My Lords, I was pleased to serve on the Economic Affairs Committee for this inquiry, and I, too, thank our advisers and our excellent clerk, Robert Graham-Harrison.
I came to these issues with a strongly positive attitude to immigration. This is partly because I hugely enjoy and appreciate the contribution of people from different countries and cultures here in this vibrant, cosmopolitan city: the entrepreneurial spirit, the artistic talent and the variety and diversity of ideas and heritages. My positive view of immigration also partly flows from the significance of new migrant labour in the two industries with which I have most contact. First, in housing, the construction industry makes substantial use of overseas workers who, in recent years, have come mostly from the A8 countries, particularly Poland. Secondly, the residential and domiciliary care sector has engaged large numbers of staff—care workers—from other countries. In relation to both groups, I have been hugely impressed by the energy, cheerfulness, honesty and reliability of the new migrants and, of course, by their willingness to work at wage levels that are unattractive to the established population, which keeps down the costs of providing services, not least the charges in care homes which can be a crippling burden for older residents.
Some of this value for money is attributable to extraneous factors; for example, an exchange rate, which, until recently, made the pound go further in the migrants' home countries, and the low cost of living for a single person working here for a year or so, not a lifetime, who is prepared temporarily to share one room with several compatriots. However, some of the benefit of employing migrants comes from their work ethic and the values that they bring. I have, for example, found that care workers in the housing schemes provided by the housing association that I chair, Hanover Housing Association, are not only diligent and prepared to go the extra mile, but caring too, perhaps because of religious beliefs which stress the respect due to older people.
It came as mild shock, therefore, to be required by the discipline of the committee's inquiry to think seriously about the economics of the relatively high levels of inward migration over recent years. All commentators, whatever the statistical disputes, agree that even though per capita incomes may or may not have grown very much as a result of immigration, the overall economic effect has not been negative to date. Of course, extra revenue from national taxation paid by new migrant workers needs to be recycled in part to fund local services, usually supplied by the local authority, which migrants use. That is a matter for sensible negotiation between central and local government.
However, two more deep-seated hazards emerged from our discussions and have given me pause for thought. First, the increase in population caused by net inward migration as well as by longer lives and births exceeding deaths makes demands on housing and infrastructure and raises concerns about congestion, overcrowding and the fear of builders "concreting over the south-east" to accommodate the extra people. It is quite true that we face overall demand for housing that far exceeds supply. This leads to considerable tensions, with those in local communities blaming each other for a problem that is caused not by discrimination or favouritism to immigrants but simply by there not being enough homes to go round. In fact, we know that the majority of new immigrants go into hard-to-let housing and the worst properties in the private rented sector, but extra population must still have a knock-on effect.
Housing shortages are set to get worse. Nevertheless, I do not believe that this is an insuperable problem, nor in itself grounds for changing immigration policy. Industry experts have recently concluded that it is within our capabilities to construct the homes that we need—some 3 million by 2020—even though the current recession may mean a couple of quiet years ahead. I contend that the required level of housebuilding does not require the sacrifice of great swathes of rural England. Pressures for out-of-town, greenfield development come not from new migrants but from the existing population, who, for some decades, have wanted to leave urban areas for the suburbs and beyond.
These market forces are not the result of "white flight", with families leaving areas to which migrants have moved, as the urban exodus is just as powerful in the towns and cities where immigration is at very low levels—for example, Hull or Newcastle. If we place a high premium on the green belt and on greenfields elsewhere, it may be sensible to resist the trend to leave towns and conurbations and to do more to regenerate and enhance those urban areas. This need not be at the expense of building to intolerably high densities: Kensington and Chelsea is the London borough with the highest density—10 times the level of, say, the London Borough of Bromley—but is regarded as very desirable. I am not suggesting that we should build to the densities of Singapore, the country with the most successful economy in south-east Asia, but, if we did, we could house the entire population of the UK on the Isle of Wight. Once we turn the corner on the current recession, I believe that it will be possible for the UK to provide the housing and infrastructure to accommodate expected population growth, including from inward migration, without desecrating the countryside.
The second anxiety raised for me by the committee's report may be more concerning. It is that the benefits I have felt as an employer or procurer of labour in the housing and care sectors may have come at the expense of employment levels for the resident population. If there is a plentiful supply of well motivated workers from other countries, why struggle to educate, train and engage hard-to-employ indigenous young people? Employers are hardly likely to take on an illiterate, inarticulate young English man when there are plenty of bright, keen migrant workers willing to work for relatively low wages. Yet the human, social and economic cost to the UK of failing to rescue the growing numbers of NEETs—those not in employment, education or training—could be incalculable. It is said that one in five young people may now fall into this horrible category. Because mobility of labour from EEA countries, soon to include Bulgaria and Romania, will continue, this issue may not be resolved by the Government's latest plans for curbs on immigration; and if the recession bites worldwide, the UK may remain an attractive destination, despite our own economic difficulties.
However much benefit we derive from immigration, I can now recognise the hazards for the priority that this nation gives to the education, training and skills of our resident population. There is far more that the Government can do to square this circle: education for 14 to 17 year-olds that teaches practical skills and job readiness; further efforts to extend apprenticeships—a big concern for the Economic Affairs Committee; specifically in the construction industry, the linking of government contracts, as has been so well demonstrated by the Olympic Delivery Authority, to high-quality training for local people; and the incorporation of "local labour in construction" clauses in Section 106 agreements by local authorities, housing associations and other bodies involved in procurement. Painful though it will be for those of us who derive benefit from overseas workers at present, employers and procurers may need to be required to try harder to train and recruit local labour before taking the easier option of employing migrant workers from outside the EEA.
I, for one, am grateful to the committee for requiring me to think through the deeper implications of the economics of immigration, even if the final outcome produces some discomfort, and I hope that it stimulates others to do so too.