There’s a brain drain going on – says a new report from the OECD. Naturally, reports like this are cannon fodder to those circles of the media who like to take any opportunity they can to take pot shots at the Government – but the truth is at once more complicated, but at the same time, far more fascinating than that.
First, let’s hear what the OECD says. Apparently, there are now 3.247 million Brits living abroad, and 1.1 million of them are university graduates.
The inference is clear, the brains in Blighty are going down the drain – fleeing to fairer places – such as the US, or Down Under, or to the Med.
Apparently, 62 per cent of the world’s star scientists live in the US – and the UK is losing doctors, engineers, and teachers.
But then again, the UK is also losing retired people too – with less than 60 per cent of people leaving the UK still working.
The report says that the UK has now lost 10 per cent of its graduates, and that it is losing more well qualified people than any other country. Apparently, only Mexico is seeing a higher emigration rate.
The report, does however, seem to overlook the key point.
Sure, well-qualified people are leaving, but you can’t say this is because of the poor tax regime, or some other weakness in the UK, for the simple reason even more well-qualified people are coming to the UK.
What we are actually seeing is the result of the UK’s policy of encouraging free trade.
Adam Smith, for many people, the father of economics, articulated the idea of economies becoming more efficient as they specialise. That is the big argument in favour of globalisation. As each country in the world becomes more of a specialist, as the world becomes more interdependent – the world becomes richer – and, goes a slightly more-debatable point, the chances of global conflict diminish too.
The UK’s speciality is the City – so it attracts the great finance brains of the world.
The big brains who don’t work in finance – leave – that’s what economic theory would predict.
Now, there are all kinds of arguments you can make to say this is a bad thing. And you may be right. But, get the argument right.
Sure, brains are being drained away – but equally, brains are coming in by the tap.
You could say the UK is too reliant on the City, you could say this is globalisation going too far – but say it. Don’t put the blame elsewhere.
Michael, I think you miss the point about why this report is significant especially in the context of the media’s reporting of it.
Like many others, the very reason I’m planning to leave this country is absolutely because of the poor tax regime. That this is balanced through a free and global employment market by someone coming in to replace me, is utterly irrelevant to me (as I won’t be here), and it should be very worrying to any government responsible for social cohesion, and taking a longer term view of guaranteeing it’s tax revenues.
Many of those that arrive now to fill the gap, may themselves choose to leave as their living standards rise and they become aware of more tax efficient opportunities elsewhere. As other economies improve and catch up with the UK, this country will become less of an attractor to the brains from elsewhere. How is the gap filled then?
It’s a pretty tenuous and risky revenue raising system that continues to drive it’s population away, in the hope that someone else will come to fill the gap. And it barely constitutes a policy for aiding continuity, cohesion and increasing overall national wealth .
Personally, I don’t object to the principle of paying more tax for higher earnings, but in return I expect a fair and equal share of access to the public services it funds. I don’t receive that. The trouble is, the tax (and spending) regime in the UK has been turned on it’s head through means-testing and special-case policies - now, the more you pay, the less you get, and as a result, I’m no longer prepared to subsidise UK plc.report this comment
Brains drain away under Labour governments, Wilson, Callaghan, our present incompetent (sorry : incumbent) due in part to savage legislation with horrendous penalties for employers. Add to that the fact that a manager doesn’t, for the most part, have to have formal qualifications but receives a salary with say a £35k starting point whereas a Ph.D. graduate after years of study has a starting point of £25k. Management promotion is up to seven times as fast as that of a scientist and is it any wonder that we lose our best brains. Jobs hard to get, pay too low for a mortgage. Not exactly rocket science is it.
A solution could be to give graduates a tax break for the first few years of their employment, or relieve them of the burden of the 11.2% surcharge on their pay, the one usually known as national insurance contributions.
Another could be to ease the employment regulations, but, sily me, the unions are this governments’ paymasters aren’t they.report this comment