The immigration debate is one based on fear

Immigration stories are never far from the news. Over the past few weeks we have had Home Office vans driving round informing illegal immigrants that they should go home or face arrest; we have had the publication of the Home Office’s Immigration Bill which is designed to “reduce the pull factors which encourage people to come to the UK“; we have also had the Chancellor flirting with the Chinese on a state visit and announcing a new visa scheme to make it easier for Chinese tourists, businessmen and students to come to the UK. Then to cap it off the Sunday Telegraph recently reported that Laszlo Andor, a European Union Commissioner had conceded that the UK was now home to 600,000 ‘non-active immigrants’ who were costing the NHS around £1.5 billion per year.

What the Sunday Telegraph failed to report was that the majority of the 600,000 turned out to be those who are recognised as economically inactive which includes pensioners, student and disabled, not ‘health and benefit tourists’. In fact figures from the report show that EU migrants are less likely than their UK counterparts to be economically inactive or unemployed. 30% of migrants compared to 43% of British citizens are classified as ‘non-active’, while 7.5% are out of work compared to 7.9% of UK nationals. The report concluded that overall “mobile EU citizens are less likely to receive disability and unemployment benefits in most countries studied in the EU“.

The actions and rhetoric outlined above are distinct manifestations of what the immigration debate has become; a debate about fear, specifically an economic fear that immigrants coming into this country hurt the economic opportunities of British-born citizens. There are two myth perpetuated about the extent to which immigration damages the UK economy. The first is that immigrants put a strain on already overburdened government spending programmes. In fact immigrants tend to be younger and are therefore likely to make less use of schools and hospital beds, as well as pay more into the public purse for longer. Under 2% of immigrants are on Jobseeker’s Allowance, half the rate of British-born citizens. Very few Europeans for example live in social housing and only 5% of immigrants receive housing benefits or tax credits. On the wider point of benefit fraud, I feel that it is worth mentioning that the estimated cost of benefit fraud is less than 1% of the total benefit expenditure.

Some reading this may think that the reason why more British-born citizens claim Jobseeker’s Allowance is because immigrants have take all the jobs. But this reveals a misunderstanding of how an economy works. The second myth is that immigrants take away jobs from British-born citizens. But no economy is a zero-sum game with a finite number of jobs to be divided up between the population. As an economy grows more jobs are created. Immigrants can help to fuel this growth by creating businesses and jobs.

Immigrants also tend to be more educated that British-born citizens. In 2012 for example more than 40% of all immigrants had finished their education by 21 compared to 20% for British-born citizens, strongly suggesting that immigrants are highly motivated to gain access to the world-class education that British universities provide. We also see that there is a greater proportion of immigrants working in the professions than British-born citizens. Given that developed countries cannot compete with developing ones on wages, they will have to find their competitive advantage through the acquisition of high-end knowledge and skills. It is essential therefore that the UK continues to attract talented and highly-skilled immigrants so that it is not left behind in the ‘global race’.

Like many European countries the UK has an ageing population. Currently there are around 10 million people over 65, and the forecast is for that to nearly double to 19 million by 2050. With an older population comes increased state spending on pensions, healthcare services and so on. So without a growing economy and workforce to complement it to pay into the public purse no economy can survive for long if the pensioner to worker ratio is approaching parity.

The coalition has managed to lower immigration by one third since 2010, mainly by clamping down on bogus student visas. As right (no pun intended) as this is, the unintended consequence has been that Britain is not considered as ‘open for business’ as David Cameron would like it to be. The message to international students, highly skilled scientists and entrepreneurs who would surely bring economic growth and jobs (directly in the case of the entrepreneur) is that they are burdensome and not wanted. Subsequently many have gone to our competitor nations instead. While the Prime Minister has stated his aspiration to make the UK one of the best places in the world to do business, conflicting announcements in other areas of government policy have led to a perception that foreign workers and students are not welcome.

Certainly there is an important debate to be had about how the UK deals with people who blatantly abuse the system, and yes there is evidence that immigrants push up housing requirements and costs. But according to the National Institute of Social and Economic Research skilled immigrants are instrumental in generating economic growth and jobs, thus paying into the public purse which can be used to build more homes if there is the political will. The UK needs to wake up to the fact that it is competing with the rest of the world for talent. We mustn’t cut our nose off to spite our face by sending out a message to the rest of the world that the UK is closed for business.