Saturday, 3 January 2015

3 Reasons Why Advertising Works (With Textbook Examples)

Advertising is perhaps the most omnipresent symptom of the modern global economic system. It is something that is not just pretty much unavoidable in one's regular daily life, but something that has grown to become far more than just a piece of material promoting a single product. Prominent pioneer of media studies Marshall McLuhan famously dubbed advertising "the greatest art form of the 20th century": look at the tearjerking recent Sainsburys ad, or Aleksandr Orlov from 'Compare the Market', and one could argue this claim to be applicable to today. 

Advertising has developed rapidly along all forms of media. Beginning largely in newspapers, ads moved onto our streets, onto our radios, onto our tv screens, onto the internet, and now, onto our smartphones and computer technology. 

The very fact that Britain's expenditure on advertising is set to hit £20bn next year shows that it is a method clearly relied upon by businesses to attract customers. Research suggests that on average, US supermarket sales increased by $89 per $1 spent on advertising

While many of us would attest that we are unaffected by advertising ("we know it's not real!"), one cannot deny that it does what it is intended to do: seduce us, make us want more- unleashing the consumers within us, as well as the money out of our pockets. 

So why exactly is advertising so effective? And furthermore, why is it so when most of us understand that advertisements are not always accurate representations of the real world/product? There are numerous answers to this of course, but let's have a look at three such reasons why advertising is so effective that even we are not always aware of its charm.

1. Personal Connection

A key to unlocking the minds of those a company is advertising to is the development of a close connection with the target audience. This creates trust, confidence and a love for the brand that simply cannot be bought.

One way in which this is done is by marketing their products as something the audience will genuinely like and lead to self betterment. Take 'Special K' cereal for example- this ad connects with women, by particularly attaching itself to the 'embrace yourself' movement. Many women (well, people in general) have worries about their size- and this ad allays those worries by spreading the message that size does not matter, that those potential customers watching are 'More than a number'. 

The advert does not actually feature anything related to cereal, it shows no more of the product than its logo, and it potentially goes against Special K cereal's appeal as a product consumed to lose weight- but this ad develops trust and admiration for the brand in the viewer that arguably is more powerful when it comes to buying decisions than the cereal itself. 

Another way a personal connection can be developed is by identifying with the viewer via a familiar face. Think George Clooney advertising Nespresso coffee, Taylor Swift advertising Diet Coke or Gary Lineker opening a pack of Walkers crisps; these are faces that people trust, admire, and brands can use them effectively to translate this trust with their products.

2. Exaggeration 

It goes without saying that a major way that advertisers rope us in is by simply exaggerating their product or service. 
Whether it's that internet provider's exaggeration of its download speeds or the over the top claimed health benefits of a familiar blackcurrant soft beverage, exaggeration is part and parcel of any modern advertisement, and it comes in many forms. 

Take a quick look at this Samsung Note advert, in particular the small text at the bottom of the screen beginning 0:04- "Screen images simulated... sequences shortened". This message must appear for legal reasons, but most people are unlikely to pay much heed to it- they will watch the entire ad thinking that all that watching-film-while-simultaneously-checking-emails action will be as buttery smooth in real life as in the video (if you've owned any multitasking smartphone of any sort you may understand that this is rarely the case). 

Another form of exaggeration that really needs little introduction is most commonly seen in fashion-related advertisements- that is the copious amount of editing of the bodies of the participants. Again, they exaggerate the effects of the product- unless the product they are selling is Photoshop, that is. 

But exaggeration is certainly only part of the art of advertising. Its effect is arguably dulled by the fact that most of us know it is there in almost every ad we see: a Lab42 survey of 500 consumers reported that just 3% of respondents described claims made in advertisements to be very accurate. 
So why are we still enticed by adverts when we know they are likely to be exaggerating? The next and final reason may perhaps be the most subtle yet significant.

3. Development of Inadequacy

This is the big one, that pretty much all the other advertising techniques culminate in. 

Advertisements make us feel incomplete, insufficient, inadequate. It's their job- to make us feel like we have a hole in our lives shaped exactly like their product.

This is a feature of every advert. Feeling hungry? Walkers' crisps will fill you up. Bad hair day? L'Oreal shampoo will ensure it never happens again. In need of entertainment? Buy a PS4.

But the most prominent, exaggerated use of this technique can be seen particularly in the advertising of upmarket, luxury products. This Mercedes 'Video Brochure' for example, promotes far more than just the car itself. Yes the car is indeed the main feature of the video but subtle things, like the house we are shown at the beginning that the 'owner' lives in, the 'owner's' clothes, the conveniently handsome young 'owner' himself.

The video promotes not just the car but the whole lifestyle, packaging the car as a part of it. Chances are, most people don't have a house that nice and clean, and aren't that photo (or video)-genic- and so we compare, we re-evaluate our own lifestyle in comparison with what we see on the screen and, unfortunately, many of us see our own as incomplete, inadequate, because we don't have a mansion or a luxury sports car.

One could ask- if most viewers of the promotional material can't afford to buy such an expensive product, why do companies like Mercedes bother with marketing? The answer is pretty straightforward, and it's why we see more adverts on TV from broader car companies like Mercedes rather than niche brands like Ferrari. One could call it the 'halo effect' of advertising, branding. We may take a look with our jaws dropped at the beauty of the Merc in the ad- and although we know we can't afford it, the company does sell cars at a considerably cheaper price, but ones that follow a similar design template. The S-Class Coupe in the video costs well over £100k, but the Mercedes C Class Coupe costs closer to £30k. So we may not be able to afford the former, but the latter may appear more attractive an option due to it being from the same carmaker. So the viewer may not buy the car directly advertised, but they'll still be more likely to buy a Mercedes. Ferrari don't sell cheap cars, so this halo effect is not present because if you can't afford one Ferrari model, you probably can't afford any of them.

The rose-tinted lifestyles presented in advertisements have the negative effect of constantly unsettling viewers, creating 'aspirations' that are often disguises for being unhappy with what may have previously been a perfectly comfortable life. You may have been happy with your 40 inch Sony TV, but when you see some celebrity showing off a 60 inch 4K curved-screen TV, your perception of your TV may completely change. You may therefore strive to be able to afford said 60 inch TV by working yourself harder while sacrificing social and family commitments, stressing more over finances, and generally in more of a rut. Should you finally make the purchase, after a few years your TV will soon inevitably be dwarfed by some new technology shown off on your TV. Your perception of your TV may change, and the deadly cycle of stress and consumption starts again.

Advertisements are not inherently dangerous. They can in fact be incredibly informative and entertaining, but that's not to say one should not be careful in assessing the impact of promotional material on our lives. Over-susceptibility to the bells and whistles of adverts can lead to dangerous consequences indeed.


Saturday, 13 December 2014

An Introduction to Bitcoins: the £3m Pizza.

Back in 2010, Laszlo Hanyecz convinced someone to accept 10,000 units of a currency he had just mined with his computer to buy pizza for him, from Papa Johns.

 On an online forum, Hanyecz asked someone to order two large pizzas, worth $25 dollars (£15) for him in exchange for 10,000 Bitcoins- a virtual currency, young and relatively unheard of at the time.

Little did the anonymous volunteer who responded to him know that soon, he would be very well paid for this job; as of the 1st of April 2014, 10,000 Bitcoins are worth £2,955,271.52.

What is Bitcoin, and why is it so popular?
Bitcoins are a virtual, online-only currency that is far different from the Pound, or the Dollar that we are used to. Unlike conventional currencies, Bitcoins are un-centralised. They dont need a bank, or central authority to control any aspects of it- and they are fully global, not tied to any specific country.

This is a particularly attractive aspect of Bitcoin- it removes the need of a third party (such as a credit card company) in a transaction- making it quicker, more private and cheaper. For example, to transfer pounds over to someone in China from Britain you'd have to pay high transaction rates, extra money that would go to the company youre using for the transaction. Bitcoin allows you to transfer this money straight to the receiver, without any extra fees or parties involved.

Contrary to regular currencies extra Bitcoins cannot be produced- there will only ever be 21 million Bitcoins; 12 million of which already exist.

Rising demand has seen Bitcoin prices skyrocket recently- at the time of Hanyeczs pizza purchase 1 Bitcoin was worth 1 two-hundredth of a pound- currently 1 Bitcoin is worth almost £300.

Sounds great! How can I get these Bitcoins?
Bitcoins are produced through a process of mining- you get your computer to solve a series complex maths puzzles via a program, and after long enough, you receive a quantity of Bitcoins. But its takes a long time- on average itd take over 100 days to mine a single Bitcoin.

Where does Bitcoin get its value?
Well, no one knows exactly, but its generally accepted that Bitcoin gets its worth from trust- similar to conventional money, but instead of relying on gold it relies on complex mathematical properties.
Essentially, people who accept Bitcoin value it as something someone else will accept for another good- just like how youll take a fiver from your dad, because you know the local Tesco will accept it for what you want to buy.

So what can I get with Bitcoins?
Anything, provided the vendor accepts Bitcoins; you can hire a private jet, order a takeaway, and a more notorious use has been in the drug trade.

Its difficult to tell whether Bitcoins are just part of a huge crypto-currency bubble, along with other equivalents such as the short-lived Coinye West and Dogecoin- and what will happen when the 21m Bitcoin limit is reached? Only time will tell.

Sunday, 23 November 2014

SLOW DOWN: How Our Impatience Is Ruining Us.

One of the most significant features engrained into almost every aspect of our modern society is undoubtedly our desire for speed. Modern lifestyle is at such a rapid pace that often we forget to see it that way- we all get fast food from McDonalds, spend extra to get extra fast One-Day delivery on our Amazon order, and we all want a fast Italian car. More than ever, speed really is of the essence in today's world, and it's unsurprising that this is the case.

A primary reason for this impatience is our lack of leisure time. One of capitalism's great claims is the reduced workload it puts on every individual who partakes in it, but a fascinating paper by Juliet B. Schor of MIT suggests that we, as an industrial capitalist workforce, actually have less leisure time than most of our medieval ancestors- who, according to former Oxford don James E. Thorold Rogers, rarely had a work day of more than 8 hours. Altogether, holiday leisure time in medieval England took up around 1 third of the year- something we today can only dream of.
Work dominates the lives of so many modern citizens- economic pressures are primarily the root of this. Americans work more than anybody else- also taking less leave, working longer days and retiring later than citizens of any other country in the world- even often taking up multiple jobs to help make ends meet. Perhaps this is an interesting statement for the the world's bastion of capitalism to put across.

Anyway, people have less leisure time in today's world and undoubtedly this is a reason for why we like to 'live life in the fast lane'- time is precious, and everyone wants to fit everything in to what time we have outside of work, be it the weekends or just a single lunch break.

This impatience has helped us in many ways- in particular with regards to the overall productivity of society. Over the past few decades economic productivity has drastically increased, one of the reasons for the rapid socio-economic modernisation that the world has seen in past decades. The extra productivity has gone into developing and producing revolutionary technology like computers, goods like clothes and food, allowing the supply to be there for more people around the world to be able to purchase such items, and thus enjoy an improved standard of living (though the effect of some consumer goods on standard of living is debatable). Capitalism may not be pretty, but ideas of Adam Smith's such as division of labour have certainly streamlined the economies of the world, in many cases leading to better lives for ordinary people.

But on the other hand, the damages of this rapid, impatient lifestyle are evident throughout our society.
Our impatience has been damaging to our health- fast food has unfortunately become the staple of the workers' diet, due to its sheer convenience. People don't want to spend their whole valuable lunch break sitting down at a table any more- McDonalds, Burger King and co. offer a far more convenient, grab and go system that lets you enter a store, place an order, grab your food and be out of there within 5 minutes. The drive-thru system means you don't even have to enter the store. Minimum fuss, minimum time lost, but pretty much maximum damage done to your health- the ingredients these companies use to provide such a quick and addictive experience for their customers are dangerous both in the short and long term for the health. Meanwhile, 'healthy' food, notorious for its supposedly  painful, long preparation time, goes ignored by many (though thankfully this trend has been reversing in recent years due to an increase in health-consciousness). Nevertheless, much of the damage has been done in the obesity rates of today's world, and is continuing to be done in how fast food remains among the world's most popular choices of food.
Further health concerns have grown along with the rise in popularity of cars in recent decades. Pretty much everyone has a car, and people who use an alternative form of transport in their daily commute are probably in a very small minority. Cars allow us to stay at home in the mornings longer, and get home sooner, without breaking a sweat- just like fast food, they are quick and easy, and our impatience and lack of time makes us particularly weak in fighting their attraction.

By no means is this to say that neither cars nor fast food have benefited society at all- the positive effects cars have had in bringing closer the world and in terms of convenience is undeniable, and fast food's affordability and convenience similarly cannot be ignored- but, the indulgent society that we can often be, when these have been used to the extremes they have proven to be catastrophic- just as an example, obesity has grown to the extent that it currently costs the world $2 trillion to deal with. And this is just the tip of the iceberg- further health problems such as stress, and social problems such as decreasing family interaction can also be attributed to the fast and busy lifestyle we live.

And our impatience does have direct economic implications on our lives. Combined with our materialist tendencies it has driven us to make many financially unwise decisions, on a daily basis. Just a small example one can witness on a daily basis at any newsagents is the lottery. In Britain, over 32 million people play the lottery every week, buying on average three tickets at a time. These people, driven by the prospect of becoming rich quick and easily, as a result overlook the fact that the chances of winning are just one in 14 million. The lottery is a small but recurrent drain on income- if those who bought lottery tickets maybe decided to invest the money spent on tickets in a savings fund they are far more likely to be better off economically.

The most significant example however comes in the shape of the borrowing phenomenon. Gone are the days of saving for many people- a 2012 survey found that 28% of Americans had no savings whatsoever, up from 24% the previous year and 49% had less than what would be necessary to cover three months of expenses, up from 46%. A significant reason for this lies in the increasing cost of living and the great stagnation of wages in America (see Seven Shocking Facts About Economic Inequality in the USA)- but considering that overall consumer spending actually increased in this period (see graph), the possibility that people are being less prudent with their finances is strong.

How is borrowing, and a lack of financial linked to our impatience? The link is clear- we no longer want to save up money for investments like a car or a house- we prefer to get them immediately, and credit allows us to do just this- transferring what is usually a greater cost to our future selves. It is pretty clear that paying for a car with cash is the best option- one significant reason being that the car itself is cheaper, with no need for extra interest payments to be made. But we don't like waiting, so we take the option of finance- spreading the (greater) cost of the car over multiple years, but gaining access to it now- you can buy a car worth £40k for example, even if you don't have £10k in your bank account. And there's nothing to stand in the way of our desire to do this- companies and banks are continuously offering seemingly attractive finance deals, making access to credit incredibly loose- affecting more significantly the housing market, where access to credit inflated the deadly housing bubble of the noughties- and we know where that led us. People borrowed more than they could afford to repay, and as a result when this was realised the bubble popped- creating one of the biggest global economic messes in the modern era.

The process of borrowing can lead to disastrous consequences- it can entail addiction, spiralling debt and subsequent homelessness. And the root of it, more often than not, is our desire to get that new car today- to get that new house as soon as possible, it is our impatience that leads us towards borrowing and putting our future at risk rather than being prudent and saving.

One cannot say that our own deficiencies can be easily resolved- as one could argue desire for speed is part of human nature- and nevertheless, the promotion of quick and easy credit by various financial institutions certainly has played a role also in our development of addiction to debt. Change will only come in the long term.

Old habits die hard, and the habit of borrowing, taking short term gains for long term losses is one that will certainly not go down without a fight.

Friday, 14 November 2014

An Introduction To The Russian Billionaire Oligarchy

You probably will have heard of the phrase 'oligarch'- a term most commonly associated with the wealthy business elite of Russian society- the natural resource and media men primarily. This group of people are widely known not just for their massive wealth (the combined fortune of the 131 oligarchs almost $450bn), but also often for their political power- amassing such a wealth has meant that Russian oligarchs have played a role in not just Russian politics but also that of other countries- recently Britain's ruling Conservative Party has come under the spotlight for facilitating this

And the fascinating thing is that while the group itself is relatively well known, receiving much media spotlight, most people know little about the individuals within- even those most well-known, such as Roman Abramovich of Chelsea Football Club or Arsenal Football Club's Alisher Usmanov, remain much of a mystery to even football's biggest followers. Russian oligarchs, while being wealthy, certainly contrast to their Western counterparts- tending more to live reclusive, closed personal lives. 

So who are these Russian oligarchs- and why are they so rich?

The story of the Russian oligarchy begins in the latter years of the Soviet Union. For the majority of the Soviet period, the rulers pursued protectionist economic policies- policies that sought to boost domestic trade by taxing highly, or even outlawing, certain imports. It's a common practice for many nations, developing and developed- for example, Obama placed a 35% tariff on Chinese tyres entering the USA in 2009. The rationale behind such protectionist policy is to discourage purchasing of products from foreign businesses, but facilitate more trade with local, domestic ones.

The AGAT-4, Soviet Russia's answer to Apple.
Anyway, these protectionist policies in Russia, especially towards the end of the century, meant that the Russian people were missing out on many of the western developments, particularly with regards to technology. Cars, for example- as Toyota, Fiat, Volkswagen and the like entered the global market from the 50s onwards, they were simply either unaffordable for the Russian public due to high tariffs, or commonly banned altogether from being imported. The Soviet government, seeking the development of Russian industries, responded by making their own competing car- the wonderful Lada Riva; perhaps an example of how state protectionism does not always produce the best results.

Protectionism affected not just cars but other everyday consumer products- computers, for example. The state's attempt to create a computer system to rival Apple's II, the AGAT computer was almost seventeen times as expensive as Steve Jobs' original computer that it was essentially a clone of. And it wasn't a very good clone either- a reviewer in BYTE magazine in 1984 stated that "even if they gave it away for free, it wouldn't stand a chance". 
So a few people saw solutions to this- such as Mikhail Khordovsky, who in 2003 was Russia's wealthiest man- among his first few business ventures was in the black market, where he bought western computers and resold them for a huge profit back home.

Protectionist policy therefore almost itself triggered the beginnings of these oligarchs, who were in fact largely self-made individuals, with no significant backing from family members as is sometimes the case with businessmen. Roman Abramovich, for example, was in his early years a soldier, and went on to become a mechanic. His first business moves were selling imported rubber ducks and dolls.

Such 'black market' activity was only helped by Mikhail Gorbachev's policy of Perestroika (translated restructuring)- this, among other things, sought to put down barriers to international trade, giving already established traders such as Khordovsky and Abramovich a better platform upon which they could do business, with less concealment.

Boris Yeltsin took Gorbachev's Perestroika policy further
transforming Russia into a capitalist economy.
But without doubt the biggest boost to the oligarchy, verily the match that lit its fire, was the fall of the USSR and the subsequent entrance of Boris Yeltsin into power- now as elected President of Russia. Seeking to overwrite the past seven decades of Communism, Yeltsin pushed for dramatic capitalist movement to be made in the Russian economy. The most significant change he made with regards to the oligarchs came in the mass privatisation of key Russian industries.

The industries in Russia dominated by the oligarchs of today were, during the time of the Communist regime, kept extremely close to the state. As we've already seen, the consumer goods industry was largely under state monopoly, but the biggest profits for the USSR were to come from the natural resource industry. Coal, oil, gold and numerous other valuable commodities were abundant throughout Russia and its associated countries- and the state wished to keep them under their control for numerous reasons, but primarily to a) keep hold of revenue to boost the economy and b) prevent any private party from becoming so wealthy and thus powerful through resources and perhaps challenging the rule of the authorities. 

Yeltsin's rapid privatisation (known informally as Catastroika), the auctioning off of key national industries, did the exact opposite of this. Russian state revenues dropped as some key industries were sold to private hands at prices that were too low (remind you of the Royal Mail?) and as a result those certain 'private hands', certain individuals who had a steady footing in Russian business, became extraordinarily wealthy.

And who exactly these individuals were was determined largely by not just their status in Russia as businessmen, but also their relationship to the authorities. According to The Guardian, "by 1996, at the age of 30, Roman Abramovich had become so rich and politically well-connected that he had become close to President Boris Yeltsin, and had moved into an apartment in the Kremlin at the invitation of the Yeltsin family."- this relationship was one that indeed did play a significant role in Abramovich's subsequent acquisition of most of Sibneft (one of Russia's largest oil producers) for just $100m (the entire company being worth $2.7bn)- one of the biggest sources of profit for him. From this point on, Abramovich's career only went up- and many other oligarchs began their billion-dollar ventures in a similar manner. 

So to conclude- the Russian oligarchy was the controversial product of Russia's rapid shift from Communism to deep Capitalism under Boris Yeltsin- from a totally nationalised economy to a largely privatised one. Vladimir Putin later went on to re-nationalise certain natural resource industries, but the spark that the initial rapid privatisation provided for these individuals is undoubtable- and it has created a generation of Russian business elite who are spreading out their wings internationally- one Russian billionaire purchasing Britain's most expensive home is just a part of it.

It may seem such a phenomenon is exclusive to Russia, but in fact this type of instance can be seen in parts throughout the world- the Middle East, for example. Unlike in Russia, the natural resource industries were almost from the beginning privately owned- but similarly a select group of business individuals have benefited hugely from exploitation of resources available to them, notably oil.

Recommended Reads:
Computing in the USSR

Inside the Hidden World of Roman's Empire

The Russian Oligarchs of the 1990s

Why are rich Russians so obsessed with buying up London property?

Sunday, 2 November 2014

What's Nigel Farage's Beef with the European Union?

One of Britain's biggest political victors of 2014 have certainly been UKIP. Farage's men have risen from sharing the BNP's status as the nation's political laughing stock, to... well, still laughing stock (as any casual viewer of BBC's Mock The Week will certainly have observed), but a party that is now genuinely feared by the 'Big Three'- Cameron's Conservatives, Milliband's Labour and Clegg's Liberal Democrats. It's difficult to believe, but a recent Observer/Opinium poll suggested that presented with a genuine chance of a UKIP victory in their constituency, 31% of British voters would vote UKIP.
Their spectacular rise in popularity has been no accident- if Farage was a surfer, he'd be a darn talented one. He has ridden the massive waves of Euroscepticism, Immigrascepticism, Welfarescepticism, many of the scepticisms you could think about that have grown in the frustrated hearts of many voters not just on the right, but much of the centre also. Oh, and perhaps we have the BBC to thank as well for their rise.

Anyway, back to UKIP policy- perhaps their most significant manifesto promise is the swift exit of Britain from the European Union, the EU.
The EU is both a politically and economically binding union that, according to the organisers itself, "has delivered half a century of peace, stability and prosperity, helped raise living standards, and launched a single European currency, the euro". If the EU could be considered a single economy, which it often is, it would be the largest economy in the world- perhaps unsurprising however when one considers it is an amalgamation of 28 economies.
The Euro currency is perhaps the most prominent factors binding European nations- but it affects the British public little in a direct sense- for Britain is outside of this 'Eurozone', the union of nations sharing the Euro as its currency. Of course, we have the pound.

But what does directly affect Britain with regards to the EU are unifying policies such as free inter-EU movement of labour, inter-EU tariff-free trade, and the power to implement these measures in itself. Let's discuss these three and see just what UKIP and its supporters see as the problem.

Free Inter-EU Movement of Labour 

Ah, well this has been a controversial issue for sure. Immigration has been constantly featured in the news outlets of Britain for the past decade- debates have erupted over whether there should be more, whether there should be less, whether there shouldn't be any at all. Farage and his crew have frequently blasted the 'unconditional open door' to EU immigrants that is enforced upon Britain, like all EU states, by the Union. Article 45 of the EU treaty entitles EU citizens to rights such as that to seek employment in an EU country with no need for a work permit, enjoy equal treatment with nationals in access to employment, working conditions and all other social and tax advantages. It also rules that EU countries must acknowledge an EU citizen's qualifications- so if a doctor has achieved his qualifications in Britain, he must be also acknowledged as a doctor if he wants to move to Belgium for example, without having to take further education.

UKIP's line has been very clear on this issue- that immigrants are coming to Britain seeking better pay (Britain's minimum wage is nine times that of Bulgaria's for example) and standard of living (the NHS, better education, better infrastructure). These are surely natural desires- a father will naturally do his best to provide a better life for his family.
But Farage and co. believe this is bleeding Britain economically. UKIP have frequently criticised immigrants for coming to leech off Britain's divisive social welfare system, that can provide residents with benefits such as free healthcare and unemployment allowance. UKIP argue this is draining the economy as EU citizens from Eastern Europe in particular take residence in the UK, and benefit from social welfare 'without contributing a fair amount' to the economy. They are certainly correct that many people have chosen to move to Britain from Eastern Europe- Polish is the most commonly-spoken non-native language in Britain - but whether they are not contributing a fair amount is not so certain. Chef Jamie Oliver, owner of over 30 branches of his Jamie's Italian restaurants throughout the UK, claims "if we didn’t have any (European immigrants), all of my restaurants would close tomorrow. There wouldn’t be any Brits to replace them"- he cites the improved work ethic of many immigrants, suggesting strongly that they do contribute a fair amount. Perhaps what he forgot to note was also that many immigrants from Eastern Europe demand lower salaries than their British equivalents- the building industry has been particularly indicative of this- you can see via a quick google search of 'Polish builders' that they are in high demand due to their cheap rates and work ethic.

UKIP's solution? Farage has suggested that he upon victory in an election, he would enforce a five-year ban on immigration- he strangely admits he would even pursue this policy if it would have a negative impact on Britain's economy; telling BBC Radio 4's Today programme "If you said to me do you want to see another five million people come to Britain, and if that happened we would all be slightly richer, I would say, do you know what, I would rather we were not slightly richer." He believes this ban would return employment back to the 'British youth' rather than immigrants, and thus boost employment rates among the natives. Hmm, this may perhaps slightly smell of racism.
Farage believes a work permit system should also be enforced, via which checks would be made about a potential immigrant's suitability to work in Britain.

Inter-EU Tariff Free Trade

This is an interesting issue because it is one that UKIP have not really vocally opposed- in fact it is seen as the best bit of EU membership, allowing Britain to trade with other countries such as France and Germany without many of the extra trans-national fees that non-EU countries like the USA or Brazil may have to cough up. 
This is perhaps where UKIP's proposal to leave the EU falls, however. This free trade agreement benefits British businesses and if we were to leave the Union the tariffs would return- harming not only British businesses wishing to trade outwards but also European businesses looking to invest in Britain, who would similarly be faced by non-EU tariffs. 
A solution proposed by some would be the formation of treaties with EU nations to restore free trade, simply on an individual nation basis. However, as well as the time and diplomatic issues this would entail, it may just be impossible. Some EU member states may see Britain as betraying the Union (Angela Merkel has already suggested Britain is doing so within it) and may as a result refuse to sign agreements, resulting in real losses for Britain's economy.

EU Legislation

A widespread worry over the European Union is its undemocratic, centralised nature.
What is called the 'democratic deficit' has become frustrating to many EU citizens- a Pew Research poll found the majorities of seven major European countries believe their votes for EU representatives have no effect- including a staggering 81% of Italians. As a result of voter disenchantment at the complex, bureaucratic nature of EU decision making, voter turnout has falling dramatically in recent decades- by almost 20% between 1979 and 2009.
The EU lacks the very democratic values that it has set as a prerequisite for its member nations. According to The Atlantic, the European Parliament is the only one of seven EU institutions that is directly elected by EU citizens- and clearly even that is not satisfying much of the public.
The EU have meddled in national affairs- for example as a result of the recent Eurocrisis they took control of Greece's financial policy (though at the cost of a huge financial bailout), and more recently they have slapped a £1.7 billion bill on Britain for underestimating its economic growth. 
Eurosceptics believe leaving the EU would remove the EU's power over Britain in terms of policy and also discipline. They say too many decisions are being made in Brussels (a phrase you'll often hear in the EU debate, Brussels being the EU's base city) rather than in Westminster- and they argue more powers would be transferred to the British government, and therefore the British people, who hold the government responsible.

The EU debate will certainly continue to be a major talking point for the forthcoming 2015 UK General Election. The major parties have all promised referendums on EU membership should they come to power, and they have certainly been shaken by UKIP's growth from a protest vote into a potential candidate for power in Downing St- David Cameron and more shockingly Labour's Ed Milliband have set immigration at the top of their agendas in search to sway potential UKIP voters towards them. The high-profile defections of two Tory MPs earlier this year to Farage's party, and rumours of even Labour MPs following suit show truly how close in policy the political parties in Britain have become. 

The next decade is key for Britain- whoever wins the next General Election, membership of the EU will be a primary focus and whether the disenchanted among the public will sway government policy, we shall see.