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Prior to the accession of Poland, among others countries, into the EU, the British government estimated immigration from the newly acceded countries at somewhere between 5,000 and 13,000 people per year. This was based on low historical migration rates and a government assumption that ‘even in the worst case scenario, migration to the UK as a result of the Eastern enlargement of the EU is not likely to be overly large’.
Just over two years later and the UK’s population is swelling at the fastest rate recorded in forty years and has recently topped the 60 million mark. Much of this has been credited to the bus, plane and boatloads of young, hungry Eastern Europeans arriving seeking employment, and with it a chance of a new start in a land of increased opportunity, or the funds to kick start businesses or property purchases back home otherwise beyond their means. How many are there exactly in the UK? It depends who you ask and who you believe. Officially, around half a million Eastern Europeans were officially registered to work as of Summer 2006. If, however, you believe highly-respected Polish publication Polityka’s estimate that 1 million people have moved to the UK from Poland alone and combine this with the popular belief that between half and two thirds of the Eastern-Bloc immigrants are from Poland, the overall number of migrants from Eastern-bloc countries could theoretically be over 1.5 million. Perhaps the only truth that can be deducted from this plethora of statistics and estimates is that the true number will likely never be known due to the government and official authority’s inability to obtain reliable data.
Depending on where you stand, this phenomenal wave of immigration is either a death knell for British values and the tradition of the blue-collar British worker, or a powerful boost to the British economy while others in Europe stagnate. While industries in other EU countries have been limited in their attempts to expand by an unavailability of high quality, reasonably-priced labour, many UK industries have been able to fuel their expansion and advances with hard working Poles, Slovaks, Lithuanians and Czechs. Regardless of the government’s decision on allowing potentially high numbers of similarly-minded Bulgarians and Romanians join the UK workforce, Britain’s ethnically diverse make-up has been irreversibly altered.
It’s not just industry that is feeling the effect – Eastern Europeans, armed with higher wages and previously unheard of disposable incomes are rapidly learning to exercise their purchasing power while firms, though initially slow to react, are now scrambling to peddle their goods to this new, vibrant sector of the British population. It’s not just businesses in London that are drooling at the prospect of a whole new demographic group to market to, the pursuit of the Polish pound is spreading to Nottingham, Manchester, Glasgow and Edinburgh with surely many more to follow now that national chains are targeting this new market.
With good reason too – demographic studies of those that have entered the UK reveal that over three quarters of immigrants fall into the 18-34 age bracket. The popular estimate is that the average age of the Polish immigrant is 28. Following natural migration trends, the large majority of these are single, with fewer responsibilities, resulting in an increased disposable income and a greater tendency to participate in the consumer culture that has been behind Britain’s economic growth over the past few years, at a time when most of Europe has been desperately trying to rein in escalating unemployment and avoid economic stagnation. Exactly how much are Eastern European immigrants contributing to the UK economy? Trusted think tank, the Centre for Economics and Business Research calculates that the average Polish migrant worker earns L20,000 per year, of which L6,000–7,000 is disposable income. With exact numbers of immigrants being unknown, the CEBR estimates spending power for this immigrant group to be somewhere between L3.5 and L4 billion.
Doug McWilliams, chief executive of the CEBR, remarks:
It’s basically been like adding the consumer demand of Liverpool to the economy in just two years. These people work hard, often 10-hour days, six days a week, so they certainly do have considerable spending power.
They do indeed have spending power – spending power that businesses interested in potential new markets would be wise not to ignore.
The potential for increases in the immigrant worker class’ spending power and consumer demand appears to be almost unlimited and those expecting slowdowns in the near future might well do better than to hold their breath. While on other fronts increased immigration is a controversial topic, economically the British government can have little cause for complaint. Eastern Europeans have plugged holes in sectors short of labour, helping to keep inflation down, and in the relatively liberal open-market economy of the UK, the extra labour has been an easily absorbed asset. The minimal effect being had on unemployment as a result of immigration in the UK has disproved the theory that there are a finite number of jobs in the labour market and that the immigrant’s gain is the Brits’ loss. Though registered unemployment has crept up recently the government argues that this is not due to the economy failing to create jobs. Indeed, the number of job vacancies remain high and the overall job market continues to expand. From an economic point of view, the fact remains that while almost all immigrant workers in the UK have found full-time employment, the non-migrant unemployment rate has remained steady – proving that immigrants are helping to fuel economic growth rather than undercut British workers in the labour market and steal their jobs.
Whether it be reduced costs and waiting times for housing repairs in London as a result of Polish plumbers and builders or new additions to the high street as a result of Polish demand for imported goods, many towns and cities are coming to appreciate the addition of yet another flavour to the bubbling concoction that is multi-ethnic Britain. Government and big business certainly appreciate the benefits brought by this dynamic new demographic group. According to the Ernst & Young Item Club, Polish and other Eastern European immigrants are having a positive economic impact by making the UK workforce ‘younger, more flexible and economical, easing the pensions burden and keeping interest rates lower’. This not only helps to keep mortgages down but has also been responsible for boosting what was an otherwise waning buy-to-let market. The influx of workers needing instant accommodation has resulted in massive increases in cash advances being given for buy-to-let purchases with, in some company cases, figures doubling between 2005 and 2006. With so many economic positives, the trend for Eastern European migrants seeking work in the UK is unlikely to slow any time soon. At least, if the UK’s biggest businesses have their way, the trend will certainly continue. Key members of the Business for New Europe Group which includes Sainsbury’s, Centrica and Merrill Lynch, have recently made clear their thoughts on the matter by pushing for maintaining the open door policy for EU immigrants and arguing that such a policy is in the best interests of British and economic growth. With government seemingly loathe to stunt economic growth and the support of big business, expect the immigrant population to continue to rise, especially with Romanians and Bulgarians soon to be added to the mix.
This means that the L3.5–L4 billion added to consumer spending as a result of migrant workers could literally be just the beginning; from 1st of January 2007, the double taxation of Polish workers no longer applies, further increasing the disposable income available to Polish workers in the UK. Up until this time, workers paid taxes on their UK incomes only to receive further demands from the Polish Inland Revenue – effectively meaning a double taxation or, as some had labeled it, an unjust ‘Pole Tax’. Under the new system, Poles will pay tax in the UK only on that income earned while in the UK. For those splitting time between the UK and Poland, Poles will pay tax in Poland only on that income earned in Poland. The estimation of L3.5–L4 billion of consumer spending power was made during 2006 meaning that the abolition of double taxation will free up even more disposable income, especially in those sectors of the migrant population on the lowest wages.
Among opinions canvassed among Polish immigrants in the UK, long-term intentions are mixed. Many have taken up similar positions to those held back home, skilled or unskilled, but now on considerably higher wages and intend to make the UK their new home. Meanwhile, others have, for the short-term at least, abandoned or put on the backburner, long-term goals in the hope of earning as much as possible, regardless of position as a means of realising long-held dreams further down the line. This perhaps explains the oft-seen phenomenon of highly skilled economists working night shifts at the local supermarket. It is believed that some 70% of Poles in the UK are graduates and, while it is true that the majority are currently in low or unskilled jobs, it is inconceivable to think that this highly skilled class of immigrants will not, with time, ascend into the ranks of the skilled workforce. Inevitably this will be accompanied by wage increases and with the importance of brand loyalty and creating lifelong customers, there has never been a more apt moment to ‘go Polish’.
While it is true that Poles and Eastern Europeans, on arrival, generally tend to live in shared accommodation in conditions considerably less than luxurious, the common conception that wages earned by these immigrant groups in the UK are sent straight home is being disproved by actual figures. Western Union claims that while 60% of Poles working in the UK do wire transfer money home, many do not and, as is natural for young, responsibility-free singles, most are much keener on experiencing the delights of the consumer heaven that is British life – that means spending those hard earned pennies. Indeed, while there are more and more Polish goods and brands rearing their heads in British corner shops and super markets, there is a sense of pride and exclusivity in bringing British brands back to Poland or donning the best British labels whether it be on the streets of London or Lublin.
Whether they be holiday workers or those in England ‘for the long haul’, both groups provide intriguing and mouth-watering opportunities for UK firms. A quick flick through the pages of Cooltura, the UK’s leading Polish-language publication, reveals a myriad of money transfer firms, firms offering cheap call cards to Poland, agencies offering to, for a fee, provide assistance in obtaining national insurance numbers and access to benefits, and travel companies promising the best route home. Many of these firms act as intermediaries, capitalising on the immigrant’s unfamiliarity with UK procedures and the English language to provide straight forward services at a premium rate – they do not provide services otherwise unattainable directly to anyone residing in the UK but make themselves appealing to Eastern Europeans in the UK by targeting them directly. Adopting the native language of the immigrant removes the uncertainty and potential barriers experienced by newcomers and, perhaps most importantly, make the client feel important and valued. After all, its much easier to trust the familiar than the unfamiliar – never more so than when arriving in alien surroundings where culture, customs and practices aren’t like those back home. Who would you trust your money with – a company that doesn’t speak your language and who you don’t fully understand, or the company that takes the time and effort to cater to your needs and who you feel comfortable with? A spokesman for a high profile advertising firm in the UK confirmed this viewpoint.
This community is growing at a rapid rate and, like other ethnic communities, it will be important to speak to them via their own media, something that clients now appreciate.
This is the penny that is finally dropping with British firms. Where small firms and corner-shops have led the way, the giants that are the national companies are sitting up and taking note. Of late, larger companies from both Poland and the UK are acting – Cooltura has recently grown to 100 pages, largely due to increased demand for advertising space. Small firms are now being joined by big-hitters such as LOT (Polish Airlines), Pizza Hut, Virgin Atlantic and Ocado. The same is holding true in Dublin where the Evening Herald now includes a 12-page supplement in Polish every Friday. This too has resulted in considerably increased circulation and increased demand for advertising space, most notably among travel related firms and mobile communication service providers.
While choice is not synonymous with many aspects of Eastern-bloc life, this dynamic migrant group of determined, ambitious workers, for the first time is greeted with more options than ever before, even for the most basic of services. While back home, up until fairly recently, access to money transfer facilities, benefits, official papers and even international travel, were severely limited and customer service non-existent, Eastern Europeans intent on working abroad are being greeted with more an more options on arrival in the UK – more and more firms eager for a slice of the migrant-worker pie. Whereas the first immigrants were limited in choice to a single budget airline or coach service, today the options are overwhelming.
Today, it is almost impossible to take a 15 minute bus or tram ride through Warsaw or Krakow and not see an advert for a special offer from Ryanair, Easyjet or any one of the budget airlines. More recently however, even airlines such as British Airways are targeting the many thousands of people making the short trip from Krakow and Warsaw to London – proof if proof be needed of the ever-increasing importance of the Polish Pound. British Airways is not alone in rushing to take its piece of the pie, with many more airlines, old and new, looking to tap into the growing demand for cheap, convenient travel to and from Poland. Recently Britain’s Jet2 and SkyEurope have joined Centralwings, Ryanair, Easyjet and Wizzair satisfying growing migrant worker communities’ demands by offering flights between Poland and non-traditional regional airports in the UK. However, not all airlines flying to the UK from Eastern Europe have advertising and promotional material available in the native languages of the traveller and, in some cases, ticket booking facilities have yet to be made available in multilingual format.
Is this a concern? Are companies missing out on custom as a result? Only the companies themselves could tell you but, with more and more options available, who would you book your ticket with? Would it be the company marketing to you in your neighbourhood with a marketing campaign that appeals to you, your customs and your sense of humour and values, or would you trust your money with the company who you have to perform an internet search to find, whose ticketing terms and conditions you think you understand but aren’t completely clear? This is the choice for many looking to take the plunge and seek employment abroad. The initial decision and travel can be a daunting experience, as are the first few months in a foreign country. Taking into account the potential spending power of many such travelers, is it not important for your firm to make the process of spending as easy as possible?
Argos Translations canvassed the opinions of a group of Polish citizens currently working in the UK. On average, Poles employed in permanent positions in the UK planned on average just over three visits back to Poland per year. In addition it was found that, though price had previously been the most important consideration, as the canvassed group became more and more familiar with the location of cities, airports and their place of work/residence as well as having more disposable income, price, though still important, became less important as the emphasis on convenience increased. In addition, most were found to have strong preferences for who they travelled with and, in most cases, only prohibitive price changes or seat unavailability would lead to a change in choice. This is a clear indication of brand loyalty and familiarity but where has this come from? It is no surprise to see that those that fly to and from Poland most frequently and are constantly increasing their routes are also those that are most visible in streets, trams, buses and magazines – a sure sign that tailored advertising and localization services and promotions lead to increased custom.
One of the most lucrative and increasingly targeted sectors of the immigrant market is that of banking. After all, once the ticket is bought and the job secured, the obvious question to follow is where to put that hard-earned cash. UK banks, small and large alike, have realised the huge amount of income being earned by Eastern Europeans and are now scrambling to embrace this ever-growing demographic, with some going as far as Poland to court the prospective client. Poles have been identified as a major growth area in the banking industry and the sector’s leaders are amongst the most imaginative of British firms in courting this new income stream. Barclays, HSBC and Lloyds TSB have all been active in catering to arriving Poles, by employing Polish-speaking staff. While this was initially to cater to immigrants in London, this is now spreading across the whole country. As banks identify university students as potential lifelong customers and do all they can to obtain their custom, Eastern European immigrants are being seen and targeted in the same way. Barclay’s bank, among the UK’s largest banks, has been among the most pro-active in wooing Poles…
The Polish community in the UK is growing and is a key target audience for us… We’re finding they value expertise on how to bank in the UK which is delivered in their own language.
This attitude and commitment to securing the custom and loyalty of immigrant workers was typified in September 2006, at Barclay’s Bank Sports Ground – the venue for the eighth annual Polish Festival. Both Barclay’s and HSBC were there to pedal their wares to in excess of 10,000 visitors. Barclay’s as well as providing the venue, also brought its recruiting hat to the fair – actively searching for the Polish-speaking potential employees that might give the bank the edge over other UK banks. In migrant hotspots, Ealing and Hammersmith, the bank has been providing evening classes aimed at helping staff deal with Poles and other Eastern European immigrants to open accounts. However, opening accounts is just the start of banking life in the UK. The committed and ambitious among the immigrant class will soon look to shed their immigrant tag as they look to put down roots and banks such as Barclays are among the leaders in facilitating this. In South London free seminars are regularly organised to offer Poles advice on how to obtain a mortgage or set up a business in the UK.
HSBC appears to be putting equal emphasis on pursuing the Polish pound. It recently rolled out its latest initiative specifically targeted at immigrant workers – the Passport account. The specially designed current account allows would-be immigrants the opportunity to open an account up to three months prior to arrival in the UK or up to four months afterwards and is sweetened by 10 pounds worth of mobile phone credit provided by the Carphone Warehouse. Though the account has been designed with immigrants of all nationalities in mind, the majority of those signing up will have been Poles. The account offers customers discounted international transfer fees and the added advantage of being able to open the account with foreign identity documents, thus removing perhaps the greatest barrier to banking facilities encountered by immigrants – that of lack of UK-issued papers, proof of income and address and the often intimidating prospect of dealing with such matters on foreign soil.
HSBC will soon be able to benefit from being able to market to Poles both home and abroad, giving it the significant advantage of being able to provide a cross-border solution to workers splitting time between the UK and their home country. With plans to open branches in larger regional cities, including Wroclaw, Katowice and Poznan, the bank hopes this will give it the edge in attracting the business of immigrants and also, by allowing companies the ability to open cross-border accounts thus making international business easier.
Keen not to be left behind in recognising this new dynamic aspect of the UK’s population, Lloyds TSB are making their own plans to keep up with competition.
We regard Polish consumers as a very important target audience, one which is industrious and a key mover in the UK economy… As such, we will be developing a number of programmes which we believe will have appeal and relevance to them.
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