Immigration must serve British interests

Last week saw two notable interventions in Britain's rolling debate about immigration and integration. Both of them felt rather anachronistic, almost historical commentaries on a debate that has since moved on. First was another speech from Eric Pickles, the secretary of state for communities and local government, which had nothing new to say by way of analysis or proposals—beyond the usual plea for newcomers to learn English. This is despite the fact that he was speaking just a few weeks after a vast deluge of new information emerged about integration, or the lack of it, from the 2011 census. More of Pickles later.

The other intervention came from Matt Cavanagh and Sarah Mulley from the IPPR, who proposed a new list of basic principles that should guide progressive thinking about immigration. Matt is a friend and someone I have learnt from: he was often a voice of reason on these issues when Labour was in power and he worked for David Blunkett and later Gordon Brown. (Sarah I know less well.) This is an ambitious and in some ways admirable project—trying to establish some first principles for the centre left—but I can't help thinking it is at least 10 years too late.

First some things about the statement that are welcome and sensible and have not always been said so unequivocally from the centre left: public concerns about immigration are real and legitimate, and in most cases do not stem from racism; the public are not just dupes of a reactionary media, so better communication of the “correct” attitude is not a sensible approach; cultural and psychological factors matter as well as economic ones and countries do have an absorptive capacity; and the distributional effects of immigration should be central to the economic benefit argument.

What I don't like so much is the fact that there is also plenty of rather elaborate restatement of very familiar, and mainly unexamined, centre-left views: there is the standard triangulation trope, and the surely inaccurate claim that the most prominent voices in this debate are often “extreme ones”; the current government's policies are dismissed as wrong and damaging largely without evidence or argument including the standard attack on the “tens of thousands” target as raising expectations that are likely to be disappointed (though to be fair the IPPR has gone into more detail on this elsewhere); and there is the underpinning assumption that immigration is of significant economic benefit, even if there are costs that arise from it.

I have recently ploughed through a lot of the economic work on recent immigration to Britain (for a book I have just written on the subject) and the conclusion of almost all the analysis on wages, employment, fiscal benefit, economic growth and so on is that despite the very large numbers the impact on the existing population has been very small, except for some negative effect for those at the bottom. Matt and Sarah have ploughed through the same work and come to the same conclusion and yet they find it hard to shake off that lurking assumption of significant benefit.

Where is it? We have now had 15 years of historically unprecedented immigration and the evidence is simply not there. And while there clearly have been some benefits it has also exacerbated some of Britain's historic socio-economic weaknesses: low productivity, lack of training, high inequality. (Like many other pro-immigration economists Matt and Sarah are insufficiently sensitive to scale, the obvious cultural and economic advantages of immigration on a small scale can quickly turn negative when numbers reach the levels experienced in Britain in recent years.)

Matt and Sarah also get into a bit of a muddle over which category to use to measure the economic benefit of immigration. For reasons they don't convincingly explain they decide not to use the Migration Advisory Committee's category of the economic benefit accrued (per head) to the previously resident population but rather choose to use median income (including the immigrants). In any case, as they themselves admit, median incomes have stagnated since 2002.

They also take the standard pro-immigration line on jobs suggesting that the significant decline in employment of the resident population and significant increase in employment of the foreign born population, since 2008, cannot be caused by immigration because we all know that is the “lump of labour” fallacy (the argument that there is not a fixed supply of labour and that new workers spend money and pay taxes which themselves generate new jobs).

Just referencing the lump of labour—as Janan Ganesh did last week in a critique of Cameron's immigration policy in the FT (£)–has become the fashionable way of waving away the problem: but there can be a displacement factor especially when the incoming labour is significantly more attractive to employ and the total number of jobs in the economy is not growing. Moreover, the remittance of money back home by immigrant workers also means demand can be sucked out of the economy—and when 20 per cent of all low skill jobs are taken by people born outside Britain you can assume that a lot of wages are being spent abroad.

The issue of median income versus benefit to the resident population may seem a technical one, but it touches a wider point on which Matt and Sarah remain unhelpfully fuzzy, and that is the concept of national citizenship and where the boundaries of solidarity are drawn. I would guess that it remains the common sense assumption of 90 per cent of British citizens that public policy should give preference to the interests of citizens before non-citizens should the two conflict: that does not mean you cannot be an internationalist, or believe that it is a valuable part of our tradition to offer a haven to refugees, or believe that all humans are of equal moral worth and if they are in British space are entitled to certain basic rights. But it does mean that the first call on our resources and sense of obligation begins with our fellow citizens.

And this should be a central principle underlying immigration policy that the authors do not spell out robustly enough: immigration policy must be designed to serve the interests of existing British citizens, especially poorer ones. It is true that it is not always easy to work out what those interests are. It is also true that Matt and Sarah do accept discrimination on grounds of nationality (and reject post-national arguments in favour of global social mobility) and understand that immigrants do not necessarily have the same entitlements as the settled population, but this is all rather tentative and overshadowed by a far more robust and often repeated commitment to a human rights ideology that too often overtly seeks to dissolve the precious distinction between citizen and non-citizen.

The thinking in this document continues to reflect one of the central policy tensions of Labour in power: the conflict between its human rights policy and its immigration policy, at least after about 2004. Surely one of the reasons that the UK Border Agency (UKBA) was in such a mess during much of Labour's period in office is that its political masters were facing two ways at once, both making it easier to come and settle in Britain and wanting to clamp down on numbers when it was clear how unpopular this was.

To return to my opening point, this is all too late. If this had been written and acted upon 15 years ago it might have prevented Labour from making a historic mistake in opening the door so wide to large scale immigration. The party has now decisively lost the argument and half apologised. The national debate has moved on and there is a clear and settled will that immigration has been much too high in recent years and must come down.

There is, of course, some scepticism about whether the target of net immigration of 'tens of thousands' can be met but there is also overwhelming support in the country for it. I would guess that unless knocked off course by a big first year number from Romania and Bulgaria in 2014 the government by the next election will have the headline net immigration number down to about 120,000, which is about half the number they inherited and will probably be enough to allow the issue to be ticked off as a success without impinging too much—except as a Tory boast—on the election campaign.

Matt and Sarah's paper is not meant to be a policy paper (even less a party political one) but to the extent that it does provide a guide as to what Labour should do now it is not a very helpful one. They quibble with government policy while accepting many of the principles behind it. They talk about the damage it is doing without providing any convincing evidence. And adjustments to the rules regulating non-EU university students has caused numbers from India to fall but overall numbers are expected to rise slightly in 2012.

It is not obvious to me what a “progressive” immigration policy is, as opposed to just a rational one. The concept progressive here, and not for the first time, gives a false sense of coherence to what is essentially a hotchpotch of ideas mainly drawn from centre left discourse but infused with a greater realism than in the past. Although she would use different language in places I doubt that Theresa May would disagree with very much of it.

She would probably insist on greater clarity around placing the interests of British citizens first (as I do), but contrary to what many people on the left believe she would be equally wary of submitting to public opinion which even on this subject is more complex and inconsistent than at first glance. And it is worth noting that in the unlikely event of the government reaching its annual net immigration target of tens of thousands—with a total of say 95,000—that would still imply a gross immigration inflow of around 240,000 a year, given continuing emigration of around 150,000 a year, which is still high by historic standards and hardly a sign of “fortress Britain.”

For both defensive, political reasons and because it is the right thing for the country “One Nation” Labour should adopt an essentially bipartisan approach on immigration policy. It should accept the broad contours of existing policy including the “tens of thousands” goal but, of course, remain free to criticise implementation.

This should apply both when it is too harsh—for example the justified clamp down on London Metropolitan University should not have removed the right to study there of legitimate foreign students (something that the courts reversed). But also when it is not harsh, or at least rigorous, enough. It is absurd that on something so central to Britain's interests and sense of wellbeing as border controls that we spend so little: UKBA has an annual budget of £1.2bn which is about 0.25 per cent of public spending. Labour should call for it to be doubled (perhaps paid for by a small levy on employers who employ a disproportionate number of non-citizens).

There are bound to be some conflicts between the democratic priority to bring immigration back down to more normal and moderate levels and the economic benefits to Britain from quite large inflows, in higher education in particular. One advantage of a bipartisan approach is that it would make it easier for the country to send a clear message to those who, often wrongly, believe that the current changes make Britain a less attractive destination.

Potential Indian students, for example, could be told by both government and opposition that Britain remains very much open to their business if they are legitimate students and that notwithstanding recent changes to the rules they can still work 20 hours a week (and full time during holidays) when studying and remain for at least two years after their course has finished, so long as they have a job offer.

But bipartisanship should not close down thinking or debate, and there are two areas in particular where Labour (and not just Labour) needs to apply some policy imagination. The first is the distinction between short-term “churn” immigration—people coming to do a job or a course for two or three years—and those granted permanent residence.

On some estimates about 70 per cent of current immigrants (those people who intend to stay in the country for a year or more) stay for less than five years. That will include a lot of students mainly from developing countries, east European “commuter immigrants” and people coming to do shortish stints in professional jobs often from anglophone countries like Australia, South Africa and the US. Some of these short-term groups can create negative outcomes for existing citizens (as well as positive ones) in competition for jobs and services and in rapid and unwelcome change to neighbourhoods. But with the exception of the east Europeans they are less likely to cluster residentially and less likely to make significant demands on the system.

By contrast those granted permanent residence are overwhelmingly from developing countries and tend to be poorer and make more demands. It is this group, intending to properly join British society, which attracts most anxiety from existing citizens and should be the focus of what passes for integration policy. Like the total net immigration number the number of those granted permanent residence has also been running at historically unprecedented levels in recent years (between 150,000 and 200,000 a year, more than three times the figure throughout the earlier period of post-colonial immigration in the 1960s and 1970s) and it is this number that should be the main focus of reduction efforts.

We need to think about new ways of distinguishing between these two groups—short-termers and long-termers—so that ordinary citizens begin to recognise the distinction and see that we are involved in two very different kinds of relationships: a mutually beneficial short-term exchange and a long-term citizenship commitment. There are several ways this can be done. We should ensure, and then publicise the fact, that the short-termers do not receive full citizenship rights and entitlements; they can of course use public services but have no right to social security payments, tax credits or public housing (this cannot apply to EU citizens; whether it should or not is an argument for another day). We might also introduce ID cards for short-termers as a mark of their special and impermanent status and as a way of ensuring that short-termers stay short-termers.

But there are two big obstacles in the way of discriminating more between short-termers and long-termers. The first is the fact that people need to have the confidence that our border bureaucracy can police the distinction. Currently they do not have such confidence, and with good reason (a senior Home Office official told me that the working assumption is that 20 per cent of all visa visitors, meaning about 400,000 people a year, overstay).

A combination of more resources and ID cards might help that but also a national conversation (and bipartisanship would again help on this) to explain and advocate the distinction: Britain is a hub economy and it is healthy and beneficial for us to have a churn of people who do not stay long and who we treat somewhat differently. If there was more consensus on this point it might also help the UKBA to do its job better; at present it receives little internal institutional support, there is no big labour inspectorate and many of the educational and public service bureaucracies are run by people who currently do not think it is part of their job to help police our borders.

The second reason that it is hard to discriminate between what one might call visitor citizens and full citizens is the legal-political influence of a human rights ideology that has been pushing hard in the other direction; but this is simply a matter of having the political and intellectual confidence to push back against the anti-national turn of human rights.

And one should remember that visitor citizens are not generally the kinds of people who particularly attract our sympathy: the genuine political asylum seekers or refugees from wars and extreme weather events or the poorest of the poor seeking a better life. Visitor citizens are more likely to be privileged people from poorer countries (students) or high-status temporary job seekers. The prize, if we get this right, is a big one: much lower permanent immigration and a generally more relaxed view of temporary migration without any corresponding damage to business or higher education; this shift might eventually include counting only permanent immigrants in the quarterly figures, or at least making the distinction much clearer.

* * *

There is a second big area where we need to use our imagination more, and in this area Labour has a potential advantage: allowing EU governments to discriminate more in favour of their own citizens in labour markets. One of the reasons the EU is so mistrusted in Britain, and other countries, is that it has so obviously leapt beyond where most people draw their boundaries of solidarity and connectedness. Most people in Britain feel much more in common with Australians or Americans, people with whom we share a language and to some extent a history and culture, than they do with Latvians or Romanians.

And yet because of the then rather symbolic commitment to free movement of people in the 1957 Treaty of Rome we have to treat all EU citizens essentially as if they are British citizens, at least when it comes to welfare and jobs. We cannot and should not try to disentangle free movement: it is part of the EU religion even if it is now operating as it was never intended, with large movements from poorer to richer EU countries. But we can, surely, introduce qualifications and caveats. That is generally how EU legislation works—with rules and exemptions.

Overall unemployment in Britain has been lower than might have been expected given the fall in output in recent years, but there are areas of the country where it is a special worry and youth unemployment is much higher than usual for Britain. As I argued above it is not good enough just to dismiss the effect of immigration on domestic employment by citing the lump of labour fallacy, indeed there is some evidence that the lump of labour fallacy is itself a partial fallacy!

The obvious answer is for EU governments to be able to provide special incentives to employ citizens in certain job sectors or geographical areas or age groups (or all three combined). There are many areas of the country where unemployment or non-employment is worryingly high and yet there are many east Europeans in perfectly good jobs. I have nothing against the east Europeans (or those who employ them): they are taking advantage of the rules and seeking a better life (or at least a better paid one) for a few years and are generally far more attractive to employ than the local poorly educated and motivated young people, but this is not a good outcome for the country as a whole.

Allowing employers exemption from national insurance if they employ locals might re-tilt the balance a little bit in favour of the locals, though in many cases it might require more incentive than that. Applying a levy on employers in designated zones, and jobs, who continue to employ large numbers of non-nationals would be more controversial but perhaps simpler to implement. The money raised could be hypothecated for local training funds.

This might not work as described above, but the principle is worth pressing for. And there are precedents of various kinds: in Germany, for example, you have to be a German citizen to qualify for the almost 4m jobs that are classified as “beamte”—the public official jobs such as teacher, civil servant and police officer. Labour should be talking about this to its sister parties in the European Socialist group; many other richer EU countries are affected in a similar way to Britain and it is not necessarily in the interests of Latvia and Romania to lose its brightest and best to work in coffee shops in Britain. There is nothing in socialist internationalism or the European spirit that says you should not try to protect your most vulnerable and least successful citizens from certain kinds of labour market competition (unfair competition one might say).

To conclude on Matt and Sarah: the horse has bolted and trampled over their fine distinctions. Between their lines I sense a continuing attachment to a certain “irrational exuberance” about large-scale immigration, a kind of middle class progressive prejudice, common in the late 20th century, that did enormous damage to Labour. (It was a very London-centric view too, though the authors are wrong to claim that opinion about immigration in London is “remarkably favourable” it is just somewhat less unfavourable than most of the rest of the country.) Their old attachments slip out in the wonderfully eccentric notion that we can immigrate our way out of recession. But by and large they have moved on, and I welcome much of their new realism, its just that much of the rest of the world has moved on again.

* * *

Matt and Sarah intentionally do not have much to say about integration, but clearly there is an important connection with immigration. If integration is successfully managed it creates the political and psychological space for a more open approach to immigration. Yet judging by the Eric Pickles speech I mentioned earlier, we cannot rely on the current government for much help here.

I do not want to disparage Pickles: his experience and knowledge of issues relating to immigration and integration, arising from his time on Bradford council (ending up as leader of the council), is much greater than many of his critics and his instinct seems to be sound enough—a combination of letting things sort themselves out (a kind of jovial but sceptical multiculturalism) and giving them a bit of a nudge. But the results of the 2011 census have provided some rich new evidence on integration and segregation that is both worrying and reassuring.

There is reassurance in the growing number of mixed ethnicity households but there is worry in the evidence of a sharp increase in white flight especially in the outer London boroughs and the entrenchment of ethnic “cliffs” around the country—for example Redbridge is only 34 per cent white British, while neighbouring Essex (where Eric Pickles has flown to from Bradford) is 91 per cent white British. With the government apparently uninterested in all this, Labour has an opening to lead the national conversation as Ed Miliband tried to do before Christmas.

The difficulty for Labour, only partly dealt with by that speech, is that it tends to see integration through its own prisms of exploitative employers and a discriminatory host society, which is not good enough any more. Labour's other problem is that it will not be listened to on integration until it has a credible immigration policy - another strong argument for bipartisanship. The one thing that Pickles did talk about was the importance of newcomers speaking English like a native (Ed Miliband also dwelt on this) but this is surely a very basic lowest common denominator factor in the integration story. (Though Pickles also reminded his audience last week of a time not so long ago when speaking English was by no means taken for granted; he recalled from his days in Bradford that he had been persuaded to allow mother tongue teaching in schools, something he now regrets.)

The census tells us that in 4 per cent of British households there is no one who speaks English as their first language. That does not seem like a large number and it will no doubt include many confidently integrated bilingual/bicultural households but it also includes many households that are neither of those things and in some towns and cities it translates into 20 or 30 per cent of the population. This is a big social problem. The £6m prize money to encourage councils to come up with innovative ways of teaching English, that Pickles announced in his speech, does not seem like a serious response.

British Future, who were hosting the Pickles speech, are a welcome addition to the think tank landscape. And Sunder Katwala, the director, rightly spoke about the need to take these issues out of the London seminar circuit and address the people and communities that have been discombobulated by mass immigration. By far the most important and interesting contribution to the Pickles event came in the question and answer session, after the speech, from councillor Unmesh Desai of Newham. Unmesh pointed out to Pickles, who had earlier been encouraging councils to do less translating from minority languages, that the statutory duty to translate comes from his own department. He also suggested that instead of the rather meaningless duty on public authorities to promote “cohesion” there should be a more concrete duty to promote mixing across ethnic boundaries—something which the councillor admitted there is far too little of in Newham schools. This is more like it. Unmesh, who is agent to Stephen Timms MP, is just the sort of figure who can help Labour lead a more serious national conversation on integration.

An earlier version of this article made an inaccurate reference to "a short British Future film... which featured not a single white person." This was in fact an ITV news bulletin, not a British Future produced film, and one of the interviewees was white