Other people's business

RSS

Is a cap on immigration a cap on growth?

Why business should be making the case for immigration.

Home Office.
Immigration is becoming a policy area fuelled by sensation and not facts. Photograph: Getty Images.

David Cameron’s recent announcement that the coalition will introduce a series of tough benefit restrictions to deter Romanians and Bulgarians from coming to the UK in January will come as little surprise to most of the population and indeed may be welcomed by many. However what is becoming surprising is the one sided nature of the conversation on immigration. At a series of fringe event’s in partnership with the ACCA at this year’s political party conferences all parties conceded the necessity of immigration to support economic growth; to succeed in what David Cameron has called "the global race". 

The irony of the debate on immigration is that the statistics illustrate a different argument from the one being portrayed in the media. At the Conservative conference Jonathan Porters, director of the National Institute for Economic and social research drew reference to the recent Fiscal Sustainability report, published by the Office for Budget Responsibility which considered the impact of reducing migration to the tens of thousands. The report found that “in 50 years from now there would either be hundreds of billions of pounds more in the national debt or we would pay about two or one per cent more in taxes”. The economic case for immigration is often ignored by politicians in favour of populist anti immigration stance; as John Longworth, Director General of the British Chamber of Commerce noted immigration is essential “we need to be able to fill the gaps in the UK economy. This is not to say that business shouldn’t be actively engaged in training UK citizens but, with the best will in the world, it’s impossible to do that in a very short space of time. So, we’re in a position where by necessity we need to be able to import those skills. Preventing that from happening actually impedes the economy overall and makes us all poorer”.

In contrast with most other European countries, the UK attracts highly educated and skilled immigrants. In 2011, 32 per cent of recent EEA immigrants and 38 per cent of non-EEA immigrants had university degrees, compared with 21 per cent of the British adult population. But it isn’t just hard skills that Britain benefits from. As ACCA research has shown, business and finance leaders increasingly require international experience in order for them to perform effectively within a competitive market place. If businesses are to counter the negative press coverage they need to do more to demonstrate they are working hard to create opportunities for UK nationals.  “We need to massively commit to up-skilling our own population, which has been marginalised because of a lack of skills and training. A lot of industries already do a huge amount but until businesses begin to pull in the same direction, I don’t think we’ll fully get that resentment out of the press,” as suggested by Dr. Adam Marshall, Director of Policy and Public Affairs at the British Chamber of Commerce. 

David Cameron’s recent announcement perpetuates the myth that immigrants come to the UK as "benefit tourists". This myth seems particularly misplaced given that the European Commission argued in a recent report that EU member states, including the UK, have been unable to provide evidence of mobile EU citizens representing an excessive burden on social security systems in the host Member States. On the contrary, they in fact make a positive fiscal contribution, especially in the UK where, according to a UCL study, recent EEA immigrants have on average contributed 34 per cent more in taxes than they have received as transfers. Recent immigrants from countries outside the EEA have contributed 2 per cent more in taxes than they have received as transfers. Also in a recent study by the Centre for Research and Analysis of Migration they found that recent immigrants (those who arrived after 1999 and who constituted 33 per cent of the overall immigrant population in the UK in 2011) were 45 per cent less likely to receive state benefits or tax credits than UK natives over the period 2000-11. They were also 3 per cent less likely to live in social housing. Furthermore the Centre of European Reform found that just 1.7 per cent of EU-8 are on Jobseeker’s Allowance. A far smaller proportion of EU-8 immigrants receive disability, pension, and child benefits than British people.  Very few European migrants live in social housing, and only 5 per cent receive housing benefit.

Immigration is becoming a policy area fuelled by sensation and not facts. If the public is to be convinced that immigration has positive consequences we must have more evidence based education and those who have benefited must do more to disseminate the message.  

The New Statesman in partnership with the ACCA will be producing a report on whether a cap on immigration is a cap on growth, it will be available from the 12 December both online and in the magazine.