Jonathan Portes is Professor of Economics and Public Policy, King’s College London and Senior Fellow of UK in a Changing Europe.
There’s a government policy that has delivered a key Brexit promise. We’ve “taken back control,” and are fulfilling the promise of “Global Britain”; the EU doesn’t object to our new approach, while non-EU countries are enthusiastic.
Moreover, we’ve done this in a way that has not only not damaged the economy, but which most economists think will over time have economic benefits. The polling evidence suggest that it’s broadly popular. Brexit naysayers (including me) who variously predicted that the policy would be unpopular, undeliverable or economically damaging have, broadly, been proved wrong.
So it’s all the more surprising to see Neil O’Brien, former and likely future minister, attack his own government’s policy.
As he says – quoting me – the new immigration system means that roughly half the jobs in the UK labour market, broadly those requiring medium and high-level skills and paying more than £20,000 to £35,000 a year, depending on the sector, are open to those coming from abroad, if they have a qualifying job offer.
Meanwhile, free movement with EU and EEA countries (except Ireland), has ended.
So the net result is that lots of jobs, mostly lower-paid or -skilled, are no longer open to EU migrants; while other jobs, mostly medium- and high-skilled, are now open to those from anywhere in the world, not just the EU. Neither levelling down nor levelling up, but a level playing field.
The result has been not a reduction in numbers, but “a UK immigration system rapidly (re)-orientating from Europe to the rest of the world, especially South and South-East Asia.”
Let me take O’Brien’s various objections in turn. First, Brexit promises and public opinion. He complains that this is not what successive Conservative governments promised, or, perhaps more importantly, what “many Leave voters assumed.”
Well, it’s true that many Leave voters – and many Remain ones – expected that Brexit would lead to a sharp fall in immigration. But it’s certainly not what was promised. Vote Leave were unequivocal that Brexit would deliver “a fairer immigration system that is better for Britain, stops discriminating on the basis of where you come from, and instead allows us to pick people on the basis of skills”.
Very specific on what the new system would look like; evasive and non-committal, at best (as Tom Harwood notes) on the implications for immigration levels.
Yes, but surely O’Brien is right when he says Brexit voters, regardless of what they were promised, didn’t really care about the details – they just wanted fewer immigrants?
But that’s simply not what the polls say. As has been widely observed, the UK public is both far less concerned about immigration than it has been for most of the past two decades, and much more positive about both the broader economic and social impacts of migration.
[Source: British Future]
But it’s not just that the public are more relaxed and more positive in broad terms. Voters were quick to realise Brexit was unlikely to reduce numbers much. But despite this, they still support the new system.
More detailed analysis by British Future shows strong support for its three key planks: a focus on “control” rather than numbers; a system which treats applicants broadly the same whatever country they come from; and one which prioritise those with skills we need, or in sectors facing shortages.
(Indeed, the only area where voters appeared sceptical is that a majority appears to favour a more liberal approach for shortage occupations in low-skilled and low-paid sectors, presumably reflecting widespread reports of labour shortages in those sectors.)
Against this, O’Brien offers only statistically dubious claims that reducing immigration is the way to reclaim “national populist” voters.
What about the economic impacts? he ignores the various research studies (commissioned by the government’s own Migration Advisory Committee) which suggest that immigration to the UK has a positive impact on productivity and innovation, with higher-skilled migration having a more positive impact. It was precisely this research and evidence which provided the rationale for the current system.
O’Brien wanders even further from the evidence when it comes to migrants’ origins. He notes, correctly, that the end of free movement and the equalisation of the system means that more migrants come from non-EU countries, and in particular from “poorer” countries – India, other South Asian countries and Nigeria.
He then argues that it’s “delusional” to suggest that this represents success, arguing that migrants from poorer countries make less of an economic and fiscal contribution than those from European or rich countries.
But the error here is obvious. The fact that India and Nigeria are (on average) “poorer countries” does not mean that Indian or Nigerian migrants to the UK who qualify for a skilled work visa are going to be earning a low salary here. The new system doesn’t let in people from poor countries because they’re from poor countries – it lets them in because they have a job offer in a relatively well-paid and/or highly skilled job.
Indeed, even under the old system the average Indian or African migrant earned more than the average Brit or European.
[Source: Migration Observatory]
And the new system, while it certainly has driven a switch from European to non-European migrants, has also driven a shift from lower-skilled to higher-skilled sectors and occupations – precisely as it was designed. We don’t yet have data on what that will mean for migrants’ wages but frankly it would be astonishing if didn’t result in them being even higher.
[Source: Migration Observatory]
Unsurprisingly, therefore, economists like myself have revised our views on the impact of the new system. Under Theresa May’s much more restrictive policies, I expected that it would make us poorer; now, if anything, it seems likely to boost GDP per capita.
So if (skilled and well-paid) immigrants from “poorer countries” make us richer, what’s the problem exactly? O’Brien hints at it when he complains about the resulting demographic change:
“In Greater London, three quarters [of state school pupils] are not white British and 45 per cent don’t have English as their first language. In Newham, 95 per cent aren’t white British and two thirds don’t have English as a first language.”
Well, yes. But Newham’s no ghetto; it’s genuinely diverse. Newham’s schools may not be dominated by white kids, but no ethnic group makes up more than a quarter of the school population.
More importantly, “not having English as a first language” doesn’t mean “don’t speak English.” Indeed, not only do the vast majority of EAL pupils speak English, but they actually do as well or better than native English speakers at exams. Newham, one of the most disadvantaged boroughs in the country, performs well above the national average.
So, if it’s not integration, language, or school results, what exactly is O’Brien’s problem with Newham’s kids?
Overall, then, the new post-Brexit system, while not perfect, is delivering broadly what was promised, what people want, and what the economy needs. This would be a pretty good balance sheet for a well-functioning, successful government. For the current one, it’s astonishing. Not broke, don’t fix.