Rt Hon Lord Lilley

    Type: Debate
    Proceeding: 50610

    Date of Proceeding: 05.07.2005

    Title: Immigration, Asylum and Nationality Bill

    Mr. Peter Lilley (Hitchin and Harpenden) (Con): I am grateful for the opportunity to speak after the hon. Member for Walthamstow (Mr. Gerrard), who brought to bear his considerable expertise in an important speech that should be read in conjunction with the truly remarkable speech by my hon. Friend the Member for North-East Bedfordshire (Alistair Burt). He highlighted how painful, sensitive and harrowing it can be to remove people from this country to a country as ghastly as Zimbabwe. The hon. Gentleman reminded us that those problems of removal increase the longer someone has been in this country. The longer the time, the more harrowing and difficult removal becomes.
    The hon. Gentleman also highlighted that, in a shameful move ahead of the election and in order to sound tough, the Government announced that there would be no automatic right of settlement after four years and no right of settlement at all for unskilled workers, effectively creating a category of guest worker. It sounded tough and perhaps popular in some quarters, but all hon. Members know that it has probably created an unworkable situation. The longer people have been here, the more they have established roots?they may have got married and had children?and removal becomes ever more difficult.
    We should remember the evidence that Dr. Teitelbaum gave to Congress on that point:
    “There is virtually no such thing as a temporary immigrant from a low wage economy to a high wage economy . . . Don‘t be tempted by the siren song of temporary worker programs. If they involve movement from poor countries to rich countries, they universally prove to be more permanent than temporary, and very difficult to turn off once turned on.”
    I would add that they inevitably involve inhumanity if turned off. It is far more sensible and humane to limit immigration at the initial stage than to allow people to come here temporarily.
    Recent debates in this Chamber have been oversubscribed. It is remarkable that on such a controversial subject, we are not subject to a time limit and only a few Labour Members have wished to speak. Even on this side of the House, our numbers are limited. I cannot help feeling that that reflects people‘s reluctance to participate in debates about immigration because all too often those debates are curtailed by accusations of racism, which are freely bandied about and recklessly applied to anybody who implies that any greater restriction should be placed on immigration. When I became involved in the immigration issue?which was almost by accident, because I was studying the housing issue and discovered that housing policy was largely driven by Home Office immigration policy?I was warned by all my friends, who had let me be reckless enough to write pamphlets in favour of

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    legalising cannabis, that I should not write about immigration. They said that I would be written off as a cranky libertarian or a dangerous racist. What I am about to say will probably have me written off on both counts.
    The Bill is about handling illegal migrants, failed asylum seekers, illegal entrants and those who have overstayed their visas. However, illegal immigration is simply the flipside of the lawful migration coin. The Government say that we need lawful migration because it is good for us. We need not just skilled people, but unskilled people. The Prime Minister has said that we need people to fill unskilled jobs that people living here are not prepared to do. We are told that lawful immigration increases the growth of our economy, and that the more there is, the faster it will grow. We are told that immigrants pay more in tax than they draw in benefits and other costs on the public sector, so the more immigration, the less tax the rest of us will have to pay. We are told that we need immigration to pay our future pensions, so the more immigrants we have, the fewer the difficulties of coping with the pension problem in the future.
    I shall discuss the credibility of those claims in a moment, but if they are true they imply that the more immigration there is, of both skilled and unskilled workers, the greater the benefits for the rest of us. The question inevitably arises, why, if economic migration is good for the rest of us, do the Government want to send back failed asylum seekers, illegal immigrants and over-stayers, who are, after all, economic migrants? The Government might say that it is a question of numbers; it is good for us, but there is a limit to the number that we can accommodate or absorb. However, they say that it is not a question of numbers. If it were, it would be natural and right to set a limit for that reason; but the Government say, no, there must be no limit to the numbers. They spent the whole of their election campaign ridiculing and opposing that idea. The Home Secretary and his predecessor said that there can be no upper limit to the number of immigrants who should be allowed into this country, and the current Home Secretary has said:
    “we want more immigration, more people coming to study, to work . . . to look for refuge”.
    If immigration is a good thing, we have to ask whether we can have too much of it. I do not ask such questions rhetorically, so when I faced up to the problem I ended up writing a pamphlet entitled “Too much of a good thing?”. When I started looking into the issues, my first conclusion was, if I am honest, not so much a conclusion as a prejudice. It came from living in areas with a high concentration of immigrants, from my experience and that of my neighbours and from working with immigrants as my constituents. I concluded that the overwhelming majority of immigrants are decent, hard-working, law-abiding people who come to this country wanting to better their lot and that of their families, and to make a positive contribution to the country. Most of them do. Indeed, to a large degree, they epitomise the very virtues of enterprise and family cohesion that Conservatives particularly admire, so we start off with a natural prejudice in favour of immigrants. We think of them as a good thing. We welcome those who are in the UK and we feel, as it were, at one with them.

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    I then considered the Government‘s economic arguments in favour of large-scale immigration. There can certainly be no reason to oppose it on the grounds of the character of the people who want to come to this country, but what are the arguments for and against encouraging large-scale migration? The first remarkable thing I found was that almost no economists thought that there were substantial economic benefits from large-scale migration. I have to confess that when my pamphlet went to print, I had not read what is probably the definitive work on the subject, published last December in the Population and Development Review, by Coleman and Rowthorn, entitled “The Economic Effects of Immigration into the United Kingdom”. Their conclusion was:
    “We conclude that the economic consequences of large-scale immigration are mostly trivial, negative or transient; that the interests of the more vulnerable sections of the domestic population may well be damaged; and that any small fiscal or other economic benefits are unlikely to bear comparison with immigration‘s substantial and permanent demographic and environmental impact. We demonstrate that such findings are in line with those from other developed countries”.
    Mrs. Louise Ellman (Liverpool, Riverside) (Lab/Co-op): Has the right hon. Gentleman compared the substance of the report from which he is quoting with the report published by the Home Office in 2002, which indicated that migrants contributed 10 per cent. more to this society than they actually cost it?
    Mr. Lilley: Yes I have, and it is fairly comprehensively demolished in the report that I have cited, which I urge the hon. Lady to read. I shall come to that point in due course and explain to her why that Home Office report was so unreliable.
    My conclusion was somewhat different from the one that I read out. I concluded that some immigration does enrich, and has enriched, this country both economically and culturally, but beyond a certain point the benefits of additional immigration do not rise with the number of people who come to the UK, whereas the costs and difficulties, especially the costs of extra housing and the pressure on land, rise in proportion to the numbers, so it is sensible and rational to set a limit.
    Let me use an analogy. Immigration acts as a lubricant for the economy, rather than a fuel. If we do not put oil in the car, it will not work well. If there is more than sufficient oil, the car will not go any better and too much oil may cause problems. To stop all immigration would be bad for the economy, but beyond a certain point increasing the amount of immigration does not make an economy grow any better. Immigration is a lubricant, but unfortunately the Government have been under the mistaken apprehension that it is a fuel. They put their foot on the accelerator and think that the more people we take into this country, the more we will grow. As a result, net lawful immigration has trebled under the Government; over the last six years it has averaged three times the level that they inherited.
    The main problem?certainly the one that brought me to the issue?the main cost, as it were, of large-scale immigration is the pressure of housing and land. The hon. Member for Doncaster, North (Edward Miliband) denied that that was a serious problem, but the Government themselves admitted, in an answer in the other place, that a third of all the households expected to be formed in future, for which housing will be necessary, are the result of net immigration to this country. Obviously, that excludes the figures for illegal immigration; if we made some estimates based on the recently published figures for illegal immigration, the number would probably be nearer 40 per cent. of all households in the United Kingdom. Net legal migration only is running at the rate of two constituencies a year, so two constituencies a year are being created in this country as a result of immigration.
    By 2031, the Government expect?again, excluding all illegal immigration and assuming a slowdown from the current level of immigration?an extra 5.2 million people net in this country, solely as a result of legal migration. Those are substantial numbers, which play an enormously important part in the housing pressures in southern England, because obviously the figures are suddenly more important. Of course the bulk of migration does not go directly to Hertfordshire, where I come from, or other home counties; it goes primarily to London. But the people who would have occupied the houses that are let, allocated or sold to the newcomers to London, move out to the home counties to get housing?they have to get it from somewhere. They do not leave because they do not like the newcomers?they

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    themselves are Londoners of all ethnicities moving out to us. That is the process: a net inflow of about 150,000 a year, mostly into London; and a corresponding outflow to the home counties, requiring very substantial house building, about which the Government refuse to talk. As my hon. Friend the Member for Orpington (Mr. Horam)?
    Madam Deputy Speaker (Sylvia Heal): Order. I have been listening with some interest to the right hon. Gentleman‘s remarks, clearly setting the background to this debate, but it would be helpful if he would now confine his remarks rather more to the context of the Bill under discussion.
    Mr. Lilley: I shall certainly follow your ruling, Madam Deputy Speaker. The Bill is about controlling immigration, and I am trying to find reasons for doing it. If we cannot find them, we cannot have a Bill, so I am sure that you would agree that we need to do so.
    I was hoping to find in the Bill a fulfilment of the promise that the Government made just before the election: that they would establish an independent commission to advise on how much immigration was necessary and desirable. Sadly, I can find no such reference in the Bill, but such a commission would, I hope, analyse the arguments in favour of more large-scale immigration and see whether they were justified. If they were, we would have that advice; if not, we would obviously have even more need for the controls and restrictions inherent in the Bill.
    The Prime Minister said that according to the Treasury, our economic growth rate would be 0.5 per cent. lower a year if net migration ceased. Lower growth, he said, means less individual prosperity. But economic growth is the sum of the growth in the number of workers and the growth in output per worker. The Treasury model, about which the Prime Minister was talking, says that immigration will add 0.5 per cent. to the growth in the number of workers, but will not increase output per worker, and it is only if output per head goes up that we get richer. So even on the figures that the Prime Minister quoted, he merely showed that we shall have a bigger economy, not a richer economy, and when he said that growth meant more individual prosperity, he was simply treating the facts with his normal discombobulation.
    The hon. Member for Liverpool, Riverside (Mrs. Ellman) asked about the study that showed that the immigrant community makes a net fiscal contribution to this country. The report that she mentioned, which I happen to have, says:
    “Migrants in the UK contributed . . . a net fiscal balance of approximately ?2.5 billion . . . This is equivalent to around 1p on the basic rate of income tax”
    for the rest of us. When we look at the figures, we find that that was a year when the Budget was in surplus. Not just immigrants were paying more in than they were taking out; the whole population was paying more in than it was taking out. When we allow for that fact, half of that ?2.5 billion disappears. The other problem was that the study attributed to both immigrants and non-immigrants in proportion to their shares of the population the taxes paid by foreign owners of companies. If we take that out, and if we also allow for

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    something that the authors of the study wholly ignored?the biggest single item, probably: the accruing pension liabilities of members of the immigrant population who are disproportionately below retirement age?all that gain disappears and turns into a net deficit.
    But I am not particularly arguing that immigrants are a burden, just that it is absurd to say that they are reducing the tax burden on everybody else. Rich people pay more taxes than they receive in benefits from the state, whether they be immigrants or previously resident people. Poor people, on the whole, pay less in to the state than they take out, whether they are immigrants or are born here. It is silly to aggregate them all. If one wants to use immigrants as a fiscal milch cow, one will obviously limit those coming here to high earners, but that is on the whole a rather unattractive policy.
    Mrs. Ellman: Does the right hon. Gentleman discount the contribution made by immigrants to the economy generally by providing skilled services, which are often scarce, and their wider contribution to society as a whole? He seems to be relating his comments only to fiscal matters and discounting the general contribution that immigrants can and do make to society.
    Mr. Lilley: Everybody in society makes a contribution to everybody else. In a free market society we are all exchanging goods and services and we are all mutually interdependent, and that is a wonderful thing. But if the hon. Lady is referring to the shortages argument?effectively to the Prime Minister‘s statement that
    “There are half a million vacancies in our job market and our . . . economy needs migration to fill these vacancies”,
    she is referring to the same misunderstanding of how economies work. Since the Prime Minister first referred to there being half a million vacancies which we need immigrants to fill, half a million immigrants have come to this country, and there are still half a million vacancies to be filled. That is not a coincidence; it is inevitable in a well-working economy, because immigrants not only produce goods and services but consume them, and the value of the goods and services that they produce is equal to the value of the goods and services that they consume. Also, in consuming goods and services they create demand for an equal net further inflow of workers, and that is why, in countries like our own where we have had a net inflow, there is still the same level of vacancies. The same is true of California, and of west Germany.
    The Bill was promised in the election, and it was promised in the Queen‘s Speech as fulfilling the election pledges, one of which was to bring in an Australian-style points system. Would I be in order if I were to address that, even though it is not in the Bill? It ought to be in the Bill, and the terms of the Bill will be used to enforce such a system if it is introduced via secondary legislation.
    Madam Deputy Speaker: Certainly, if the right hon. Gentleman feels that certain aspects are not in the Bill that should be, discussion of them would be in order.
    Mr. Lilley: I am grateful to you, Madam Deputy Speaker, for that ruling. I will therefore briefly refer to those aspects, which relate back to issues that we were discussing.
    The Government have promised an Australian-style points system as their way to limit immigration. At least, that is how they presented such a system at the election. Of course, the Australian-style points system included a numerical limit and a system of taking the immigrants with the maximum number of points up to that limit. That is how it operated. The idea of the points system without that numerical limit makes little sense.
    My right hon. Friend the shadow Home Secretary asked rhetorically?I was almost tempted to intervene at that stage?how a points system would work without an annual limit. We know how, because the Government have already put one in place. It is called the highly skilled migrant programme. They assess the points needed to be granted permission to enter this country. They set up the system; they set a level of points; and they found that they got a disappointingly low number of applicants. So what did they do? They reduced the number of points that people needed to be allowed into the country, until they got a welcome increase. Indeed, they were swamped by the increase, and they are now six months behind in processing applications.
    When the Government establish a points system, they manipulate the points to increase the number of people coming to this country?not, as they implied at the election, to reduce the number of people coming here. I am therefore extremely suspicious of any such proposals, unless a quantitative limit is imposed. I hope that the Government will progress that proposal, if not during consideration in Committee, subsequently by secondary legislation, and that they will progress their promise to introduce an independent commission to establish to what extent we need large-scale immigration into this country from an economic point of view.

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    I am confident that such a commission would work if it were genuinely independent, not employer based, as the Government rather laughingly suggest. Employers will always want to employ cheap labour from abroad; there will be a demand for that. There is an almost limitless supply of people whom they could bring in from abroad in almost any profession, except possibly those that depend on fluency in the English language and familiarity with our systems, and employ at lower rates of pay than they need to provide for people from this country. Therefore, one wants a commission to be established that will make the assessment on a economic basis, rather than on a desire to undercut the pay levels of the people who are already here.
    One way or another, we need to hear from the Government the reasons why they put any limit on immigration. We can then establish what that limit logically should be. We can then determine how the terms and tightening of the rules on appeals and so on in the Bill will apply at that limit, and in doing so, I, like everyone else, would want those rules applied as humanely, sensitively and rapidly as possible to minimise the harshness and damage that was highlighted so eloquently earlier in the debate by my hon. Friend the Member for North-East Bedfordshire.