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A third way on immigration Samuel Brittan Financial Times 25/04/08 On October 25 2001, in a column entitled Let the huddled masses go free (reprinted in my book Against the Flow), I proposed abolishing the tenuous distinction between economic immigrants and asylum seekers and conducting a five-year experiment in which anyone who wished could come and go. Well over five years have passed, and I could no longer repeat the suggestion. Part of the evidence I cited was that the Netherlands, with a higher population density than the UK, had not suffered as a result of a tolerant attitude to immigration and cultural diversity. Now, I could hardly overlook the heightened sectarian tensions in that country following the murder of the film-maker Theo van Gogh in 2004. Moreover, I cannot ignore the way in which questions of "immigration and race relations" have reached the top of UK voters' concerns as the most important issue facing the country. The issue has again attracted attention with the report of the House of Lords select committee on economic affairs, which concluded that there was no evidence that net immigration "generates significant economic benefits for the existing UK population". The reaction to this has been polarised between shocked liberal indignation and tabloids delightedly calling for ever-tougher barriers to keep out newcomers. Official statistics suggest net legal immigration to the UK averaged more than 160,000 per annum in the past decade, representing the difference between a gross inflow of 490,000 and an outflow of 330,000. Government projections assume a future net inflow of 190,000. The effect is expected to be an increase in population from 60m now to about 80m in 2056. In the past, new Commonwealth immigrants preponderated, but the composition is changing now that member countries are ultimately committed to free entry among all 30 states in the European Economic Area. How should we react? There is a third way between the hawks and doves. The important argument for an open-door policy is humanitarian more than economic. Since governments insist on the refugee/economic migrant distinction, the true liberal course should be to advocate a much less suspicious attitude to asylum seekers and to put those who are looking only for better-paid jobs second in line for admission - in other words, a reversal of current priorities. There are some good economic as well as cultural arguments for immigration. One has only to look at the number of successful British businesses founded by immigrants or their children, or the impetus that immigrants have recently given to trades as diverse as nursing, catering and construction. But the cause of toleration is not helped by relying on bad economics, as the government so often does. The Lords committee rightly castigates the government for judging the effects on overall gross domestic product, which increases with the working population, as an index of prosperity. The focus should be on income per head of the resident population. At a first approximation, the main long-run effect of large net immigration is a higher GDP shared out among a larger population. By making the case for immigration depend on supposed labour shortages, British ministers are scoring an own goal. As the Lords point out, the official case ignores potential alternatives, "including the price adjustments of a competitive labour market", which is committee-speak for paying higher wages to recruit indigenous workers. I have often inveighed against "economics without price". The so-called points-based system being introduced, based in part on educational and training credentials, is another such example, which embodies all the faults of discredited postwar manpower planning. It would be far better, as Martin Wolf has suggested, to auction the right to work in the UK. A weakness of the Lords report is that it does not compare the pros and cons of importing products and allowing those who make them to settle in the UK. If free entry for Indian pharmaceuticals is beneficial, as many economists would argue, what is so bad about allowing those who make them to settle in the UK instead? To answer this question we would have to go beyond a first approximation to consider the second-order effects, such as savings in transport costs, against the extra infrastructure investment needed to accommodate new settlers, and many more intangible considerations. Ultimately, however, the most important concern should be to improve the treatment of asylum seekers. Official statistics show the number of applications for asylum running at about 23,000 per annum, of whom 3,500 are successful. There is, however, a huge backlog of cases. Many refused and illegal entrants would welcome a chance to work, but instead have to exist in what Amnesty International calls "penniless poverty" in parks, public lavatories or drop-in shelters, without access to proper medical care. And there have been too many cases of refugees being urged by the Home Office to return to countries where they are likely to be tortured or otherwise ill-treated. If a more restrictive policy towards economic migrants were the price of a more humane treatment of asylum seekers, it would be worth paying.
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