4 thoughts on “Options for a post-Brexit immigration policy”

  1. Posted 14/05/2018 at 12:21 | Permalink

    Excellent piece

  2. Posted 16/05/2018 at 10:14 | Permalink

    I was in complete agreement with this post until I got near the end. I had expected your conclusion to be that the Tiers 1 through 5 immigration visa systems works well for Non-EU immigrants and so there is no reason why it shouldn’t also work well for EU immigrants, together with a possible increase in the number of Tier 2 visas available.

    As one of the antipodeans who came to the UK in the 1980’s with a 3-5 year working Visa, I believe that a time limited, skills based visa system should be the only system for 2 main reasons; firstly only immigrants who have a skill that is either not available or in short supply in the UK can get a visa provided that they are sponsored by their future UK employer and secondly because the visa’s are for a limited time period there is no brain drain or skills drain from the immigrants home country. Of the generation of Australian futures traders who moved to London when the LIFFE exchange was started, the majority returned to Australia at the expiration of their Visas, having given their valuable derivative experience to the UK (exchange traded financial futures were new to London in the 1980’s but well establish in Sydney) and having gained valuable connections and insight into global banking to take home with them. A kind of Win Win Win scenario for the host country, the home country and the immigrant.

    Retaining the present Free Movement of (unskilled) People after the UK leaves the EU is a very bad idea for two reasons; firstly coming from much poorer economies, EU immigrants are often willing to take low level jobs in the UK because they are paid more than they would be for working in a medium level job in their home country. If you think your Barista speaks very good English it is probably because she’s a university graduate or a qualified accountant, according to the ONS 60% of EU immigrants are over qualified for their jobs in the UK. The Free Movement of People has caused a massive brain drain in Eastern Europe. Lithuania and Latvia have both seen their populations drop by 15% in the 15 years that they have been members of the EU. Roumania and Bulgaria have seen their populations decline by 7% in the 7 years that they have been members of the EU. And you can be sure that the people who are leaving these countries are the educated ones, the ones who speak English, the young and energetic ones. The very people that should be developing their home countries are instead moving to the UK to make you a cappuccino or dig out your basement. The other problem with unlimited unskilled labour is that they have lowered wages in unskilled and low skilled jobs in the UK and have reduced the need for employers to invest in productivity improving capital equipment. Why use a digger on a building site when 3 Romanians are cheaper? Employers have been able to pay lower-skilled jobs, the no-skills, minimum wage because they have unlimited numbers of EU immigrants willing to do this work for the minimum wage. And the workers can afford to do this because the government is subsidising their efforts with tax credits, council housing, child benefit payments, free schooling, free health care etc. We can’t be surprised to learn that 50% of the construction workforce in London is from the EU and consequently that the latest Rich List is full of the owners and CEO’s of building companies; your taxes are subsidising their labour costs.

    The solution to post EU immigration is simple; the present system for Non-EU immigrants should be used for all immigrants and if employers have to pay a little bit more for their labour force, who knows maybe they will finally consider investing in productivity improvements.
    And besides we all ready have the Tier 1-5 Visa forms printed.

  3. Posted 16/05/2018 at 19:40 | Permalink

    Catherine,

    I’d be interested in evidence about the adverse economic consequences of the “brain drain” you hint at from Lithuania, Latvia, Romania and Bulgaria. As far as I can tell, these countries have been growing strongly even as a significant portion of their labour force left the country. It’s also not clear that the beneficial impact you cite of returning Australians won’t apply for A8 EU countries, too. And in the meantime, they get remittances.

    Your argument that “[our] taxes are subsidising their labour costs” is ubiquitous yet, again, rarely buttressed by empirics. People get paid their marginal product – if they won’t work for that, they get no work. Welfare policy is quite independent from that and at the pleasure of the host country, not the immigrant. And while in theory there could be a net deficit for some low-paid migrants, I’ve seen no such impact for even “unskilled” EU immigrants for the A8.

    There may be benefits to a symmetric policy, but let’s be clear that a “points system” is central planning of immigration, and certainly not a free-market policy. I’d personally rather auction off visas and allow prospective immigrants to borrow at market rates in order to buy them.

  4. Posted 17/05/2018 at 12:02 | Permalink

    Diego and Catherine

    I feel ill equipped to argue economics cases here but let me give you an idea how the free trade of computer development and support has benefitted all parties.

    When India first started being the centre of IT over 20 years ago as an offshore model the average salary was about 10% of an UK IT worker. It is now about 33%.

    I also had a first a couple of months ago. I was speaking to a Romanian about a role in Munich. He was working freelance which means he earns 50% – 100% more than someone in a permanent position, but low tax Romania versus high tax Germany meant that in net terms he was better off in Romania. Standard of living wise he was infinitely better off in Romania.

    This anecdote could be both humorous and apocryphal, but IT workers in Eastern Europe are known to earn relatively high salaries. When going to a bar or a club and want to impress a potential partner, you don’t put your Ferrari keys and Black American Express card on the table, but instead, you put down your Java or Linux Systems Administration manual discretely on the table.

    I also had a Polish Java developer turn down a £110,000 salary to work in Zurich as it was “not enough”.

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