UK: The immigration situation

It is now commonly accepted that immigration was the single most important topic in the UK’s EU referendum. The level of vitriol generated by this aspect of the campaign shocked many foreign observers, but a look back at history shows that whilst the UK has generally been welcoming to foreigners, the issue has often generated significant controversy. I was reminded of this recently when reading  the third volume of David Kynaston’s superb social history of the UK since 1945 (Modernity Britain) in which he described, using contemporary source material, the level of conflict generated by the Notting Hill race riots of 1958. And just ten years later, when Nigel Farage was still in short trousers, senior Conservative politicians were warning of “rivers of blood” if immigration was allowed to continue unchecked.

We should bear this historical context in mind when looking at the UK’s immigration data, the latest release of which occurred last week covering the period to March 2016. At the aggregate level, net immigration in the twelve months to March totalled 327,000 – down fractionally from the 12 months to December 2015 but double the levels four years ago. Excluding flows of UK nationals, the proportion of immigration from EU countries is still less than 50% of the total, though at almost 49% it is considerably higher than six years ago. Incidentally, EU citizens generally take exception to being classified as immigrants, which has connotations of forced movement similar to what we have recently witnessed from the Middle East, and probably says a lot about the different way in which freedom of movement is perceived in other EU countries relative to the UK. A more cynical interpretation is that immigrants are looked upon as coming from “poor” countries, whereas those coming from richer countries prefer to class themselves as expats.

There has, to be sure, been a substantial increase in those coming from EU15 countries, whose numbers have more than doubled in the past decade largely due to poor employment prospects in the euro zone. The numbers arriving from the EU8 countries (including Poland) are running below 2008 levels, although Poles are now the most populous group of non-UK born residents, having overtaken those born in India. But by far and away the fastest rise in immigrant numbers has come from Bulgaria and Romania, which now account for over 16% of non-nationals arriving in the UK versus 1% in mid-2011, and which has led to a predictable surge in calls for tighter border controls.

But with more than 50% of the total numbers coming from non-EU countries, I remain at a loss to understand why leaving the EU is going to lead to a regaining of control over the UK’s borders that so many apparently seek. As I have long argued, if people have a problem with immigration numbers, they might want to question why the government has failed to control its non-EU borders rather than direct their anger at the EU. It is interesting too that the proportion of immigrants arriving in the UK for study-related reasons is 35% down on its 2010 peak. This may well reflect the fact that foreign students simply do not feel as welcome in the UK following David Cameron’s ill-advised pledge in 2010 to return immigrant numbers to the “tens of thousands.” And with reports suggesting that PM Theresa May’s government is planning a further clampdown on student visas, it is likely that we will see further declines.

People may have differing views on immigration numbers, but it is clear that the Conservatives’ policy over the past six years is proving to be self-defeating. With the government having cut funding to the university sector since 2010, higher education institutions are increasingly reliant on the higher fees that they can charge non-EU students for the privilege of studying here. But if fewer students come to the UK, this will put further pressure on university finances. The government may end up being accused of not only creating a problem but nixing attempts to find a solution.

It is understandable, perhaps, that so many people fear the consequences of unfettered immigration – it is a problem which has echoed down the years. Indeed, it represents the flip side of globalisation which has left so many people struggling to make ends meet in their own home towns. Nor should we underestimate the problems of assimilating huge numbers of migrants with the attendant consequences for local resources and the undoubted impacts on labour markets and wages. But immigration also brings benefits: How, for example, would the NHS function if it were not for the foreign medical staff who help to keep it running? And what about the contribution made by foreigners who choose to settle in the UK and make it their home? For example, the Nobel Prize won by two physicists at the University of Manchester in 2010 (Andre Geim and Konstantin Novoselov) went to men born in Russia, who may have been denied the opportunity to work here under the proposed new rules.

Cameron’s 2010 immigration pledge made him a hostage to fortune. It was a foolish thing to have said and fanned the flames of a problem which ultimately became a fire which consumed him. As his now-reviled predecessor Tony Blair once said “A simple way to take measure of a country is to look at how many want in ... And how many want out.” It is thus ironic that more British citizens are flowing out than are returning, whereas many non-Brits believe the UK is still a land of opportunity.

EU debate: Depressingly familiar

The EU referendum campaign rolls inexorably on but we are none the wiser after the big TV debate last night which was very much a classic case of much heat but little light. Indeed, this summed up the whole campaign. Claim and counter claim, met with spin and counter spin. As an economist, I am totally unpersuaded of the case made by the Leavers. They appear to be adopting a naive belief that in the event we leave, our erstwhile EU partners will be only too willing to do a deal with us. It would be foolish in the extreme to assume this, since one of the motivating factors in their dealings with the UK will be to persuade other countries not to go down the same route and will be in no mood to offer any concessions. 

When it comes to immigration, the Leavers have been somewhat disingenuous. It is true that the number of net immigrants into the UK hit record levels last year but less than half of them were from the EU. If we have an immigration problem it is that the UK, in common with other EU countries, has failed to control its borders with countries outside the region. The bigger irony is that a large proportion of non-EU immigrants come to the UK to study. To the extent that these students pay much higher tuition fees than EU students, they contribute significantly to the finances of the higher education sector at a time when the government has been cutting its own university funding. As an aside, I am struck by the irony that one of the key protagonists in the Leave campaign is Gisela Stuart MP who is herself German-born. I have nothing against Ms Stuart, who is a perfectly competent MP, but in effect she is seeking to deny those from a similar background the same opportunities which were granted to her. 

Ultimately the EU referendum has proven to be a debate in which both sides are talking at cross purposes. The Remainers argue that the economic costs are too high (they're right) whilst the Brexiters argue that this is about regaining sovereignty (they're wrong). We live in a globalised world in which countries such as China are awakening giants. I believe we are indeed better together with our European partners, with Britain's voice more likely to be heard if we act in concert with our neighbours. 

Last week's murder of MP Jo Cox was a symbol of the divisions in British society - divisions which have been exacerbated by the ferocity of this debate. Whatever happens tomorrow, the divisions which have been opened up will be slow to heal. The referendum is not just about Europe: It is the chance for the British electorate to vent its spleen along the same lines that Donald Trump has been elevated to become the Republicans' candidate for the US presidency. If we could hold up a mirror to our society, we might not like what we see. I, for one, certainly do not.