Immigration and the UK Economy

Professor Jonathan Wadsworth, senior research fellow at the Centre for Economic Performance, LSE—Immigration and the UK Economy, published today:

  • Much of the recent falls in net immigration are driven either by a rise in emigration or a fall in the number of Britons returning to the UK—things over which the government has very little control.
  • Immigrants do not take most new jobs. The immigrant share in new jobs is—and always has been—broadly the same as the share of immigrants in the working age population.
  • Areas of the UK with large increases in total or EU immigration have not experienced greater falls in either jobs or pay of UK-born workers. The big falls in wages observed after 2008 are more closely associated with the fallout from the global financial crisis than immigration.
  • There is little effect of immigration on inequality and the relative pay and job prospects of less skilled UK workers. Changes in wages and joblessness for less educated UK-born workers show little association with changes in immigration.
  • Immigrants pay more in taxes than they take out in welfare and use of public services. UK-born individuals, on average, take out more in welfare and benefits than they pay in taxes. So immigrants help to reduce the budget deficit. There is little evidence that immigrants have negative effects on crime, education, health or social housing.

On productivity and GDP growth:

Migration acts much like trade in capital, as people tend to move to countries where they can be more productive and earn higher incomes. This increases welfare through greater efficiency in labour allocation across the world. Immigrants also fill the gaps in the skill composition of the national workforce. This fosters specialisation, increases productivity and raises the wages of national workers with complementary skills.

Recent work by Boubtane et al (2015, Table 3) finds that a 50% decrease in the net immigration rate would reduce UK productivity growth by 0.32% per annum. Since EU immigration is half of the current UK total … cutting EU immigrants to 80,000 per year is likely to shave 0.16% off productivity growth. So about a decade after Brexit, UK GDP per capita will be about 1.6% lower than it would have otherwise been.

Merkel’s European Wake Up Call Is Being Answered in the Nordics

Today in independent countries co-operating with each other economically and militarily…

Bloomberg, 29 May:

Sweden, Denmark, Finland and Norway have over the past two years been deepening their military cooperation to counter a deteriorating security situation in the Baltic and the Arctic. They are also forging closer ties on softer issues, presenting this week a joint initiative to meet sustainability goals, promoting the 20 million-person region’s shared values on social equality, and discussing joint interaction with China.

[Finnish Prime Minister Juha] Sipila said there are “a lot” of possibilities to strengthen economic ties across the region, including setting up a single “digital market” and a bio-fuels market.

The Nordic leaders also discussed more joint cooperation in dealing with China, albeit on an “ad-hoc” basis, according to Swedish Prime Minister Stefan Lofven, as well as combating climate change.

“As the most integrated region in the world we have today agreed to further deepen our cooperation,” Lovfen said at a press briefing.

Also, a relevant article from last year: Nordic Nations Deepen Cooperation Amid Worsening Baltic Security (Bloomberg, 27 Sept 2016).

In relation to Scotland, I’ve not yet read the recently published book Security in a Small Nation: Scotland, Democracy, Politics, edited by Edinburgh University’s Andrew Neal, but I intend to do so. Chapters include ‘Perspectives on Small State Security in the Scottish Independence Debate’, and ‘Do Small States Need “Alliance Shelter”? Scotland and the Nordic Nations’. It’s freely available to download in PDF format.

General Election 2017 projection and prediction, 25 May update

On Monday night Manchester was hit by a cowardly and brutal terrorist attack. It targeted young people who were together to enjoy themselves and have fun, just as previous terrorist attacks in Paris and Berlin did. It is yet another sign that those who want to destroy our democracy will stop at nothing.

We won’t back down. We will stand up united for freedom, life and joy.

Some have already tried to make political gain out of this terrorist act. Shame on them.

My thoughts with Manchester and all who lost loved ones or were injured in the attack.

And now back to business as usual, with a heavy heart.

On the reliability of polls

We already know that polls have a reputation for unreliability. The 2015 General Election is the best known example. The 2011 and 2016 Scottish Parliament elections also prove it. And hard evidence demonstrates that polls can often be off by much more than the margin of error. The methodology itself is sometimes flawed, especially the weighting of voting intentions relative to previous votes or other mysterious criteria. A pollster following British Polling Council guidelines doesn’t mean the results should be taken at face value. They all follow the guidelines and have all been wrong at some point in the past.

So let’s see what the projection of seats becomes on three possible scenarios:

  • Scenario A is based on last week’s polling average. SNP 44%, Conservatives 29%, Labour 16%, LibDems 6%.
  • Scenario B is SNP overestimated by 4%. Vote supposed to be SNP 40%, Conservatives 31%, Labour 17%, LibDems 7%.
  • Scenario C is SNP underestimated by 4%. Vote supposed to be SNP 48%, Conservatives 26%, Labour 15%, LibDems 6%.
A B C
SNP 51 41 58
Labour 0 1 0
Liberal Democrats 1 3 0
Conservatives 7 14 1

Note that even the worst case scenario would still give the SNP as many seats as Scottish Labour held from 2005 to 2015. Remember nobody then denied Labour was the dominant party and had a mandate to speak for Scotland. Whether Labour did it or not is a different story and I won’t discuss that right now.

Continue reading General Election 2017 projection and prediction, 25 May update

General Election 2017 projection and prediction, 18 May update

Teaser: this week’s update will definitely be better for the SNP than the previous ones.

Scottish Greens standing down: a game-changer?

Technically the Scottish Green Party are not standing down. They just will be fielding only three candidates, compared to thirty-two in 2015. Whatever the official explanations and carefully crafted talking points, the true political intention is clear: get out of the way in marginal constituencies and hope it will benefit the SNP. And then get something in return. But that’s me going cynical.

In 2015 Scottish Greens received 39,205 votes or 1.3% of the national vote (sixth behind UKIP). In the 32 constituencies where they stood their average vote was 2.6%. Lowest in Rutherglen and Hamilton West (0.5%) and Glasgow East (0.9%). Highest in Glasgow North (6.2%) and Edinburgh East (6.0%). They also lost their deposit in 29 constituencies and that’s certainly something they chose to avoid this year. But that’s me going cynical again.

Recent polls credited Scottish Greens with 2 to 6% of the vote, with pollsters assuming they would stand in all constituencies. On average they’re credited with almost 4%, double their 2015 vote share. Allowing for margin of error and uncertainty about how Green supporters will vote now, it probably leaves about 2 to 3% of the vote literally up for grabs for the SNP nationally.

At the time of the announcement my model identified 14 Scottish seats as marginals. Seven of them with the Conservatives favoured; five with the SNP and two the Liberal Democrats. The Scottish Green Party fielded candidates in nine of these constituencies in 2015 and will be fielding only one this year (Edinburgh North and Leith). So the SNP have a real opportunity either to switch some seats back to their column or to hold them on better margins than projected.

Will the Greens’ decision be the turning point of this campaign? Probably yes if the SNP play it smart from now on. Conservatives have already started denouncing a ‘Yes alliance’ which in fact doesn’t exist; because they know some seats might be out of their reach now. And ultimately it’s up to the SNP to make the best out of the better hand they have unexpectedly been dealt.

UKIP are also fielding fewer candidates this year than in 2015, and this should bring a few more votes to the Conservatives. I expect the impact to be less visible, because polls show UKIP in Scotland down from 2015 as in the rest of the UK. Their vote share was never really significant in Scotland and some of their 2015 voters seem to have shifted to the Conservatives already.

How did the polling data evolve?

Unfortunately we don’t have any new full Scottish poll again this week, but a large number of new Scottish subsamples from UK-wide polls, used with all the usual caveats. Now that the campaign has started, polls show a slight swing towards the SNP and against the Conservatives. This is visible in the trendlines and has started to make rolling average better for the SNP.

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James Kelly’s ‘Poll of polls’ on Scot Goes Pop is even more favourable to the SNP. But he doesn’t use the same set of subsamples. I keep some older ones in my set that James has already discarded. They were distinctly less good for the SNP than the more recent ones. And, as I said before, when I have a choice I always choose the scenario that is least favourable for the SNP. Previous elections taught us that a cautious approach is often the wisest.

How do all these factors change the projection and prediction?

I have adapted my model to the new context. In an additional final step I chose to reallocate 60% of the potential Green vote to the SNP and 90% of the potential UKIP vote to the Conservatives in all constituencies where Greens or UKIP stood in 2015 and don’t stand this time. This is obviously an approximation and the real transfers will be more complex. But I had to make an assumption and this one seemed as good as any other.

The cumulative effect of the slight change in polling average and the reallocation of Green votes is to shift three marginal seats from the Conservative to the SNP column (Edinburgh South, Perth and North Perthshire, and Stirling). Aberdeen South and Moray remain in the Conservative column because of the reallocation of the 2015 UKIP vote but in both cases the Conservative lead is much reduced.

Martin Baxter at Electoral Calculus has also adapted his model to account for the actual Green and UKIP candidacies. He delivers the exact same number of seats as my model when fed with the same polling average data. But there are still a few differences in the allocation of seats to each party. ScotlandVotes is less favourable for the SNP but close nevertheless. I have a hunch their model has not been adapted in the same way as the others (yet) and still reflects what would happen with a much larger number of Green candidates.

Below are my updated projections (seats by SLLM—Safe, Likely, Lean, Marginal—rating, and seat by seat winner’s margin) and the full seat-by-seat projected results. Again I’m taking a big risk here as some of the detailed results might be way off, but it’s worth it.

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And finally the summary of my updated projection (compared with what Electoral Calculus and ScotlandVotes would project) and my updated prediction.

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In my prediction I switched three seats from the Conservative to the SNP column: Aberdeen South, East Renfrewshire, and Moray. I already explained my reasons for these three seats in previous posts, so I will not elaborate further.

Seats to watch

Dumfries and Galloway

Dumfries and Galloway is one of the top Conservative targets in this election. This seat and its (almost) predecessor Galloway and Upper Nithsdale have been held by all three major parties (SNP, Conservatives, and Labour) at some point in the past 24 years. So it can really be called a battleground.

The decline of Labour in recent years has benefited both the SNP and the Conservatives here. But recent trends point to Conservatives having the upper hand, with the SNP coming second both in 2016 and 2017. Even if Scottish Parliament and Council elections are not predictors of the General Election, they nevertheless give some hints on which direction the electorate is moving.

The SNP candidate is sitting MP Richard Arkless. He gained the seat from Labour in 2015 on a 25% swing and with a majority of 6,500. As a hint of things to come the Conservatives finished second and Labour was already relegated to third place. I didn’t find much to say about Arkless except what you find in his profile on the SNP website and his Twitter account. He comes out as a typical low-profile backbencher, deeply involved in his job as MP and certainly respected and well-liked by his constituents. But is that enough to win in a competitive election that has already turned nasty on the national level?

The Conservatives are fielding Alister Jack (a local farmer and businessman who will campaign on the usual ‘no to independence’ and ‘best Brexit deal’) and Labour Daniel Goodare (a local A&E doctor).

Goodare doesn’t stand a chance as Labour support has gone downhill here just as much as anywhere else in Scotland. Jack will try to build on Conservative success in the area in 2016 and 2017. Apart from the classic Conservative campaign themes, he will also try to rally the farmers’ vote. It already paid off in other rural areas of Scotland in 2016, regardless of the validity of the arguments, and is probably the key to a Conservative gain here.

I rate it as a Conservative gain from SNP
Conservatives 41% (+11%), SNP 39% (-2%), Labour 18% (-7%), LibDems 2% (-)

Edinburgh South

This one will obviously be the most watched of all Scottish constituencies in this General Election, being the last Labour seat in Scotland and an unexpected Labour hold in 2015. Over the last 40 years Edinburgh South has been first a weak Conservative seat and then a weak Labour seat. It is also one of the trickiest to predict as Edinburgh politics have a life of their own and have recently been full of upsets. So whoever wins on 8 June will probably do so by just a few hundred votes.

In 2015 the SNP clearly did not choose the best candidate here. This is obviously not the case this year. SNP candidate Jim Eadie was MSP for Edinburgh Southern from 2011 to 2016. During his term he played an important part in the Scottish Parliament’s work; first as Parliamentary Liaison Officer for First Minister Nicola Sturgeon and then as Convener of the Infrastructure and Capital Investment Committee. Eadie was unseated in 2016 by Labour’s Daniel Johnson though he gained 2,500 votes and 3% of the vote compared to 2011. His defeat was at the time widely attributed to massive Unionist tactical voting, which seems to have become quite common in Edinburgh recently. His nomination for the General Election has been interpreted as a clear sign the SNP intend to put up a real fight for this seat. The SNP can certainly count on Eadie’s high name recognition, personal status and strong campaigning skills to bring in the extra votes needed to gain the seat.

After a seemingly chaotic selection process, the Conservatives nominated Stephanie Smith, who has since been elected Councillor for the Liberton/Gilmerton ward. Previously she stood for MSP in Almond Valley in 2016 and finished a distant third. Other than this I admit I know nothing about her. I find it surprising that the Conservatives did not choose a more high-profile candidate such as Miles Briggs, who stood here in 2015. But this year Briggs is standing in the neighbouring Edinburgh South West, which I will discuss in my next update. The Conservatives probably expect that Smith will automatically benefit from their surge in Edinburgh over the last two years but they should not take it for granted. She could also benefit from UKIP fielding no candidate this year (they received 1.2% here in 2015).

And finally Ian Murray, the sitting Labour MP. Murray was first elected in 2010, taking over from retiring Labour MP Nigel Griffiths. Common wisdom at the time was that he would lose the seat (then a Labour-LibDems marginal) to the Liberal Democrats. But he won by 316 votes. Again in 2015 Edinburgh South was generally considered highly likely to switch to the SNP. But Murray held the seat by 2,637 votes, with some help from the SNP themselves. There’s definitely something of the ‘come-back kid’ in him.

Murray is a member of the Blairite (or ‘progressive center-ground’ as they call themselves) Progress group and it shows in his voting record. He has been the target of harsh criticism from within Labour after his highly publicised resignation from the Shadow Cabinet and also because of his perceived undermining of Jeremy Corbyn. Murray has won an award as ‘most responsive Scottish MP’, whatever that actually means. But he is certainly not as popular as he claims or would like to be, even within his own party. What was once dubbed ‘The Socialist Republic of Morningside’ may well not be as kind to him as it was two years ago.

This seat is technically a three-way marginal bordering on a three-way tie. Common wisdom is that Conservatives will gain it but I strongly doubt it. The Greens’ decision to stand down in this constituency will probably be less of a game-changer here than in other seats. They received 4.2% of the vote in 2015 and it’s likely to switch to both SNP and Labour.

So I will go out on a limb again and…

I rate it as a SNP gain from Labour
SNP 35% (+1%), Labour 33% (-6%), Conservatives 29% (+12%), LibDems 3% (-1%)

A little extra: the three constituencies where the Scottish Green Party stands…

Edinburgh North and Leith

I expected Greens to stand down in this one too, because it’s a marginal and the only one of the three where a Green candidacy could actually hurt the SNP’s prospects of holding the seat. Greens received 5.4% of the vote here in 2015 and can be expected to reach 8-10% this year under favourable circumstances. Such a result would reduce the SNP margin to probably 2 or 3% down from almost 10% in 2015. I don’t expect Greens to do much better than that. They do well in the eastern part of the constituency but significantly less in its western part; and their results here in the 2017 Council elections were not much different from 2012. But I think the SNP here would still welcome a fair share of tactical voting within the pro-Independence camp.

Falkirk

Greens intend to campaign here on ‘ban fracking’. The SNP have already explained at length why the current moratorium is the best choice; and how an outright ban would backfire as it would be challenged in court and would be overturned. Greens did not stand here in 2015 so there is little basis for comparison; only that they received 4.7% of the list vote for the Central region (which includes Falkirk) in 2016; and 3.6% in Falkirk Council elections this month. I expect their share of the vote in this GE to be fairly close to that.

Glasgow North

Patrick Harvie received 24% of the vote last year in the Glasgow Kelvin Scottish Parliament constituency. But it doesn’t say much about what might happen in this General Election. Greens did well in the Hillhead ward two weeks ago (26%; one councillor elected on first count) but not so well in other areas of the constituency. Greens received 6.2% of the vote here in 2015. So I don’t expect Harvie to do much better than 15% this time. That would have him competing with the Conservatives for third place, not with the SNP for first.

Next week: Edinburgh West, Edinburgh South West

Saor Alba gu bràth.

Jeremy Blackwell, 17 May 2017

Jeremy BlackwellJeremy Blackwell is an analyst and statistician living and working in Edinburgh. You can follow him on Twitter at @WeAreThe59.

General Election 2017 projection and prediction, 10 May update

By Jeremy Blackwell

Now that the Conservatives have won the Council elections in Scotland, and Ruth Davidson has taken Glasgow and won the French Presidential election, I will have to reconsider all my predictions. Just kidding, but in some cases what happened last Thursday offers a different perspective on what might (or might not) happen on 8 June. So let’s go.

How did the polling data evolve?

For the record, I have my doubts about polls. In 2011 they underestimated the SNP and failed to predict the SNP majority in the Scottish Parliament. In 2015 they were spot on and predicted the SNP landslide in Westminster. In 2016 they overestimated the SNP and failed to predict SNP losing their majority in the Scottish Parliament. So what is it going to be this time?

That being said, there have been few new polls in the last week and unfortunately no full Scottish polls. The trend, not unexpectedly, is again better for the Conservatives than for the SNP:

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The rolling average also moved in favour of the Conservatives and against the Liberal Democrats. This obviously has an impact on the projections, and has also changed my prediction for a few seats.

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Continue reading General Election 2017 projection and prediction, 10 May update

Roundup, Wednesday 10 May 2017

4 May local election results

Party Seats +/- Votes Vote % % +/-
SNP 431 6 607,747 32.3 0.0
Conservative 276 161 477,124 25.4 +12.1
Labour 262 -132 376,799 20.0 -11.4
Lib Dem 67 -4 130,018 6.9 +0.3
Green 19 5 75,669 4.0 +1.7
UKIP 0 0 2,869 0.2 -0.1
Independents/other 173 -31 209,131 11.1 -2.6

Source: Britain Elects

General Election 2017 projection and prediction, 4 May update

By Jeremy Blackwell

I will have an update on my projection and prediction every week on Thursday until Election Day. I will keep it short and mostly point to the changes since the last update. At the end of each update I will also discuss some specific points like ‘seats to watch’.

How did the polling data evolve?

The complete crosstabs for some of the weekend polls were late showing up. And there were two Tuesday polls to add. But the main trends have not changed significantly since Monday. For better visibility I have hidden the small dots that represent individual polls. The large dots on the left side are the actual 2015 results.

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The rolling average barely changed with the new polls in:

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Continue reading General Election 2017 projection and prediction, 4 May update

Former ECJ Advocate General: Post-Brexit, Scotland could be in both the UK and EU

Miguel Maduro
Miguel Maduro at The State of the Union 2013, European University Institute. License: CC BY-SA 2.0.

Professor Miguel Poiares Maduro, former Advocate General at the European Court of Justice, giving evidence today to the Committee on Constitutional Affairs (AFCO) in the European Parliament:

“There is one other possibility, that is to have that some UK citizens may maintain citizenship of the European Union and others won’t. And this is a bit of a provocation… It is… Nothing prevents a part of the United Kingdom to stay and another part of the United Kingdom to leave. We have a precedent with that; it’s called Greenland. We have the case of one member state where part of its territory left the European Union and another part stayed. So, in principle, nothing will prevent for the territories, for example, of Northern Ireland and Scotland to stay in the European Union, and for the rest of the territory of the United Kingdom no longer to be part of the European Union.

“Of course, this will be complex to organise in practice, it will require a border inside a member state, because it will basically mean that Scotland and [Northern] Ireland will remain part of the European Union and part of the United Kingdom. But it will not be impossible.

“Still, it will be again very problematic in political terms, and the consequences of it will make it difficult. If we think about it… I think, on the one hand one risk will be economic—for the UK—because naturally you will have… I will say for Scotland and Northern Ireland, it would be extremely positive. They will attract lots of investment and companies that will locate in those territories because they could benefit from both those markets. But of course for the rest of the United Kingdom it will be even more dramatic because there will be economic mobility to that part of its territory.

“For the European Union, the difficultly will be that if this will take place without the UK formally leaving as a state—because part of its territory will stay, in the same way that happened with Denmark and Greenland—it will mean that the representation of that part of the territory would be made by the UK government; not by the Scottish and the Northern Ireland governments. For this to be done, without leaving and then coming in as Scotland and Northern Ireland to be then in terms of state secession, the representation of this part of the territory will have to continue to be done by the United Kingdom central government.

“Of course, there will be the possibility to leave as [the] UK and come in as part of the UK. That will be another alternative.”

The Scottish Government made proposals along these lines in the paper Scotland’s Place in Europe, published late last year. David Davis, the UK Government’s Brexit secretary, rejected the proposals.

Roundup, Wednesday 3 May 2017

General Election 2017: which way will Scotland go?

By Jeremy Blackwell

You’re lucky this time you won’t have to go through the ‘A few words about me’ and the ‘Hits and misses’ parts. You already got them. So let’s go directly to the heart of the matter.

How does my model work?

Like all election projection models, my model works mostly on ‘Uniform National Swing’ (UNS). With UNS you have all seats moving in exactly the same direction as the national polling average—which never happens in real life.

So I have a second algorithm on top of the first one which I call ‘relative swing’. It factors in not just the usual UNS, but the way parties’ vote shares change relative to each other.

For example, you might start with the SNP on 50%, Labour on 24%, the Conservatives on 15%, and the Liberal Democrats on 8%; then later have the SNP on 45%, the Conservatives on 30%, Labour on 15%, and the Liberal Democrats on 5%. With UNS you simply subtract 5% from the SNP vote, 9% from the Labour vote, 3% from the Liberal Democrat vote, and add 15% to the Conservative vote, in every seat. (And get negative votes for some parties sometimes.)

But the truth is that it’s more complex than this. That’s what ‘relative swing’ takes care of, by taking into account the ‘multiplier effect’. With the above numbers you multiply the SNP vote by 0.9, the Labour and Liberal Democrat votes by 0.625, and the Conservative vote by 2.0 in every seat. (And sometimes get a vote total over 100%.)

So my model is a mix of both, and currently tuned on 80% UNS and 20% ‘relative swing’.

The first step as described above will sometimes deliver negative votes in a few cases. And in some seats the vote total doesn’t add up to 100%. The second step is to eliminate all the negative votes. This is done simply by automatically switching from the model parameters to ‘100% relative swing’. This being a multiplier, it guarantees there can’t be any negative results. Third and last step is to deal with seats where the vote total is not 100%. This is also done automatically by recalculating votes proportionally from what the second step delivers.

Is the model foolproof? Of course not. No statistical model is, especially when you consider tactical voting. That’s why we can get wrong projections even with accurate polls (see ‘Hits and misses’ in my previous article). But I’ve compared my results with those you can get using Electoral Calculus or ScotlandVotes and they’re pretty similar. Not identical, but pretty close (more on that later). So I guess their underlying algorithms are pretty similar to mine.

How do I feed the model?

The source data are all the polls that I can find. Ideally I would rely on full Scottish polls (that is polls fielded in Scotland only and with a sample size of over 1,000). There were plenty such polls before the 2015 General Election and they proved accurate, unlike UK-wide polling. In the graph below the small dots are individual polls. The large dots at both ends are the actual 2010 and 2015 results. The trendlines show the evolution of vote shares and how polls correctly predicted the SNP landslide.

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We are not that lucky this year. The snap election took everyone, including the pollsters, by surprise and there are many fewer full Scottish polls: nine so far and only five in 2017.

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I therefore also have to rely on Scottish subsamples of UK-wide polls. A subsample size is typically 100 to 150, so they have a much larger margin of error (MOE) than full polls. This is the reason why many people think they should be discarded from any analysis. In principle I agree with this point of view, but this year subsamples are the bulk of the data we have. And there is a simple way to deal with the larger MOE and still get valid projections when interpreting the data. Which I will explain in the next section.

Continue reading General Election 2017: which way will Scotland go?