What is the problem?

Introduction

1. The UK now has a governing party committed to reducing net migration to the tens of thousands. This is the first time that a government has had an explicit policy to reduce net migration, although it is increasingly clear that this objective is unlikely to be met by the end of this Parliament.

2. While non-EU net migration has fallen by a third since the present government came to power, EU migration has increased significantly and is now almost at a similar level to non-EU migration.

3. Non-EU outflow remains stubbornly low. This seems to be mainly because large numbers of students are staying on legally or illegally.

4. There is more to be done to reduce non-EU migration but without a significant renegotiation of the current regime of European free movement, EU migration will continue into the medium term at something like the present level.

5. Only migration in the low tens of thousands will stabilise the population in the long term so this should be the longer term objective. Of course certain types of migrants benefit the UK considerably, filling skills gaps, building successful businesses and contributing to the dynamic fabric of British society. But this is no justification for net migration of 200,000 a year - the equivalent of adding a city the size of Aberdeen to our population every year.

The thinking behind the policy

6. The argument in favour of reduced immigration has now been won. The public have, for many years now, expressed their concern about levels of immigration and the impact that this had on housing, public services, and the labour market. 94% of Britons think that Britain is ‘full up’ and 79% of people in England think that England is ‘overcrowded’. While the public are sufficiently nuanced to welcome highly skilled workers and students to our best universities, they are aware of the impacts of high levels of immigration on public services with 76% believing that immigration has placed too much pressure on health, transport and education and 69% believing that immigration has had a negative impact on the availability of housing. As for current government policy, 78% of the public support the aim to reduce net migration to the tens of thousands. (For more on this see here)

7. All of the major parties now recognise that immigration has, in recent times, been too high and that it needs to come down. The disagreement now is how to achieve lower levels of net migration and what measures are acceptable. Labour are struggling in this regard and while they accept the need to reduce immigration – as well as continuing to admit that they made mistakes on immigration in the past – they have yet to propose any measures that will actually achieve this. The Liberal Democrats – the junior party in the coalition government – agree in public statements that immigration has to come down yet in reality they have been an impediment to the Conservative’s attempts in coalition to reduce the scale. The electoral success of UKIP in local and European elections in May 2014 is a further demonstration of the strength of public opinion on immigration and will likely contribute to ensuring that the main political parties are not be able to avoid the issue in future.

The Scale of Immigration to the UK

8. In 1997 net migration to the UK was just 47,000. In the years that followed net migration rose to well over 200,000 and reached 273,000 in 2007. Revisions to the immigration statistics mean that, during Labour’s period in office (mid-1997 to mid-2010) net foreign migration was almost four million – about two thirds of which came from outside the EU.

9. The significant increase in immigration during the previous government’s 13 years in power was not the result of globalisation but was instead a result of deliberate policy changes. Such changes included abandoning the primary purpose rule for marriage, expanding the system of work permits and expanding the student sector.

10. In 2008 the Labour government introduced a Points Based System to regulate non-EU migration into the country. The system, it was claimed, was based on a tough Australian style points system however the UK version was in fact neither tough nor Australian style. The threshold for entry to the UK was very low and immigration officers were no longer expected to interview applicants. There was no attempt to limit overall numbers.

11. Significant policy changes have been made since the change of government in May 2010 but net migration remains above 200,000, this is despite an early reduction in 2012 when it fell to 177,000. The majority of net migration has traditionally come from outside the EU, however this ratio has changed and almost half of net migrants now come from within the EU. The reason for this is twofold: non-EU migration has fallen due to government reform of the Points Based System and EU migration has risen, largely a result of the financial crisis in Southern Europe and ongoing migration from Eastern Europe. It is for these reasons that the current government is unlikely to reach its target by the end of this Parliament.

Impact of Immigration

12. The major impact of immigration is on the population of the United Kingdom. On Census day 2001 the population stood at 59.1 million. Ten years later the population had grown by over 4 million, the largest increase since 1911, and stood at 63.1 million.

13. The Office for National Statistics (ONS) projects that the UK population will reach 70 million by 2027, an increase of 5.9 million on the most recent population estimate of 64.1 million in 2013. This is based on the principal projection under which net migration continues at a rate of 165,000 per year. Under this scenario 60% of population growth is attributable to future immigration, either directly or indirectly from the additional children. The remaining population growth will come from the UK’s existing population, including births to immigrants already here. The reality is that, unless net migration is brought down, the UK population will increase at a faster rate than the principal projections suggest. This is because the latest data shows that net migration in 2013 was 212,000, and the average of the last ten years was much closer to the ONS high projection under which net migration runs at 225,000 a year.

14. Government produced household projections show that migration has a significant impact on housing and that immigration at current levels will account for 36% of all new households in the next 20 years.

15. Immigration is having a significant impact on primary school places in England. In the 2012/13 academic year there were 4.060 million primary school pupils in England. The Department for Education projects that this figure will rise to 4.571 million by 2017/18 yet there are only 4.4 million places available leaving a shortfall of around 155,000 places. (See here) A recent report commissioned by the Department for Health estimated that the NHS spent £2 billion per year treating temporary migrants demonstrating the impact on health services across the country. (See here) Health tourism is also a problem however the exact impacts in terms of costs are difficult to identify. Immigration also impacts on the environment as a larger population will use more land, energy and natural resources and will produce a greater carbon footprint on the environment.

Economic Benefit

16. Migrants add to overall GDP but they do so roughly in line with the proportion that they add to the population meaning that the average resident is no better off financially. The only major inquiry ever conducted in the UK was carried out by the Select Committee on Economic Affairs of the House of Lords in 2007/08. In April 2008 they reported that "We have found no evidence for the argument, made by the government, business and many others, that net immigration - immigration minus emigration - generates significant economic benefits for the existing UK population." As regards the contribution of migrants to the Exchequer, they concluded that "The overall fiscal impact of immigration is likely to be small, though this masks significant variations across different immigrant groups." (See here) These findings have been endorsed by the OECD which found in its annual report that ‘estimates of the fiscal impact of immigration vary, although in most countries it tends to be small in terms of GDP and is around zero on average across OECD countries.’ (See here)

17. A recent study by academics at the Centre for Research and Analysis on Migration at University College London found that between 1995 and 2011 all migrants in the UK received £95 billion more in services and benefits than they contributed in taxes. Breaking this figure down, it was claimed that EEA migrants contributed £9 billion more than they consumed whereas non-EEA migrants consumed £104 billion more than they contributed. (See here)

18. However, a Migration Watch UK analysis of this report questioned their finding that recent EEA migrants contribute more in taxes than they receive in government expenditure and suggests that the contribution is in fact neutral. (See here)

19. A report by the National Institute for Economic and Social Research stated in 2011 that the potential long-run impact of EU8 migration (Poland et al) on GDP per head was expected to be “negligible”. (See here)

Sources of Migration

20. The major components of Non-EU migration to the UK are:

Work Migration
Work immigration was the major source of immigration until the mid-2000s. In 2005 almost 200,000 work permits were issued to non-EU nationals. Since then substantial changes to the rules have reduced this number to around 110,000 and a large shift in work immigration from routes that led directly to settlement to temporary routes. For example, the largest category for work visas is the intra-company transfer. This route used to lead to settlement (under certain conditions) but was made entirely temporary for new applicants by the last government in May 2010, so the majority of holders will return home at the end of their stay. The current government further tightened up the work route by placing an annual cap of 20,700 on the number of applicants from outside the EU that companies can directly recruit to work in the UK. Only half of these permits have ever been taken up. This route also requires the worker to reach a certain salary level before they can apply to stay permanently.

Family Migration
Family migration has fallen significantly in recent years with 33,690 visas issued in 2013 under the family route, including spouses of British citizens and settled residents, children and elderly dependent parents. When the coalition came to power in 2010 over 53,700 visas were granted under the family route and this was a reduction of over 15,000 from 2006 when over 70,000 were granted. The coalition government has introduced a minimum income threshold for those wishing to bring their spouse to the UK on the grounds that sponsors should be able to support their family without recourse to publicly funded benefits.

Student Migration
Students are by far the largest component of those moving to the UK. In 2013 over 199,700 Tier 4 student visas were granted, excluding dependants, a fall of almost 75,000 compared to 2009 when 273,200 visas were granted. This fall however has not affected Universities; numbers have fallen in the further education and language sectors. Genuine students that come to study and then return home do not contribute to net migration and therefore to population growth. However, large numbers of students are staying on either legally by extending their student visa or moving into the work or family category or are staying on illegally. In 2013 just 50,000 non-EU students departed, which is a third of the average inflow over the previous five years. The government has closed over 600 bogus colleges and has introduced interviews to weed out bogus applications.

Asylum
In 2013 there were 23,500 applications for asylum and over 6,500 applicants were granted either asylum or some type of humanitarian protection. Applicants are significantly down on the late 1990s and mid-2000s; in 2002 alone over 84,000 applications for asylum were submitted. The removal of failed asylum seekers is low – just 4,670 failed asylum cases were removed in 2013. Those who are removed will often have been refused asylum after appeals.

Illegal Immigration
By its nature it is impossible to know the number of illegal immigrants currently living in the UK. Some enter clandestinely, others overstay a visa, and some fail to go home once their asylum application has been refused. The government are opposed to an official amnesty for the very good reason that amnesties have been shown in other European countries simply to encourage further illegal immigration. (See here and here)

What next?

21. Only migration in the low tens of thousands will stabilise the population in the long term so this should be the longer term objective. Of course certain types of migrants benefit the UK considerably, filling skills gaps, building successful businesses and contributing to the dynamic fabric of British society. But this is no justification for net migration of 200,000 a year - the equivalent of adding a city the size of Aberdeen to our population every year.

22. In the meantime it is essential that the government maintains a net migration target so as to provide a focus for government policy. Although the current government is very unlikely to reach its target of tens of thousands by the end of this Parliament, without this target net migration would have been far higher today than it is.

23. In order to achieve the necessary reductions in net migration it is imperative that this and any future government seeks in some way to limit EU migration which is presently substantial but remains beyond the control of any government. Action on out of work benefits will have only limited effect as most EU migrants come to work. Action on in work benefits such as working tax credit, housing benefit and child tax credit could be helpful but, even once benefits are excluded, the take home pay of migrants from poorer EU countries remains a multiple of what they would receive at home. Some, at least temporary, modification to the principle of free movement of labour in Europe may prove to be essential.