Labour Market

This anti-immigration arms race exemplifies everything that’s wrong with politicians


Economic Theory
Tax and Fiscal Policy
‘Race relations/immigration’ is now ranked by voters as the most important issue facing Britain, according to Ipsos MORI. On 39 per cent, it’s above the economy and the NHS – areas the Conservatives and Labour want at the centre of their 2015 campaigns.

This concern is not new. Even in the 1990s, when net migration was 60,000 per year, the public wanted lower levels of immigration. What’s different now – with net migration at 243,000 – is that Ukip is framing the issue and no party is willing to make the intellectual case that immigration is good for the economy. The Conservatives are a confused mix of Ukip-fearing euroscepticism and economic liberalism, Labour is petrified of losing working class votes to Ukip, and the Liberal Democrats have simply stopped being listened to. This vacuum is allowing an arms race to develop, with parties calling for ever tighter migration restrictions to assuage voter concerns.

The Conservative pledge to get net migration down to the tens of thousands was doomed to fail, given the government’s inability to control our borders with the EU. So the parties want to ‘go further’. They all desire tightening access to public services and welfare, and requirements to speak English – harmless ways of reflecting voter support for the idea of contribution and the preservation of British culture. Yet now some politicians suggest curbs on free movement of people within the EU. The belief seems to be that the voters have spoken: lower numbers or else. This is worrying, as the arguments to suggest immigration is bad for Britain are very weak.

There is little statistically significant evidence that immigration (particularly from the EU) has led to fewer jobs for native workers, for example. This is not unexpected – there is no more reason to suspect a larger population from high immigration will lead to displacement of British workers than that female emancipation in the workforce would lead to fewer men in work. Immigrants also create demands of their own, complement existing workers, and fill gaps in the labour market – often creating new opportunities.

Even on pay, there is only limited evidence of a very small downward effect on real wages at the low-skilled end of the labour market. But even this need not be seen as just a ‘cost’ to UK workers overall – cheaper products and services benefit Britons too. Further, any effect is trivial relative to technological change, domestic skills problems and the cost of living. Immigrants are more likely to be younger, working and thus net contributors to the public finances – meaning they facilitate a lower overall tax burden on UK workers than if migration were restricted. And the real unseen gains are the interchange of ideas and specialisation, which raise overall productivity and pay levels in the economy.

Some believe the UK is ‘overcrowded’ and immigration puts a huge strain on public services. This is just scaremongering. The UK is less crowded than Belgium or the Netherlands. Just 10 per cent of our land is developed. There are of course some pinch-points with public services, but these are failures associated with central planning – you rarely hear supermarkets complain that immigration is not allowing them to plan appropriately where to put their stores.

Far from showing how in touch they are, adopting further economically-damaging migration restrictions to chase votes, on the false promise this will solve voters’ problems, would exemplify everything that’s wrong with the political classes. Politicians who believe in Britain as a dynamic, open economy should be willing to extol the benefits of free movement – not just economically for us, but on the principle of liberty too.

This includes eurosceptics who believe in free-market economics. Ukip has effectively linked restricting immigration to our EU membership. But it’s perfectly consistent to believe the UK’s immigration policy should be decided domestically, should be non-discriminatory against non-Europeans, but that we should remain liberal and open. The long-term consequences for the UK of substantial protectionism on this could be very damaging indeed.

This article was originally published by City AM.

Head of Public Policy and Director, Paragon Initiative

Ryan Bourne is Head of Public Policy at the IEA and Director of The Paragon Initiative. Ryan was educated at Magdalene College, Cambridge where he achieved a double-first in Economics at undergraduate level and later an MPhil qualification. Prior to joining the IEA, Ryan worked for a year at the economic consultancy firm Frontier Economics on competition and public policy issues. After leaving Frontier in 2010, Ryan joined the Centre for Policy Studies think tank in Westminster, first as an Economics Researcher and subsequently as Head of Economic Research. There, he was responsible for writing, editing and commissioning economic reports across a broad range of areas, as well as organisation of economic-themed events and roundtables. Ryan appears regularly in the national media, including writing for The Times, the Daily Telegraph, ConservativeHome and Spectator Coffee House, and appearing on broadcast, including BBC News, Newsnight, Sky News, Jeff Randall Live, Reuters and LBC radio. He is currently a weekly columnist for CityAM.

8 thoughts on “This anti-immigration arms race exemplifies everything that’s wrong with politicians”

  1. Posted 14/10/2014 at 11:31 | Permalink

    How does England, particularly the SE compare with the Netherlands?

    So, perhaps we should privatise our roads, schools, hospitals and de-regulate water, rail, and energy?

    Then everything would be fine, and we’d have everything run as efficiently as Tesco.

    Sounds like heaven.

  2. Posted 14/10/2014 at 13:06 | Permalink

    Submitted by Benji on Tue, 14/10/2014 – 12:31.

    How does England, particularly the SE compare with the Netherlands? So, perhaps we should privatise our roads, schools, hospitals and de-regulate water, rail, and energy? Then everything would be fine, and we’d have everything run as efficiently as Tesco. Sounds like heaven.

    depends where you mean in the Netherlands. The provinces of North Holland and South Holland (which contain the cities of Amsterdam, Rotterdam the Hague), have average population densities of 800/sq km and 1300/sq km, which I would hazard is higher than that of the SE of England other than London.

  3. Posted 14/10/2014 at 14:49 | Permalink

    There is a lot more wrong with politicians than this, but this is an extremely important issue i agree. I think that we should give a new party a chance, like the Green Party, its disgusting that some parties arnt allowed to attend the televised debate.

  4. Posted 14/10/2014 at 19:01 | Permalink

    What is the role of government; is it to carry out the wishes of the people, or is it to rule over the people? As an individual, I have the right to my opinions, whether they are right or wrong. If my opinion is prevalent, and democracy actually means something, then my (our) government should enact my opinion (within the NAP of course). If democracy doesn’t mean anything and the government can just tell the people that they are wrong, therefore their wishes will be ignored, let’s just dispense with the charade of voting for them as they are our rulers, not our representatives. The correct place to convince people of the pros or cons of immigration, or any other issue, is in the media. Once people have formed an opinion for themselves, they can select the party that advertises that they support that opinion.

  5. Posted 15/10/2014 at 11:43 | Permalink

    “perhaps we should privatise our roads, schools, hospitals and de-regulate water, rail, and energy? Then everything would be fine, and we’d have everything run as efficiently as Tesco. Sounds like heaven.”

    -Yes, that’s the idea.

  6. Posted 15/10/2014 at 12:41 | Permalink

    @ Anon

    Including cities, England has the highest population density in Europe. According to some studies anyway.

    Not that that matters in itself.

  7. Posted 15/10/2014 at 19:44 | Permalink

    Why does Mr Bourne, in common with so many other commentators who should (and probably do) know better, persist in distorting the immigration issue – especially in respect of where Ukip stands?

    Of course immigration is good, provided that a) it enables the economy to get the staff, professional or otherwise, it needs, and b) that it can determine, through work permits, who comes in and ensure that they leave when that stay expires.

    Immigration has only become a problem because of the EU and its hallowed tenet of the free movement of people. As the EU has grown in size, so the number of EU citizens who have the automatic right to enter this country, with their dependants, has increased – exponentially and particularly from the poorer, former soviet bloc member states. This was the root cause of David Cameron’s absurd panic-commitment to impose a net immigration limit. Because he could not stop any EU citizens, whether skilled or otherwise, needed or not, coming in, he made entry difficult or impossible for all the English-speaking skilled professionals we do need. All he has done is increase the pool of now resident unskilled EU workers and their dependents and starved industry of the skills it so desperately needs.

    Whether seasonal (a non-term in an EU context) farm workers from Bulgaria, Indian computer specialists or nurses and care workers from the Philippines, the work permit system, as advocated only by Ukip, would enable us to take those, and only those, we need and whom our infrastructure can support. No matter what the EU does, the end result is a not-fit-for-purpose distortion so it should not surprise that the dead hand of Brussels has made the immigration question for Britain unresolvable. And that is how it will remain as long as we stay in it.

    Tony Stone

  8. Posted 15/10/2014 at 20:04 | Permalink

    @ Kris

    To be fair, privatized schools and hospitals, with “tokens” does have some merit, as there would be some level of competition.

    However, privatized roads, and de-regulated water, energy, rail would be a disaster.

    Unless you clawed back all their monopoly profits via an LVT 😉 Which then allows the market to operate of a level playing field. No LVT=no capitalism.

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