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23 February 2012

The coalition’s migration troubles continue

The government is still struggling to keep its promise to reduce net migration.

By Matt Cavanagh

The latest immigration figures published by the ONS today, covering the first full year of the coalition, show net migration – which Conservative ministers have pledged to cut “from hundreds of thousands to tens of thousands” – remaining at a record high: in the year to June 2011, 250,000 more people came to the UK than left. The Immigration minister Damian Green is sticking to his line that the coalition inherited rising net migration and has stabilised it. This is despite the fact that, when he made this claim last year, the UK Statistics Authority wrote to correct him. The true picture, as the ONS makes clear, is that from both immigration and net migration rose steadily from the mid 1990s to 2004; since 2004, immigration has been stable, and net migration has fluctuated in line with changes in emigration, with no clear trend. Today’s figures show this overall picture continuing: immigration remains stable at similar levels to 2004, emigration is stable since last year, and so there is no change in net migration (there is, however, a rise in emigration of UK nationals, of 14 per cent, apparently offset by a fall in emigration of foreign nationals).

The other aspect of today’s figures likely to attract attention is what is happening with immigration and employment. In his response to the figures, Damian Green emphasises the slight fall in the number of work visas granted to non-EU nationals (down 7 per cent to 149,000 in the year to December 2011). However, this appears to be more than offset by an increase in the number of Eastern Europeans coming to the UK to work: National Insurance Numbers issued to Eastern Europeans rose by 14 per cent to 183,000 in the year to September 2011 (unfortunately, all these data series have slightly different time periods).

Overall, the total number of National Insurance Numbers allocated to foreign nationals, both EU and non-EU – the best estimate of the total number of foreigners coming here to work – increased by 11 per cent in the year to September 2011. This is in line with last week’s labour market statistics, and is likely to reinforce widespread fears that immigration is exacerbating Britain’s current unemployment problem. This problem is clearly very serious, especially in relation to youth unemployment – as today’s NEET figures remind us. But the rise in youth unemployment predated the financial crisis, and also predated the rise in immigration from Eastern Europe. Its causes are far too complex to be reduced to blaming immigration (see recent IPPR analysis here), and cutting the supply of immigration is unlikely to be the answer, even if the government was able to achieve it.

Nevertheless, controlling immigration is a legitimate policy objective in its own right, even if it is not the solution to unemployment. The problem is the way the government is pursuing this objective, and in particular, the crudeness of net migration target, which brings two related risks. The first risk is that it will be seen as another example of politicians promising what they can’t deliver, which could feed people’s disillusionment, rather than taking the heat out of the immigration issue, as ministers say they want. The second risk is that as they struggle to hit the target, ministers will be tempted to make increasingly drastic policy choices. So far, Conservative ministers’ response to the stubborn refusal of net migration to fall has been to blame the previous Labour government, and more controversially, to blame the country for being “addicted to immigration“. Both responses are approaching the end of their shelf life: in political terms ministers will need the next few sets of figures to start showing real changes, or they will have to act.

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There are signs that immigration may have started to fall slightly in the second half of 2011. Green made clear today that the bulk of the reduction in work and study visas (which fell by 4 per cent) came in the second half of the year. IPPR has forecast that these trends will continue in 2012 – but they will not be enough to put the government on track to hit its target, particularly if there is no change in the trends of immigration from the EU. Moreover, while policy changes are undoubtedly having some effects on the supply of immigration, a bigger factor is likely to be the relative performance of the UK economy, which is likely to reduce the demand for immigration – potentially from the EU as well.

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One illustration of this is the fact that the ‘cap’ or quota on skilled migrants from outside the EU has been nowhere near fully taken up for the present financial year. Ministers and officials refer to this in their private conversations with employers who lobby them against restricting immigration policy. They tend not to refer to it in public, since it involves admitting that their flagship policy hasn’t actually had any effect. They also don’t want to admit that the main reason the quota hasn’t been taken up is the state of the economy: many employers just haven’t been hiring for these kinds of jobs.

The government is likely to leave the cap where it is for the next financial year: it would be hard to justify reducing it. The wider point is that ministers find themselves in the perverse position that their best chance of hitting their overall migration target is if the UK experiences a prolonged economic downturn, reducing the demand for immigration across all categories, not just skilled workers from outside the EU. If instead, as we all hope, we start returning to growth late this year or early next, the government may face a more difficult set of choices. The risk, as noted above, is that rather than looking to support growth, the net migration target will force them to attempt more drastic reductions in work and study from outside the EU, simply because those are the easiest categories to control, and despite the fact that they are also the most economically beneficial categories, and the kind of immigration which surveys show the public are least bothered about.