The immigration question is much more complex than many dare to admit

Daniel Bentley, 1 August 2014

We live in a GDP-fixated age. If something promotes economic growth, it’s got to be a good thing, right? Well immigration is a case in point, and – as Robert Rowthorn’s report for Civitas today illustrates – it is one example of how limited a picture the latest GDP stats provide.

Yes, a larger population will lead to a larger economy, but almost entirely in proportion to the additional headcount. That is to say, there is a bigger cake but more people taking a slice of it. Rowthorn calculates, on current population forecasts, per capita growth of 3% between now and 2087, a tiny advance over so many decades – and even that is predicated on most people being productively employed. From that point of view, on average, nobody’s really any better off.

But perhaps having more people here is a good thing for the profile of the population? Most immigrants are of working age and pay taxes, so don’t we need them to rejuvenate our ageing population, supporting our swelling ranks of pensioners? It is certainly a popular argument. The problem is, with the scale of immigration anticipated over the coming decades, the impact on our infrastructure – already creaking in terms of housing and transport for example – will be that much greater. If per-capita growth is marginal, as Rowthorn demonstrates, it is this extra strain on infrastructure that will be decisive in terms of standards of living.

There is an additional point here, which is that if we pursue population growth via immigration to pay for our older citizens, there will be no end to that process. Because in time that additional population will age too and need supporting in turn. It is a “never ending treadmill”, in Rowthorn’s words: “To maintain a once-and-for-all reduction in the dependency ratio requires a never ending stream of immigrants. Once the inflow stops, the age structure will revert to its original trajectory.”

He concludes that the UK could get much the same benefits from immigration with a net intake of 50,000 a year – and with much less pressure on infrastructure. Of course, the government can’t even get net migration below 200,000 a year at the moment. David Cameron’s “tens of thousands” target is pie in the sky, largely because the government is unable to limit EU immigration, currently running at about 130,000. Naturally, as the prime minister plans to renegotiate the UK’s relationship with the EU, many eyes are on those free movement of labour rules.

But Rowthorn frames the debate around the longer term, stressing that the principal driver of immigration is the wealth inequality between nations. For as long as poor countries remain poor, large numbers of their citizens will want to move to rich countries like the UK. In this context, Britain’s embrace of a highly-selective immigration policy, in which we pick and choose the best applicants from less developed nations, risks making matters worse by denuding those places of the professionals they need to prosper.

He floats a couple of ideas, including Dani Rodrik’s proposal to introduce temporary immigrant work visas for a period of, say, five years. Such a scheme would not be without difficulties, but Rodrik reckons this could give the world economy a boost worth hundreds of billions of dollars while allowing immigrants to develop skills, know-how and savings before they return to their home nations.

Rowthorn also proposes a massive system of student bursaries for youngsters from poorer nations, helping to circulate talent and enabling those countries to benefit from the educational opportunities on offer in the UK and elsewhere. The bottom line is that immigration policy should be considered in tandem with our wider international aid and development work.

The answers to these questions are not all immediately apparent. There is no obvious solution that suits rich and poor alike. At every turn in the debate additional considerations arise. This is why we need more discussion about immigration, not less, and one that is both respectful towards those people who want to come here – the vast majority with perfectly honourable ambitions – but also rational in its assessment of what actually works.