Dr Gerard Lyons is a senior fellow at Policy Exchange. He was Chief Economic Adviser to Boris Johnson during his second term as Mayor of London.
Migration has returned to centre-stage. There has been much commentary regarding the morality, legality, likely effectiveness, and uncertain cost of the Government’s Rwanda policy to halt Channel crossings.
Whether it will act as a deterrent, or incentivise smugglers and those being smuggled to behave in a different way, remains to be seen.
There is little doubt that the UK has benefited in economic and cultural terms from migration, with one in seven people living in the UK and 18 per cent of workers born overseas. But it is clear that this policy area is going to become more important, and contentious, the further one looks ahead.
The wider policy debate too continues to evolve, whether that be those advocating open borders or those changing the focus from illegal to undocumented migrants.
According to the UN, 36 out of every 1,000 people live in a country that is different to the one that they were born in, reaching 281 million in 2020 from 173 million in 2000.
International migrants are people who cross a border into a different country, and are classified into economic migrants and those seeking a safe-haven, such as refugees fleeing wars or famines, or asylum seekers who may be escaping persecution.
Often refugees flee to the nearest possible safe-haven, many of which may be poor countries that can’t cope with the influx and need international help. Half of international migrants in low-income countries are refugees, whereas in high-income economies refugees make up only three per cent of the total. The latter would include those fleeing Ukraine into other European countries.
Future migration flows are likely to increase. One factor will be climate change, as it triggers famine and as flooding impacts some heavily populated coastal parts of the globe. Meanwhile, demographic change could impact future economic migration.
For instance, there will be increased migration flows from sub-Saharan Africa to Europe. Africa’s population is close to 1.3 billion and will see a mammoth rise of 450 million in its working age population by 2035.
Two-thirds of international migrants live in twenty countries. The largest numbers are in the USA (51 million), Germany (16 million), Saudi Arabia (13 million), Russia (12 million) and the UK (nine million). The United Arab Emirates has also seen large inflows.
The vast bulk are economic migrants whose primary motive for moving is in pursuit of improved opportunities and a better life. Thus, money sent back home can be high, and last year total remittances were $589 billion, higher than governments send overseas via development aid. While some migrants are initially poor and unskilled, there are many who are well qualified.
It is interesting to see how the migration flows to the UK have evolved. In the 1960s and 1970s there was more emigration than immigration. The 1980s witnessed net immigration that averaged about 7,500 per year.
The big changes followed the 1992 Maastricht Treaty, rising to an average of 62,500 per year in the 1990s, and the enlargement of the EU in 2004, with net inflows averaging over a quarter of a million per year for the following decade.
For many firms, there was a virtually limitless access to a low-cost workforce, negating the need in many instances to invest in skills training at home. Now non-EU migrants coming to the UK exceed those from the EU.
The latest available data, up to March 2020, shows a 6.3 million increase in the UK population this century, driven by net migration alongside rising life expectancy.
In March 2020, 9.2 million people were foreign born in the UK. Increasingly of diverse origin, the largest numbers are from India (847,000), Poland (746,000), Pakistan (519,000), Romania (370,000), and Ireland (364,000).
Migrant workers are spread across high and low-skilled sectors, with at least one in five workers in hospitality, transport and storage, information communication, and information technology, and about one in five in health and social care.
(Whether we should be attracting skilled doctors and others from lower income countries – the so-called brain drain – where their impact could be significant, is for another discussion.)
Also, reflecting the UK’s strong humanitarian role, between 2011 and 2020 the UK granted protection to about 70,000, with Syria (31,000, Iran (16,000), Eritrea (12,000) and Sudan (11,000) figuring prominently.
In the wake of recent elections, including the 2016 referendum, a number of issues have come to the fore. This includes the fact that the large rise in population has reinforced the need to address existing pressures on public services and housing.
The policy preference has remained for a points-based system to attract targeted migrants the economy needs.
Impact assessments by the Government show a £2.4 billion cost over the next decade from the new skilled-persons route. Also, the British National (Overseas) visa scheme aimed at Hong Kong is expected to attract 290,000 people in the first five years.
According to Oxford’s Migration Observatory the overall fiscal impact of immigration is small, although they acknowledge it depends upon assumptions made and upon the characteristics of migrants.
A long-term analysis by the Office for Budget Responsibility showed a net fiscal positive, although they note, “higher migration could be seen as delaying some of the fiscal challenges of an ageing society, rather than a way of resolving them permanently.”
Indeed, as the UN note, three out of four international migrants are of working age, and as a result the dependency ratio (which shows the number of dependents to the working age population) would otherwise be slightly higher in high income countries.
What does this complex picture mean for the UK?
Migration has been a positive, but I think it important we don’t fall into the trap of assuming that because migration may be seen to pay for itself in fiscal terms we should just allow it to continued uncapped.
Britain is a low-skilled, low-wage economy and we must not lose focus from the need to invest more here at home, rather than always attracting workers from elsewhere because it is easy to do so.
As with other areas of policy, the UK needs to continue to ensure its policy on migration is fit for purpose, not just for economic migration but also refugees and asylum seekers
It is right to try and stop illegal migration. Whether the Rwanda plan or a better alternative can be found is for those who are more intimate with the policy area.
Notwithstanding that, it is important that the UK has sufficient safe channels for refuges and others.
There are both push factors triggering people to leave their home countries and pull factors attracting them to this country. Through overseas aid, bilateral relationships and via international fora, the UK needs to work with other countries to influence push factors.
Perhaps too we can link our overseas aid to exporting the courses and services of British universities, helping African economies and others grow their numbers of highly educated people, the key to future growth.
While, at the same time, directly addressing the pull factor, I have favoured changing from a Beveridge benefits system, where everyone qualifies, to a Bismarckian system where a person’s contributions history determines what they can receive.
Nonetheless, the controversy surrounding the Rwanda policy issue, plus the bureaucracy that characterised the UK’s initially slow response to hosting refugees from Ukraine, should not take away from the fact that the UK is a very open, globally-minded, and tolerant society.