The net migration target is bad policy and bad politics

The cuts to foreign student numbers come at a significant economic cost to the UK.

The latest migration statistics have been met with the usual barrage of claim and counter-claim. The government is claiming the fall in net migration as a sign of success in its efforts to get net migration down to less than 100,000 a year. On the other side, the education sector (particularly further education and English language colleges) will see the 26 per cent decline in foreign student visas as a disaster for the economy. Meanwhile, the latest report from the Independent Chief Inspector of Borders and Immigration highlights failures to enforce student visa rules properly.

It is clear that it's premature of the government to declare victory on the net migration target – there’s a long way to go yet. Yesterday's figures showed net migration in the year to March 2012 of 183,000, against the government’s target of less than 100,000. Although ministers have tightened up immigration rules across the board, the main effects on migration numbers have come from changes to the student visa regime. The net migration figures published yesterday only cover the period up to March 2012 – more up-to-date student visa data suggest that further falls in the net migration figures are likely in the coming months. But the impact of declining foreign student numbers on net migration is likely to be short-lived. Because most students only stay in the UK for a short time, reduced immigration today means reduced emigration in two or three years’ time, which could see net migration rise again. That would further undermine public confidence in the government’s ability to deliver on immigration.

It is also clear that cuts to student numbers come at a significant economic cost to the UK. Although government rhetoric around student visas is usually focused on abuse of the system, it is clear that the falls in foreign student numbers required for the government to meet its net migration target would mean drastic cuts to the numbers of genuine foreign students. Indeed, it is hard to argue that today’s statistics show anything other than a reduction in the number of genuine students coming to the UK. All this is costing the economy billions (as the government’s own impact assessment acknowledged) at a time when we can ill-afford to reduce export earnings (which is what foreign student fees and spending are), and is leading to more jobs being lost in the UK.

And none of this will help assuage public concerns about immigration if UKBA cannot carry out the basic functions of enforcement. It is meaningless to talk about making the rules tougher if you can’t enforce the ones you already have. It may even be that the government’s single-minded focus on reducing net migration creates new enforcement problems in the future. For example, "student visitors" who come to the UK for less than 12 months do not count as migrants for the purposes of net migration figures, and are subject to less rigorous checks than those coming through the main student visa route. The number of student visitor visas issued is continuing to rise, perhaps because tough action on student visas aimed at meeting the net migration target has led to a displacement effect. The government needs to be sure that it has the systems in place to deal with this.

All this confirms that the net migration target is leading to bad policy. It may also be bad politics. The government need to be brave enough to change their approach, or at least exclude students from the net migration target. Labour need to admit past mistakes, but avoid getting into a "bidding war" on migration numbers, as Ed Balls acknowledged yesterday. Politicians from all sides need to be prepared to have an honest discussion with the public about the difficult trade-offs that migration policy presents to policy makers. Sadly, the ritual debate about net migration does not move us further towards that goal.

Sarah Mulley is associate director at IPPR.

A protester takes part in a demonstration outside the Home Office over restrictions on foreign students. Photograph: Getty Images.

Sarah Mulley is associate director at IPPR.

Getty
Show Hide image

In your 30s? You missed out on £26,000 and you're not even protesting

The 1980s kids seem resigned to their fate - for now. 

Imagine you’re in your thirties, and you’re renting in a shared house, on roughly the same pay you earned five years ago. Now imagine you have a friend, also in their thirties. This friend owns their own home, gets pay rises every year and has a more generous pension to beat. In fact, they are twice as rich as you. 

When you try to talk about how worried you are about your financial situation, the friend shrugs and says: “I was in that situation too.”

Un-friend, right? But this is, in fact, reality. A study from the Institute for Fiscal Studies found that Brits in their early thirties have a median wealth of £27,000. But ten years ago, a thirty something had £53,000. In other words, that unbearable friend is just someone exactly the same as you, who is now in their forties. 

Not only do Brits born in the early 1980s have half the wealth they would have had if they were born in the 1970s, but they are the first generation to be in this position since World War II.  According to the IFS study, each cohort has got progressively richer. But then, just as the 1980s kids were reaching adulthood, a couple of things happened at once.

House prices raced ahead of wages. Employers made pensions less generous. And, at the crucial point that the 1980s kids were finding their feet in the jobs market, the recession struck. The 1980s kids didn’t manage to buy homes in time to take advantage of low mortgage rates. Instead, they are stuck paying increasing amounts of rent. 

If the wealth distribution between someone in their 30s and someone in their 40s is stark, this is only the starting point in intergenerational inequality. The IFS expects pensioners’ incomes to race ahead of workers in the coming decade. 

So why, given this unprecedented reversal in fortunes, are Brits in their early thirties not marching in the streets? Why are they not burning tyres outside the Treasury while shouting: “Give us out £26k back?” 

The obvious fact that no one is going to be protesting their granny’s good fortune aside, it seems one reason for the 1980s kids’ resignation is they are still in denial. One thirty something wrote to The Staggers that the idea of being able to buy a house had become too abstract to worry about. Instead:

“You just try and get through this month and then worry about next month, which is probably self-defeating, but I think it's quite tough to get in the mindset that you're going to put something by so maybe in 10 years you can buy a shoebox a two-hour train ride from where you actually want to be.”

Another reflected that “people keep saying ‘something will turn up’”.

The Staggers turned to our resident thirty something, Yo Zushi, for his thoughts. He agreed with the IFS analysis that the recession mattered:

"We were spoiled by an artificially inflated balloon of cheap credit and growing up was something you did… later. Then the crash came in 2007-2008, and it became something we couldn’t afford to do. 

I would have got round to becoming comfortably off, I tell myself, had I been given another ten years of amoral capitalist boom to do so. Many of those who were born in the early 1970s drifted along, took a nap and woke up in possession of a house, all mod cons and a decent-paying job. But we slightly younger Gen X-ers followed in their slipstream and somehow fell off the edge. Oh well. "

Will the inertia of the1980s kids last? Perhaps – but Zushi sees in the support for Jeremy Corbyn, a swell of feeling at last. “Our lack of access to the life we were promised in our teens has woken many of us up to why things suck. That’s a good thing. 

“And now we have Corbyn to help sort it all out. That’s not meant sarcastically – I really think he’ll do it.”