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Inflexibility on immigration could hurt UK prospects


The writer is director of the Institute for Government, a think-tank

“Indians stand to benefit as Priti Patel unveils new points-based immigration system.” That was the headline in the Times of India this week, as the UK home secretary set out new rules which are set to be among the most consequential changes this government will make.

That headline is just one sign that there will be winners as well as losers from the much-criticised changes, and that some kinds of immigration may go up under the new rules, even if that is the opposite of what the government appears to intend. However, business leaders have warned that parts of the economy will be hard hit by labour shortages if the new rules come abruptly into force on December 31, when the Brexit transition period ends.

This policy is driven above all by politics. Its effects are, at this point, impossible to calculate. The government would be well advised to build in room for itself to make further changes as it plunges the nation into this experiment.

The motivation for the new system lies in Brexit itself. For one kind of Brexiter, including some of those now in the cabinet, “taking back control” of the UK’s borders was synonymous with controlling immigration. Resentment of freedom of movement within the EU had fuelled the Brexit vote, ministers deduced; when the government won a hefty majority in December, they vowed to do something about it.

Hence Ms Patel’s announcement on Wednesday — made while parliament was in recess, suggesting the government wanted maximum attention with a minimum of challenge. While it has avoided setting a target for the annual number of immigrants (of the kind that tripped up former prime minister David Cameron), the aim, Ms Patel said, was to “move away” from relying on cheap labour from Europe and “encourage people with the right talent” to move to the UK.

The new rules adopt, in part, an Australian-style “points-based” system, treating EU and non-EU applicants the same. For skilled workers, the education threshold is lowered from the present requirement of a university degree to A-level or equivalent. Speaking English and having a job with an “approved sponsor” would get them 50 of the required 70 points; they could score more points through other qualifications or working in a sector deemed to have shortages. The salary threshold is lowered from the current £30,000 to £25,600 — and to £20,480 in sectors with shortages. Crucially, the present cap on the number of visas for skilled workers is abolished. However, for unskilled labour, there is no other application route; for agriculture, where there are shortages, there will be a cap.

If the rules stay as set out this week, they would undoubtedly tilt immigration towards more skilled workers. At least that would be the effect on legal migration, although they might encourage illegal migration. Those arguing for the benefit of immigration to the economy say that an influx of comparatively young, educated workers can be of considerable help to growth.

Beyond that, however, the rules are full of potential pitfalls for the government. It is notoriously hard to estimate what the effect on total numbers would be. There might well be a jump in the number of skilled workers as Migration Watch UK, a group lobbying for lower migration, has warned — hence the Indian media’s spin.

Immigration is hard to predict, not least because the “pull factor” depends on economic growth. While growth has recently been sluggish, employment levels are very high.

The loudest complaint about Ms Patel’s announcement has been that sectors reliant on low-skilled workers would be hard hit — not just agriculture, but catering, hospitals and social care. Some businesses will be able to invest in technology to replace workers, but this takes time and is rarely the case in care for the elderly. Yet the home secretary has said that in the interests of simplicity, the government does not want lots of sectoral exemptions.

Most derision has been reserved for Ms Patel’s assertion that the new rules will be an opportunity for 8.48m “economically inactive” British people between 16 and 64 to join the workforce. The Office for National Statistics estimates that 2.3m of those are students, 2.1m are long-term sick and disabled, 1.9m are looking after their family or home, 1.1m are retired and 160,000 are temporarily sick. There are only 1.87m who would like a job and do not have one, it reckons.

Nor does the home secretary’s notion that spouses of skilled immigrants can do unskilled work bear close examination. “Come to Britain and your spouse can pick cherries — is that really the message that Global Britain wants to give?” asks Joe Owen, programme director at the Institute for Government.

The worst case for the government would be that its rules increased competition for British skilled workers just as wages were rising above inflation, while hitting growth in parts of the economy dependent on low-skilled labour — not least the construction industry, central to its plans for road, rail and housing. For all its desire for simple rules, that is why there are likely to be more exemptions as the impact becomes clearer.

That would be a good thing. Immigration is one of the main ways the UK interacts with the rest of the world. The effects are hard to calculate and rules need to evolve. The economy will suffer if ideology trumps flexibility.

The main lesson from the past is that this is a tricky area in which predictions often are wrong. If you cannot predict the future, then leave yourself room to react to it.



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