19 September 2018

The Brexit migration report: one step forward, two steps back


After more than a year of waiting, the Migration Advisory Committee’s report on our post-Brexit immigration system is finally here.

Its publication is timely, in the sense that immigration has for too long been on the back burner in the Brexit debate.  Ironically it is the Irish border, barely mentioned during the campaign, that has come to dominate recent discussions, while immigration – for many the key referendum issue – has been largely out of the headlines.

Whatever the MAC had said would have divided opinion, such is the often intemperate atmosphere on this issue. Nonetheless the Committee’s findings are pretty clear, and for the most part favourable to those of us who favour a liberal immigration regime.

Perhaps the headline finding is that migrants have not had much impact on British workers’ wages. While there is “some evidence” that lower-paid workers have suffered from migration, overall migration is “not a major determinate of the wages of UK-born workers”.  They also find “no evidence” that inward migration has had any impact on the unemployment or training levels of British workers.

And while there are manifestly problems with the NHS, they are not due to EU migrants, who the report notes “contribute much more to the health service and the provision of social care in financial resources and through work than they consume in services”. The same is true of education, where the MAC finds “No evidence that migration has reduced parental choice in schools or the educational attainment of UK-born children”.

Again, that is not to say that some areas of England and Wales have had very different experiences to others. But that is true not only of immigration, but of all manner of other things – education, the NHS, council services and transport all vary hugely in standard in different parts of the country.

The same is true of housing. The report says migration has helped push up house prices, but that the ultimate responsibility lies with the vagaries of the planning system – a drum we’ve beaten pretty loudly here on CapX. In all of these areas, immigrants are often less an explanation for our problems than an easy scapegoat for them.

Along with its assessment of the story so far, the MAC has a series of recommendations for  where we go next. They are a bit of a mixed bag. As I’ve noted elsewhere the need for reform is pressing, especially given the decade of slow growth we’ve endured since 2008.

Most media outlets have focused on the committee’s very welcome call to treat non-EU migrants the same as their European counterparts. This seems both much fairer than our current system and more economically sensible.

However, it’s worth remembering that this can only happen if the Government fails to reach an arrangement on migration as part of the Brexit negotiations. We still don’t know the extent to which ministers will want to exchange freer trade with the continent for a preferential treatment for EU citizens. There is also the significant issue of Britons living in EU member states, whose status will be affected by a future deal, or lack of one.

The MAC also wants to remove the cap on the number of Tier 2 skilled workers, which has led to absurdities such as thousands of IT specialists and engineers being denied entry into the UK. This would be hugely welcome. Letting in more skilled migrants not only has very obvious economic benefits, but also the notable advantage of public support.

Far less encouraging is the MAC’s suggestion that so-called low-skilled migration should be capped.  Employers across the board are pretty miffed. The construction, farming, food and road haulage industries have all made clear they view the recommendation like the proverbial bucket of cold sick.

And you can see why – capping the number of low-skilled workers will inevitably mean businesses can’t get their products to market in a timely fashion – or perhaps at all, in the case of some perishable goods. That’s before we come on to the ever more important social care sector, which is heavily reliant on migrant labour.

There’s a big problem too with the distinction between “skilled” and “unskilled” work? As Brian Berry of the Federation of Master Builder’s succinctly puts it: “It’s not at all clear that EU workers with important skills already in short supply, like bricklaying and carpentry, will not fall foul of a crude and limited definition of ‘high-skilled’ worker.”

The committee’s rationale seems to be that lower-skilled migrants pay less tax and are therefore less of a benefit to the public finances. That underplays how important having a ready, flexible supply of labour is to our economy. Interfering in that will ultimately mean higher prices in the shops and a lower standard of living for all of us.

The obvious way to square this circle is to require anyone coming to the UK to have a job offer, with the length of their visa reflecting their employment contract. Ideally the government would then come up with an easy system for employers to extend their staff’s contracts and visas if conditions demand it.

That is the sensible thing to do. Unfortunately, as Kristian Niemietz pointed out so archly last week, what is economically sound seldom lines up with what voters want and, by extension, the policies politicians are wont to offer. The galling thing is that this report has now given ammunition to any politician wanting to introduce an economically illiterate cap on “low-skilled” workers.

You can hear the cloying Today programme interview now. “Well, we’re actually acting on the advice of the independent Migration Advisory Committee…”. It’s frustrating too, that the committee should get the Tier 2 recommendations so right, but miss the mark when it comes to industries which are crucial to the British economy.

On the bright side, this is simply a report – there is nothing binding any government, present or future to its recommendations. Let’s hope whoever gets round to implementing the post-Brexit immigration system takes on board the sensible suggestions and junks the rest.

John Ashmore is Deputy Editor of CapX