My Lords, I was not a member of this committee, so I thank noble Lords who were, and the committee staff, for their hard work. I try to read as many of our Select Committee papers as possible, because I value their information and insights. I had a special reason for reading this one because I, too, am an immigrant.
However, as I read this paper, like the noble Lord, Lord Dubs, I began to feel more and more dismayed by its tone. The noble Lord, Lord Griffiths, spoke of empirical evidence. The noble Lord, Lord Vallance, said that he is sticking to the facts. However, early in the paper, at paragraph 7, we are told that a recurring theme in the inquiry was a serious shortage of facts and reliable and complete empirical data. The paper says that this,
"makes it very difficult to assess the scale, characteristics and impacts of immigration".
This concern is repeated many times by witnesses. I join the noble Lord, Lord Moser, in his surprise that, in spite of this, the paper draws some pretty firm conclusions. As a result, one gets the feeling that the committee did not want to be bothered by the facts. It had already made up its mind that immigration did little for the economy.
The noble Lord, Lord Griffiths, also said that this report is not racist. While I am sure that it was not intentional, the impression given is that the politics of the committee are anti-immigration. If they want to, a reader can detect racist views in the paper, because its arguments only applied to those outside the European Union—immigrants from Asia, Africa or the Indian subcontinent. Like my noble friend Lord Peston, I think that this was rather unfortunate.
My noble friend Lord Layard said that immigration is political. He is right. This is a political paper because, as the right reverend Prelate reminded us, immigrants are people. The impression that this is a political paper is reinforced by the fact that it only looks at recent immigration. In fact, it looks at immigrant manual labour during the time of the present Labour Government. As many speakers have said, we have had immigration into this country for hundreds of years. What about the economic impact of immigration from earlier years? What about the effect of immigration by non-manual workers? As my noble friends Lord Paul and Lord Peston explained, they have certainly had an impact on the economy and it is a pity that the paper did not acknowledge this. They have had an impact not only the economy, but on many other aspects of life here that have been enriched by those who came from elsewhere, as the noble Lord, Lord Dholakia, reminded us.
My noble friend Lord Paul said that immigrants make a contribution to the economy because they are self-selecting. That may be true, but I believe that there is another important reason. They are innovative because they do not have the historical baggage of the resident population. This is how progress is made. Keynes tells us that the major barrier to developing new ideas is escaping from the old ones. Immigration certainly helps that escape.
That was why I was concerned when, in chapter 4 of the paper, the committee tells us how businesses should be run. During my business life, I was very careful not to do this because the real test of a business is not how it does things but how it satisfies its consumers. Surely this is the economic impact of a business. Somebody, often an immigrant, will always find a new way of doing things cheaper, better, quicker, safer, nicer, with less energy and waste, and with more variety. The analysis in paragraphs 117 and 118 hardly touches on the need for businesses to constantly raise their game, as the noble Baroness, Lady Valentine, pointed out. It is this which makes our economy competitive in the world—not simply holding down wages.
In paragraph 102, the committee says that,
"immigration that is in the best interest of individual employers is not always in the best interest of the economy as a whole".
I am not an economist—eminent economists are taking part in the debate—but it seems to me that that may be correct at a moment of time. But surely over time this economic opportunity becomes productive capacity, which in turn becomes a well paid job and eventually turns into wealth. Therefore, what starts as an economic opportunity eventually benefits the nation. I think that the noble Lord, Lord Layard, implied that in a roundabout way.
The paper explains that by joining the European Union we cannot control immigration because the right to work anywhere in the Union is one of the four freedoms. In fact, the freedom to travel and work anywhere within the EU is probably the freedom which the younger generation appreciates most. What business appreciates most is a free market where it can not only sell its goods and services but buy the goods and services that it needs, and this includes labour. Is this immigration, or itinerant labour, as the noble Lord, Lord Vallance, called it? To me, it is just the free movement of labour. Most of us believe that we benefit from our membership of the EU and that this free movement of labour—a sort of immigration—is part of that benefit. However, the paper seems to ignore this entirely. In chapter 3 it speaks of the danger of immigration lessening the need for skills training of the resident population. This is very short term. The pressure to compete in the EU means that we have to raise the skills and knowledge of our workforce. Just holding down wages does not make us competitive.
I am also concerned at the simplistic view expressed in chapter 4 that the cost of wages is the sole criterion that affects immigrant employment. The noble Lord, Lord Best, spoke of construction. I happen to know that it is not just a matter of labour cost as regards the bathrooms discussed in paragraph 121; it is also very much a matter of waste. A recent paper by your Lordships' Science and Technology Committee pointed out that the construction industry is responsible for nearly a third of the waste in this country, and that one way in which it is being cut in that industry is by carrying out as much work as possible in a factory rather than on a building site. That is the point about the bathrooms that I mentioned being constructed off-site. It is not a case of using cheap labour.
It is obvious that immigrants have an enormous impact on our economy. I am sure that the committee is right in paragraph 43 to call for an improvement in the data. It points out the danger that immigration might have an adverse impact on training and skills opportunities offered to other UK workers. It also points out that, in spite of the minimum wage regulations, some immigrant labour might be exploited and that the Government have to deal with this. It rightly points out that over the short term immigrants might cause pressures on health, housing and education. The noble Baroness, Lady Cox, is certain that they do. She is wrong because nothing in the paper proves that that is the case.