What would radically cutting immigration really mean for businesses?
Getting the balance right in legal immigration is the key challenge of our time, and there are myriad medium- and long-term benefits to be seized, says James Price
Following the ping pong grudge match between the Commons and the Lords on Monday, we may finally start to see the end of the beginning of the saga that has been Rwanda.
Perhaps this will give us the space to think about the even greater numbers of people who have been crossing (at least ostensibly) legally in recent years. Legal net migration topped 700,000 last year, meaning that something like one in 60 people you will meet in Britain today arrived here in the last year or so. These are staggering numbers that are difficult to put into context, not least when you factor in a pre-existing housing crisis.
My purpose here is not to debate, ad nauseam, the benefits and costs of immigration. Suffice to say that getting the correct balance will be a key challenge of our time.
Instead, I want to imagine what British society and our political economy would look like if, after the next election, the government actually did slash numbers down to the tens of thousands as promised.
Specifically, I want to lay out the case that, after an initial shock, there are myriad medium- and long-term gains for the United Kingdom if the government gets it right.
I have already mentioned housing. Without the argument that we are despoiling our green and pleasant land building for migrants, the selfish Nimbys will lose one of their best arguments for blocking construction. If more houses are approved, more of today’s young people would be able to have the families they say they want, more world-class infrastructure would be built, and we would gently deflate a housing asset bubble that is making small homes in outer London out of reach for all but plutocrats.
Companies will also turn to automation across a whole sweep of sectors. The UK is well below the world average (not just developed world) for robots per worker. This is catastrophic for our productivity and threatens our ability to keep pace with the modern world. Automatic car washes being replaced by low-paid migrants are one thing but we are missing out on bleeding edge robotics that will build the future elsewhere. For cash poor industries like agriculture, we could extend full expensing to help farmers free up workers from the back breaking toil that has so immiserated countless generations of farm labourers, once and for all.
Where the tech doesn’t exist (yet) or will take a while to become more widely adopted, the HGV driver shortage of a few years ago is instructive. That shortage seems to have been filled not by bringing in foreign drivers, but by paying more and diverging from stultifying EU regulations that made it easier to issue new licences. Of course, in the coming decades, driverless trucks will come in and free those workers up for other roles, as automation almost always does. All this will also help generate the money to pay to fund much higher salaries in areas like social care, which will remain more labour intensive for longer.
This is a bright vision for the UK that will see us peaceably start to overcome social tensions, make us much richer, and allow more debate on how to better assimilate those who have arrived, as well as the children of immigrants who seem to be, at best, ambivalent about this country.
But as Stephen J Shaw, a demographer, points out, with the exception of a few places, birth rates are collapsing around the world. This means that sucking in working-age migrants is a short-term fix at best and will come to be actively debilitating for the sender countries as they start to suffer their own manpower shortages.
Our current system is unsustainable, but we have a bright future ahead as long as we can show people and businesses the benefits of grasping this nettle – before it stings us.
James Price is director of government relations at the Adam Smith Institute