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Will Conservatives Out of Control Immigration Crisis Boost UKIP Election 2015 Prospects?

ElectionOracle / Immigration Feb 26, 2015 - 02:56 PM GMT

By: Nadeem_Walayat

The latest immigration statistics out of the ONS once more illustrate the magnitude of the ConDem Coalition governments failure to control immigration where to all intents and purposes the past 5 years have just marked a continuation of the Labour catastrophe that set in motion a mega-trend for a 15 year long surge in net immigration of well over over 3 million people, where approx 90% of the adults were expected to vote Labour.

The facts to date illustrate that David Cameron just CANNOT be trusted on immigration, for his party in government has repeatedly FAILED in virtually EVERY IMMIGRATION PROMISE made as when David Cameron took power in 2010 he promised that he would cut net immigration towards the end of the parliament to the tens of thousands from the then disastrous annual figure of 205,000, instead the latest data from the ONS shows that net immigration has continued to SOAR to a level far higher level even than in 2010 to now stand at 298,000, near 1/3rd higher.

"Overall, net immigration would be kept in the tens of thousands, rather than the current rate of hundreds of thousands”. - David Cameron 2010

Furthermore the net out of control immigration trend is ACCELERATING as 298,00 in the year to Sept 2014 is up from the 260,000 in the year to June 2014, and up near 50% on the year earlier of 182,000 (June 2013). As 624,000 people flooded into the UK in the year ending September 2014, compared to 530,000 in the previous year which is set against emigration of 327,000 in the year ending September 2014 compared to 320,000 in the previous year.

The following chart illustrates the magnitude of the Conservatives failure to control immigration which shows that the brief dip in immigration soon evaporated as the UK economy started to recover that now results in immigration at levels exceeding that of under the last Labour government

As expected the tories attempted to put a positive propaganda spin on the unfolding catastrophe by virtually in unison stating that it was a 'problem of success'.

"What we are seeing at the moment is the impact of this country having a dramatically stronger economy than in the rest of Europe... it is a problem of success" - William Hague

Instead what it really is, is a problem of being in the EU!

And as I repeatedly warned during much of 2013 to expect a surge in immigration from Romania which has materialised as whole villages have moved lock stock and barrel to places such as Sheffield resulting in huge social consequences for settled communities and public services such as in housing, health and school places.

Whilst the primary reason given for migrating to the UK being work (250k) with study second (170k), that feeds into state propaganda (BBC) that most migrants come to the UK to work and not claim benefits, however as I illustrate next that the reality is the exact opposite.

Tax Credits, In work Benefits

Repeatedly a politically correct BBC brings forth a stream of recent migrants on broadcast news to proclaim that they are in the UK to work and not to claim benefits. But what state propaganda repeatedly tends to ignore or brush over is the consequences of the IN WORK BENEFITS such as Tax credits, housing benefit and social housing which amounts to HUGE benefits payments for migrant workers and a subsidy to employers.

Analysis by the Open Europe think tank illustrates the effect of in work benefits on actual earnings and why contrary to state propaganda that it is BENEFITS as the PRIMARY reason why eastern europeans arrive to WORK in the UK at huge expense to British workers, both in terms of continuing high unemployment especially for british youth as 1 in every 3 jobs created goes to migrant workers (ONS) and in terms of depressing wages that contributes to the cost of living crisis.

Weekly take-home pay: single earner, minimum wage, no dependent children (UK GBP at PPP)
	UK nationals and EU migrants under current rules	EU migrants in UK under OE rules	Spanish minimum wage	Polish minimum wage	Bulgarian minimum wage
Salary	£227.50	£227.50	£178.07	£174.06	£79.48
Total deductions	-£30.99	-£30.99	-£11.31	-£60.05	-£18.20
Income post deductions	£196.51	£196.51	£166.77	£114.01	£61.28
Benefits/tax credits	£93.77	£0.00	£47.30	£0.00	£0.00
Total	£290.28	£196.51	£214.07	£114.01	£61.28
Effect on income of moving to UK under current rules			+35.6%	+154.6%	+373.7

 

Weekly take-home pay: single parent, UK minimum wage, two dependent children (UK GBP at PPP)
	UK nationals and EU migrants under current rules	EU migrants in UK under OE rules	Spanish average wage	Polish average wage	Bulgarian average wage
Salary	£227.50	£227.50	£433.65	£387.90	£191.69
Total deductions	-£30.99	-£30.99	-£80.77	-£136.67	-£43.90
Income post deductions	£196.51	£196.51	£352.88	£251.23	£147.79
Benefits/tax credits	£330.52	£0.00	£9.45	£18.43	£1.66
Total	£527.03	£196.51	£362.33	£269.67	£149.45
Effect on income of moving to UK under current rules			+45.5%	+95.4%	+252.6%

Source: Open Europe

This analysis shows that the effect of in work benefits results in 'single' Polish workers being typically 150% better of coming to the UK in terms of pay and a Bulgarian near 400% better off. Whilst a single parent polish worker would be near 100% better off and a Bulgarian typically 250%. Where it is the benefits that on several measures are many multiples of the actual pay rates in Poland and Bulgaria hence why migrant workers are contributing NOTHING in terms of net economic output because on average tend to consume far more in benefits than contribute in economic output let alone in terms of taxation which does not even amount to 1% of the amount taken in benefits.

Additionally other costs / benefits are not being factored into the equation such as the NHS, social services, education and child benefit.

The truth is that most migrant workers, at least 80% make NO NET positive contribution to the UK economy. However, neither do some 80% of british workers as Britain's political system through inflation and election bribes has been designed by successive governments to turn virtually everyone into a vested interest benefits claimant. 80% of the British people ARE benefits claimants, where the cost of which is financed by PRINTING MONEY (Government bonds and QE) which causes the inflation that the elite leveraged themselves to by means of oscillating asset prices around the exponential Inflation mega-trend as I have covered at length over the past 5 years in the Inflation mega-trend series of ebook's (FREE DOWNLOAD).

I further elaborated upon the consequences of Britains' immigration catastrophe at the start of 2014 -

02 Jan 2014 - One Million Romanian and Bulgarian's to Descend upon Elysium - Britain's Immigration Catastrophe

Breaking the Back of Public Services

Public services such as health, housing and schools were already stretched to breaking point as a consequence of a decade of mass immigration and ongoing health tourism are now likely to effectively seize under the weight of the latest wave of as much as 1 million over the next 2 years as many hundreds of thousands of poor families will dump themselves at the feet of Britain's local councils and welfare state to home, feed, cloth and school in perpetuity that will prompt many hard working taxpayers to question exactly what are they being forced to pay taxes for because when they attempt to gain access to services they will experience much inertia.

UK Population Growth Trend Trajectory

My long standing forecast is for the UK population to grow from 62.2 million as of Mid 2010 to at least 70.5 million by 2030 as illustrated by the graph below. However the actual trend trajectory as per the most recent population data into Mid 2012 suggests that the UK population could increase by an additional 4 million by 2030 as a consequence of what amounts to out of control immigration that translates into a population increase equivalent to 15 cities the size of Birmingham.

02 Aug 2010 - UK Population Growth and Immigration Trend Forecast 2010 to 2030

Continuing out of control immigration looks set to have a huge impact on the UK housing market in terms of availability and prices as covered in-depth in my forthcoming UK Housing Market ebook (FREE DOWNLOAD).

Both Major Political Parties Support Immigration

Leaders and representatives of both major parties have been busy making statements promising to control immigration in the future, however these amount to nothing more than bare faced lies when one considers the real fundamental drivers for immigration because if the politicians were really serious about controlling immigration than it would already have been done!

Labour Supports unlimited immigration because the vast majority of immigrants will tend to vote Labour i.e. be politically left of centre, therefore Labour sees immigration ultimately in terms of hundreds of thousands of new Labour voters who will ensure further election victories. Labour's strategy has therefore been highly successful as in a little over 10 years it has changed many constituencies in favour of voting Labour to the point where it has become near impossible for the Conservatives to win elections with significant majorities such as the landslides achieved by Margaret Thatcher achieved during the 1980's.

Conservatives support immigration because it is highly profitable for their pay masters - big business, as the influx of migrant workers will tend to drive down wages for all workers thus deliver higher profits for business. Academic economists may rightly argue that by doing so businesses will ultimately erode their own profits as workers who earn less also spend less. However what academics fail to appreciate is that the state steps in to fill the gap by subsidising workers through tax credits and paying some 8 million people who are economically inactive all of which is funded by money conjured out of thin air i.e. government debt that is not backed by any economic activity that acts to inflate the economy, and thus corporate profits which are leveraged to inflation.

The Conservative led Coalition boasts that it has cut net migration by a third, but what they forget to mention is that only immigration from OUTSIDE of the EU has been cut i.e. many of whom would be highly skilled workers, who instead of being reliant on the state would have paid taxes. Additionally the Conservatives conveniently tend to forget that the Borders Agency has been an abysmal failure that routinely allows in many tens of thousands of illegal migrants every year.

Therefore one should realise that high net immigration is in the interests of both major political parties both in terms of votes and for those that bankroll the parties, which means neither Labour or Conservatives will actually do anything significant in respect of controlling immigration, so everything you are hearing in the mainstream media from the politicians such as Cameron promising a referendum in 2017, some 2 years AFTER the next election is purely smoke and mirrors BS to mislead the population into thinking that something will eventually be done about Britain's immigration crisis.

Yes each party may announce plenty of policies and massage figures in the run upto the next General election, but they will break ALL of their immigration promises just as they have done before because it is not in either main parties interests to control immigration.

UKIP Keeps Clutching Defeat from the Jaws of Victory

Continuing out of control immigration crisis should amount to a huge boost for UKIP at the May General Election, However, unfortunately for UKIP they are remarkably good at one thing which is in clutching defeat from the jaws of victory as virtually everything the party is riding high in the polls, usually on the back of the latest disastrous immigration statistics then near immediately an event happens such as a derogatory 'sluts' comment and far worse that prompts voters to think again on whether they should vote for this far right of centre party. The latest gaff to hit UKIP was Channel 4's docudrama that painted a dire picture of a UKIP government one of storm troopers that was soon followed by racist comments by a UKIP councillor who declared that she 'had a problem with black people'.

According to the BBC poll of polls UKIP currently stand at 14% that compares to just 3% in 2010, and far ahead of the Liberal Democrats on just 8% that are expected to achieve between 20-30 seats. Therefore this has prompted UKIP to start to fantasies for a similar if not better outcome in May 2015. Off course it is not going to happen because the UKIP vote is too thinly spread unlike the far more concentrated Lib Dem vote.

Therefore the consensus view on how many seats UKIP will gain greatly differs from that of the UKIP high command by suggesting UKIP will be lucky to secure any additional seats to their existing tally of just 2 seats.

So if UKIP are unlikely to win any more seats then one could conclude they are an irrelevance for 2015 were it not for the fact that the UKIP share of the vote at a potential 14% means millions of potential voters lost to primarily to the conservatives and to a lesser extent Labour. The consequences of which is to increase the number of marginal seats that could be lost from 100 in 2010 to as many as 300 today, that results in a difficult to call election as the UKIP share of the vote has the effect of greatly whittling down majorities converting former Labour and Tory strong holds into marginal's that other parties could target to win.

UKIP whilst drawing voters from both major parties nevertheless draws three times as many voters from the Conservatives than from Labour, therefore on face value this implies certain disaster for the Conservatives were it not for the fact of the SNP insurgency that seeks to wipeout Labour in Scotland. Therefore, luckily for the Conservatives the SNP catastrophe for Labour more than cancels out the UKIP nightmare erosion of Tory voters.

The fatal flaw at the heart of UKIP is also its greatest attraction in that it is seen as a one trick pony - immigration, which whilst an important voter issue, nevertheless ranks about fourth in importance for most voters. Which explains why UKIP will never actually be able to convert votes into many seats because unless UKIP is able to present credible policies on the NHS, Economy and Welfare state in just as vocal a manner as it does for immigration then UKIP will never be able to muster enough concentration of votes in any more than a handful of constituencies.

Where immigration is concerned, the truth is that Britain needs millions more young hard working tax payers to pay for the increasing economic burden of the ever more demanding ageing population (grey vote). To achieve this either Britain has a big baby boom that is then educated over the next 3 decades into becoming hard working tax payers, or imports ready made hard working immigrants that another nation has spent several decades educating that have not been brought up as vested interest benefits scroungers for life that the Labour party tends to favour as its default position for buying votes.

Therefore my UKIP conclusion is that given an expected 14% share of the vote, it is inconceivable that UKIP won't win any more seats, especially as they can focus all of their resources on just a handful of seats. So UKIP likely to win at least 2 additional seats and probably achieve 4 to bring their election night total to between 4 and 6 MP's.

What the UKIP vote does is to reinforce the fact that a hung parliament is virtually certain, as UKIP votes from the Tories will hand a number of Conservative seats to Labour whilst the SNP blood bath will more than negate this number to Labour seats lost to the SNP. Which means that the Conservatives should still be on course to form the largest party.

My next in-depth analysis concludes in a detailed seats per party election forecast, so ensure you are subscribed to my always free newsletter to get this in your email box on completion.

In the meantime see my existing long standing forecast conclusion as of December 2013.

16 Dec 2013 - UK General Election Forecast 2015, Who Will Win, Coalition, Conservative or Labour?

The following graph attempts to fine tune the outcome of the next general election by utilising the more conservative current house prices momentum of 8.5% which has many implications for strategies that political parties may be entertaining to skew the election results in their favour.

The the key implications of the above graph are -

• The window for an outright labour election victory has ended as of July 2013.
• As of writing an election today would result in a Coalition government with a majority of about 40 seats.
• The window of opportunity for a Coalition government ends by mid 2014 after which there is an increasing probability for a Conservative outright majority.
• A May 2015 general election at an average house price inflation rate of 8.5% would result in a Conservative overall majority of about 30 seats. Therefore this is my minimum expectation as I expect UK house prices to start to average 10% per annum from the beginning of 2014.

And also a video version of the analysis and forecast conclusion -

Source and Comments: http://www.marketoracle.co.uk/Article49602.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2015 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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