Opinion | BN(O) emigrants: HK beckons as UK falters
By Grenville Cross
Birmingham is the United Kingdom's second-largest city. After London and Manchester, it is the third-most popular destination for Hong Kong British National (Overseas) (BN(O)) passport holders who have migrated to Britain, many under the UK's special immigration scheme, which started on Jan 31, 2021 (and which, as of March 31, 2023, had attracted 172,500 applications, with 166,420 visas having been granted).
It is, however, now in deep trouble as a result of mismanagement, and this is having serious consequences for everybody who lives there.
On Sept 5, the Birmingham City Council effectively declared itself bankrupt. It did this by means of a Section 114 notice, issued under the Local Government Act, indicating it is unable to meet its financial commitments. There will now be spending cuts and tax increases, with many local services, including street cleaning, building maintenance and libraries, being canceled, along with community group funding. This will affect the lives of many people.
In Parliament, the levelling up secretary, Michael Gove, said, "Poor leadership, weak governance, woeful mismanagement of employee relations, and ineffective service delivery have harmed the city." He indicated there would also be an inquiry into what went wrong, and the option of selling city assets to pay off debts is on the table.
The government has announced emergency measures to help run the city during its financial crisis, and commissioners will be sent in to oversee the council, with powers to take decisions directly.
However unfortunate, Birmingham's plight is by no means a one-off. Since 2018, seven councils, including Croydon, Slough and Woking, have announced they cannot make ends meet and declared Section 114 bankruptcy. When Northamptonshire County Council, which controls a large area where Hong Kong migrants have also settled, went under, it became the first to declare bankruptcy in over 20 years. It ran out of money largely because of its failure to take into account its growing population, its risky strategy of outsourcing social care services and the failure of its plan to sell off public buildings.
Whereas Northamptonshire's council was managed by the Conservative Party, Birmingham's is managed by the Labour Party, and no political party has a monopoly of the incompetence that is blighting cities and towns across the country.
Although successive Conservative governments could always bail out the failed councils, the current prime minister, Rishi Sunak, realizes that good money cannot simply be thrown after bad. After all, given the parlous situation of the national finances, there is little he can do, particularly if he is ever to balance the books (invariably the target of Conservative leaders).
In May, the UK's national debt reached 2.6 trillion pounds ($3.14 trillion), estimated at 100.1 percent of gross domestic product. In other words, as state borrowing has more than doubled, its debt was over 100 percent of annual national income, for the first time since 1961. The situation is dire, and, for example, Britain will spend 10.4 percent of total government revenue on servicing its debt in 2023.
Although it is always open to the Bank of England to inject more money into the economy through quantitative easing (printing money), this would stoke the already high levels of inflation. The Organization for Economic Cooperation and Development has forecast that prices in the UK will rise faster than in any other advanced country this year, with inflation averaging 7.2 percent, the highest rate in the G7 grouping. There is, therefore, no appetite in Britain for throwing oil on the fire by printing more money, not least because price inflation is already bringing misery to many households.
According to Fitch Ratings, the UK is spending more to service its debt than any other developed economy as a percentage of government revenue. Fitch estimates that the government will spend 110 billion pounds on servicing its debts in 2023 (double the 2021 level), which is not much less than, for example, the cost of the education budget (131 billion pounds). In July, moreover, the Office for Budget Responsibility (the UK government's fiscal watchdog) explained, "The 2020s are turning out to be a very risky era for public finances."
What this means, therefore, is that the UK is now living "hand to mouth", as there is not enough money to go around. Given the rate of inflation, many people are no longer earning a living wage, and are demanding pay rises. This is why workers in many sectors, including railway staff, airport workers, teachers and lecturers, are going on strike, some of whom, like barristers, have never done so before. They are little short of desperate, and even junior doctors and consultants are striking in protest at their low salaries for the first time in the history of the National Health Service (NHS officials have warned their strikes will disrupt patient care "unlike anything before").
Given its indebtedness, however, the government cannot meet the bulk of the pay demands, and the country is lurching from bad to worse. As it is having difficulty funding essential public services, it cannot satisfy wage demands of up to 20 percent.
In NHS England, the number of people awaiting hospital treatment is at record levels. It is estimated there are now approximately 7.21 million people on the waiting lists, with, for example, some cancer sufferers having to wait 18 months for treatment, a dire situation the strikes can only aggravate.
The chief executive of NHS Providers, Sir Julian Hartley, has said there is a "fundamental mismatch between demand and capacity across all systems". It is, he said, vital for the government to provide a fully funded NHS workforce plan (which would sound fine, were the government not up to its neck in debt).
Another expert, the president of the Royal College of Emergency Medicine, Dr Adrian Boyle, has pointed to the intolerable pressures on overworked staff, many of whom are "burned out and exhausted". He said there is a "crisis" in emergency care caused by a "significant shortfall of beds and staff", but his pleas are going unheeded as the coffers are empty.
Within the education system, the situation is no better. Schools are being undermined by too few teachers having to manage bloated classes. In April, for example, the Education Policy Institute reported that southeast London had dozens of full or overcrowded primary and secondary schools, placing extra strain upon the teachers. They are sick of it, and, while many are taking strike action, others are simply throwing in the towel.
In June, the Department for Education's workforce survey revealed that 40,000 teachers resigned from state schools in 2022. This was almost 9 percent of the entire teaching workforce, and the highest figure since it began publishing the data in 2011. A further 4,000 teachers retired, which aggravated an already alarming situation. In February, The Times reported that 85 percent of state schools had been affected by teacher strikes, a sure sign that many of those who had not yet quit were at the end of their tether.
No less shocking was the large number of teachers who were absent through illness in 2022, much of it undoubtedly stress-related. Over 3 million working days of sick leave were taken last year, which was a rise of over 50 percent in comparison with the pre-pandemic level in 2018-19.
Whereas Jack Worth, School Workforce leader at the National Foundation for Educational Research, said it was "hugely concerning" to see so many working-age teachers quitting, the teaching unions have blamed the exodus on poor working conditions and the ongoing erosion of pay. Bridget Phillipson, who is expected to become the education secretary if the Labour Party wins next year's general election, said, "This is yet more evidence that this incompetent Conservative government has created the perfect storm in recruitment and retention of teachers."
Amid this educational chaos, the big losers are, of course, the children, the quality of whose tuition is suffering. It is particularly sad that a not-insignificant number of them will have come from Hong Kong, with their parents having been lured away with promises of a better life in the UK, a chimera if ever there was one.
In the area of public policing, moreover, there are also huge problems. In April, it was reported that the police forces of England and Wales were 30,000 officers short of what was required to keep the public safe. In the year ending in March 2022, officers who had left their forces totaled 8,117, the highest figure since comparable records began. According to insiders, this has been brought about through a combination of poor pay, rising workloads and a ban on striking.
On Jan 11, the Police Federation of England and Wales, which represents over 130,000 officers up to the rank of chief inspector, published its annual survey, and this showed that 18 percent of the 36,669 officers surveyed planned to resign either as soon as possible or within the next two years. The main reasons were morale (98 percent), how the police are treated by the government (96 percent), and pay (95 percent). The survey also revealed that 19 percent of officers never or almost never have enough money to pay for essentials.
This situation has led, amongst other things, to an absence of police patrols on the streets and escalating crime rates (with the police failing to solve 90.2 percent of crimes in the year to March 2023, the highest on record).
It is clear, therefore, that the UK is not, as the people of Hong Kong were led to believe by the likes of Boris Johnson, Dominic Raab and Chris Patten, the answer to all their worries, let alone the Promised Land. In late 2020, when the BN(O) special visa scheme was unveiled by the British government, there were those in the UK who wanted to harm Hong Kong by luring away its brightest and best (as part of the larger US-inspired strategy to hurt China), but they were never upfront about the actual situation. They undoubtedly hoped that some of those who moved to Britain could help to fill the labor shortages resulting from the UK's withdrawal from the EU in early 2020, but this has not worked out, as most Hong Kong people are not interested in menial labor unless they are really desperate — as some now are.
Although the British government, in violation of the Sino-British Joint Declaration of 1984 (as the then-attorney general, Peter Goldsmith, explained in 2008), has issued visas to tens of thousands of BN(O) passport holders with a view to eventual citizenship, they have been sold a false prospectus. Whatever Britain's past glories, now is the worst possible time for anybody to emigrate to the UK, and anyone who does so is asking for trouble.
As the Hong Kong emigrants are finding out the hard way, they have exchanged a city that is well-resourced with effective medical services, good schooling and efficient policing for a country that, sadly, is broken, and up to its eyeballs in debt.
By contrast, Hong Kong's economy, according to the ASEAN +3 Macroeconomic Research Office (AMRO), is expected to grow by 4.7 percent this year, buoyed by the government's huge fiscal and foreign exchange reserves and resilient banking system. The economy, says AMRO, has rebounded strongly in the first half of the year, and this is largely because of robust domestic consumption and inbound tourism after the Chinese mainland's reopening. Whereas growth for the rest of 2023 and 2024 is projected to be boosted by the normalization of cross-border travel, inflation, which stood at 1.9 percent in June, is expected to remain moderate.
So, while the picture is bleak in the UK, in Hong Kong it is rosy, and many of those who moved to Britain are learning the hard way that Boris Johnson's government led them up the garden path. It is, of course, tempting to say they have made their beds and must lie in them, but a more compassionate approach befits Asia's world city.
If those unfortunates genuinely wish to return to Hong Kong, and are of good character, they should be encouraged to do so. They could be given financial and other assistance, and the initiative might be called "Project Hope". Its objective would be to enable people who have seen the light to return to Hong Kong and enjoy the bright future there that is being denied to them in the UK.
The author is a senior counsel and law professor, and was previously the director of public prosecutions of the Hong Kong Special Administrative Region.
The article was first published in China Daily.