Is the UK’s policy onmigration a success?

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Ruth Tarrant, Head of Economics,Bedales School

Immigration is never far from the top of the British public’s list of concerns or the government’s priority list.

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Since 1997 immigration policy has become more targeted and arguably more restrictive.

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The government has tried to focus on allowing immigration that provides economic benefits to Britain rather than fiscal costs.

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Introduction

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The 2011 census showed that the number of foreign-born residents of England and Wales rose by 3m to 7.5m over the decade.

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The most common birthplaces outside the UK for residents are India, Poland, Pakistan and the Irish Republic.

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This means that 13% of the population is made up of foreign-born residents, compared with 9% in 2001.

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UK migration statistics

Traditionally migrants from particular countries have settled together, but are now becoming more dispersed as they seek work rather than a culturally-similar community.

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The rate of increase of inward migration is slowing as the availability of jobs has fallen.

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Concern of the general public over immigration appears to have increased since 1999 according to polls.

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People in Britain see immigration much more negatively than citizens of other countries.

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Thus political parties have raised the status of immigration on their policy agendas.

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Why has immigrationPolicy been on thegovernment’s agenda?

But, a 2010 survey found that 72% of British people supported an increase in immigration of doctors and nurses.

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Whilst British people see immigration as being bad for the country as a whole, only 15% say that migrants are causing problems in their local community.

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Effects on wages and employment levels depend on whether migrants have skills that are substitutes or complements to those of existing workers

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As migrants demand for goods and services increases, this can increase wages and employment.

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For low-wage unskilled migrants, an increase in immigration of one percentage point causes a 0.5% fall in average wages for existing low-skill workers, but an increase in wages for high-skill workers.

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Some economic effects ofimmigration into the UK

Immigration has adverse effects on employment for those with only GCSE-equivalent qualifications but has positive effects on employment for those with A Level or higher qualifications.

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The unemployment effects of immigrant workers only last about 5-10 years and there are no significant longer-term effects according to OECD.

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Non-EU immigration has an adverse impact on UK unemployment whereas EU-immigration has no impact.• C

Allows unrestricted access for EU citizens as a result of the UK’s membership of the EU.

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Allows asylum seekers to seek refuge for humanitarian reasons.• C

Applies a partial Points-Based System for managing the immigration of non-EU nationals.

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What is the UK’s policyon migration?

Aims for net immigration of only ‘tens of thousands’ by end of this Parliament.

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Requires non-EU migrants to be earning at least ￡ 31,000 per year and to pass a ‘Life in the UK’ test.

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Plans to reduce the number of student visas by 260,000 over this Parliament.

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Tier 1: For highly skilled workers, such as scientists and entrepreneurs.

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Tier 2: For skilled workers with a job offer, such as teachers or nurses.

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Tier 3: For low-skilled workers filling specific temporary labour shortages, such as construction workers on a particular project.

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The Points-Based,or Tier, System (1)

Tier 4: For students.• C

Tier 5: For temporary workers such as musicians to play in a concert.

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System aims to allow people in who are able to support themselves financially and whose skills are crucial to UK economic growth.

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The squeeze even on Tier 1 migrants is tightening, and this is potentially a problem for UK economic success.

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This is even though incomers are more likely to be more highly educated than native Britons.

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The evidence strongly suggests that an increase in such migrants has a positive effect on wages, employment and growth.

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The Points-Based,or Tier, System (2)

Specific industries in the UK are really suffering under the new immigration rules.

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High-tech/IT businesses often have to recruit from abroad where technical skills are highly developed.

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Technology and financial services are two of the UK’s most valuable sectors, in terms of contribution to GDP both domestically and through exports.

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Businesses have complained that red-tape and expensive form-filling to get work visas are hampering their efforts to employ skilled workers.

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The Points-Based,or Tier, System (3)

The government has set the bar higher for student visas, resulting in 26,000 fewer student visas being issued in the year to September 2012.

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Whilst this may prevent the ‘bogus student’ problem, it may be to the detriment of long-term UK economic growth.

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Students contributing to higher immigration figures now, will also contribute to higher emigration figures when they have graduated, so reducing their numbers now may cause the government to miss its net immigration target in future years.

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Capping student visas

There is no overall integration policy helping immigrants to settle more quickly into decent housing and learn English to an adequate level.

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The UK has followed other European countries by requiring non-EU migrants to take a ‘Life in the UK’ test and to have a basic level of spoken English.

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There is clearly recognition by the government that integration is a key part of ensuring that immigration brings economic benefits to the UK, but so far joined-up policy seems to have been lacking.

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Integration policies

The Labour Party has developed some policy ideas which they would implement on returning to government which would include….

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A ban on employment agencies recruiting only, or mainly, migrants.

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An early warning system when employers, sectors or regions have at least 25% foreign born, low wage workers so that local people can be trained in the necessary skills.

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Opposition policies

Tough transitional controls when newcountries join the EU.• C

Stricter enforcement of minimum-wage laws, so that employers don’t actively seek to illegally employ immigrants on wages below the minimum wage, with heftier fines

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Since 1997, government policy on immigration has certainly intended to be ‘tougher, in order to ensure that further immigration has only economic benefits for the UK economy, and also meets the demands of the electorate.

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But current immigration policy appears to be quite short-sighted and may damage Britain’s long-term growth prospects by keeping out highly skilled, hard-working and entrepreneurial immigrants.

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Conclusions

When countries such as Australia, Canada and the US are relaxing rules for such skilled immigrants, those talented people may well just move somewhere else other than Britain.

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