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Bring me your huddled masses
Samuel Brittan: Social Market Foundation Talk 18/11/03

Needless to say, I agree with the drift of what Barbara Roche has said and I am extremely grateful for the factual background she has provided.

Indeed I agree with the more "extreme" position she outlined, only to reject. I mean that Britain should have no immigration controls at all for an experimental period. The main argument against is that put forward at much greater length in a study made for the European Commission (1). This is that we should concentrate instead on "reducing the causes of immigration". It makes a wonderful sound bite, like tackling the causes of crime, or the causes of drug taking.

Imagine what would have happened if during the great nineteenth century migrations to the USA, American legislators had said: "We must deal with the causes of migration. We must put down corrupt and despotic governments, such as those of the Russian, Turkish, German and Austrian empires. We must accelerate the industrialisation of central Europe; and tackle the causes of anti-semitism and other ethnic prejudices." The result would have been to slow down the development of the United States, intensify poverty and mutual hatred in Europe and deprive many people of the chance of a better life.

An advantage of my suggestion is that we could do away with the distinction between refugees, economic immigrants and visitors who overstay their official welcome. These distinctions are in any case highly artificial.

Let me take my own family. My parents arrived here from eastern Europe, as did Michael Howard's father. Recollecting these events in tranquillity, well after World War Two, my father used to say that he had predicted that there would be a grim polital future in Lithuania, his home country. He was not however technically a refugee, as he arrived before Nazi Germany took over the Baltic states.

I sometimes thought that he was rationalising after the event and that he really sought a better economic future in the UK, even though in those days it meant requalifying as a doctor here after having already acquired an MD in Berlin. In which category should he then have been put? His so-called professional colleagues in the British Medical Association had no doubt: he was competing with native-born doctors; and he escaped being deported to somewhere like South Africa only because a sympathetic Home Office official managed to find a loophole in the regulations.

I must now bring in some boring economics. Globalisation means the free movement of goods, capital and labour, the last of which is heavily curtailed compared with pre-1914. The onus is on those who want to make a partial or complete exception for any one of these categories. Obviously I cannot outline the whole case for global free markets in this short response. But just let me make one point. If we favour the free movement of goods, capital and people, between Yorkshire and Lancashire, or between the north and south of England, why should a frontier make a difference?

Indeed, the case for movement across frontiers - or more accurately between currency areas - is stronger than for movements within a country. For if such movements cause temporary tensions such as a shift in the balance of payments or inflationary or deflationary movements, we have flexible exchange rates which act as a safety valve and will continue to do so so long as Britain has the good sense to remain outside the eurozone. Such a safety valve does not exist between Yorkshire and Lancashire or Texas and Oklahoma. Nor does it exist today between Spain and Germany, as both countries are discovering to their cost.

Look at the economic consequences of an inward movement of migrants to a western country. The migrants themselves become better off - unless we make the condescending assumption that they do not know what they are doing. Rather less obviously, the workers in the country of origin benefit. Many of these are countries with high structural unemployment and emigration has the effect of reducing competition for jobs in local labour markets, and of raising wages to a level higher than they would otherwise be.

It is in principle possible that, although the UK national income would rise as a result of an inflow of people only too willing to work, if they are allowed to do so, the pay and conditions of unskilled native workers would be depressed relative to what they would otherwise be. A much under-publicised Home Office study found that this as not the case (2). Typically there was a cycle in which unskilled migrants first did the low-paid unpleasant jobs which the British were disinclined to do, then moved up in the skills and pay ladder and eventually even exceeded their native-born compatriots.

If at some future date the pay of unskilled workers were to be depressed, it would be best countered by general policies of redistribution which one can favour without in the least regarding equality as an aim. Indeed the British chancellor Gordon Brown has been moving in that direction with his tax credits directed specifically at lower paid families with children, as well as general increases in child allowances. Although the primary aim is to reduce poverty, it also gives the most help to families with most children, thus moving a little way towards encouraging the population turnround which David Willetts advocates(3).

This is as far as a modern government should go towards a population policy. Improvements should be directed towards reducing bureaucracy and reducing the frenetic emphasis on proving that you are seeking work.

Let me come finally to some cultural points. The first is to remember that Britain is just as much an immigrant country as the United States. If we take away the Anglo-Saxon invaders in the so-called Dark Ages, the Danes who followed them, initially as raiders, then the Norman French conquerors, the Huguenot refugees and the more Jewish immigrants, what is there left? Perhaps a few Celts who took refuge in Scotland, Wales and Cornwall. But even they were probably themselves immigrants a few thousand years earlier, perhaps from Hallstadt, one of the original homes of the Celts, now a beautiful village on an Austrian lake.

According to estimates I have seen, the gross inflow of legal immigrants to the UK was about 400,000 per annum in the late 1990's - to which, at a guess, another 200,000 should have been added for those arriving illegally. This is about one per cent of the UK population, a much smaller proportion than the US experienced during the pre-1914 period - and probably more recently too, if we had reasonable figures.

But some concessions do have to be made by those who claim to speak for immigrants and ethnic minorities. For those who arrived on Ellis Island or in the old East End, it was a point of pride to learn English as a principal tongue. They were perfectly free to continue and develop their own cultures, traditions and languages. Some did and some did not. But any suggestion that they should be taught in Yiddish or Romanian, with English as a second language, would have been rejected with horror. Culture is something that develops and mercifully does not respond much to preaching. But the ideal surely should be a maximum of cultural diversity but backed up by a common language and legal and political systems.

The second and more serious drawback is that we are increasing population densities in an already crowded island, which will increase the medium term pressures on house and land prices. It is not obvious that the UK is that overcrowded. Certainly I would be happier making my case in Ireland or the US which have much lower densities, let alone Australia which is virtually uninhabited. The UK has a density of just over 240 inhabitants per square kilometre (it is sometimes made to look worse by taking England on its own). This may be too high for those like myself nostalgic for a rural paradise. But the fact remains that the Netherlands has a population density nearly twice as high and there are few who suggest that the Dutch have a low quality of life. In any case, you cannot in the same breath bemoan the short term increase in population density and then bemoan the likely fall in the population in the longer term because of low reproduction rates.

There is undoubtedly the problem of a high age dependency rate looming, which Willetts has rightly highlighted. I used to think that the burden on state pensions could be solved by indexing the official retirement age to increasing longevity. And I still think that essential. But such a link alone would not solve the other part of the problem. A low birth rate will ultimately lead to a lower propulation of working age and thus reduce the denominator of this ratio.

An inflow of immigrants, many of whom would be of prime working age, would alleviate this aspect of the problem for a good generation or two to come. Willetts says that it is not a solution because the countries of central and eastern Europe, whose workers Britain will be bound to accept from 2005 onwards, come from countries with an even lower birthrate than our own. But this is to assume against all the evidence that we would be drenched with an inflow from countries such as Poland, Slovakia or the Baltic states. In fact EU statistics suggest that the bulk of asylum applications at least come from four countries - former Yugoslavia, Turkey, Iraq and Romania, which have the opposite problem of young and rapidly expanding populations.

So if we are really worried about population in two generations' time, the response should be to widen the immigration gates to encompass the near and middle East, north Africa and the former Soviet republics, and not just the enlarged EU alone. The alternatives to a liberal immigration policy are far from painless.

Political leaders such as David Blunkett, who are belatedly trying to induce a more liberal attitude, are scoring an own goal by suggesting that there are absolute shortages of certain kinds of workers, which are known to government officials or trade associations. This is to commit the cardinal sin of "economics without price".

There are rates of pay at which we could get native doctors, nurses, plumbers, kitchen hands and even electronic engineers. But this would involve much higher wages - preferably regionally differentiated - which reflected the scarcity of such workers. We would then see how much British middle class voters really relish the tax cost of the improved public services for which they are clamouring.

What is in fact likely to happen is that these jobs will be filled in erratic bursts, by illegal or semi-legal immigrants who afterwards acquire the right to stay. The inflow will occasionally be bolstered by improved legal quotas for those whom the Home Office designates as economic migrants.

Why cannot New Labour welcome some measures of economic freedom without insisting, like Old Labour before it, that these need to be regulated or managed. As my old Latin master used to say, "Quis custodiet ipsos custodes?"

The present approach is too reminiscent of policies for drugs. Because they are so strictly regulated, wide boys who are prepared to take a risk can reap rich rewards and their victims will take great risks to come to this or other western countries in overcrowded, insanitary ships or trucks, and in the meanwhile, organised crime receives the greatest boost imaginable.

Like New Labour, I believe in evidence-based policies, but over a somewhat longer run and less breathlessly. Why not try complete free movement of labour for a five or ten year period and then review the evidence? Who knows? We might even enjoy the experience.

1 States of Conflict, commissioned from the IPPR by the European Commission
2 Migration, an Economic and Social Analysis, Home Office 2001
3 David Willetts MP, Old Europe? Demographic Change and Pension Reform, Centre for European Reform

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