious connection between immigration and pay as a right-winger bent on demonising foreigners.” This claim was false.  In fact, Professor Portes’ own research has explored the connection between immigration and wages, and he has never suggested that it is illegitimate to discuss this topic. We are happy to apologise for the error.