QUEENS SPEECH DEBATE - HOME AFFAIRS AND TRANSPORT

- Thursday, 23rd November 2006

 

Debate
Date of Proceeding: 23.11.2006
Reference: 453 c745-7
Member: Lilley, Peter
Title: Home Affairs and Transport
Description: My hon. Friend makes a good point, although I think that lots of people do want to go to Finland-it is just that it is quite difficult to get to from the places that immigrants tend to come from.

Could it be that the Government want to reject unskilled migrants? No. The Home Office issued a document that stated:""There is clearly unsatisfied demand at all skill levels in the labour market…skill shortages and unfilled vacancies manifest themselves at all skill levels”."

So it is not simply a matter of allowing in a narrow group of skilled people-we are told that unskilled people are as necessary if not more necessary. Indeed, the Prime Minister specifically said that we need people to do jobs that British people will not do. We are allegedly too grand to do the dirty work and must therefore import a class of helots, who will presumably be required to do only that and never move on to anything else, such as the higher paid jobs that the domestic population finds preferable. Once one allows them to do that, the stream will be unlimited. People will come in initially to do the unpleasant jobs at artificially low wages and then move on to other jobs. The answer is that we should pay people a decent rate for the job. We would then have no difficulty in persuading members of the domestic population to be dustmen and so on. Indeed, there is no shortage of people.

The Government’s economic arguments all lead in the direction of unlimited immigration. If they are accepted-they tended to be accepted by a broad political and business consensus until recently-we reach two unacceptable conclusions. The first is that the number of economic migrants to this country should be unlimited and the second is that the only reason for opposing or restricting immigration is hostility to immigrants. Sadly, sections of the press and parties that are anxious to restrict immigration play to the caricature of immigrants as lazy criminal scroungers and so on.

Unlike most hon. Members, I have lived in largely immigrant areas. I have represented many immigrants in my constituency and worshipped in the same church as people from immigrant communities. I therefore know that the caricature is false. Most economic migrants who want to come to this country are hard working and law abiding and want to make a positive contribution. I would not be prepared to base a policy on a caricature founded on hostility to them.

However, it is important to examine the economic arguments to ascertain whether they lead ineluctably to unlimited access to this country. When we do that, we find that they do not. The Government’s first argument is that immigration is good for economic growth. It is true that immigration makes the labour force bigger but it does not necessarily make it richer per head. Indeed, the Government’s own figures are based on the assumption that, although the people coming to this country will add to the labour force, they do not add to output or income per head. That is not surprising.

Some people believed that there might be a dynamic effect and that a flow of immigrants would raise the rate of increase in output per head. However, since the Government have encouraged the process of increasing the flow of often unskilled labour into the country, there has been a decline in the growth of productivity. That applies not only to this country but to America, which is often held up as an economy booming because of immigration. It has grown bigger because of immigration, but, since immigration accelerated there, output per head has grown only at much the same rate as that in Europe and on this side of the Atlantic. Immigration does not, therefore, have that dynamic effect.

The Government’s second argument, which also, if true, means that we should have more and more immigration is that a fiscal benefit ensues; that the amount of tax paid by immigrants exceeds the cost of benefits. Of course, we all know that the initial sums were calculated in a year when there was an overall surplus, so everybody, not only those of immigrant origin, paid more tax than they received benefits. Even if one corrects for a different year, as the Institute for Public Policy Research did, there appears to be a small differential in favour of net taxes-payments to the Exchequer by immigrants. However, that is the case only on the assumption-the Government have refused to revise the figures or acknowledge the need to do that-that all children, one of whose parents is an immigrant and the other is of domestic birth, are counted as British citizens. Their total costs are attributed to Britain, rather than half of them-as one would expect-being attributed to the immigrant parent and the other to the domestic population. Once we take that into account, there is no net surplus fiscally. In any case, we know that rich people pay more in taxes than they receive in benefit, by and large, and that it is the other way round for less well-off people. That would lead purely to differentiation in the type of immigration by the likely income level of immigrants, if the Government really believed that it was the case, which they probably do not.

There is an argument that we should import a finite number of people to deal with a finite shortage. Some years ago, the Prime Minister referred to there being some 500,000 vacancies in this country, and said that we therefore needed to import the labour to fill them. Since then, we have let in the best part of a million workers-that is the net figure-yet there are still 500,000 vacancies. That is no accident, because every new worker not only assuages the demand for one unit of labour but is also a consumer. Through their consumption, they create the need for just as much labour as they provide. So there is no net filling of vacancies. Nor do those people undermine the jobs of existing workers here, as the British National party suggests, making the mistake known as the lump of labour fallacy. If there were a domestic labour shortage, we would experience wage inflation, yet we have never seen it at a lower level than now. Furthermore, the answer would not be to encourage unlimited immigration but to tighten monetary policy appropriately.

We need to look closely at the Government’s arguments for justifying virtually unlimited immigration and to recognise that some immigration is necessary to this country. However, it should be more a lubricant than a fuel. A limited amount is good for us, but an unlimited amount is unnecessary and would bring costs and problems in its train. We will need control of immigration, and it is sad that the Government have not given us a rationale for the powers that they propose to take. My hon. Friend makes a good point, although I think that lots of people do want to go to Finland-it is just that it is quite difficult to get to from the places that immigrants tend to come from.

Could it be that the Government want to reject unskilled migrants? No. The Home Office issued a document that stated:""There is clearly unsatisfied demand at all skill levels in the labour market…skill shortages and unfilled vacancies manifest themselves at all skill levels”."

So it is not simply a matter of allowing in a narrow group of skilled people-we are told that unskilled people are as necessary if not more necessary. Indeed, the Prime Minister specifically said that we need people to do jobs that British people will not do. We are allegedly too grand to do the dirty work and must therefore import a class of helots, who will presumably be required to do only that and never move on to anything else, such as the higher paid jobs that the domestic population finds preferable. Once one allows them to do that, the stream will be unlimited. People will come in initially to do the unpleasant jobs at artificially low wages and then move on to other jobs. The answer is that we should pay people a decent rate for the job. We would then have no difficulty in persuading members of the domestic population to be dustmen and so on. Indeed, there is no shortage of people.

The Government’s economic arguments all lead in the direction of unlimited immigration. If they are accepted-they tended to be accepted by a broad political and business consensus until recently-we reach two unacceptable conclusions. The first is that the number of economic migrants to this country should be unlimited and the second is that the only reason for opposing or restricting immigration is hostility to immigrants. Sadly, sections of the press and parties that are anxious to restrict immigration play to the caricature of immigrants as lazy criminal scroungers and so on.

Unlike most hon. Members, I have lived in largely immigrant areas. I have represented many immigrants in my constituency and worshipped in the same church as people from immigrant communities. I therefore know that the caricature is false. Most economic migrants who want to come to this country are hard working and law abiding and want to make a positive contribution. I would not be prepared to base a policy on a caricature founded on hostility to them.

However, it is important to examine the economic arguments to ascertain whether they lead ineluctably to unlimited access to this country. When we do that, we find that they do not. The Government’s first argument is that immigration is good for economic growth. It is true that immigration makes the labour force bigger but it does not necessarily make it richer per head. Indeed, the Government’s own figures are based on the assumption that, although the people coming to this country will add to the labour force, they do not add to output or income per head. That is not surprising.

Some people believed that there might be a dynamic effect and that a flow of immigrants would raise the rate of increase in output per head. However, since the Government have encouraged the process of increasing the flow of often unskilled labour into the country, there has been a decline in the growth of productivity. That applies not only to this country but to America, which is often held up as an economy booming because of immigration. It has grown bigger because of immigration, but, since immigration accelerated there, output per head has grown only at much the same rate as that in Europe and on this side of the Atlantic. Immigration does not, therefore, have that dynamic effect.

The Government’s second argument, which also, if true, means that we should have more and more immigration is that a fiscal benefit ensues; that the amount of tax paid by immigrants exceeds the cost of benefits. Of course, we all know that the initial sums were calculated in a year when there was an overall surplus, so everybody, not only those of immigrant origin, paid more tax than they received benefits. Even if one corrects for a different year, as the Institute for Public Policy Research did, there appears to be a small differential in favour of net taxes-payments to the Exchequer by immigrants. However, that is the case only on the assumption-the Government have refused to revise the figures or acknowledge the need to do that-that all children, one of whose parents is an immigrant and the other is of domestic birth, are counted as British citizens. Their total costs are attributed to Britain, rather than half of them-as one would expect-being attributed to the immigrant parent and the other to the domestic population. Once we take that into account, there is no net surplus fiscally. In any case, we know that rich people pay more in taxes than they receive in benefit, by and large, and that it is the other way round for less well-off people. That would lead purely to differentiation in the type of immigration by the likely income level of immigrants, if the Government really believed that it was the case, which they probably do not.

There is an argument that we should import a finite number of people to deal with a finite shortage. Some years ago, the Prime Minister referred to there being some 500,000 vacancies in this country, and said that we therefore needed to import the labour to fill them. Since then, we have let in the best part of a million workers-that is the net figure-yet there are still 500,000 vacancies. That is no accident, because every new worker not only assuages the demand for one unit of labour but is also a consumer. Through their consumption, they create the need for just as much labour as they provide. So there is no net filling of vacancies. Nor do those people undermine the jobs of existing workers here, as the British National party suggests, making the mistake known as the lump of labour fallacy. If there were a domestic labour shortage, we would experience wage inflation, yet we have never seen it at a lower level than now. Furthermore, the answer would not be to encourage unlimited immigration but to tighten monetary policy appropriately.

We need to look closely at the Government’s arguments for justifying virtually unlimited immigration and to recognise that some immigration is necessary to this country. However, it should be more a lubricant than a fuel. A limited amount is good for us, but an unlimited amount is unnecessary and would bring costs and problems in its train. We will need control of immigration, and it is sad that the Government have not given us a rationale for the powers that they propose to take.
Proceeding: 60296
Legislature: House of Commons (HoC)
Place: Commons Chamber
Session: 06-07

 

 

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