My Lords, as a member of the Select Committee it is a great pleasure to pay tribute to the outstanding chairmanship of the noble Lord, Lord Wakeham, which brought back happy memories of those same skills being deployed when he held high office in the 1980s at No. 12 Downing Street.
Two of my former teachers have taken part in this debate. The noble Lord, Lord Peston, was my first teacher of economics, and I do not think I ever had such a withering attack on any essay that I might have written as he has given us. The noble Lord, Lord Moser, who is an extraordinarily distinguished social statistician, was maybe more delicate in his attack but nevertheless just as penetrating. I shall refer to some of the points they made as I have a different perspective.
First, it sounds obvious but it needs to be said that the nature of the inquiry was limited. I make the point in particular to the remarks in the maiden speech of the right reverend Prelate the Bishop of Lincoln. Immigration is an extraordinarily complex issue with many facets. The economics of immigration that we considered were: the impact on the living standards and real income of the existing population; the implication on the public finances; the implication on health education and housing, and so on. They are fiendishly complicated issues. Justifying the limited, even narrow nature of the report, in view of the complexity of the subject, is perfectly reasonable.
Our report was not about the cultural or social impact of immigration, let alone the ethical issues involved. They are all crucial to immigration policy, but we approached the subject as objectively as we could, and did so always on the basis of empirical evidence. I accept, as the noble Lords, Lord Peston and Lord Moser, said, that in certain areas the empirical evidence is limited. We have studiously avoided making it in any way overtly political. That is important for one reason. One can accept the conclusions and recommendations of our report and have very different views on what immigration policy should be. One could say that we need more net migration, to continue with existing net migration, or to reduce net migration. Our report does not of itself lead to any one of those conclusions.
It is important to point out, in view of some of the comments that have been made, that our report is not anti-immigration. It recognises that it brings benefits to the nation. Paragraph 186 states:
"Significant gross immigration of highly skilled non-EU nationals may well be desirable. There may also be important dynamic gains from the exchange and movement of people".
Paragraph 144 recognised that,
"immigrant children also create benefits for schools".
Dr Dobson, whom we referred to, from University College, London, said that many immigrant children study very hard, resulting in the quality of education for all children in the school being improved. We recognised evidence from the National Farmers' Union that in some rural areas, village schools have been boosted by immigrant enrolment. It should be recognised that if net immigration were reduced to zero—emigration equals immigration—the immigrant share of the population in the foreseeable future would grow steadily.
In this connection, I fully accept what the noble Lord, Lord Moser, said about the press and headlines such as "We must cap immigration"—the report never suggested that we should do anything of the sort—"Mass immigration is destroying Britain"—if you read our report, it patently is not—and "Devastating demolition of the case for mass immigration"—frankly, it was nothing of the kind. If you read our report from cover to cover, as the noble Lord, Lord Peston, has done, there is no way that it advances a racist or xenophobic agenda. Having said that, I have one regret, which is that we should have been more explicit and fulsome in our praise of the contribution of immigrants to the UK economy, as has been mentioned.
However, I defend the central conclusion of our report. It has three positions. The first is that the principal measure of the economic case for immigration is its impact on GDP per capita. I am delighted that in their response the Government said:
"The Government has been crystal clear that GDP per capita growth must be the principal determinant of success. Indeed, the Minister of State for Borders and Immigration said to the Committee: 'I personally do think that GDP per capita is the key thing to focus on'".
Since GDP per capita is such an overall figure, the noble Lord, Lord Moser, raised important questions about how adequate it is for measuring various effects. I agree. The only thing that we were looking at was whether any measure was available for the existing population of the effect of net immigration in terms of real income. That is a legitimate reason for choosing GDP per capita. I agree with the noble Lord, Lord Peston, that there is a case for saying that the total size of GDP matters in the example he gave; however, I find that argument rather worrying. He used the example of war. When countries say that they simply want to have a large GDP, I get very nervous about the reasons that politicians might be interested in a large GDP per se, rather than per capita. The noble Lord, Lord Peston, laid it out clearly.
We all have anecdotal evidence of the benefits of immigration. I have been involved in the City for 40 years, and I agree totally with that. In the bank where I am at present, we have people from many nationalities with many languages, and I have no doubt that that has a positive impact. In making GDP per capita central to our report, we were asking whether there was any way to isolate the impact on the real income of the existing population.
Our second conclusion was that from the available research evidence, which is limited, the impact on GDP is small, even negligible. Some of it is positive and some negative. That is important because if the impact of immigration on GDP had been substantial, whether positively or negatively, that would be an important conclusion. What we found—and what, incidentally and perhaps more interestingly, has been found in studies in other countries such as the USA, which has had huge immigration—was that the impact of immigration on GDP was small. I recognise that there are dynamic gains. We mention that dynamic gains could be important because of the effect of having a larger economy with a more diverse workforce with people from different backgrounds, cultures and experience; and the impact of migration on strengthening international networks, which will affect trade and investment. We were not unaware of that, but the problem is that it is hard to measure.
The third important conclusion of our report—this goes back to the speech of the noble Lord, Lord Layard, at the beginning of our debate—is, to me, the real point of this debate. That is the potential impact of current immigration on the size and composition of population in future. Under projected estimates by the Government for 2031, 70 per cent of future population growth depends on net immigration. If we look longer ahead to 2081, it is 100 per cent. That is important because the current population is 60.6 million. By 2031, it is estimated to be 71 million; by 2081, it is estimated to be 85 million, if net immigration proceeds at its current rate.
The crucial issue raised by our report is: what is government policy on future population growth? The noble Lord, Lord Turner, pointed out, and the noble Lord, Lord Layard, emphasised again that there are important implications of a higher population density for transport infrastructure, environmental damage and housing.
The economic case for positive net immigration is not strong. The impact on per capita GDP for the existing population is fairly small. The dynamic effects are difficult to estimate. As a member of the committee, I categorically reject the suggestion that in any of our discussions, and certainly in our report, there is any trace of racism or xenophobia. I abhor the fact that our report could be used as a protective cover for such arguments. Many of us in this House come from ethical and religious traditions that accept the responsibility of prosperous nations to poorer nations. We are totally opposed to discrimination in employment and we recognise that entry to this country may for many people be the best way to escape poverty and to educate their children.
In conclusion, therefore, the task for government policy is not easy. We must be open as a country to net immigration. We must recognise, however, its impact on future population. The points system that the Government have proposed is an advance on the past, but my crucial conclusion would be that we need a longer term framework within which to resolve the challenge posed by the growth of population, which is the key issue that faces the Government in addressing the report.