TOO MUCH OF A GOOD THING?

- Tuesday, 22nd March 2005

 

CENTRE FOR POLICY STUDIES

website: www.cps.org.uk e-mail: tim@cps.org.uk

 
TOO MUCH OF A GOOD THING?


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 immigratio? 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.


NOTES
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 www.cps.org.uk/pdf/pub/409.pdf


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.

 

 

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