Rt Hon Lord Lilley

    Written for The Telegraph.

    Since it has failed, why do we need more? Isn’t doing the same thing and expecting a different result Einstein’s definition of madness?

    The old maxim that “facts speak for themselves” is bunkum. Facts are dumb unless someone points them out. Take mass immigration. When Tony Blair opened our borders, he claimed that it would deliver three economic benefits. It would fill skill shortages, assuage the overall labour shortage and boost economic growth.

    After decades of unprecedented mass immigration, the economic facts are undeniable. Skill shortages have worsened. The overall labour shortage measured by total vacancies has doubled to a million. And far from boosting growth, the highest level of immigration in our history has been accompanied by our slowest productivity growth on record.

    Yet, there has been a deafening silence about these failures. Employers and civil servants calling for more immigration are almost never asked: “Since it has failed, why do we need more? Isn’t doing the same thing and expecting a different result Einstein’s definition of madness?” Like quack doctors selling snake oil, they have taken the lack of visible results as an excuse to double the dose.

    This week’s net migration figures could be three quarters of a million. Anyone forecasting that, even a year ago, would have been accused of xenophobic scaremongering. We have sleepwalked into this because there has been a taboo on questioning the merits of mass immigration.

    For decades, this taboo has been enforced by an unholy alliance between employers keen to recruit cheap labour from abroad, and virtue-signalling intellectuals labelling any critics as “racist”. Sadly, most British economists were cowed into silence by this threat, even though basic economic analysis would have predicted the issues we now face.

    The UN International Labour Office did warn that trying to remove domestic skill shortages by increasing immigration would only intensify the shortage. It said: “What may begin as a temporary shortage of trained native workers can be made more permanent by attempting a quick fix from migrant labour. Importing migrants into a sector whose employers are complaining of insufficient trained natives will exacerbate (rather than alleviate) its native shortage.”

    By contrast, when government resists siren calls to issue more visas, shortages evaporate. Remember the HGV driver crisis in late 2021? HGV drivers’ pay was held down for years as Eastern European drivers displaced Brits. During the pandemic, EU drivers returned home and Brits switched to delivering booming online retail orders. So, when the economy recovered from the Covid lockdowns, there was an acute shortage of HGV drivers. Petrol stations were closed and food deliveries disrupted.

    Now the shortage appears to have virtually disappeared. Why? Because pay rose, attracting more recruits. Employers expanded training. Ministers set up training “bootcamps” and exploited Brexit freedoms to speed up the process of training and granting permits. Now, thousands of Brits have better jobs.

    The highest-profile “shortages” are in the health sector. Not because British people don’t want to become doctors or nurses. We turn away tens of thousands of British applicants every year because training places are rationed. The NHS prefers to let poor countries do the training.

    When anyone suggests that mass immigration will create unemployment by “taking British jobs”, economists denounce this – and rightly so – as the “lump of labour fallacy”. That is the fallacy that there is a fixed amount of work to do, whereas, in fact, more workers generate more demand for goods and services. But those economists were too scared to warn that the same fallacy applied to claims that importing workers would assuage the overall labour shortage.

    The most egregious economic fallacy was the claim that mass migration would boost economic growth. Of course, more workers mean a bigger economy. But our standard of living only grows if productivity per head rises. The two things which increase productivity are more capital investment per head and improving our skills. Yet mass immigration reduces the incentive to invest, acquire skills and offer training.

    The Government will not, and maybe should not, abruptly end mass immigration. But for any skill designated in short supply, it must agree with employers and colleges a plan to eliminate that shortage by improving pay, conditions, training and investment within a fixed time period. After which, no more visas.