Immigration only helps the economy if strictly controlled

Observer

8 hours ago

Immigration has been an issue for a number of years in the UK and it, inevitably, played a major role in the referendum for Brexit in 2016. Regardless of whether immigration involves an EU state or elsewhere, it remains an important issue with the government.
It was of no surprise that the Prime Minister, Kier Starmer, unveiled last month, as widely reported, sweeping reforms to the UK's immigration system in a bid to curb levels of net migration. Starmer laid out a series of measures that will make it harder to move to the UK and obtain citizenship.
The UK government's proposals to prioritise highly skilled immigration are understandable – the only question is whether they go far enough. Since the pandemic, the profile of immigration patterns has shifted sharply towards low-skilled migration, while the number of visas granted to dependents has risen sharply. This includes over 300,000 granted to dependents of those on the health and social care route alone between 2021 and 2023.
The number of international students has also soared, driven by one-year masters courses at low-ranked universities. UK visas for universities globally ranked between 601 and 1,200 increased by 49 per cent between 2021 and 2023, while visas for those ranked in the top 100 fell by seven per cent.
And far from paying their fees, studying and then departing, in the year to June 2023, 46 per cent had shifted to a non-study visa within one year, compared to just two per cent of those who arrived on such visas in 2019.
While the Treasury may simplistically score migration as boosting growth, what matters is GDP per capita. Recent OBR analysis shows low-skilled immigrants are a fiscal burden throughout their lives – and this analysis does not account for the impact of dependents. The government's own figures show the average employment rate for adults arriving by the family route is only 64 per cent, with average earnings of £27,200.
Mass immigration drives up house prices and, undoubtedly, puts more pressure on public services and social cohesion. It places downward pressure on wages, despite the fervent wishes of some, the labour market obeys the law of supply and demand. More insidiously, it reduces the incentives of employers to train up British workers., confident that they will instead be able to import a cheaper worker from overseas.
The argument is – where immigration is permitted, it should be primarily short-term in nature, rather than long-term, which is why the extension of the qualification period to apply to stay in the country permanently is important.
As announced, the tightening of English language requirements and the reimposition of a degree requirement for skilled workers are positive, as is the increase in Immigration Skills Charge. Closing social care visas to new overseas applicants could be significant, though the governments own analysis estimates that it will reduce net migration by only 7,000 a year.
The new restriction on graduates are largely cosmetic and will do nothing to stop the scandal that only 30 per cent of surveyed graduate visa holders were working in professional level jobs after graduation.
However, many of these changes will not come into effect until next year, and the details are too often vague or incomplete. How many occupations will be on the new Temporary Shortage List? How many refugees will be allowed to apply through the skilled worker route? Will the levy on international student income ever be implemented? The Home Office (Interior Ministry) stands alone against the vested interests and stakeholder lobbies of other government departments. Immigration can deliver economic gains – but only if it is tightly controlled and very strictly targeted on those who will be net contributors.
Andy Jalil
The writer is our foreign correspondent based in the UK