Immigration reforms don’t go far enough
The UK government’s immigration reforms take a step toward prioritising high-skilled migrants but fall short in scale, clarity, and immediate impact, says Iain Mansfield
The government’s proposals to prioritise highly skilled immigration are welcome – the only question is whether they go far enough.
Since the pandemic, the profile of immigration patterns has shifted sharply towards low-skilled migration, while the number of visas granted to dependents has soared. This includes over 300,000 granted to dependents of those on the health and social care route alone between 2021 and 2023.
The number of international students has also soared, driven by one-year Masters courses at low-ranked universities. UK visas for universities globally ranked between 601 and 1,200 increased by 49 per cent between 2021 and 2023; whilst visas for those ranked in the top 100 fell by seven per cent. And far from paying their fees, studying and then departing, in the year to June 2023, 46 per cent had shifted to a non-study visa within one year, compared to just two per cent of those who arrived on such visas in 2019. Universities have been selling immigration, not education.
What really matters is GDP per capita
While the Treasury may simplistically score migration as boosting growth, what matters is GDP per capita. Recent OBR analysis shows low-skilled immigrants are a fiscal burden throughout their lives – and this analysis does not account for the impact of dependents, who increase the burden still further. The government’s own figures show the average employment rate for adults arriving by the family route is only 44 per cent, with average earnings of £27,200.
Mass immigration drives up house prices and rents and puts pressure on public services and social cohesion. It places downward pressure on wages: despite the fervent wishes of some, the labour market obeys the laws of supply and demand. More insidiously, it reduces the incentives of employers to train up British workers, confident that they will instead be able to import a cheaper worker from overseas.
As Policy Exchange argued in our report, Compassionate but Controlled, the test for immigration is that it must benefit the average British person, not just employers and the affluent. Where immigration is permitted, it should be primarily short-term in nature, rather than long-term – which is why the extension of the qualification period to apply to stay in the country permanently, as called for by Policy Exchange, is welcome.
The announced toughening of English language requirements and the reimposition of a degree requirement for skilled workers are positive, as is the increase in the Immigration Skills Charge. Closing social care visas to new overseas applicants could be significant, though the government’s own analysis estimates that it will reduce net migration by only 7,000 a year. The new restrictions on graduates are largely cosmetic and will do nothing to stop the scandal that only 30 per cent of surveyed graduate visa holders were working in professional level jobs after graduation.
What is more concerning is that many of these changes will not come into effect until next year, and the details are too often vague or incomplete. How many occupations will be on the new ‘Temporary Shortage List’? How many refugees will be allowed to apply through the skilled worker route? Will the levy on international student income ever be implemented?
As Policy Exchange wrote in Why is it so hard getting immigration numbers down?, the Home Office stands alone against the vested interests and stakeholder lobbies of other government departments. The department of health wants cheap labour to prop up the ailing social care system; the department for education uses international fees to avoid facing the fact that we send more students to university than we can afford or require; and the Treasury chases short-term tax revenues heedless of the wider cost.
Immigration can deliver economic gains – but only if it is tightly controlled and ruthlessly targeted on those who will be net contributors. The government’s White Paper has changed the tone of the debate. To truly build a system that works for Britain, however, the measures announced this week are only the start of what is needed.
Iain Mansfield is director of research at Policy Exchange