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.

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Brexit has opened up big rifts among the remaining EU countries

Other non-Euro countries will miss Britain's lobbying - and Germany and France won't be too keen to make up for our lost budget contributions.

Untangling 40 years of Britain at the core of the EU has been compared to putting scrambled eggs back into their shells. On the UK side, political, legal, economic, and, not least, administrative difficulties are piling up, ranging from the Great Repeal Bill to how to process lorries at customs. But what is less appreciated is that Brexit has opened some big rifts in the EU.

This is most visible in relations between euro and non-euro countries. The UK is the EU’s second biggest economy, and after its exit the combined GDP of the non-euro member states falls from 38% of the eurozone GDP to barely 16%, or 11% of EU’s total. Unsurprisingly then, non-euro countries in Eastern Europe are worried that future integration might focus exclusively on the "euro core", leaving others in a loose periphery. This is at the core of recent discussions about a multi-speed Europe.

Previously, Britain has been central to the balance between ‘ins’ and ‘outs’, often leading opposition to centralising eurozone impulses. Most recently, this was demonstrated by David Cameron’s renegotiation, in which he secured provisional guarantees for non-euro countries. British concerns were also among the reasons why the design of the European Banking Union was calibrated with the interests of the ‘outs’ in mind. Finally, the UK insisted that the euro crisis must not detract from the development of the Single Market through initiatives such as the capital markets union. With Britain gone, this relationship becomes increasingly lop-sided.

Another context in which Brexit opens a can of worms is discussions over the EU budget. For 2015, the UK’s net contribution to the EU budget, after its rebate and EU investments, accounted for about 10% of the total. Filling in this gap will require either higher contributions by other major states or cutting the benefits of recipient states. In the former scenario, this means increasing German and French contributions by roughly 2.8 and 2 billion euros respectively. In the latter, it means lower payments to net beneficiaries of EU cohesion funds - a country like Bulgaria, for example, might take a hit of up to 0.8% of GDP.

Beyond the financial impact, Brexit poses awkward questions about the strategy for EU spending in the future. The Union’s budgets are planned over seven-year timeframes, with the next cycle due to begin in 2020. This means discussions about how to compensate for the hole left by Britain will coincide with the initial discussions on the future budget framework that will start in 2018. Once again, this is particularly worrying for those receiving EU funds, which are now likely to either be cut or made conditional on what are likely to be more political requirements.

Brexit also upends the delicate institutional balance within EU structures. A lot of the most important EU decisions are taken by qualified majority voting, even if in practice unanimity is sought most of the time. Since November 2014, this has meant the support of 55% of member states representing at least 65% of the population is required to pass decisions in the Council of the EU. Britain’s exit will destroy the blocking minority of a northern liberal German-led coalition of states, and increase the potential for blocking minorities of southern Mediterranean countries. There is also the question of what to do with the 73 British MEP mandates, which currently form almost 10% of all European Parliament seats.

Finally, there is the ‘small’ matter of foreign and defence policy. Perhaps here there are more grounds for continuity given the history of ‘outsourcing’ key decisions to NATO, whose membership remains unchanged. Furthermore, Theresa May appears to have realised that turning defence cooperation into a bargaining chip to attract Eastern European countries would backfire. Yet, with Britain gone, the EU is currently abuzz with discussions about greater military cooperation, particularly in procurement and research, suggesting that Brexit can also offer opportunities for the EU.

So, whether it is the balance between euro ‘ins’ and ‘outs’, multi-speed Europe, the EU budget, voting blocs or foreign policy, Brexit is forcing EU leaders into a load of discussions that many of them would rather avoid. This helps explain why there is clear regret among countries, particularly in Eastern Europe, at seeing such a key partner leave. It also explains why the EU has turned inwards to deal with the consequences of Brexit and why, although they need to be managed, the actual negotiations with London rank fairly low on the list of priorities in Brussels. British politicians, negotiators, and the general public would do well to take note of this.

Ivaylo Iaydjiev is a former adviser to the Bulgarian government. He is currently a DPhil student at the Blavatnik School of Government at the University of Oxford

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