22/06/2012 Newsnight

The Labour Government got it wrong on immigration. The party's leader

Ed Miliband admits they did not recognise the cost to society. His

solution? Companies to report if more than a quarter of their

workers are from overseas. We return to Crewe to find out how

that has gone down. They knew a long time ago they were wrong. That

was before the Conservatives came into power. We debate whether any

party is being straight with voters about immigration.

In Warsaw the German Chancellor reacts to Greece leaving the euro,

Surrey leaving Euro 2012. In Rome that there is another big

sounding promise of action. Just how long can this game go on? We

ask if we can keep on waiting for another solution just around the

corner. Good evening. For politicians of

the main parties the immigration debate has rarely been a

comfortable one. When voters raise something they still passionately

about, as happened to Gordon Brown, they can be dismissed as bigoted.

When political leaders promise a brake on immigration, employers'

organisations start fuming about the loss of reliable, foreign

workers. His Ed Miliband's confession of past Labour mistakes

the beginning of a new policy or an attempt to defuse the issue? Tim

Whewell reports from Key Crewe, where in 2006 he fell hunt for

Newsnight on the social tensions. Where he made a film for Newsnight.

He is a place that sums up how recent migration has changed the

face of Britain, a place most people speed through, but where,

eight years ago, thousands of Polish people suddenly and totally

unexpectedly got off. The demography of a medium-sized

town that had seen little previous immigration was transformed.

According to the local council, at least 3000 Polish people have a

right in this one town alone, immediately making up over 6% of

the population. Families like the Roberts were not hostile to the

incomers, but they were remarkably prescient. It feels like a foreign

country sometimes. If this continues, the bubble will burst

and jobs will become scarcer. What happens then? What happens to where

you have got British lads working alongside immigrant labour? Who

gets the sack? The arrival of the migrants, following the Eastern

expansion of the European Union, came as a complete surprise to the

then Labour Government. It predicted net immigration from the

new EU states would be between 50131000 a year. Some mistake. In

fact, 576,000 arrived over the following seven years, peaking at

112,000 in 2007 alone. Today, the present Labour leader, Ed Miliband,

kind dog apologised. We too easily assumed that those who were

worrying about immigration were stacked in the past, and realistic

about how things could be different, even prejudiced. But Britain was

experiencing the largest peacetime migration in history. People's

concerns were genuine. For much of the last decade there was something

missing between what people were talking about and what politicians

were prepared to talk about at Westminster. The impact of European

migration was not acknowledged and many felt that showed the elitism

of the political class. They were not concerned about the problem

because it did not affect them. But schools and other services came

under unexpected strain and inevitably, as very few politicians

noticed at the time, wages were driven down. Now that process is

continuing as early migrants become more settled and new ones arrive

from further afield. Brian Roberts has worked in the building industry

for 45 years. I just spoke about an instance today with a colleague of

mine who said a gang of Romanians weather gang master paid exactly

half of what he was getting paid. That wage which they were taking

home was well below the basic minimum wage. It was recruitment

agencies that fuelled migration to Crewe. For a while this one had a

branch in Poland and was single- handedly responsible for attracting

many of the new workers. Our name was being published in the

equivalent of almost the Daily Times in Poland, not to our

knowledge. Suddenly, we were getting 400 e-mails a week.

firm, which has since changed hands, has always paid the minimum wage or

above. Labour now wants a new regulation to ensure recruitment

agencies do not exclude British workers. But they say they never

did, they just do not get enough local applications. The reason

Labour did not talk much about European migration is not just

because of blindness or political correctness, it is because there

are no easy solutions. Most EU citizens have a right to work here

and as recruitment agencies will tell you they are often more polite

and more punctual than local job- seekers and more willing to do jobs

that locals often will not take on. Filling the local skills gap in the

electrical trade is one way to create a more level playing field

in employment. More apprentices like this are being trained, but

they still face competition from incomers. They are willing to work

for a lot less, people from other countries. Do you see that? You see

it from time to time on site. like many similar places up and

down Britain, is now more mixed ethnically than ever before. Most

locals accept that, but they wish they had had more warning.

He is this really a complete change of heart from Labour? I have been

speaking to Labour's Shadow Communities Secretary Hilary Benn.

To be clear, this is the Labour Party saying there are too many

immigrants in this country? No, it is not that. What Ed Miliband said

is that in relation to the accession States we got it wrong in

not putting in place transitional controls. Looking back on it, we

should have done and had we done so, fewer people would have come from

those countries. So there are not too many immigrants in this

country? You got it wrong about the numbers, but there are not too

many? This is all about innuendo? could not disagree with you more.

This is about recognising the benefits and the consequences and

understanding when people see communities that changing very fast,

they feel uncomfortable. It does not mean they are bigots. It is

also about looking at the way in which the economy works. There is

also evidence this immigration has had an impact on wage rates. Some

recruitment agencies say they only recruit people from certain Eastern

European countries and that cannot be right. It is also looking about

the skills that people in this country have so they also can

participate in the labour market. You are accepting there is a

cultural issue. A parent can say in leaves, my local school, more than

half the children do not speak English as a first language and I

am worried about that. To say that is not bigoted? I do not sign

constituents saying that. They talk about housing and jobs. In some

parts of the country they talk about the pace at which their

community has changed. It is right we should be debating it and

looking at practical solutions, for example whether people are from the

UK or if they come from abroad they get at minimum wage. Looking at the

work of the gang masters' Licensing Authority which we set up in the

way of that tragedy in Morecambe. If your proposals go through, if a

work force contains more than one in four emigrants, the Jobcentres

should get involved. That would apply to a lot of hospital wards,

wouldn't it? Let's be clear, the country has gained a lot from

immigration. In Leeds many people have come from all over the world.

Can you say is there any upper limit to the number of immigrants

who should be allowed into this country because of the social

strains and consequences you have talked about? We have said we will

look at the question of caps, but you have got to be straight about

Eastern European migration because there is no control over that. That

is why we said clearly, we should have put those controls in place.

The problem with the Government's cap is it only applies to a very

small proportion of migration. We did put in place the points based

system which allows people to coming weather is a skills shortage

and that is sensible and the Government has carried on with it.

What about non EU immigration which some people feel is culturally more

difficult to assimilate and that is not a matter that you have

discussed? With respect the points based system applies to non e

migration and that is something we thought it was right we should be

looking at what the skill needs are and if there is a shortage and if

it is important for the economy, you can allow people in, but you

should be able to control immigration at immigration control.

The Government has continued with that because it was the right thing

to do. Deborah Mattinson runs the Opinion Research Company Britain

Thinks and Ian Birrell was a speechwriter for David Cameron in

the 2010 campaign, but thinks they are getting it wrong on immigration.

First of all, do you see this announcement by Ed Miliband as him

saying, actually, we have got a political problem and it is a vote

user for Labour? I think he is, yes. Basically, the situation Labour

finds itself in his we have seen a lot of disillusionment with the

Government, but people not yet rushing towards Labour. They are

not yet ready. Labour does not have the licence to be heard yet and it

will not have that until it really accepts responsibility for some of

the things people think it got wrong the last time and immigration

is one of them. When you did focus groups through the last Government,

does it come up a lot? Yes, and we saw a real change as well. In 1999,

fewer than 5% said immigration was one of the top problems facing the

country. It is now a number two only to the economy. People are

really, really worried about it. you think there is actually among

the main parties a bit of a political consensus about this?

They head like his immigration spiralling out of control and

something must be done and there is a fundamental agreement? All the

parties have accepted this is an issue that needs to be addressed.

But I thought the speech day was disingenuous drivel. All the

parties are coming out with the same rhetoric and promises, but it

is down to economics and there is very little they can do. What Ed

Miliband should have done is apologise because they are not

telling the truth about immigration. Immigration benefits our public

services because immigrants are more likely to pay taxes, it helps

our pension crisis, and it is good for the British economy. That is

not what they are saying and that is why the public is in such a mess

on theirs. Politicians have not stood up and said, immigration is

beneficial for us, we need it and there is not much we can do about

it. People think politicians have not been straight because they have

not allowed a debate. It is not that they are not making the right

noises, they are not talking about it at all. The discussion has

closed down. If you raise it, you are regarded as a bigot. This it

that or is it that there is no easy solution as you suggest?

endlessly here there is no debate. We hear is when people are debating

it. We had Margaret Hodge talk about the pressure on social

housing which led the BNP to power in her local area. We have had

Gordon Brown and David Blunkett raised it. There is nothing we can

do about it because it is economics and it is good for the country.

That is a message a lot of people are not prepared to listen to.

People see it as a problem. have to start with where people are.

There are a lot of good points to make about immigration, economic,

but if you do not start where people are, they are not going to

listen or be persuaded. What Ed Miliband has done today, quite

successfully, is to say, I understand how you feel. I

understand the problems. He has also talked about the benefits in

It's rubbish. We will have this early warning system when we get

recruitment company which gets up to 20%. When I saw Hilary Benn

being asked what he would do about it, he had no answer. It's figure

leaf solutions. They should say out loud and proud that immigration is

very good for the country. That we need. It it helps our public

services. One of the things that he said, let's be honest, let's not

overpromise. If leading politicians made that argument, what would

happen? People would close down. They wouldn't listen to it. What

they are saying, at the moment, people feel that it causes more

problems than it offers solutions. Unless you start were they are, at

the problem end of things, you are not going to be able to persuade

people of the solutions. We never hear anything... All we hear from

politicians are the problems, never the solutions. That is not true.

The politicians failed it give leadership on this issue what so

ever. That is why the public has myths and misconceptions because of

the appalling political leadership in all parties. Do you accept there,

is as I tried to explore with Hilary Benn, a cultural issue.

People see their communities changing it causes fear and concern.

It's legitimate? There are concerns and issues. It's wrong for

politicians to come out with this shallow rhetoric that we hear today.

Yes, there is a plus side to it. It is good for our schools. A study

came out if there is Polish kids in schools, schools do better. Not bad

for housing. 25% of the population think if you weren't born in this

country you shouldn't be educated by the state. That is were people's

views are at the moment. That is the way politicians have been

handling this. That is because of the lack of leadership. It make it

is far worse. What he said carefully today is, let's not over

promise. He was critical of what David Cameron has said because it's

not deliverable. We will leave it there. Here's another one of those

notorious BBC repeats. Everyone is terrified by the euro crisis. The

top leaders in Europe get together and decide something must be done

to save the euro. They announce something big, but a few days later

people decide it wasn't that big after all. Everyone returns to

being terrified. Today's big sounding announcement was another

�100 billion for investment in growth. Will it make any

difference? Here is Paul mason. Confidence in Europe is burning.

Time is running out. Men the -- when the IMF says you are facing a,

"Critical stage" you had better believe. Christine Lagarde laid

down a challenge to the way Europe and, above all, Germany has faced

the crisis. She called for immediate concrete steps to form a

banking union. For the ECB to begin printing money. An end to

austerity-driven bail outs and the direct bail out of the Spanish

banks from money from the ESM. In Rome today, at the pre-meeting of

the eurozone's four big economies they decided to do none of the

above. TRANSLATION: I think that in

European politics and culture a new awareness has grown up that growth

can be based only on budgetary discipline, but that budgetary

discipline is not sustainable economically and politically if

there are no possible conditions for growth and employment. Against

the rumble of protests across Europe today, the leaders are

proposing a stimulus package worth 130 billion euros. It sounds a lot.

It's worth 1% of the eurozone's GDP. The political pressure now is on

Angela Merkel, asked to release central bail out funds to help

Spain she said simply this. TRANSLATION: If I simply gave money

to a Spanish bank or other bank I can't say what that bank should

change because I'm not responsible, I'm the German Chancellor. I can

only say that to my banks. That is the problem I vfplt it's not that I

do not want to help, but we set up them under such conditions. That is

how we will condition. There is a German word for all that, it is

nien. Paul is with me now. How long have they got? Well, month Monti,

the Prime Minister of Italy said today, a week to save the euro. He

is not normally given to high peshly. That is probably right. We

started this week in Mexico at the G20. What happened? The Germans

gave a positive signal about two things that everybody knows we need

to do. Europe needs to get a decision on. One is banking union.

The idea of various steps, whether it is guaranteeing everybody's

deposits or pan-European regulation. They have said, they have flagged

up very strongly, there will be a deal on that at the end of next

week at the summit in Brussels. The thing the Germans have been

resisting on, that is using the bail out fund of Europe, to pump

money into Europe's banks direct. Merkel had up to now said, no, in

Mexico on Monday she said it was possible. The whole of the

broadsheet press of the world took that as a signal that, by now, by

Friday, in Rome, the scheduled pre- summit we might be hearing some

kind of maybe. Instead, as you saw in my package she said, no, we are

not going to do it. Now, you can only watch history unfold like a

car crash with four drivers, as we have done, and conclude there will

be an impact unless they steer away from the problem by next Friday.

Well, OK. We are joined now by the Financial Times' Gillian Tett,

Maria Margaronis of The Nation and Dr Imke Henkel of Germany's Focus

Magazine. Economics first. Does this pre-summit summit get us

anywhere at all? We are back to were we where before. Frustration

and disappointment in the markets and amongst other world leaders. As

Paul says, in Mexico last week there was a feeling there would be

a breakthrough. Certainly the Americans have been pushing very,

very hard. There were rumours about a five-part plan doing the rounds

growth pact, the hopes have been dashed. What we are seeing is that

Angela Merkel is caught between a rock and a hard place right now.

She is under intense pressure from the markets and international

leaders to do something. The political opposition inside Germany

itself to bailing out other parts of the eurozone is rising too.

that fair. If she is blinking, she is blinking in such a way that

people can't really notice it, she is not moving it at all?

description is very fair. It is interesting, it is not just the

opposition that we used to have that we don't want to pay for it.

Which she should have started arguing against far earlier because

Germany profited hugely from the euro. She should have brought it in

a way to pay it back. There is another position growing this is

the fear that is what going to further and further integration

will be undemocratic beast. That is quite interesting. The German

Parliament will vote end of next week on the fiscal compact. They

will pass it. That won't ab problem. The President won't sign it because

they are now looming quite a few calls in the constitution court

that might bring it down or at least will change it. As the Greeks

watch this, also watch the football tonight, perhaps, with the same

kind of feeling, you must feel that the politics of this, never mind

the economics, is not going your way at all? No, I think the

question is people are asking, is how long will European policy be

held hostage by German domestic politics. It feels clear the

blockage is in Germany. Maybe for forever. Given that rock and the

hard place argument Mrs Merkel may not move at all? She may not. If

you look further down-the-line, we either have dissenter gracious of

the eurozone or greater political union, givenlet gap between the

northern and southern countries, which is worse than it was two

years ago, how is it going to happen Is the big solution is so

elusive, there is no big solution. It's politically impossible. These

are nation states remaining nation states and this rhetoric we need

more Europe is simply that. Fear is gluing them together. The political

elite know if the project falls apart it will be very nasty indeed

if Greece leaves the eurozone. You could say the European Union was

driven by fear of committing the sins of World War II. A project was

designed to heal those wounds. Tragically a project designed to

heal the wounds of World War II is re-opening them. Look at all the

rhetoric coming out of Germany and Greece right now. A project that is

glued together by fear, without any positive vision for the future,

it's debilitating. Nobody today in the eurozone doing what you hear

from a place like America saying, this is the American dream. What is

the European dream today? What is the positive image the voters can

cling to. Mrs Merkel will say, it's more Europe. What do Germans think

of that? For Germany it's connected to what was said 20 to 30 years ago,

more democracy. What Merkel is saying is more Europe is in fact

quite contrary. It will be less democracy. It will be... Or some

people... It's aiming towards an entity that will have augtisim to

rule over national budget that will take away sovereignty from national

budgets. It will, in the end, have far less democracy and far less

rights for the European citizens. The implications of that,

presumably if you are sitting in Greece and worried about where the

next pay cheque is coming from, is more German control. Where the

nationalism comes in More German control and much less democracy.

Gillan talks about the wounds of World War II opening up. We have

real ghosts for this party called Golden Dawn, beating migrants on

the streets and working hand in hand in Athens with the police and

is very frightening indeed. Do you think your country is a democracy?

No, I don't. Not at this point. The economic programme imposed on

Greece was not designed. They are not choosen. The last election was

fought on the grounds of fear. Two German newspapers published Greek

editorials in Greeks telling Greeks which way to vote as if they were

dropping leaflets on an occupied city. I'm sure that went down

really well. I wonder if they know what they are doing. We learnt

after Lehman Brothers collapsed that extraordinarily unexpected

things can happen in financial and economic terms. What we are

learning right now in Europe is that something extraordinarily

unexpected things can happen in political terms too. Who would have

imagined, think back a year or two years ago, just as we find it

impossible to imagine a big bank collapsing, who would imagine that

this think you are hearing about in Greece and Germany could have

happened. It's extraordinary. Just how much further can it go?

other terror in Germany, apart from not having a sound currency, it

produces political extremism in Germany itself? In Germany itself

as well. Political extremism isn't a big danger in Germany. We have

other parties who are more funny than extreme. I wonder, I say you

are quite right in asking that, does Merkel, do they know what is

going on in Greece? Do they really feel that they might be responsible

for the Greek right and -- right emerging and becoming more popular.

We watched the football tonight when we were trying to do work.

When you see Angela Merkel celebrating, as is her right, she

is a German Chancellor, supporting a German team. Do you think that

gets, that in itself strikes a serious raw nerve as well in

Greece? I don't think it's so much Angela Merkel celebrating. People

in Greece feel so ground down. So exClarence Housed at this point

that the football has a symbolic meaning. I was in Athens last week

when Greece beat Russia. There was this moment of, kind of, a day

before the election. Somebody sitting next to me in a cafe said,

"If we win the party will win tomorrow" of course they didn't. It

will be depressing for the Greeks. Paul, your sense of this. Listening

to what Mario Monti had to say and the politicians getting it in the

neck now. Is this when economic unrest is spreading into a wider

political discontent? What Maria Margaronis said there, I spent the

last two weeks in Spain and Greece, you are right there is a tangible

fear of being beaten up and the police standing back and doing

nothing. The Greeks voted for parties that were Europeanists.

Even the left party, Europeanists. If the Europeans abandon them, what

an example to Spain, which is next up. We will have to leave it there.

In a minute Kirstie will be presenting the Review Show from

Glasgow. What do we have? Tonight, it's move over Malcolm Tucker the

Veet is coming through. Julie Walters as a hippie trippy old in