Sunday, June 23, 2024

Why the panic over rising immigration? The post-Brexit order is working. Jonathan Ports


TeaThe UK public policy landscape is littered with disasters. From record nhs waiting list For the de facto legalization of petty crime and aggravated sexual assault, for environmental damage done by privatized water and sewerage companies.

With immigration data on Thursday likely to show that net migration in 2022 was the highest level on record, it is tempting for politicians and commentators to add immigration to this list – although many have already done so , which, depending on the donation, are wild, uninformed guesses. For Labour, immigration levels play into the narrative that 13 years of Tory rule has broken the country. For the ethno-nationalist right inside and outside government, the view that our culture and national identity is threatened by an influx of mostly dark-skinned foreigners was well represented at last week’s national conservative conference.

The truth is very different. Indeed, the migration statistics reflect something that is truly rare in the UK right now – a successful policy that has been implemented efficiently and effectively, and even rarer, the crystallisation of a genuine “Brexit opportunity”.

First of all, those figures. Some of the increase is temporary, driven by special visas for people arriving hong kong and Ukraine. The relatively low profile of these schemes is a success in itself, reflecting the fact that, despite the rhetoric surrounding Channel crossers, in the rare cases when the UK opens “safe and legal passage” to refugees, So it works well. The effect of increasing international student numbers on net migration will also reverse over time, as most will leave after completing their studies.

But what about the new, post-Brexit migration system? Number of people coming for work and studies on one side Increased, On the other hand, businesses, especially in the food and hospitality sector, continue to complain about labor shortages.

Some of it is normal. Anti-immigration politicians and lobby groups, and the Home Office, have always complained that the numbers are too high, while business, and other government departments such as the Treasury and Health Departments, have always wanted a more liberal system. But these long-standing struggles have brought great relief from two things. First, the current state of the labor market, with high demand for labor after the pandemic, and an increase in ill health and early retirement constrain domestic labor supply. And the end of free movement was always going to reduce the flexibility of the UK labor market.

Second, Brexit. The government has been forced to make policy choices around which businesses and sectors should be open to migrant workers. And this in turn has increased the political salience of these options and the associated lobbying. So complaints on both sides represent a success in a political and democratic sense: a feature, not a bug.

This is also true of economics. Most economists, including me, thought that Brexit would make the UK significantly less open to both trade and migration with the EU, but somewhat more so to the rest of the world. We were right. We also thought that the downside of the former would outweigh the benefits of the latter. we were wrong.

In fact, the new post-Brexit migration system has achieved its key objectives. by eliminating free movement, it is Reduced An influx of relatively low-skilled and low-wage workers into certain sectors. But by liberalizing migration flows from the rest of the world, it has significantly increased workers in high-skilled and high-paid roles in the NHS, the care sector, and information and communication technology, finance and professional services.

It is too early to say what the overall balance sheet will look like – but as well as easing workforce pressure on the NHS and social care sectors, an increase in international students as well as an increase in the flow of skilled workers, is likely to increase not only GDP but also GDP per capita, benefiting the UK economy and public finances. and, above all, public opinion seems to rest intensely Regarding increasing flow when the economic case is clear.

It’s not all good news. So far, at least, there is little to suggest that ending free movement has raised wages in the sectors most affected; In fact, wages in hospitality are Fallen relative to other areas. And it is very hypocritical for the government to ask employers in that sector to recruit UK, whereas in the care sector, where it has more control over wages and conditions, it is encouraging Employers make nominal payments to expatriates.

So what should the government – or the next one – do about immigration? as little as possible. Some useful changes can be made in the system. But where there are serious systemic problems, such as social care, a lack of good quality training in some areas, or the over-reliance of some of our universities on attractive international students at the expense of loss-making Britons, the solutions are almost entirely outside the immigration system.

We just made the biggest change to immigration rules in half a century, and by and large, it’s working. Let’s take a sigh of relief and let it sleep. In the meantime, there are many more important things to worry about.