September’s Migration Advisory Committee report on immigration to the UK from Europe claimed that European migration into the UK has caused only small impacts to our economy compared to other events such as the post-Brexit referendum devaluation of sterling, for example.
Its main conclusion appeared to be that the many immigrants to the UK from the EU (who arrived in waves, first after we opened our borders to Eastern European states in 2004, and again during the economic crisis from 2008 onwards) have made a much more fiscally positive contribution to the UK than immigrants from elsewhere. This fitted nicely with the views of most politicians and journalists and so generated a good few headlines along the lines of “Immigration myths that fuelled Brexit blown apart” (the Independent).
But is the conclusion really so simple?
It seems not.
The Committee’s chair, LSE’s Professor Alan Manning, gave evidence to the Home Affairs Select Committee
The SNP’s Stuart McDonald asked him: “Given the research, should the conclusion just be that the best thing for the UK to do is just carry on with free movement of people from the EU?”
The answer was a surprise – “No” replied Professor Manning
He and his team had, regrettably, failed to synthesise their argument: “It’s all in there – but not brought together in one place”
What they actually meant is “lower-skilled migrants have been fiscally-negative – they make the UK a slightly lower wage, lower productivity kind of economy – any effects that they have on innovation are not positive – and, basically, if you ask what have been the benefits of this lower-skilled migration, there isn’t very much on the positive side of the ledger”
“That doesn’t come through very much in your report”, said Mr McDonald. And indeed, it doesn’t. But it is very very important.
If Professor Manning’s conclusion is correct, and a lot of work has gone into it, then he may just have put the UK’s 14-year debate over the EU’s bedrock principle – free movement of labour – to bed
By the time of the EU referendum, the UK had seen more EU immigration, and vastly more low-skilled immigration, than any other country – it has, for example, been the primary reason why the UK’s foreign-born population, rose from 8.6% in 2003 to 12.3% even at a time when major economies such as Germany and Italy actually saw their foreign-born populations slightly contract
If, as many have argued, that has come with huge fiscal benefits for the UK, it isn’t necessarily a bad thing. But if it has not, as seems to be the case, a more restrictive policy post Brexit might be a very good idea
It could, for example, force Britain’s employers of low-wage labour to invest in greater automation, leading to greater productivity (n.b. already happening, even in advance of Brexit) and to real wage growth
That, surely, would be a result welcomed by both sides of the Brexit debate