UK Immigration: A political agenda or an economic necessity?

December 17, 2014

As the year draws to a close and the 2015 General Election looms, the main political parties are starting to make a lot of noise about their key policies to win seats, but this time around they all have a similar tone. Most likely brought on by UKIP’s surge in popularity; curbing immigration seems to be the key agenda to win back votes.

Despite several surveys and reports showing the economic benefit of immigration to the UK, politicians from all parties are showing a tough stance on immigration, particularly from the EU and are in agreement that net migration should be cut to the tens of thousands from the hundreds of thousands that it is currently. Is this because certain parties have played on the British people’s fear that all of our economic instability and stretched public services are a result of our ‘open door policy’, or has the increased immigration rate really put a strain on housing and the job markets? Undoubtedly, steps taken so far to curb migration to the UK are floundering (although admittedly current measures are focused on non-EEA migrants) with the current government failing to meet their targets and net migration figures to the UK actually increasing. 

According to new research by the UCL Centre for Research and Analysis of Migration (CReAM), European immigrants have contributed more than £20bn to the UK economy between 2001 and 2011. Not only that but, they have provided the country with productive human capital that would have cost the UK £6.8bn in spending on education. When compared with UK natives, immigrants were 43% less likely to receive state benefits or tax credits and 7% less likely to live in social housing, so the notion of benefits tourism, is a very weak one.

The Director of CReAM and co-author of the study, Professor Christian Dustmann, said “Our new analysis draws a positive picture of the overall fiscal contribution made by recent immigrant cohorts, particularly of immigrants arriving from the EU. European immigrants, particularly, both from the new accession countries and the rest of the European Union, make the most substantial contributions. This is mainly down to their higher average labour market participation compared with natives and their lower receipt of welfare benefits.”

Whichever side of the fence you sit on, it’s clear that whoever wins the next general election, or whichever two parties form a new coalition, a change in our relationship with the EU is on the cards. Whether it’s a renegotiation of our EU membership or the Conservatives plan for an in/out referendum in 2017, things are likely to change. Only the Liberal Democrats have said they would continue to back the UK’s membership of the EU.

Another, key consideration for leaving the EU or changing the way our borders are run, is the fact the UK is an ageing nation and according to a recent article in the FT, we need the new blood that immigration brings. The article looks into the study from the European Commission called ‘The 2015 Ageing Report’. It predicts that by 2060, there will be just 3 working aged people for every elderly person, but this is based net migration from the EU rising from 165,000 last year to over 200,000 per year. If we were to leave the EU or limit numbers of European citizens coming through our borders, then by 2060 there would be just 2 working aged people for every elderly person in the UK.  This sobering forecast seems to support the case of why immigration is more of an economic necessity than a political choice.

Finally, there would be huge implications for many UK employers as industries such as hospitality, agriculture and manufacturing rely on migrant workers from Europe who are generally lower-skilled.

Earlier this year, a report from the Migration Advisory Committee, Migrants in Low-skilled Work, showed that migrants now account for 16% of low skilled jobs whilst having very little, if no effect on the employment rate of UK-born working-age population even after the substantial inflow of EU8 migrants after 2004. Evidence presented to the MAC from UK employers showed that ‘Migrants are more mobile and flexible than UK-born workers e.g. prepared to change location, live at the workplace and do shift work. This helps grease the wheels of our flexible labour market.’

If the ease of access to the European workforce was to end then the evidence in the MAC report showed that UK employers would find it very difficult to fill lower skilled vacancies with British workers for the following reasons:

·         Some British workers applying for low-skilled jobs lack basic numeracy and literacy skills;

·         Many migrants – particularly East Europeans – have a superior work ethic to British workers;

·         Employers state that UK workers have very high attrition rates in such jobs;

·         Many migrants have higher level qualifications than their low-skill job requires;

·         On average migrants are superior to British applicants on “soft skills” including reliability, team working and confidence;

·         Migrants are more flexible than UK-born workers, e.g. much more likely to do shift work;

·         Migrant workers are more willing to move or live on the site than the domestic workforce which (for obvious reasons) tends to be attached to particular geographic locations: low-skilled British workers are, relative to migrants, less geographically mobile; and many British workers, again understandably, will not accept pay rates and conditions that many migrants tolerate.

Therefore it seems that UK employers would still need to look overseas to fill their lower-skilled vacancies following tightening of our borders, but it would be much more difficult to bring them to the UK.

One solution to this would be for the Home Office to activate the Tier 3 Low Skilled Worker route of the Points Based System which to date has never been live and which would require employers to attempt to source labour domestically before recruiting from a wider base outside the EU. These visas would be based upon the creation of low skilled working schemes on an ad hoc basis when a shortage is identified which cannot be dealt with by the domestic workforce. Entry to the UK, as with Tier 2, Tier 4 and Tier 5 visas, would require a certificate of sponsorship as part of each application. However, unlike other routes, applicants living and working in the UK on this temporary route would not be permitted to bring dependents with them and would most likely only be valid for a maximum of 12 months, putting real strain on employers and the Home Office alike with a high and regular turnover rate.

Suffice to say that whatever happens next year in the election, it’s clear that a renegotiation with Europe and or a future in/out referendum will be on the cards, but let’s hope whoever is in power presents both the potential issues and benefits of immigration to the UK public so that voters can make an informed decision regarding what is right for their country.