Claim That Reducing Low-skilled Migration Would Harm Economy Not Backed Up By The Facts


Economics, Employment, European Union, Migration Trends, Population

A recent Economist article (‘Keep Out: Lower immigration could be the biggest economic cost of Brexit’, 25th February 2017) makes a number of bogus claims about both the impact of immigration and the public’s response to it that deserve to be soundly rebutted.

The article starts by suggesting that net migration into the UK is ‘hardly out of control, at least compared with other rich countries’. It argues: “On average annually it amounts to about three times the attendance at a Manchester United football match. Compared with their population, Ireland, Australia and Canada see far more arrivals.”

Net migration in the year to September 2016 was 273,000. Although this is lower than recent figures which saw net migration hitting a record third of a million, it is far from insignificant. Indeed it is the equivalent of adding slightly more than the population of Cardiff to the UK in the space of a year.

The ONS population projections estimate that if net migration continues just below that rate (265,000 or its high migration scenario), the population of the UK will rise at its fastest rate in nearly a century – by half a million people each year. At that rate, the UK population would be projected to reach 73 million by 2031. This increase of nearly eight million would be the equivalent of adding the combined population of Greater Manchester and the cities of Birmingham, Glasgow, Liverpool, Leicester, Leeds, Sheffield, Bradford, Nottingham, Portsmouth and Bristol. Three-quarters of that increase would be down to future migrants and their children.

The rather selective comparisons with Ireland, Australia and Canada do not stand up to scrutiny. All of these countries have population densities that are fractions of the UK. Canada and Australia have two and three people per sq. km of land area, while Ireland has 67. The UK currently has a population density (266 people per sq. km) that is nearly four times that of Ireland. The population density of England – the destination of 90% of international migrants – is 420 people per sq. km, more than six times that of Ireland. Such figures help one to understand why it is that 79% of people tell pollsters that they feel England is overcrowded.

The Economist also implies that cutting net migration from the EU would have a ‘serious’ negative effect on the UK economy and that the ‘biggest loser from slashing immigration would be the public finances’.

At least with respect to proposals put forward by Migration Watch UK for reducing EU immigration, this is untrue. Our scheme would expand the current work permit system to cover EU nationals travelling to the UK to take up highly-skilled roles. But of those who arrived from the EU in the last ten years, 80% are currently in lower-skilled work.

Migration Watch UK research suggests that cutting out EU inflows into lower-skilled work could reduce net migration by as much as 100,000 a year. The economic cost of such a reduction would be limited. The Migration Advisory Committee found little or no benefit to the budget, GDP per head or productivity as a result of low-skilled migration.[1]

The suggestion that the public finances would lose out from cutting migration into lower-skilled work is disingenuous. The vast majority of the net 70,000-100,000 people who have arrived each year from Eastern Europe since late 2013 go into lower-skilled jobs. Migration Watch UK has calculated that recent arrivals from Eastern Europe made a negative contribution to the public finances at least £1.5 billion in 2014/15, in line with the downward trend in net fiscal effect over time observed by University College London’s Centre for the Research and Analysis of Migration. Meanwhile, HMRC data released last year show East Europeans pay only half as much income tax as the average taxpayer.

The Economist claims that cutting net migration would lower GDP per person by 1% in the long-term. But this modelling does not take into account the potential negative externalities associated with large scale population growth, such as congestion and pressure on public services.

The article also alleges that high net migration is necessary to address Britain’s old-age dependency ratio.

While high migration might temporarily deliver a slightly younger population, it is also of course true that migrants grow older. A Ponzi Scheme of ever increasing net migration to try to constrain the dependency ratio of working age to non-working age people cannot be sustainable in the long term.

This brings us to the last of the Economist’s claims that ‘British concern about immigration has little to do with raw numbers’. It cites as evidence a poll which found that, even in 1995 when net migration was well under 100,000, two-thirds of Britons wanted it cut.

It is inaccurate to say that British feelings about net migration ‘have little to do with raw numbers’. Ipsos MORI notes that the surge in concern about immigration as a national issue in the early 2000s followed rather than preceded the increase in immigrant numbers. The organisation adds: “The relationship is clear enough to conclude that the number of immigrants is important to public attitudes.”[2]

Not only do polling organisations find that voters cite immigration as one of their top concerns, it is also clear what the public want to happen: large majorities (69% in a January 2017 YouGov poll, to take a recent example) consistently say they would like immigration rules to be tightened. NatCen reveals that around seven in ten voters believe current free movement rules should end when the UK leaves the EU.[3] This is backed up by other polling.

Indeed, the referendum result was a clear message from the British people that net migration from the EU must be reduced. It would be foolhardy for those in the political and media class to dismiss this as has happened so often in the past.

[1]  Migration Advisory Committee report ‘Work Immigration and the Labour Market’ (2016), URL: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/547697/MAC-_report_immigration_and_the_labour_market.pdf

[2] Ipsos MORI, January 2014, URL: https://www.ipsos-mori.com/Assets/Docs/Publications/sri-perceptions-and-reality-immigration-report-summary-2013.pdf

[3] NatCen, November 2016, URL: http://whatukthinks.org/eu/wp-content/uploads/2016/11/Analysis-paper-9-What-do-voters-want-from-Brexit.pdf

1st March 2017

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