There has been a great puzzle in Westminster over the past two years. There is a lacuna in British thinking that is hard to fathom.
It is this. The Prime Minister’s analysis of why Britain voted to leave the European Union hangs on one thing: immigration. And lots of people think she is right. The reasoning of many conservatives as to why Brexit is happening turns on one element of the European single market: freedom of movement. This, they say, is what the British people really object to. I disagree – more on that later – but if you follow the conservatives’ logic you would surely then expect a clear government policy on immigration, on which all other choices depend.
But there isn’t one. We have no idea what the Government actually wants its immigration policy to do. And this is the source of the vacuum. This could not be more clearly exemplified by the migration statistics. Every year Theresa May was home secretary she had the power to reduce non-EU migration by diktat. But she didn’t. Now she is prime minister and the Migration Advisory Committee (MAC) on Monday produced a report on immigration to advise the government on post-Brexit migration policy which contained an in-depth analysis of the impact of migration on the British economy and British workers. It turns out, no surprise to anyone who has glanced at our ageing population statistics, that migrant workers are essential to various sectors.
And this is the reality that explains the hole in conservative thought over the past decade. We need more people of working age to support our ageing population, but successive right-wing political actors have sought advantage by exploiting the negative image of immigration amongst some voters. They want both to balance the books, and bash the foreigners. It’s a terrible dilemma.
As previous analysis, the positive – some might say necessary – impacts of immigration are clear in their evidence base: “EEA migrants make a larger contribution both in terms of money and work to the NHS than they receive in health services” and they “pay more in taxes than they receive in welfare benefits and consume in public services.” In economic terms, the benefits are blindingly clear. But more importantly, the report states in black and white that most of the objections to freedom of movement are just false. The number of times I have heard that immigrants are ‘taking our jobs’ – well, the report says there is “no evidence that EEA migration has reduced employment opportunities for the UK-born on average”, nor any evidence it reduces wages.
So how will the Government respond? Well, the recommendations of the report are curious, based as they seem to be on hypothesis rather than evidence. The MAC calls for a minimum wage for migrant workers in order to receive a visa, the same as that from outside the EEA, of £30,000. As the Resolution Foundation have pointed out, EU migrants tend to be clustered around the lower part of the earnings distribution, with 75% of EU nationals currently earn less than the salary threshold of £30, 000. Furthermore, in food manufacturing, hotels and domestic personnel over 20% of workers are EU migrants. This policy would have a huge impact on these sectors. A study by Oxford Economics, commissioned by the government, showed that EU migrants contribute £2,300 more per year than UK nationals. Migrants from the rest of the world contribute more than UK nationals but less than EU nationals. Reducing immigration, especially EU immigration, will hurt our tax revenues.
If this goes ahead, we will have to find that money somewhere else. We will still be locked in the dilemma of needing to balance the books and the tendency of political right-wingers to have a go at immigrants.
The MAC claims that the restriction of low-wage labour would have an upward pressure on wages, but this is a puzzle. Having said that there is no evidence that migration reduces wages on average, it is hard to see where such an upward pressure will come from. The average wage in the UK is £28,677, according to the ONS this year. It is unclear how low-skilled or low-wage work will overtake the £30,000 threshold. So does, ‘upward pressure on wages’ actually mean very much in relation to low-skilled migration? I can’t see how.
The MAC don’t appear to have filled the policy hole, then, so much as looked away from it, in the knowledge that they needed a report that would back up the Prime Minister’s central premise: that immigration must go down.
Yet none of this is necessary.
If we want – as we should – better wages for workers then there are ways to ensure it: a proper living wage, wider trade union membership, better rights and better enforcement of them. Unscrupulous employers will always tell UK workers that they can be replaced with cheaper foreign workers. I know that they will use that as an excuse for poverty pay. But just because the kind of employer who pays badly says it, it doesn’t make it true.
Rather than for wage growth then, this policy is actually designed to continue the hostile environment. It is designed to put pressure on those who might need to engage with the Home Office, all the while our economy depends on them. And if you happen to have a spouse who is a national of another country, don’t expect to bring them here unless they can earn more than £30,000. Your right to a family life comes second to the conservatives’ dislike of immigration. A policy like this will be as divisive as any other Tory migration policy which has gone before.
And our ageing nation will still need people to move to Britain to work. It is just that we will have fewer talented individuals who will want to, given the damage Brexit has done to our global reputation.
So, this report might seek to end the vacuum at the heart of the government’s policy, but it is not at all clear that it helps our future relationship with the EU, our future immigration policy, or our future economic policy. Instead of presuming that banning low-wage migrant labour will put an end to badly paid jobs, we should focus on the economic structures which allow low paid work to flourish: pay, conditions, and rights at work. Instead of continuing the hostile environment, we should remember our history. Immigration has made Britain strong, not weak.
Alison McGovern is the Labour MP for Wirral South
