Rt Hon Lord Lilley

    Mr Peter Lilley (Hitchin and Harpenden) (Con):
    I am grateful for the opportunity to participate in this debate, and I congratulate the right hon. Member for Birkenhead (Mr Field) on introducing it. Like him, I welcome the change in tone that has occurred in raising and debating the subject of immigration. In 2005, I wrote a pamphlet on the subject entitled, “Too much of a good thing? Towards a balanced approach to immigration”. I was immediately assailed by my political opponents in my constituency and accused in the local press of being racist. That was before they had read anything that I had said. In those days, simply raising the subject was deemed to be racist, but I am happy to say that when they read what I had said they withdrew their remarks, because I was manifestly not racist. I am glad that we have moved on, and that we can now discuss such matters.

    For much of my adult life-this is probably not true of most hon. Members in the Chamber-I have lived in parts of London that have strong immigrant populations, and cheek by jowl with people who had emigrated to this country. As a result, I knew from working with people of immigrant origin, and from knowing them as friends and neighbours and worshipping in the same churches, that the caricature of immigrants often portrayed in the media is often the very reverse of the truth. Far from being scroungers, criminals and a threat to society, the majority of them are decent, hard-working, law-abiding people who want to make a positive contribution to the community.

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    So I began with a bias in favour of immigration. I became involved in the subject and was prompted to write the pamphlet only because I was investigating the housing issue in Hertfordshire. I was intrigued as to why housing targets were constantly raised. When I inquired why, I was told by the great and the good and by the officials in local authorities and planning authorities that there were two reasons that we needed constantly to build more houses. The first was declining household size, and that was true. On average, if there were an unchanged population in Hertfordshire, we would need 0.5% more houses every year because household sizes are declining by 0.5% each year.

    The second reason I was given was that there was an inflow into the south-east from the rest of the country. I looked into that, and I found it to be untrue. It was what we would call, in places other than this, a lie. In fact, there was a net outflow of people from the south-east of England to the rest of the United Kingdom. There was, however, a net inflow into London, particularly, from abroad. In 17 statements to the House on housing made by the previous Government, the impact of international migration on demand for housing was never once mentioned. That was the nature of our debate. We were pretending that the phenomenon was not happening, even though everyone could observe that it was.

    As far as my constituency was concerned, people were moving to London from abroad and occupying houses-because they were allocated them, because they had bought them or because they had rented them-that would otherwise have been occupied by the people already resident in London. Those people therefore moved out to Hertfordshire and the rest of the home counties, and we had to build houses for them.

    When I looked into the matter further, I found that 80% of the expected population growth and more than 40% of new household formation in this country was the result of net immigration from abroad. That is why we have a housing crisis in this country. That is why housing waiting lists have increased so dramatically over the past 10 or 15 years. That is also why so many of our constituents link housing with immigration. They do not dislike immigrants. Like me, they probably know them and live with them-we are all human beings; we are all children of the same God and I hope that we all get on with each other-but they know that if there is a net inflow into the country and we are not building as many houses as there are people coming in, that will result in a housing crisis and the people who are already here will have to bear the brunt of it in due course. I therefore wrote about that and thought about it purely in those terms.

    I went on to look at the economic benefits that were alleged to result from large-scale immigration into this country. I found that the debate on those supposed benefits was depressingly superficial. It consisted of slogans rather than analysis. When I looked at the analysis that had been seriously carried out into the economic benefits that flow from immigration, I could find no major study that believed there to be any substantial net gain to an economy from large-scale net immigration. The hon. Member for Cheltenham (Martin Horwood), who is no longer in his place, mentioned

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    certain publications by the Institute for Public Policy Research that were in favour of immigration, but I shall quote from a document that the institute published entitled “The Politics of Migration”. It contains an essay by Mark Kleinman, in which he states:

      “There is not a compelling long-term case for increased immigration purely in terms of economic benefits.”

    I could quote from many other studies that reached the same conclusion. According to some, there might be a mild economic benefit if we ignore all the housing and infrastructure problems, or according to others, there might be a small net loss. The idea that we can substantially improve the well-being of this country through large-scale immigration is simply unsubstantiated by any major study.

    This does not mean that we should have no immigration. My analogy is that immigration is much more like a lubricant than a fuel. Without lubrication, a car would suffer severe damage, but once it has enough lubrication, adding more will not make it go better; it might even cause problems. Likewise, stopping all immigration would damage the economy, but encouraging more immigration beyond a certain point will not make those already here any better off. I challenge anyone to rebut that basic thesis. We need a modest amount of to-and-fro among people, with some moving here, others returning or moving elsewhere, but we do not need a substantial net increase in our population through immigration.

    I shall deal with just one economic argument-the issue of skilled workers. The debate in this area is particularly superficial. It is widely assumed that allowing any skilled workers into the country must always be beneficial to the well-being of those already here, but that is not necessarily so. The only way to raise the living standards of our existing population over time is to increase the level of skills and the proportion of our population that has those skills, expertise and experience. Importing skills from abroad is often a substitute for doing that and discourages it. This is not the only reason, but it has contributed to the fact that this country has a less skilled population than many of our competitors, including Germany, France, Japan and America. A smaller proportion of our population has qualifications below degree level than almost any of our competitors.

    We pretend that we can make do by importing skilled people instead, thereby simply leaving large swathes of our population unskilled, with reduced incentives to acquire skills, depression of the wages of people with skills and reduction of the differentials that can be gained from acquiring a skill. That cannot be right. Employers might say, “Ah, I would like to employ some skilled workers from abroad,” but we should be wary of saying that this is a good thing. Employers always like to employ cheap labour. They would like to get cheaper accountants from abroad, cheaper lawyers from abroad, cheaper journalists from abroad-

    Stephen Pound (Ealing North) (Lab): Cheaper MPs!

    Mr Lilley: And cheaper MPs, says the man from the Pound store. These professions tend to be somewhat immune, in that if one wants to be a journalist or a lawyer, it helps to be English, to understand English law and so forth.

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    Gordon Birtwistle (Burnley) (LD): Does the right hon. Gentleman agree that we have to bring in some skills from abroad? There are new technologies abroad, such as the electric cars being developed by Toyota in Japan. In those cases, do we not need to bring in the skills from abroad so that people can bring the technologies with them? Is that not necessary to keep this country’s skills up to date on technologies that are available abroad, but not available here?

    Mr Lilley: Absolutely. I was coming on to that issue, which requires intelligent debate and recognition that it is not a matter of “all or nothing”. The absurd idea that we should allow anybody who can be labelled a skilled worker to come here is wrong.

    Mr Virendra Sharma: Will the right hon. Gentleman give way?

    Mr Lilley: In a moment, as I want to finish answering the point that was raised.

    I am not suggesting that certain categories of skilled workers could not be used during a temporary shortage while domestic employees were being trained, or that there could not be a skills transfer when the skills that were required could not, by their very nature, be acquired domestically or through training. We have traditionally allowed companies to import workers for the purposes of skills transfers when the skills concerned are company-specific.

    Let us say that IBM is setting up a factory here. It has an IBM way of doing things. Initially, it will need to bring in the IBM accountant to show British accountants how to run the accounts and the financial system. Those running the production line may have to bring in IBM production engineers to train British engineers in their ways of doing things. It is not possible to buy such company-specific skills on the market; they must be imported temporarily. However, because the people who have transferred the skills invariably return, the transfer does not result in net migration. That is very different from allowing cheap skills into this country.

    In a blog that is influential in the IT industry-here I declare an interest-the author of the Holway report constantly hammers home the fact that we are moving slowly towards circumstances in which fewer and fewer entry-level jobs are available in the industry. Last year 9,000 skilled IT workers were brought into the country by a handful of companies under the intra-company transfer scheme. That is not transferring skills from a company to domestic residents; it is importing cheap labour. However, we allow it, although as a result the IT sector has one of the highest rates of unemployment in industry. The Government must think seriously about the issue, and must not form policy on the basis of slogans such as “Skilled work is good” and “Open border to skilled workers”. That is not good in the long run if it means that fewer of those who are already here acquire skills, experience and expertise.

    David Mowat (Warrington South) (Con): Using the analogy of the IT industry, my right hon. Friend has pointed out that unemployment exists, and that there is a demand from a small number of companies for a large number of people to come into the country. The corollary is that, in a process called outsourcing, we move jobs to

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    other parts of the world. That is just part of being a free trade country. If we wish to position ourselves as leaders in terms of free trade, as the Prime Minister said 10 days ago, the corollary is a degree of freedom of movement. There has been a massive skills failure in the country over the past decade and a half. Most of the 180,000 entrants are for STEM subjects-science, technology, engineering and mathematics. If we are unable to train people ourselves, it behoves us to allow them into the country in a way that benefits us.

    Mr Lilley: My hon. Friend’s intervention prompts a number of questions. For instance, why do we not train people?

    For a while I was chairman of a small German company as a result of a merger, and the first thing that we did was bring in British employees to train its employees. It is considered automatic: every company, even a small company with only 200 employees, trains people. Sadly, that culture does not exist in this country. All that we think of doing is importing people from abroad, or possibly stealing them from our competitors down the road. At least if we steal them from our competitors down the road, we have to bid up the salaries for the particular skill involved. We encourage more people to acquire that skill, and as a result increase the number of people with such skills in our economy. However, the idea that we should assume passively that this country alone in the world cannot train people to acquire skills that semi-developed countries seem to be able to train their people to acquire strikes me as a defeatism that is sad and deplorable.

    I hope we will recognise that there are some skills that we should allow into the country: entrepreneurial skills, for example, I rather doubt whether entrepreneurship can be taught. Some people are natural entrepreneurs while others are not. That is fair enough: if someone has proven success as an entrepreneur abroad, we should let him in, with some of the capital that he has acquired. Only a small number of people will be involved, however. That is not mass immigration. It will generate a lot of jobs and it is a sensible thing to do, so let us do it. However, we must distinguish between those sorts of skills and the sorts of skills we can enable the existing population of all ethnic origins to acquire, so that the well-being of those already here improves.

    Mr Virendra Sharma: First, let me say that I take the recent sedentary comment of my hon. Friend the Member for Ealing North (Stephen Pound) as a compliment, rather than something negative. The right hon. Gentleman agrees that there is a skills gap within the work force at present, and to fill that gap we need workers coming from overseas because we cannot train people here overnight or in a short period. We need to address both ends of this issue by filling the gaps now from overseas while training the work force here for the future.

    Mr Lilley: Yes, and that would imply the following policy: if a company says, “No one in this country yet has expertise in-“ [Interruption.] Yes, in electric cars, as the hon. Member for Burnley (Gordon Birtwistle) suggests. I do not know whether that is the case, but if it is we might have to introduce that expertise from overseas in the short term, but the understanding should be that that is in order to transfer the expertise to the domestic population, rather than because we have given up on

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    the domestic population ever learning the skills to make electric cars. It should be short-term immigration, not long-term immigration.

    Mr Sharma: I do not think that anybody is advocating that the work force here should not be trained. However, there is a skills gap in the work force and we need to fill it otherwise we will suffer economically.

    Mr Lilley: Yes, but above all we need to fill it by training people up. That is what countries that grow and prosper do, and we have got to learn to do it too.

    Mr Brazier: Will my right hon. Friend give way?

    Mr Lilley: May I make a little more progress?

    The hon. Member for Ealing, Southall (Mr Sharma) mentioned the skill of cooking Bangladeshi meals. There are a large number of unemployed Bangladeshi people in this country, and there are a large number of Bangladeshi restaurants. Why, therefore, do the restaurateurs not train up their staff to acquire these skills? I am afraid that the reason is because they can get staff with such skills more cheaply from the subcontinent. We must say that we want to have well-paid chefs in this country, not depress the pay by importing from abroad.

    I want to refer to an aspect of the debate that none of us has mentioned, and that I suspect nobody except me will mention. Indeed, I would not have done so had I not acquired my copy of Prospect magazine yesterday. It is a left-wing magazine, but I am very open-minded so I read even left-wing monthly journals.

    Stephen Pound: That’s more than we do.

    Mr Lilley: The hon. Gentleman is one of the few Members of this House who admits to general illiteracy.

    The magazine contains a very interesting article by Professor Coleman, a professor of demographics at Oxford university and former consultant to the Government. I have always dealt with immigration in terms of net immigration. I have been concerned about numbers and housing, and so forth. If 200,000 people come here and 100,000 people leave, that is a net change of 100,000. The professor’s article, however, looks at the impact of gross flows on the composition of this country’s population. He observes that projections carried out by the Government Actuary’s Department suggest that if the levels of immigration we inherited from the last Government and factors such as the birth rates of those who come from abroad, as against those of the domestic population, persist into future decades, in 50 years less than 50% of the population of this country will be ethnically British-ethnically English, Scottish, Welsh and Irish. That may not matter. If we reduce the level of net immigration into this country to 80,000 from the many tens of thousands, as we promised to do, it will take 70 years before less than half the population of this country are the original, indigenous, ethnic British. If we move towards a position of balanced migration, on which I have supported the right hon. Member for Birkenhead, it will take to the end of the century- 90 years-before the existing British ethnic population is a minority. If there is no immigration and no emigration-that is a rather unlikely eventuality-by

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    the end of the century we will still be 75% ethnic British. All I ask of Members of this House is to consider whether this is a good thing or a bad thing. Does it matter if the indigenous population becomes a minority, as has happened in Fiji, where the Fijians now constitute less than half of their population? I do not expect to receive a reply, because that is the sort of question that polite people do not ask. But it is what our constituents are asking and we should face up to it.