The immigration speech David Cameron should be giving
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Version 0 of 1. “When we came to power, I said that Britain was open for business. I also said that we would return net migration to the level of the early 1990s, when it averaged about 50,000 a year. We thought we could square this circle. We were wrong. But it is worth asking why. Most commentators have focused on the relative economic performance of the UK and the eurozone over the past two years in particular. High youth unemployment in countries such as Spain and Greece, combined with the UK’s flexible labour market – which excels in creating jobs for motivated workers – has indeed led to a significant increase in migration, from the countries of southern Europe in particular. But the importance of this factor should not be exaggerated. In fact, net migration from “old Europe” – the 15 states that were members in 2004 – is only about 25,000 a year above its long-run average. And migration from the new member states, although still high, is well down on its peak of the mid-2000s. More important, in fact, is migration from outside the EU. While the numbers have significantly reduced over the past five years, this is still running at about 170,000 – more than from within the EU. This is the migration we can, in theory, control. So if we can control it – and indeed we are controlling it – the question is: why we have still missed our self-imposed target by so much? The answer is that we had a choice, as many economists pointed out at the time. The Britain of today is a much more globalised economy than ever before in our history. Some of our key export industries – not just financial services, but also business services, the creative industries and higher education – are crucially dependent on a liberal migration system. So we could hit the target, and mess up the economy. Or we could accept that prosperity and growth are actually rather more important than an arbitrary target. Fortunately we chose the latter. We could have capped international students. We have tightened up the system and closed bogus colleges, but there is no cap. We could have capped the number of skilled workers – and we did. But to avoid the inevitable economic damage that would have resulted, we invented a new visa category to allow them in under a somewhat different regime. The new system has had its problems. We have turned away some students who would have both brought in much-needed fee income and made a real contribution to our world-leading universities. Even worse, we’ve told motivated, highly skilled English-speaking students who’ve studied here, and want to stay and work, that they have to get out. We have done some real damage to our image in India, a country I regard as a priority for trade and investment links. And businesses, especially SMEs, have had to deal with more red tape and bureaucracy in order to hire the skilled workers they wanted. But while the economy was relatively weak, the damage was limited. So we compromised. We’ve reduced non-EU migration, but not by nearly enough to hit the target, bar another severe economic downturn. And we’ve increased regulation and reduced growth – but again, fortunately, not by all that much. Of course, if the UK economy continues to grow at a reasonable pace, the pressure to loosen some of these controls will increase. So we need to stop trying to pursue two contradictory objectives at the same time. We need to return to a migration policy that is no longer driven by arbitrary targets better suited to a centrally planned economy – and an immigration system that doesn’t assume bureaucrats in the Home Office are best placed to assess the needs of a flexible labour market in an increasingly knowledge-driven economy. Even more importantly, we need to stop pretending to young people excluded from the labour market, or communities left behind by economic recovery, that restricting migration – as opposed to the hard work of real policies to improve skills or invest in infrastructure – is somehow a magic solution. And politicians must have the courage to try to explain this to the public, and to convince them that an open, outward-looking Britain may not be the best of all possible worlds. This is better than any of the options on offer.” |