Author Topic: Why limiting immigration is bad for Britain (Financial TImes of London)  (Read 1153 times)

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Offline Murray Von Hayek

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Why limiting immigration is bad for Britain
Danny Sriskandarajah

Published: October 31 2007 18:52

It has been a busy week for ­immigration stories. But amid the claims and counter claims about statistics, there is a ­worrying political trend emerging if you look through the smoke and mirrors.

After years of growing immigration, Britons seem more anxious than ever about the scale and impact of immig­ration. Responding to this public concern, both main parties are eager to outdo each other in convincing voters that they can reduce the number of newcomers from outside the European Union. The government and the opposition are engaged in an “arms race” on stricter admission criteria and seem to agree that explicit or implicit annual limits on the numbers of economic migrants are the way forward. But what may seem like a politically attractive strategy in the short term is likely to be operationally impractical, economically painful and politically toxic if this race runs its course.

For a start, the scope for limiting migration to the UK is much smaller than either the government or the Conservatives make out. Some types of non-European inflows cannot be limited at the politician’s whim.

Restricting the numbers of people who marry British nationals (about 50,000 in 2006) or claim asylum in the UK (about 25,000 in 2006) in any dramatic manner would require dismantling human rights conventions and withdrawal from treaties.

So what are their options? Inter­national students, 309,000 of whom came to the UK from outside Europe in 2006, provide a lucrative source of income for British educational institutions. The lobbying of vice-chancellors from Liverpool to Luton about increased visa charges showed just how sensitive education providers are to making the UK less attractive in a highly competitive international marketplace.

That leaves economic migration from outside Europe as perhaps the easiest and most politically appealing option for restriction. After all, if it cannot be “British jobs for British workers”, as Gordon Brown, the prime minister, recently suggested, it might as well be European jobs for European workers. But restrictions in this area are unlikely to make much of an impact on the numbers of people coming and are likely to hurt Britain’s economic competitiveness.

The number of work permits issued to skilled workers from outside Europe in 2006 was just under 100,000, with about half of these being for periods of less than a year. The numbers of non-EU nationals issued with national insurance numbers has stayed fairly consistent over the past five years, whereas National Insurance numbers issued to EU nationals have more than quadrupled.

This suggests that the UK has relied on a fairly stable supply of skilled work permit holders from outside Europe to fill vacancies in important sectors. More than a quarter of London’s financial services workforce is estimated to be foreign-born and about half of all newly registered doctors and nurses in recent years have come from outside Europe. A fifth of the 1.5 million new jobs filled by foreigners since 1997 have been in the public services, with a further fifth working in jobs in banking and insurance.

Despite the relatively large numbers of recent arrivals from new EU member states, British employers are not going to find these workers to be ready substitutes for non-EU migrants.

In their rush to control immigration, both parties are also suggesting a departure from the market-based, employer-led system of allocating work permits that has served the UK economy so well over recent decades.

Historical analysis suggests that the number of work permits issued each year has broadly been in keeping with economic and labour market conditions. An individual-led, points-based system, in which someone need not have a job offer in the UK, may not be sufficiently responsive.

Annual limits or sector-based quotas are likely to be even worse. Imagine a desperate would-be employer being told that the new head of mergers and acquisitions or eminent university professor or star footballer cannot take up his or her post until next year because the annual limit has already been exceeded.

Britain’s political leaders either do not realise that migration cannot be cut in the crude ways they say they want to, or they have calculated that political benefit of being tough on immigration from outside Europe is worth the undoubted economic costs this may incur.

Unfortunately, denying UK employers access to the best and brightest workers from across the world may hurt more than they expect and still not stop the inflows that worry the electorate.Indeed, without a long-overdue reality check, Britain may continue to have relatively high levels of immigration but not necessarily the right workers for the right jobs.

The writer is director of research strategy at the Institute for Public Policy Research
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