Confronting the immigration conundrum

July 1, 2010


Laurence Copeland is a professor of finance at Cardiff Business School. The opinions expressed are his own.-

After being the third rail of British politics for a generation or more, immigration is suddenly a topic which can be spoken about in polite society.

Unfortunately, as far as policy is concerned, it is also a classic case of the politician’s syllogism familiar from Yes, Minister: something must be done; this is something; therefore this must be done. Most of the proposals on offer seem likely to make the situation worse, which is not surprising since many are based on a thoughtless acceptance of conventional wisdom.

Take for example a proposition which had the three party leaders nodding in agreement during the pre-election TV debate on this subject: that only the most highly-qualified immigrants should be allowed entry into the UK.

Really? This raises at least two issues.

First, what is the point of the foreign aid budget?

Leaving aside the suspicion that it mostly ends up in numbered Swiss bank accounts or converted into malt whisky to keep the local officer class in their barracks, the question arises: why subsidise impoverished countries which have a desperate shortage of skilled personnel, while simultaneously raiding their human capital to make up for the shortfall in our own?

Would it not be more sensible to divert most, if not all of the overseas aid budget to increasing our home-grown production of doctors, dentists and computer programmers, and reducing our reliance on imports from impoverished aid recipients?

Even leaving these considerations aside, however, do we really have no need of unskilled labour?

Take, for example, our health services. In my experience of both the NHS and the private sector, immigrants are heavily represented at both ends of the pay and skills spectrum (and in the middle too). Many top consultants are immigrants, but so also are many of the porters, cleaners, laundry staff, carpark attendants and so on.

Now, of course it is easy to see why politicians find it expedient to talk as though the latter are unnecessary – after all, there are many thousands of Brits (possibly even voters!) who would be glad of those jobs, aren’t there?

Well, maybe. The truth is that, while we don’t have enough homegrown hospital consultants, we also don’t have enough natives willing to fill all the vacancies for porters and cleaners.

At this point trade unionists will shout out their solution to the problem: simply pay more and you’ll get more porters and cleaners without any need of immigrants. It takes higher wages to persuade us natives to take on jobs that are often dirty and unpleasant.

Our youngsters prefer to go to university to spend three years drinking, dating and training for unemployment (aka reading media studies, business or leisure centre management), or if we have no middle-class pretensions, simply go straight from school to the dole queue.

If only we had the money to pay higher wages………. The fact is that paying enough to man the NHS (at anything like its present scale) was a long way beyond our means even before the disasters of the last three years, so that, in practice, cutting off the supply of immigrants would inevitably mean making do with less – essentially, closing hospitals.

This flies in the face of the demographic time-bomb, which is going to require more, not fewer hospitals – along with thousands more care workers to look after the day-to-day needs of the bulge generation as it reaches old age.

Of course, there is another way out of this impasse, but it is not one that was ever going to appeal to  politicians in pre-election mode.

If British people don’t want to do the jobs on offer, it is not because they prefer to starve, but because the welfare state offers cushier alternatives – another indication that it is time to reduce the level of benefits and/or restrict access to them.

The need to reduce the country’s borrowing levels in the next few years will have this effect in any case, but the benefit cuts are unlikely to be so drastic as to force enough Brits into employment to satisfy the needs of the NHS and the rest of the care sector, let alone the other industries which rely heavily on immigrants (e.g. catering and hotels, security, office services, agriculture).

Nor will the cuts be so deep that they no longer offer an attractive standard of living to the minority of immigrants content to rely on welfare benefits to survive.

On this last point, I have another problem with every one of the “solutions” so confidently offered on all sides: the point score system copied from Canada and Australia, the payment-for-entry system proposed the other day by Nobel Laureate Professor Gary Becker, quotas, bans, etc.

They all set limits on legal immigration, but ignore the problem of illegal immigration. Now, of course, it may sound sensible enough to deal with one problem at a time – but not if imposing tighter limits on legal immigration simply increases the numbers arriving illegally – which is why I can see little point in any proposal that is not accompanied by new thinking on how to deal with illegal arrivals.

The point is this. If, for whatever reason, we really believe the country cannot sustain its current rate of (net) immigration – whether because we think the country is overcrowded, or our social services cannot cope, or our culture under threat – setting limits will, on its own, not help much.

We have to be able and willing to enforce the limits. At the moment, as far as I can see, we are unable to catch illegal immigrants in significant numbers, and we have now overwhelmingly rejected ID cards, which might have made the task a little easier.

Moreover, even when illegal immigrants are caught, deportation is by no means automatic. In the end, like more or less every other country in Europe and North America, we have lost control of our borders.

In short, we know where we want to go, but so far, on balance, we have no stomach for the sort of measures needed to get there. This consensus (which I share) may yet change.

In the meantime, until it does change, it makes very little difference what new schemes we introduce to limit immigration. But thinning the upholstery of the welfare state and doing more to limit access to its benefits would be a good start, and as I have argued above, is desirable for other reasons too.

In terms of the well-worn saying, the welfare state was never intended to be a hammock. If it were only a safety net, there would be less reason to worry about the nationality of those snoozing in it.

Picture Credit: Shoppers walk in a market in Upton Park in Newham, London’s most culturally diverse borough. June 26, 2010. REUTERS/Paul Hackett

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