The above headline must seem a bit strange, but bear with me.
Total UK credit card debt in May 2016 stood at £67 billion. Per household this amounts to £2,397 per household for credit cards bearing the average interest. It would take 25 years to repay this if you only made the minimum payment every month. The UK was ranked third in the list of countries which rely on credit cards (Turkey is highest – 56% of Turks have outstanding debt on their cards). The British have an insatiable appetite for credit and the card companies are only too delighted to indulge the appetite. There are more than 50 million cards in circulation in the UK, and almost a third of all unsecured debt is on these cards, compared with only 1.6% in France. One in five adults (8 million people) have unsecured debt of more than £10,000. The total British consumer debt is a massive £1.1 trillion. Consumerism is the best friend of every bank and lender
Immigrants partake of this orgy of unsecured spending, often having two credit cards being used simultaneously. Availability of credit makes it very easy for them to move to the UK, and because of credit, they have time to find lodgings and a job, and cover rough periods where they have higher than normal expenditures, by borrowing.
I know someone who operated like this, paying one credit card company off, loading a second card, alternately for ages. I doubt she could have done this anywhere else in Europe. It allowed her to learn English and establish herself in a job. (Later, this hard-working and intelligent person got married and stayed in England). Without the credit she would have had to return to her own country.
What we don’t know is how many short-term migrants return home without paying off their credit card debt. But in any case, it is clear that this ability to secure credit the day you land is an encouragement to migrate. If this is the case, then the government should have regulations governing borrowing by non-citizens. The reality is that businesses want these immigrants and would resist if credit was withdrawn. Instead of a decent wage they rely on credit cards to keep their inexpensive foreign workers working. Dreadful, isn’t it, but they would argue that these people have jobs they wouldn’t have in Poland etc, and can learn English on the spot.
I personally think that immigration has been a good thing. Most (not all; some are dishonest freeloaders) are young, smart, educated and responsible, and make first class citizens if they stay. In the London area they take nearly all the retail, hotel and catering jobs, so much so that to be served by an English waiter, for instance, is now rare. And this is the political and social problem.
I think it’s generally too easy to borrow money, for both immigrants and native British. For instance, I can borrow up to £3000 on my overdraft and because I’m a student, it’s interest free. It’s this sort of policy, combined with low interest rates and quantitative easing, that caused the financial crisis. Whether it’s mortgages or simple credit cards, there ought to be tighter requirements.
Also, I doubt changing the rules on credit will reduce immigration by much. I don’t blame the individual immigrants for borrowing, it’s the rules that are at fault. But I also think the government has made the economy too dependent on migration labour for economic growth. Instead, there ought to be more of a focus on rasing average per capita incomes. Finally, I don’t doubt that most immigrants are probably beneficial, but I would stop short of saying that they are necessary. There are of prosperous parts of the country with very few immigrants. There are also many poor places with a lot. Overall, immigrants seem to enlarge the economy as a whole, but don’t have any positive or negative effect on per capita income.