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19 February 2020updated 09 Sep 2021 4:10pm

The Tories still haven’t decided whether they want to reduce immigration or control it

The proposed points-based system will depend on continual tinkering by ministers. 

By Stephen Bush

The government has unveiled its first detailed and in-depth statement about how its proposed points-based immigration system will work after the UK formally leaves the institutional structures of the European Union on 31 December. 

The story that the government wants to tell is that there is no route to low-skilled migration. Employers are instead being encouraged to fill the gap through hiring British workers, increasing their productivity and investing in automation. 

There are a couple of risks to this approach. The first is that it was my understanding until yesterday that government ministers believe the UK is enjoying an employment miracle, that the UK is at or near full employment – hence the large list of job vacancies. It may be that the shortfall of so-called unskilled immigration cannot be made up for by increasing productivity, wages and automation, because the businesses in question cannot afford to do so. That may be particularly acute for the hospitality sector, a vital part of the local economy in many coastal constituencies – seats largely held by Tory MPs, don’t forget. 

The second is that while the Migration Advisory Committee (MAC) found that the free movement of labour had some impacts on pay at the bottom of the income distribution, it also had impacts on inflation. If the inflationary pressures are larger or even equal to the consequences for wages then that won’t be painless for you and me, or the government either for that matter. 

But I suspect that in practice there will be many more holes in the government’s system than they want to advertise explicitly at this point. The price of entry is that applicants must pick up 70 points or more. You can secure the required points if you can speak English, have a job offer at an appropriate skill level, and are working in a job that the MAC has designated as a shortage occupation.

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The lesson from Australia’s points-based immigration system is that the way to make a points-based system work, given that governments are good at a lot of things but are bad at assessing the employment needs of businesses and the wider economy, is to tinker and tinker often. 

To take my favourite Australian example – in 2002, hairdressing was listed as a skilled occupation but fitting windows was not. In 2018, fitting windows was listed as a skilled occupation but cutting hair was no longer listed as skilled. That’s not because cutting hair became a less skilled job between 2002 and 2018, or because fitting windows became more difficult, but because in both cases, the change was about government scrambling to adjust for a real economic need. 

You can see that this is a system built for tinkering with those artificially high points totals – at present you could achieve the same level of finesse with a points-based system rated one to seven as this one that goes one to 70. But if you’re looking for ways to loosen your system without unpicking it down the line, a one to 70 gives you more flexibility. 

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All of which comes to the big known known about Brexit and migration: does the Conservative electoral coalition want a reduction in numbers, with all the economic implications that approach entails, or just more control? This is an approach that is being spun heavily as delivering a reduction – while giving ministers and the MAC acres and acres of space to tweak and increase migration if need be. The government hasn’t committed itself completely as far as the control/reduction question is concerned: I suspect because they have no more idea which their voters really want than the rest of us do.