TIMOTHY Nick Barrie

Nick Timothy is Director of the New Schools Network and a former Chief of Staff to Theresa May.

Two weeks after the General Election, David Cameron chose to make immigration the subject of one of his first speeches as the Prime Minister of a Conservative-majority government.  The decision to do so – and the symbolic decision to make the speech at the Home Office – was quite deliberate.  Downing Street advisers told me at the time that “David feels very personally and very strongly” that he had won the election only because Conservative voters who wanted much less immigration had decided to stick with him – despite the fact that net migration was three times higher than he had promised in 2010.

The speech reflected what those advisers told me.  The Prime Minister told the civil servants gathered before him that “we are for working people.  For them, we will control immigration.  Now we’re on our own in government, we can be stronger.”  And – like the Conservative Manifesto – he reiterated his commitment to the Government’s net migration target: “more than ever, this country needs a majority Conservative government – one which aims to get net migration into the tens of thousands – and that remains our ambition.”

But last week, the publication of the latest immigration statistics showed just how far away the Government is from hitting its target.  And more worryingly, the small print of the Autumn Statement, which was published the day before the immigration figures, proves that it is not really the policy of the Government as a whole to cut immigration at all.

The immigration statistics showed, for the year ending June 2015, that net migration to Britain had reached a record high of 336,000.  They showed that where Theresa May has had the freedom to change the immigration system, her reforms have had an effect and net migration has fallen.  The number of family visas is down, the industrial-scale abuse of the student visa system has been ended, and work visas have been reformed to prioritise skills shortages.  The number of people given permission to settle in Britain permanently is down from almost 250,000 in 2010 to less than 100,000 in 2015, while the number of people granted citizenship continues to fall.

But the statistics also showed that the rise in net migration is being driven by people coming to Britain through routes that the Government has no intention of reforming.  The generosity of our student visa rules alone make the net migration target almost impossible to achieve: last year, non-EU student net migration was 93,000.  Twice as many people come to work in Britain through intra-company transfers – which are exempt from the cap on economic migration – than through the general work permit system, which is capped.  And, of course, there is European immigration, which thanks to EU free movement rules is impossible to control.  EU net migration is up to a record 180,000, while more than two thirds of the increase in overall immigration in the last year was accounted for by EU nationals.

It is well known that the Home Office would like to reform the student visa system further, reduce the number of work permits issed to foreign workers, change the way the asylum system works, and win greater control of immigration from other EU countries.  But many of these changes have been blocked already or will be blocked by other Government departments, while the Government’s stated policy of trying to control EU migration through benefits changes has been blown out of the water by its promise to introduce the biggest “pull factor” of all: a new ‘Living Wage’ of £9 an hour by 2020.

As Anthony Seldon recorded in his book, Cameron at 10, the Prime Minister is often heard to complain that “I am the only person in this government who supports the Home Secretary on immigration”, and he is right.  Instead of supporting the manifesto drive to reduce immigration, within a few months of the election the Foreign Office, Business Department and Treasury combined to try to try to take foreign students out of the migration statistics altogether.

That campaign to weaken immigration control appears to have failed, yet the Autumn Statement shows that Government policy is not to reduce and control immigration but to keep immigration high. The spending review settlement between the Treasury and the Business Department is predicated upon the recruitment of an additional 55,000 non-EU foreign students by 2019/20, which it is estimated will raise £1 billion and take the total number of these students to 320,000.  No work appears to have been done to estimate the costs of this additional immigration, such as its effect on the housing stock or public services, no thought seems to have been given to whether policy ought to distinguish between the brightest students and the rest, and no consideration appears to have been made about whether these students will ever return home: the Home Office estimates that one in five foreign students already overstay their visa.

Worse still, we can now expect the Business Department and Treasury to lobby the Home Office to liberalise the student visa system – by allowing more people on student visas to stay and work when their courses end for example – in order to meet this new target.

And it is not just foreign students about whom the Autumn Statement gave the game away.  The Office for Budget Responsibility – whose revised forecasts the Chancellor relied upon to reverse the tax credit cuts and ease the reductions in public spending – said that it had changed these forecasts in part because of high projected net migration: “we have … revised growth up a little in 2016 and 2017, reflecting both higher population growth (driven by higher net migration) and the Government’s decision to slow the pace of fiscal tightening.”

No doubt this will cause advocates of more and more immigration to argue that this is the proof that mass immigration is good for the economy.  But while selective immigration can of course bring benefits such as filling skills shortages, there is no evidence that mass immigration brings any significant economic benefit for the existing population. The OECD, for example, concluded that: “the impact of the cumulative waves of migration that arrived over the past 50 years in OECD countries is on average close to zero, rarely exceeding 0.5% of GDP in either positive or negative terms.”

Instead, there is evidence that mass immigration can hold down wages and displace some workers from the labour market.  But these effects – and other downsides of immigration – are always excluded from the impact assessments used by governments when they take decisions on immigration policy.  In fact, the Treasury orthodoxy is, in the words of Sir David Metcalfe, the chairman of the independent Migration Advisory Committee, “that more immigration is automatically a good thing because it raises GDP”, a view he politely describes as an “odd conclusion”.

And there is a new reason why the Treasury is keener than ever on mass immigration.  It might not bring any significant economic benefits for existing British citizens, but it does mean a bigger population, and a bigger population means a bigger economy overall, which means that the effect of spending cuts increases when the deficit is measured as a percentage of GDP.  In the past, the Treasury has sought to inflate its way out of economic trouble.  These days it takes a similar approach – not just by artificially increasing the money supply but by inflating the size of the population: quantitative easing meets demographic loosening.

But this is a mistake.  As the OECD says, “immigrants are … neither a burden to the public purse nor are they a panacea for addressing fiscal challenges.”  And – notwithstanding the undoubted benefits that controlled immigration can bring – the very good reasons the Prime Minister and Home Secretary have repeatedly set out for why we need to reduce immigration remain.  The trouble is, as the Autumn Statement made plain last week, other than in the Home Office the Government is no longer trying to cut net migration – and we can expect the numbers to keep going up and up.

55 comments for: Nick Timothy: The Government as a whole isn’t aiming to cut immigration – and the Autumn Statement proved it

Leave a Reply

You must be logged in to post a comment.