By Richard M. Hui Second Year, Third Prize

Transcription

1 In a July article published in The Telegraph, David Cameron stated, We re building an immigration system which puts Britain first. Are cries for a clamp down on immigration justified? By Richard M. Hui Second Year, Third Prize A simple way to take measure of a country is to look at how many want in.. And how many want out. Tony Blair Introduction In the past decade, UK net migration rates have been steadily increasing, raising some social and economic concerns among the native populace. This essay first examines and analyse some of the impacts rising net migration has on the country followed by the constraints which the current UK government faces in an effort to reduce net migration and ultimately whether a clamp down on immigration is justified. Timeline Figure 1: Net migration trend (2012) Source: Office of National Statistics, 2012 UK net migration rates had remained relatively stable up until 1997, after which there was a significant increase in immigration while emigration stood unchanged. Between 1997 and 2003, net migration had nearly increased by four-fold, rising up from 48,000 to 184,000 and in the following year this figure rose to 320,000. Since

2 then, the UK has been experiencing relatively high levels of immigration and as of today s writing (2015) net migration has reached 298,000.

3 Public Concern of the Native Population With the volume of immigrants entering the UK akin to the size of a city every year, there is a rising concern amongst the indigenous populace on how the rising number of migrants will affect them. With population growth in the country increasing at an immense rate, the strain on housing and welfare benefits worsens while wages and employment level may change. According to the British Social Attitudes (2013), 77% of the public wish to see a reduction in immigration to Britain, indicating there is a significant public consensus that immigration should be reduced to relieve the pressure on the country s facilities and resources. This segment of the essay will analyse the impacts which immigrants have on the aforementioned factors of interest. Wages and Employment British jobs for British workers Gordon Brown A study by Dustmann, Frattini and Preston (2007) indicates that rising migration levels have a net absolute positive effect on wages where there was a 0.6% increase in wages at the median, and a 0.4% increase in wages at the 9 th decile but also stated that wage levels in the bottom 10% were depressed as a result. However, an empirical analysis conducted by Nickell and Saleheen (2009) shows that overall immigration had a small negative impact on wage levels but it was subjective to occupational and regional differences. The sector which faced largest impact was the semi/unskilled service sector where 10 percentage point a rise in the proportions of immigrants is associated with a 5 percentage point fall in wages. The overall findings from both these studies indicates that rising migration has a modest effect, if any, on the average wage level across different regions and occupations. Both studies do, however, indicate that increasing migration levels do depress the wage levels of low/unskilled jobs and the lowest earners. In terms of employment rates, data collected from the Migration Observatory (2014) revealed that since the 1993 to 2013, foreign born employment has more than doubled from 2.9 million to just under 6 million and that in 2013, 15.2 percent of total employment in the UK was accounted for by immigrants. At a glance, it appears that the public is correct in being concerned that they are losing jobs to migrant workers however, think-tank Centre for Entrepreneurs (2014) shows that there are about 450,000 immigrant entrepreneurs in the UK and about 14 percent of all UK companies are started by migrant entrepreneurs. Migrants are also more likely to start their own company than their native counterparts, displaying a more proactive role in trying to ensure employment to fulfil visa requirements. During the winter of , the Charted Institute of Personnel Development (CIPD) conducted a labour market outlook based on a survey on 700 private and public sector employers (CIPD, 2010). Of these 700 organisations, a report on migration and skills outlook wrote:

4 41% stated they had vacancies that were hard to fill, of which engineering posts were the most difficult to recruit for. Lack of relevant experience accounted for 48% of these vacancies, while 52% were due to a shortage of skills. In 2014, an article on the BBC (Wall, 2014) wrote that Kevin Green, chief executive of Recruitment and Employment Confederation stated: Last year we had nine areas of skills shortages, now we have 43 areas. Every single type of engineering is in short supply, from mechanical to software, civil to electrical. In IT, coders, programmers, developers are all in short supply; there's a shortage of doctors and nurses in the National Health Service; and we need about 20,000 more teachers in the UK. The reality of the situation suggests that the UK labour force is suffering from skill shortages and therefore companies both in the private and public sector have looked to migrant labour to fill the gaps. Shortages in key occupations such as those in construction, healthcare, engineering and education will have a detrimental impact on the country s economy as such assets are needed to facilitate progress. Welfare Benefits Take what you can, give nothing back. Captain Jack Sparrow Key findings done by the British Social Attitudes (2014) shows that 55% of individuals which held a negative view on immigration think the main reason for migrants entering Britain was to claim benefits. Other key findings include 47% of the participants think that immigration has a negative impact on the British economy and 54% which think that welfare benefits should be only allowed to migrants after 3 years or more of working. These findings generate as perspective as to how the natives feel about the impact which migrants are having on the country draining the country of its wealth and resources. However, data from the Centre of Research and Analysis of Migration (CReAM) at University College London has provided new data challenging this perspective (Dustmann and Frattini, 2014). Following the research, immigrants who arrived in Britain since 2000 have contributed a net positive of over 20 billion to UK public finances between 2001 and This is in stark contrast to the negative fiscal contribution of almost 617 billion from the natives over the same period. The accusation of migrants coming in for the purpose of benefits is dubious as the data reveals that immigrants form the EU-15 contributed 64% more in taxes than they took in benefits and those from the A10 (joining the EU since 2004) contributed 12% more in taxes than they took out. They were also 43% less likely than natives to receive state benefits or tax credits. On top of that, migrants arriving in Britain since 2000 are on average more educated than the natives (in 2011, 25% of immigrants from A10 countries and 62% of those from EU-15 countries had a university degree, while the comparable share is 24%

5 among natives). It is then not surprising that shortages of skilled British labour was filled with a more skilled and educated labour force from aboard. In monetary terms, immigrants have bestowed Britain with human capital which would have costs 6.8 billion if it was done through the British education system. Housing Communities need to feel that they can accommodate people. Rather than feeling that it's not possible to integrate and that the stress and strain on housing and public services is too great. Theresa May The diversity of migrants arriving in the UK has made it what is today an ethnic melting pot of cultures and people from different backgrounds. Polish delis, Indian curry houses, Chinese restaurant and a smorgasbord of other ethnic enterprises can be found dotted in the capital of London. With just over a third (36.2% according Rienzo and Vargas-Silva, 2014) of its 8.3 million inhabitants hailing from lands far and near, London is one of the most culturally diverse places in the world. However, such a proud title does not necessarily bode well with the native populace. Rising net migration levels, especially in the capital, is placing an enormous strain on housing availability and this led to the natives lamenting that it has made the search for housing difficult. However, simply accusing immigrants as the cause of housing shortages might be a short-sighted argument. Figure 2: Number of houses built (2014) In 2007, the UK government had a plan to build 240,000 new homes by 2016 to bolster housing supply in order to meet a severely backlogged demand as well as to prevent prices from spiralling out of control (Wilson, 2010). The immediate hindrance faced

6 by the government the following year was the global financial crisis of 2008 which had incapacitated the government s ability to proceed with its plan. Just as well, the crisis had caused mortgage advances to collapse which in turn caused private builders to reduce the construction of new homes and the net result was a sudden and steep dip in the number of house built as shown in the graph. The major tipping point which would lead to the UK s present shortage of housing dates back to 1979 when Britain s first woman Prime Minister was elected Margaret Thatcher. Under her government much of the public sector was privatised, including social housing (de Castella, 2015). However, opening up the social housing market did not see the expected rise in the amount of houses being built as a result of competition, in fact, less houses were being constructed by private companies than in the 1940s and 50s. Overall Impact on the Country In general, migrants have proved to a gain to country s economy, bringing in revenue and human capital which has kept the economy in a functional state. Most of the current issues such as the shortage on housing and employment is not a direct result of rising net migration but an internal lack of investment in these areas. However, the rising rate of population growth will exacerbate the severity of situation and so the UK government is determined on reducing net migration. A Crusading Stance on Reducing Immigration The promise which Prime Minister David Cameron has made to bring down net migration levels from above 250,000 to below 100,000 was a formidably challenge for his government and in order to achieve a figure anywhere near the target amount, focus on suppressing immigration from all possible sources of migration was necessary: work, family and study. Even though that promise has been broken with final net migration number sitting at 298,000 54,000 higher than it was before the pledge was made (Travis, 2015), we will examine potential obstacles the government has encountered on its crusade to reduce net migration levels. Study According to the International Students and UK Immigration report by Universities UK (2014), international students entering the UK from outside and the EU collectively represented 18.2% of the student population in the UK in Following the data, international students in general are seen to be an economic boon to the country, bringing in revenue which has allowed universities to expand and improve their facilities, fund teaching, and create jobs as a result from their enrolment into university. These students also add to cultural diversity and vibrancy in their area whilst improving the local economy through expenditure on goods and services, and once they have graduated they may then choose to work in the UK with their newly acquired knowledge and skills, further improving the country s economy.

7 Knowing this, there is no doubt the government would encourage more international students to study and work in the UK and based on data from the UK Higher Education International Unit (Cavanagh and Glennie, 2014), this encouragement also extends from the British public. The challenge for the government is that international student immigration accounts for a significant portion of net migration the UK is experiencing. Figure 3: International student population in UK (Source: Built Environment Networking, 2014) In 2011, international student migration accounted for 40% of the total immigration that took place (Cavanagh and Glennie, 2014). Since the 2010 general election, the government has made a number of changes on visa requirements and imposed tougher restrictions on post-graduate employment, all in an effort to reduce the level of immigration, and whether intentional or otherwise, has made visa applications for studying in the UK more tedious. This has brought up some debate on whether international students should be removed from the net migration target as most students will eventually return to their home country, leaving only a handful remaining in the UK (Cavanagh and Glennie, 2014). Drawing upon further research from the International Students and UK Immigration report, reducing net migration by targeting international students would to fail to address any concerns which the public has over rising net migration levels. Such a course of action would also cost Britain the aforementioned benefits which these students bring to both the local economies and universities. In general, bearing down on student numbers would not solve the issue of rising net migration and will be detrimental to the UK, even if it is the largest contributor to the immigration numbers.

8 Free Movement Directive On the 29 th of April, 2004, the Free Movement Directive was enacted and gave the right of free movement to citizens of the European Economic Area (EEA), which includes member countries of the EU and the European Free Trade Association. This directive also gave EU citizens the right to reside in any of the member states. With the right of free movement, citizens from all over EU were able to move about freely and took for better opportunities at improving their life looking for a better job, finding a better place to live and start a family. Under these notions, the UK began experiencing a large influx of migrants entering the country. The period after the 2004 directive was enacted and the 2010 UK elections might have been the tipping point leading to the concerns of the British public on effects rising net migration had on the country. Figure 4: Estimated and Actual net migration figures Between 2004 and 2008, the ONS had an estimate on net migration figures data the government could have used to plan and invest on improving social infrastructure or gradually tightening immigration rules, however the data provided by the ONS had underestimated the actual number of migrants entering the country by almost 350,000 (BBC, a, 2014). The method of data collection, the International Passenger Survey (IPS), had failed to take into account some citizens arriving from the A8 through other means of transportation as it focused mainly on major airports in the country. By the time these discrepancies were identified, the damage was

9 already done as social infrastructure began to strain under the volume of migrants entering the country. Since then, the Prime Minister has been negotiating to no avail with EU leader on reforming immigration policies (BBC, b, 2014). Conclusion This essay has examined the impact that immigrants have on the economic and social aspect of the country, and the data indicates that they have bestowed the UK with great wealth, skills and cultural diversity. While the British public encourages more foreign students to further their education in the UK, concerns over how increasing net migration figures will affect housing and employment remain. Although not mentioned, community cohesion is another factor which concerns the British public. With large volumes of immigrants entering the UK, there is an uneasiness amongst the public that they will not be able to integrate into the native community due to language barriers or cultural differences and am unhealthy form of segregation will manifest. Governments should also look into improving community cohesion amongst migrants, perhaps by requiring certain categories of migrants to engage in community service to improve integration levels. When it comes down to whether there should be a clamp down on immigration numbers, a broad answer across all categories suggests that there should not. Setting to achieve a net immigration target as low as that of the current figure is impractical as there are far too many variables outside government control such as the number of foreign students wishing to enter the country and the amount of labour available in the market for specific occupations at any given time. The larger view of the problem with rising net migration suggests that it is not an issue of volume but rather one of accommodation. If the British public would like to see a reduction in net migration numbers, then skill gaps need to be filled by natives since labour hired from aboard will require housing and use of other social infrastructure. The most effective changes the government can conduct is first by overhauling how net migration figures are calculated and rebranding its definition of immigrant (current definition holds as any individual who remains in the UK for over a year) since international students should be excluded from the net migration figures. This can be followed by discussions and planning as to how long term rising net migration is to be overcome should more housing be built to accommodate migrants who fill in the skill gap in the country? Should more investment be made into improving the education and skills of the local populace? Although there is no need for the UK to experience net migration levels equivalent to a city, streamlining the process by first attending to issues which can be controlled by the government is a definite step in the right direction.

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