Trade, Development, and Immigration

UK should scrap net migration target & introduce two-lane immigration system post-Brexit, says new report


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IEA releases report on immigration policy post-Brexit

The UK’s approach to immigration policy is economically damaging, too restrictive when it comes to high-skilled workers and does not reflect the British public’s nuanced attitudes towards immigration, according to a new report from the Institute of Economic Affairs.

The report, out today, outlines a liberal, economically sensible immigration system that could be practically adopted and compatible with current public opinion on immigration.

Contrary to the way the debate is often framed, concerns about immigration are cultural, not economic. Setting arbitrary overall targets and capping certain types of immigration is therefore not only counterproductive, the report argues, but also unpopular.

Its author, the IEA’s Head of Political Economy Dr Kristian Niemietz, calls for the arbitrary net migration target to be scrapped, as well as caps on visas for highly-skilled workers and restrictions on foreign students working to be lifted.

Niemietz outlines a two-lane system the UK could adopt post-Brexit, in which free movement with some countries is maintained, while a simplified, uncapped version of the current system is introduced for the rest of the world.

Key recommendations

•   Scrap the arbitrary migration target: This agenda-setter wrongly focuses attention on overall numbers. The British public are concerned about types of immigration, not volumes.

•   Abolish the cap on work visas (Tier 2) for highly skilled people: Skilled migration is popular with the public and Tier 2 migrants are, almost by definition, highly productive economic and fiscal net contributors. Limiting their numbers is needless economic and political self-harm.

•   Drop ‘working limits’ on foreign student visas: International students are another highly popular group of immigrants, but their working hours are restricted by the current system. This discriminates against part-time students & students from less wealthy backgrounds.

Blueprint for a future two-lane system

Thus far, the debate around immigration post-Brexit has been predicated on the assumption that the UK will have one, single immigration policy, and that this policy will be negotiated between the UK and the EU-27. But this does not have to be the case.

The system would comprise of two lanes:

Standard lane

•  Based on current tier system – especially Tier 2.

•  Abolish the cap and many costly bureaucratic requirements.

•  Abolish the Resident Labour Market test, which obliges employers to offer the position to current residents first.

•  Abolish the sector-specific income threshold, which prevents even the most highly-paid migrants from engaging in wage competition.

Fast lane

•  Based on current system of free movement with the EEA.

•  Limits and restrictions which are permissable within that system would be used to the fullest.

•  Fast lane would not necessarily apply to the whole of the EEA, and could be extended to non-EEA countries.

Commenting on the report, author Dr Kristian Niemietz, Head of Political Economy at the Institute of Economic Affairs said: 

“Our current immigration policy represents, in some ways, the worst of all worlds. It inflicts enormous economic self-harm, because it is needlessly restrictive and bureaucratic in some respects – but at the same time, it fails to genuinely address the public’s concerns and anxieties. 

“The main reason for this is that in debating immigration, we are not being honest with ourselves. A close look at the survey data shows that when people claim to oppose “immigration”, it is really only specific types of immigration that they have in mind. They do not really care all that much about how many people come here. They care a lot more about who comes here, and why.

“It is therefore possible to liberalise immigration rules substantially in some respects, whilst also accepting the public’s concerns and objections. An economically literate immigration policy can be popular. This paper tries to show how.”

Notes to editors: 

For media enquiries please contact Nerissa Chesterfield, Head of Communications: [email protected]  020 7799 8920 or 07791 390 268

To download the IEA’s ‘Immigration: Picking the low-hanging fruits’ click here.

For more research from the IEA on immigration click here.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems and seeks to provide analysis in order to improve the public understanding of economics.

The IEA is a registered educational charity and independent of all political parties.