Too Much of a Good Thing? - the case for controlled immigration

- Tuesday, 22nd March 2005


57 Tufton Street . London SW1P 3QL . Tel: 020 7222 4488 . Fax 020 7222 4388
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0001 TUESDAY 22 MARCH 2005
The case for controlled immigration
The net total of legal immigrants has trebled from 47,000 in 1997 to 151,000 in 2003. This
is not so much the result of Government?s failure to control immigration as the success of its
largely unreported policy to "encourage... sustain and? increase lawful immigration?
writes Peter Lilley MP in Too Much of a Good Thing? Towards a balanced approach to
immigration, published today Tuesday 22 March 2005 by the Centre for Policy Studies.
However, this change of policy has largely escaped critical attention. In this pamphlet,
published the day before the author introduces a Bill (under the 10 minute rule) entitled
Immigration Control (Balanced Migration), Peter Lilley quotes official documents
confirming the Government?s policy of unlimited immigration, cites government letters
encouraging employers to bring in low-skilled workers from outside the EU and lists a
dozen policy changes that have boosted the inflow. He analyses government arguments
justifying this and finds that:
Economic Growth: the Prime Minister has claimed that immigration increases per capita
incomes. This is not true. Immigration does make the economy bigger but that does not
make us on average better off.
Shortages: the Prime Minister claims that Britain needs immigrants to fill labour shortages.
Yet this ignores the fact that the demand generated by immigration creates as many new
jobs as immigrants fill.
Fiscal benefits: the Government claims that immigrants make a net fiscal contribution of
?2.5 billion. The data on which this statement rests is flawed and ignores the large pension
liabilities immigrants are accruing.
Pensions: today?s immigrants will become pensioners when the demographic problem they
are supposed to alleviate is most acute. To maintain the current ratio between working age
and retired people would require over a million immigrants, year in year out.
Lilley acknowledges readily that immigrants enrich us economically and culturally. But
he likens the economy to a car: immigration acts as a lubricant, not (as the Government
mistakenly believes) a fuel. Some immigration is essential but beyond a certain point
increasing the inflow does not make the economy go better. He argues that the benefits do
not increase in proportion to numbers whereas the problems (e.g. pressure on housing) do.
In particular, net immigration will account for a third of the projected extra households by
2031. Since brown field sites provide two thirds of new homes, net immigration is the main
reason for green field development.
Lilley therefore supports setting an annual limit on the total inflow sufficient to meet our
humanitarian obligations and genuine economic benefits. In addition rules for work
permits should be restricted to secure the genuine benefits of immigration. And market
forces should be harnessed to restrict the inflow of immigrants by charging employers for
work permits a sum reflecting the full environmental, housing and administrative costs of
extra people.
This would protect UK workers from being undercut, maintain incentives for Britons to
acquire scarce skills and free immigrant workers from being indentured to an employer
if they or their new employers pay the cost of their remaining visa period.
The policy objective should be to bring a balance between the inflow and outflow of
non-EU citizens as soon as feasible. That would mean that 200,000 non-EU citizens
would come here every year in addition to the continuing immigration from new EU
member states to which the UK is now committed.
1. Too much of a good thing? Towards a balanced approach to immigration by Peter Lilley is
published today, Tuesday 22 March 2005 by the Centre for Policy Studies. Price
?7.50. The pamphlet can be downloaded from
2. Peter Lilley is MP for Hitchin and Harpenden. He has served as Deputy Leader of the
Conservative Party, Shadow Chancellor, Secretary of State for Trade and Industry
and Secretary of State for Social Security. He is the author of a number of recent
pamphlets, including Identity Crisis: the case against ID cards (Bow Group, 2005), Save
our Pensions (Social Market Foundation, 2003), Taking Liberties (Adam Smith Institute,
2002), Common Sense on Cannabis (Social Market Foundation, 2001), and Patient Power
(Demos, 2000).
3. The CPS has led the debate on immigration since its publication of Welcome to the
Asylum by Harriet Sergeant in September 2001. In May 2003 it also published No
System to Abuse: immigration and healthcare in the UK by the same author.
4. Contact details:
Peter Lilley: 07720 297 956 (mobile)
Tim Knox: 020 7222 4042 (office, direct line)
(Editor, CPS) 07906 562 202 (mobile).



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