Dispelling Misperceptions About Our Proposal For A Possible Post-exit Immigration Policy

Jeremy Warner is right to suggest that current record levels of net migration are a crucial part of the national debate as the EU referendum approaches (‘Immigration is what will decide the outcome of the referendum, as it will in Holland too’, Daily Telegraph, 29th March 2016, see article).

He expresses uncertainty as to whether a possible vote to leave the EU by UK voters would have any effect in cutting current flows of migration.

However, he seems to misunderstand Migration Watch UK research which has suggested a vote to leave the EU could cut net EU migration by as much as 100,000.

He suggests that this argument rests on two ‘somewhat questionable assumptions’ about what would be the case after a possible Brexit vote. These are 1) that EU migrants would be treated in exactly the same way as non-EU applicants, and 2) that there would be no corresponding increase in net migration from elsewhere in the world.

Our paper does broadly treat EU migrants the same as non-EU migrants when it comes to work migration. It is other categories that we suggest remain open – in part because the EU would likely reciprocate on any restrictions. In setting out an ideal negotiating position for the UK should voters choose to leave the EU, it argues for self-sufficient migrants and students from the EU to be able to reside here freely, proposing only that EU migrants wishing to access the labour market should be subject to controls by means of work permits. Work permits here would be limited to higher skilled work thus cutting out low skilled migration from the EU. Around 60% of work migration from the EU has been into work regarded as low-skilled. Cutting out this low-skilled migration is what could reduce EU net migration by around 100,000 a year.

There is no route from outside the EU to directly enter low-skilled work in the UK so it does not follow that there would be a corresponding increase in net migration from elsewhere in the world. Non-EU work immigration is already limited to higher-skilled jobs.

It is likely that business lobby groups would complain but we think that the impact of restricting the supply of labour into low-skilled work would be very beneficial overall for the UK (some sectors such as the agricultural sector schemes to allow temporary short-term workers could be resurrected).

Mr Warner’s article is a balanced attempt to put the economic case both for and against mass migration. However, his claim that ‘all credible research finds that immigration is broadly positive economically, creating its own employment and output growth’ overstates the case somewhat.

Net migration currently stands at 323,000 a year and the UK population is rising at its fastest rate in nearly a century, increasing annually by half a million people, equivalent to the population of Liverpool. Mr Warner acknowledges that such rapid change may be putting ‘excessive pressure’ on roads, housing, hospitals and schools.

To cope with this large rise in population, significant amounts will have be spent on infrastructure at a time when public funding is being cut. Workers in low-paid work do not generally make a positive fiscal contribution to UK finances.

More generally, it should be pointed out that increasing GDP is not a good measure of the benefits accruing to ordinary people. There is no evidence that mass immigration has generated significant economic benefits for the existing UK population (see here).

And, as Mr Warner notes, there is ‘evidence to suggest employers are choosing easily dispensable cheap labour in preference to productivity enhancing investment’. Indeed, most EU migrants work in lower-skilled jobs and this may help to explain the low productivity of recent years.

Since 2004, productivity growth has slackened and has then tailed off altogether.

Recognising these costs and largely unconvinced about oft-touted and intangible economic ‘benefits’, the British people have been clear on this issue in responses to successive opinion polls. Not only do the public see immigration as the most important issue facing Britain, but that they also overwhelmingly want net migration to be brought down.

They recognise that the cost of continued record-breaking inflows of people in terms of social cohesion and pressure on schools, housing and hospitals is far from offset by any debateable impact that such migration may or may not have on the economy.

31st March 2016 - Employment, European Union, Visas/Work Permits

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