Brexit means higher immigration and more social spending
As many commentators have pointed out, the UK welfare state faces long-term structural problems in two main areas. Globalisation and technological changes demand that government directs attention to national competitiveness, and population ageing requires more spending on pensions, health and social care. Recent policy initiatives have cut social spending, especially on those of working age, directing what resources are available to pensions and to some extent health care. Competitiveness demands higher productivity if the return to UK business and workers is to be maintained. This can be achieved by increasing the number of workers or the quality of workers or by capital investment.
Very little has been done in these directions. As the chart shows, productivity in the UK has hardly risen since 2010, although employment has remained high. Other major trading nations have improved their productivity, suggesting that we will only be able to compete by lowering the return to UK workers, in other words, by further cuts in living standards. The second long-term problem is partially addressed at the expense of the first.
Brexit imposes yet greater demands on competitiveness by reducing UK access to its largest trading partner. Constraints on immigration diminish the most significant source of extra labour in recent years. The UK needs a serious social investment programme to improve the quality of its workforce. Re-Doubling the Crisis of the Welfare State examines the failure of recent policies to address the pressures on the UK welfare state or to prepare for the problems that will face us after Brexit. It develops the case for investment in training, education and child care programmes and for a welcoming immigration policy. These policies will become even more desirable if the UK leaves the EU than they are at present. Brexit does not go hand in hand with immigration cuts and lower social spending. Brexit demands immigration and more spending especially on people of working age.