The Government’s migration cap: is it right, and will it work?
Last week’s immigration news was the announcement of the plan to turn this year’s temporary cap on non-EU worker immigration into a permanent one by the end of March (through secondary legislation, but it will still be a bit of a rush). Theresa May gave the business community a lot of what it wanted, broadly maintaining the number of migrants coming in under Tier 2 (people who already have skilled jobs to go to) at 20,700 a year and abandoning any plans to cap those coming in under Intra-Company Transfers (ICTs), where companies’ existing employees in other countries are allowed to come to the UK temporarily. Instead, the cuts will be borne by Tier 1, highly skilled people coming to the UK to look for work. And the super-rich will be allowed to continue to come here unchallenged (strange, isn’t it, that bankers keep coming even though they claim that taxes are such a disincentive?) The only crumb of comfort for those who want to ensure that migration doesn’t undercut existing terms and conditions – leading to lower wages all round and an increase in community tension - is that the rules on what you can pay someone coming in under ICTs will be tightened to raise the minimum wage levels and the skill bar. The TUC remains concerned that the rules on ICTs are too loose and that there is widespread abuse: why else would so many IT graduates be unemployed while so many ICTs are in precisely that sector?
Of course, the TUC is opposed to the overall approach of capping migration. The idea is wrong to start with, because it restricts freedom of movement, and is based on the belief that migration itself is the problem, suggesting that, with a given (and smaller) number of net migrants, there will be no problems. In reality, there are problems that can be caused by migration such as overcrowding (although that’s not a country-wide prospect, as the inhabitants of a still-depopulated Scotland will tell you), pressure on services/infrastructure/housing (which can be solved through greater public investment paid for out of the higher than average net taxes paid by immigrants) and undercutting (which is almost exclusively the fault of employers rather than migrants, and can be avoided by tougher inspection and regulation; by wage floors – as, admittedly, do apply to ICTs if they are enforced; by general provision of equal treatment; and by unionisation and collective bargaining). Training has a part to play too. There are also, of course, huge benefits to be gained from migration, and the contribution migrants can make to the economy and society aren’t limited to highly skilled migrants – as the OECD has in the past pointed out, even low-skilled migration can help fill gaps in the labour market.
But as well as being wrong in principle (and a diversion from tackling the real problems which migration can cause), the TUC doesn’t believe it is actually possible to cap migration in the way the Government wants. They are clearly already having problems reducing net migration to under 100,000 a year and will need either to slash the number of migrant workers (which employers have rebelled against as last week’s announcement showed) or other classes of migrants, such as students (which could blow a huge hole in the financing of higher education) or family reunions, which would be hugely unpopular and lead to all sorts of social problems. And that’s before cuts in the immigration service budget and a tougher formal entry route pushes more people into illegal immigration.
A poorly performing economy could, however, assist the government, by encouraging more people to leave the UK (that usually happens when the economy isn’t booming, as people swap rainy old Britain for jobs and sunshine in Australia or South Africa) and by discouraging people from wanting to come to the UK. Although if the rest of the world economy does similarly poorly, emigration is less feasible/attractive, and immigration retains its attractions. So it’s a good thing for the Home Office that Australia largely escaped the global economic crisis (let’s hear it for the Australian Labour Government) and China and India continue to grow – in both cases, the irony is that Britain’s reducing net immigration will be the result of other countries pursuing the direct opposite of the UK Government’s slash and burn economic cuts!