Immigration (EAC Report)

Part of the debate – in the House of Lords at 12:30 pm on 14th November 2008.

Alert me about debates like this

Photo of Lord Vallance of Tummel Lord Vallance of Tummel Spokesperson in the Lords, Department for Business, Enterprise and Regulatory Reform 12:30 pm, 14th November 2008

My Lords, I, too, thank the noble Lord, Lord Wakeham, for his admirable chairmanship of our committee over the years. He is indeed a very hard act to follow.

Soon after the publication of our report, I recall hearing Trevor Phillips on the radio saying in so many words that the legacy of Enoch Powell is that it is no longer possible to have an impartial discussion of immigration as the participants tend to be more concerned with sounding out each other's prejudices than with the objective facts. The immediate reactions to our report, whether in the media or elsewhere, rather confirm that view, as they ranged from thinly disguised xenophobia to high moral dudgeon, with rather less than one would wish in between. This debate gives us the opportunity to stick to the facts as we know them.

I shall not rehearse the economic arguments that the noble Lords, Lord Wakeham and Lord Layard, have already expounded, except to note with approval the Government's conversion to our committee's view that the appropriate measure of the economic benefit of immigration is the impact on GDP per capita rather than on GDP itself, on prosperity rather than on the size of the economy. As to the precise measure of that impact over the past decade of exceptionally high levels of net immigration, all that we could reasonably conclude against the background of what the Government have acknowledged as inadequate data was that the effects were likely to be small in one direction or the other. Put in layman's language, the average immigrant to the UK is likely to end up making the same sort of contribution to the economy as the people who were here already. That is not an altogether startling conclusion; in fact, I found it rather reassuring.

Another lesson that sprung from our work on the report was that averages in this area can be misleading and veil significant differences. The average immigrant does not exist. In practice, there is a host of individuals with widely different attributes and aspirations. It is important to try to unpack that average and see what is there. First, it is clear that some immigrants are more likely to bring economic benefits to the UK than others. As has been mentioned already, highly skilled immigrants, particularly if their skills are complementary to those of the home population, are more likely to add to the party than the unskilled or dependents who may not be economically active. Perhaps I should declare an interest here; I chair an Indian-owned and managed specialist IT company based in London whose employees come in the former category of the highly skilled and who, in my view, make a positive contribution to GDP per capita, albeit a small one. The point I am making is that if—and I stress the "if"—you want the driver of your immigration policy to be its economic benefits, you clearly need to be selective. Selectivity seems to be what the Government's new points-based system is about and I shall return to that later.

The second bit of unpacking we have to do is to acknowledge that some immigrants are more equal than others. We have moral, as well as legal obligations to asylum seekers, for example, which offer them the undoubted right to come here. As you will see from the report, their numbers are small and of no real economic significance. Europeans, too, have reciprocal rights to come and go. Interestingly, the wave of immigrants from eastern European A8 countries, which was the centre of a lot of attention for a while, made up no more than 20 per cent of gross immigration even at its peak. Whether those people were true immigrants, or just itinerants, remains to be seen. The remainder, the non-European arrivals, make up some 70 per cent of the total and are subject to immigration controls—the same controls, whether they are from Africa, America, Asia or Australia, which is just as it should be.

The third bit of unpacking is to recognise that immigrants to the UK do not spread themselves evenly across the country. They concentrate in particular locations. Over the 15-year period to 2006, almost two-thirds located in London and the south-east and, indeed, in particular boroughs. This is perhaps the most important bit of unpacking to be done, and the evidence of some of the local authorities most affected was particularly relevant. The inescapable fact is that if you have large numbers of people arriving in a limited number of locations, the shoe will begin to pinch. Educational facilities, health facilities, housing and indeed job markets will all be affected. That is what has happened over recent years, and the local authorities' complaint is that, partly because of shortcomings in the data on immigration, they have not had the right resources in time to deal with it. Scale is important here, as the noble Lord, Lord Layard, said, and, looking to the future, the Government's principal projection of population growth between now and 2031 is about 10 million, almost half of which is directly attributable to net immigration. If, on past form, two-thirds of that half—some 3 million—were to locate in specific parts of London and the south-east, the scope for pinching shoes would be considerable, as it would be in other areas of concentration elsewhere in the country.

There are, broadly speaking, three responses you can make to net immigration on that scale: bury your head in the sand and deny that there is a problem; invest the resources to deal with it in time; or exercise a level of constraint over the numbers arriving from those immigrant groups over which you have some control. It seems from the recent statements by the new Minister for immigration that the Government may be moving swiftly from the first to the third of those options. That brings me, finally, to the new points-based system, to which I said I would return.

The five tiers of that system are, in effect, inlet valves for five different categories of immigrant and are no doubt intended to regulate the flows of immigrants into the UK to some purpose. We can see that happening already. For example, tier 3—the unskilled category—is to be suspended for the foreseeable future, thus ensuring that the only unskilled immigrants into the UK will be from Europe, together with some dependants and, perhaps, asylum seekers. What we do not know, yet, is the net impact of the expected numbers of immigrants coming in via the other tiers, which are all in operation. As I said earlier, scale matters here if you are going to plan to deal with a significant net increase in numbers in an orderly fashion. It matters particularly to local authorities and other public service providers at the sharp end, so it would seem sensible for Government to have a broad, quantified intention in mind when they operate the inlet valves of their new, much-vaunted system.

Let me reinforce what the noble Lord, Lord Wakeham, has said on this point. What our report recommended was that:

"The Government should have an explicit and reasoned indicative target range for net immigration, and adjust its immigration policies in line with that broad objective".

That was simply a call for a rough, quantitative explanation of what the Government were intending to achieve with their new system in terms of the net flow of immigrants, as they will no doubt operate those inlet valves with something in mind and not just at random. There is no excuse for confusing our recommendation with a call for a cap on gross immigration, which is a different kettle of fish altogether, and one which to my mind is neither necessary nor desirable.

Yet the Government's response to the recommendation seems to have confused net with gross and a reasoned indicative target range with an arbitrary cap. I quote paragraph 4.50 of the Government's reply to our report:

"We believe that an arbitrary cap on numbers picked out of thin air simply risks denying Britain access to skills and ideas as and when they are needed - thereby damaging the ability of the economy, the labour market and business to function in a flexible way".

I could not agree more, but it is of no real relevance to our report's recommendation. I wonder whether, today, the Minister would care to respond to the recommendation we made, rather than to a fabrication that we did not make.