Brexit and the Labour Market (Economic Affairs Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 1:41 pm on 8th February 2018.

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Photo of Lord Reid of Cardowan Lord Reid of Cardowan Labour 1:41 pm, 8th February 2018

My Lords, I wish to make three simple points. However, I have a feeling of déjà-vu as these issues were argued about, certainly internally, when the last Labour Government were in office. I confess that I lost on two of them.

First, I think it is right for the Government to take a view on immigration numbers and the level of immigration. I disagree with my noble friend Lord Darling: I do not see anything anti-New Labour in that. To find a middle way between the unfettered free market and central diktat is typically New Labour. Therefore, I welcome the Government’s intention in this regard, although I am not saying that I agree with any specific mechanisms. Incidentally, I have never understood why everyone accepts that it is correct to shape the flow of capital or investment through fixing interest rates but somehow it is terrible to try to do the same thing with the flow of labour. I recall that within a week of becoming Home Secretary, I suggested that and merited an editorial in the Guardian accusing me of trying to impose a Soviet-style system on Britain. Unfortunately, that kind of extreme cliché mars this whole debate.

My second point on the value of immigration is equally simple. I for one do not doubt the value of immigration as a whole, at a macro level, to the country’s GDP. The Treasury constantly argued this case throughout the tenures of different Governments. It found it too indelicate to mention publicly the fact that immigration also brought down wages hugely, but it always talked about the increase in GDP. The problem with that argument is twofold. First, you cannot estimate the value of immigration without weighing on the other side the social costs. Secondly, the value is always estimated at a macro level but the social costs apply at the micro level: they hit people and local communities. All other things being equal, an influx of large numbers of people reduces the services that local people get and their access to housing, a doctor, roads, flats and education. That cannot be wished away by branding people as somehow inherently racist. It is not a perception based on racism; it is based on people’s own self-interest and their standard of living, which they see being reduced. Therefore, I have always believed that if you are to have even managed migration, you also have to have a managed differential distribution of resources to those areas where the largest numbers of immigrants arrive and live. That brings me to my third point because, to do that, you need to be able to measure immigration.

One of the phrases that has, unfortunately, stuck with me for the last 15 years is “unfit for purpose” as regards the immigration department of the Home Office. I am glad that it has at least stood the test of time, as I think the noble Lord, Lord Forsyth, used it four times when he referred to the lack of empirical data due to the flawed nature of the statistics. It is an area where I won an argument, along with colleagues in the Labour Government. Unfortunately, that was not followed up by the then leader of the Lib Dems, who, on coming to power, immediately abolished the system of ID cards—I might add, without paying compensation to those who had voluntarily paid to have them. I predict that the Government will not be able to manage, measure or operate an immigration system in the absence of biometric ID cards and biometric visas. This is not a case of surveillance being carried out on the population. It is not merely a mechanism to counter terrorism and theft or to protect individuals’ identity, which is now the subject of increasing theft. It is an elementary mechanism for making sure that we have a managed and humane immigration policy that combines increasing the value to the country through immigrants and the skills they bring with maintaining services to individuals in their localities.