Where now for the immigration debate?

The coalition's political approach is at risk of unravelling, but genuine policy challenges remain.

The economic impacts of migration, and of immigration policy, are back in the spotlight. Today, Gus O’Donnell accused the government of "shooting itself in the foot" on growth by restricting skilled immigration. Yesterday’s two big economic reports, from Michael Heseltine and the Resolution Foundation’s Commission on Living Standards also considered the issue from different perspectives.

O’Donnell and Heseltine both highlight the potentially negative impacts on growth of immigration policy that restricts (either in principle or in practice) the ability of businesses to access a global pool of talent. Meanwhile, the Commission on Living Standards, in an exhaustive study of the causes of the "wage squeeze" that has affected low and middle earners in the UK, concludes that immigration has not been a significant factor.

So if immigration is important for growth, and doesn’t have significant effects on low and middle earners (the evidence for both these claims is strong), what’s the problem? Why does the government persist with an immigration policy that appears to make no economic sense, and why does the opposition not offer a more straightforward criticism of it? There is sometimes a feeling on the "progressive" side of the argument that this is simply a problem of politics and public opinion – if only the economic evidence could be better communicated and understood, then the path would be clear for a more "rational" (and, by implication, more liberal) immigration policy. This is wrong, for at least two reasons.

The first is that there are genuine policy challenges with respect to immigration policy that need to be addressed – this is not simply a case of politics and public opinion muddying the crystalline waters of economic evidence.

The impacts of migration on the labour market and the economy are complex. Although the finding that migration has had little impact on wages or unemployment is robust, there are some important caveats which need to be considered. Too little is known about the distributional impacts of migration. The Commission on Living Standards is right that even at the bottom end of the labour market, the impacts of migration on wages and employment seem to be very small, but this does not rule out more significant impacts on specific groups of workers (for example in some sectors in particular local areas). Nor does it take into account the fact that migration (including skilled migration) has been part of an economic model that has seen wages at the top end of the labour market become disconnected from those at the bottom. Pleas from the City to be able to bring in more highly-skilled (and highly-paid) migrants may make sense from the point of view of economic growth, but we should take seriously the argument that some kinds of growth are better than others, and that migration policy needs to be part of that discussion.

Migration also poses a range of complex policy challenges beyond labour markets and the economy, particularly at the local level – the rapid population change that can result does affect housing, public services, and community cohesion, whatever the economic benefits.

The second reason, which Heseltine recognised in his report yesterday, is that migration policy must have "public assent". This is not just an argument for better communications. Progressives and economic liberals may find some aspects of public opinion on this issue uncomfortable, and it is always open to them to try to shift the terms of debate – but the right response can never be simply to ignore the views of the electorate. Arguments over migration cannot be left to experts or economists but must be shaped through democratic debate and choice.

So where does this leave migration policy and politics? There are three key challenges that policymakers and politicians must face up to. The first is that migration must be situated in a wider policy debate about the economy (and housing, welfare, and communities). Ed Miliband has understood this, and Labour is showing promising signs of tackling migration policy in this way. The second is that many of the real policy challenges are local ones, and need to be addressed at the local level – something that will require a big change of approach in a policy area that has traditionally been highly centralised. The government’s net migration target is about as far away from the nuanced local policy mix that is needed as it is possible to get. In light of this, the third challenge presents a paradox – although there are real policy challenges at the local level, the public don’t (on the whole) feel that immigration is a problem in their own local communities, although a large majority do feel that it is a problem for the country as a whole.

So politicians are faced with a national political problem which is cast in terms of very simple choices, and a need for nuanced and local policy solutions. The government has opted to play the political game rather than the policy one – a strategy that is at risk of unravelling under the weight of its own contradictions, and the kinds of critiques that have emerged this week. Labour are engaging seriously with the policy questions, but are still in search of a narrative on immigration – "one nation" Labour is as good a starting point as any, but much more work is needed given the party’s difficult recent history on this issue.

David Cameron watches passengers go through immigration control during a visit to Heathrow terminal 5. Photograph: Getty Images.

Sarah Mulley is associate director at IPPR.

Photo: Getty
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The three big mistakes the government has made in its Brexit talks

Nicola Sturgeon fears that the UK has no negotiating position at all. It's worse than she thinks. 

It’s fair to say that the first meeting of the government’s Brexit ministers and the leaders of the devolved legislatures did not go well.

Scotland’s Nicola Sturgeon told reporters outside that it had all been “deeply frustrating”, and that it was impossible for her to undermine the United Kingdom’s negotiating position as “I can’t undermine something that doesn’t exist, and at the moment it doesn’t seem to me like there is a UK negotiating strategy”.

To which cynical observers might say: she would, wouldn’t she? It’s in Sturgeon’s interest to paint the Westminster government as clueless and operating in a way that puts Scotland’s interests at risk. Maybe so, but Carwyn Jones, her Welsh opposite number, tends to strike a more conciliatory figure at these events – he’s praised both George Osborne and David Cameron in the past.

So it’s hard not to be alarmed at his statement to the press that there is still “huge uncertainty” about what the British government’s negotiating position. Even Arlene Foster, the first minister in Northern Ireland, whose party, the DUP, is seen as an increasingly reliable ally for the Conservative government, could only really volunteer that “we’re in a negotiation and we will be in a negotiation and it will be complex”.

All of which makes Jeremy Corbyn’s one-liner in the Commons today that the government is pursuing neither hard Brexit nor soft Brexit but “chaotic Brexit” ring true.

It all adds to a growing suspicion that the government’s negotiating strategy might be, as Jacqui Smith once quipped of Ed Miliband’s policy review, something of “a pregnant panda – it's been a very long time in the making and no one's quite sure if there's anything in there anyway”.

That’s not the case – but the reality is not much more comforting. The government has long believed, as Philip Hammond put when being grilled by the House of Lords on the issue:

"There's an intrinsic tension here between democratic accountability of the government and effective negotiation with a third party. Our paramount objective must be to get a good deal for Britain. I am afraid will not be achieved by spelling out our negotiating strategy."

That was echoed by Theresa May in response to Corbyn’s claim that the government has no plan for Brexit:

 “We have a plan, which is not to give out details of the negotiation as they are being negotiated”

Are Hammond and May right? Well, sort of. There is an innate tension between democratic accountability and a good deal, of course. The more is known about what the government’s red lines in negotiations, the higher the price they will have to pay to protect. That’s why, sensibly, Hammond, both as Foreign Secretary during the dying days of David Cameron’s government, and now as Chancellor, has attempted to head off public commitments about the shape of the Brexit deal.

But – and it’s a big but – the government has already shown a great deal of its hand. May made three big reveals about the government’s Brexit strategy it in her conference speech: firstly, she started the clock ticking on when Britain will definitely leave the European Union, by saying she will activate Article 50 no later than 31 March 2017. Secondly, she said that Brexit meant that Britain would control its own borders. And thirdly, she said that Brexit meant that Britain would no longer be subject to the judgements of the European Court of Justice.

The first reveal means that there is no chance that any of 27 remaining nations of the European Union will break ranks and begin informal talks before Article 50 is triggered.

The second reveal makes it clear that Britain will leave the single market, because none of the four freedoms – of goods, services, capital or people – can be negotiated away, not least because of the fear of political contagion within the EU27, as an exit deal which allowed the United Kingdom to maintain the three other freedoms while giving up the fourth would cause increased pressure from Eurosceptics in western Europe.

And the third reveal makes it equally clear that Britain will leave the customs union as there is no way you can be part of a union if you do not wish to accept its legal arbiter.

So the government has already revealed its big priorities and has therefore jacked up the price, meaning that the arguments about not revealing the government’s hand is not as strong as it ideally would be.

The other problem, though, is this: Theresa May’s Brexit objectives cannot be met without a hard Brexit, with the only question the scale of the initial shock. As I’ve written before, there is a sense that the government might be able to “pay to play”, ie, in exchange for continuing to send money to Brussels and to member states, the United Kingdom could maintain a decent standard of access to the single market.

My impression is that the mood in Brussels now makes this very tricky. The tone coming out of Conservative party conference has left goodwill in short supply, meaning that a “pay to play” deal is unlikely. But the other problem is that, by leaving so much of its objectives in the dark, Theresa May is not really laying the groundwork for a situation where she can return to Britain with an exit deal where Britain pays large sums to the European Union for a worse deal than the one it has now. (By the way, that is very much the best case scenario for what she might come back with.) Silence may make for good negotiations in Brussels – but in terms of the negotiation that may follow swiftly after in Westminster, it has entirely the opposite effect. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.