Why Cameron shouldn't celebrate the fall in net migration

Reducing net migration by cutting foreign student numbers is an act of economic masochism.

David Cameron was quick to celebrate the news that net migration to the UK has fallen by nearly a quarter over the last year, declaring that "effective immigration helps us compete in the global race". The fall in net migration (the difference between the number of people leaving the country and the number entering), from 242,000 to 183,000, is the largest for four years and means Cameron is significantly closer to his goal of reducing the number of net arrivals to "the tens of thousands" by the end of the Parliament.

But what Cameron didn't and won't say is that the fall in net migration was principally due to a decline of 19,000 in the number of foreign students, with 26 per cent fewer visas issued. Relying on reduced student numbers in order to curb net migration is, as I've written before, an act of economic masochism. Estimates suggest that an annual fall of 20,000 in the number of foreign students, who account for more than a tenth of higher education income in England, will cost the economy around £1bn-£1.5bn. With the government unable to restrict EU immigration (unless it leaves the club altogether), its only option is to squeeze non-EU migration as hard as it can and that means closing the door to thousands of would-be students.

There's still little chance of Cameron meeting his target, but at least he'll be able to boast that the numbers are "moving in the right direction" (even as our anaemic economy is further enfeebled). Yet since most student migration is short-term (they study, then leave), reduced immigration now means reduced emigration later, so the impact on net migration is negligible. Is the government really strangling one of our most successful sectors so that it can temporarily claim that immigration is coming down? The answer is yes.

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

George Eaton is political editor of the New Statesman.

Getty Images.
Show Hide image

Martin Sorrell: I support a second EU referendum

If the economy is not in great shape after two years, public opinion on Brexit could yet shift, says the WPP head.

On Labour’s weakness, if you take the market economy analogy, if you don’t have vigorous competitors you have a monopoly. That’s not good for prices and certainly not for competition. It breeds inefficiency, apathy, complacency, even arrogance. That applies to politics too.

A new party? Maybe, but Tom Friedman has a view that parties have outlived their purpose and with the changes that have taken place through globalisation, and will do through automation, what’s necessary is for parties not to realign but for new organisations and new structures to be developed.

Britain leaving the EU with no deal is a strong possibility. A lot of observers believe that will be the case, that it’s too complex a thing to work out within two years. To extend it beyond two years you need 27 states to approve.

The other thing one has to bear in mind is what’s going to happen to the EU over the next two years. There’s the French event to come, the German event and the possibility of an Italian event: an election or a referendum. If Le Pen was to win or if Merkel couldn’t form a government or if the Renzi and Berlusconi coalition lost out to Cinque Stelle, it might be a very different story. I think the EU could absorb a Portuguese exit or a Greek exit, or maybe even both of them exiting, I don’t think either the euro or the EU could withstand an Italian exit, which if Cinque Stelle was in control you might well see.

Whatever you think the long-term result would be, and I think the UK would grow faster inside than outside, even if Britain were to be faster outside, to get to that point is going to take a long time. The odds are there will be a period of disruption over the next two years and beyond. If we have a hard exit, which I think is the most likely outcome, it could be quite unpleasant in the short to medium term.

Personally, I do support a second referendum. Richard Branson says so, Tony Blair says so. I think the odds are diminishing all the time and with the triggering of Article 50 it will take another lurch down. But if things don’t get well over the two years, if the economy is not in great shape, maybe there will be a Brexit check at the end.

Martin Sorrell is the chairman and chief executive of WPP.

As told to George Eaton.

This article first appeared in the 30 March 2017 issue of the New Statesman, Wanted: an opposition