5.3.1

Migration & Capital

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Migration

UK government decisions on international migration and capital markets have had significant impacts on the potential for growth and investment.

Illustrative background for The UK and migrationIllustrative background for The UK and migration ?? "content

The UK and migration

  • The UK target for net migration is currently 100,000 people per year.
    • Net migration = number of immigrants − number of emigrants.
Illustrative background for The European Union (EU)Illustrative background for The European Union (EU) ?? "content

The European Union (EU)

  • The UK is not part of the Schengen area in the EU, where people can move almost freely without a passport and border controls.
    • The Schengen area has come under pressure from the recent influx of migrants from places like Syria.
  • But, migrants from the EU can come and live and work in the UK.
  • The vote to Leave the European Union may affect this in years to come.
Illustrative background for Positive economic effect of migrantsIllustrative background for Positive economic effect of migrants ?? "content

Positive economic effect of migrants

  • Most economists agree that migrants have a positive effect on economic growth and cultural diversity.
  • More culturally diverse nations are often better innovators.
  • Many migrants fill skills shortages and work as doctors/nurses in the NHS, and as labourers in construction and farming.
  • Most European and international migrants are from a desirable demographic. They are young adults who will work and pay taxes, rather than claiming welfare benefits or pensions.
  • Many migrants are students who may stay in the country and pay tax revenues in the future or contribute important research.
Illustrative background for Negative economic effect of migrantsIllustrative background for Negative economic effect of migrants ?? "content

Negative economic effect of migrants

  • Some people argue that migrants put more pressure on local services (schools, housing and hospitals).
  • Although migrants may benefit the economy as a whole, some European workers may be hired instead of a British worker if the employer thinks they are more talented.

Capital

Apart from labour, capital is another important contributor to the economic and social success of an area.

Illustrative background for DeregulationIllustrative background for Deregulation ?? "content

Deregulation

  • The Conservative government deregulated a large portion of the financial services sector under Margaret Thatcher in 1986.
  • Since then, there has been a huge amount of Foreign Direct Investment (FDI) into financial services in the UK, particularly in London.
  • But, the 2008 financial crisis was partly caused by a failure to regulate commercial and investment banks.
Illustrative background for LondonIllustrative background for London ?? "content

London

  • The City of London (located around Bank tube station) has benefited hugely from the growth of the UK financial services industry.
    • Hedge funds like GLG, asset managers like Blackrock and banks like Bank of America, have offices in this area. Lots of retail, grocery and restaurant services businesses support the city.
  • Canary Wharf in East London was developed largely for the financial services sector. Barclays and JP Morgan have very large offices in Canary Wharf.
  • Financial services have supported the commercial property, residential property, retail and services sectors in London.
Illustrative background for Leaving the EUIllustrative background for Leaving the EU ?? "content

Leaving the EU

  • Many banks are relocating jobs to the European Union after the decision to leave the EU.
  • This may not harm the financial services industry too much, but in the past, Venice, Antwerp and Berlin have all been huge financial centres and are not any more.

Jump to other topics

1Tectonic Processes & Hazards

2Option 2A: Glaciated Landscapes & Change

3Option 2B: Coastal Landscapes & Change

4Globalisation

5Option 4A: Regenerating Places

6Option 4B: Diverse Places

7The Water Cycle & Water Insecurity (A2 only)

8The Carbon Cycle & Energy Security (A2 only)

9Superpowers (A2 only)

10Option 8A: Health & Human Rights (A2 only)

11Option 8B: Migration & Identity (A2 only)

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