Lazy Assumptions About the Benefits of Mass Migration Have Been Torn to Shreds

Nowhere is the policy failure that seems to have engulfed virtually everything the Government touches more apparent than immigration.

I don’t know why anyone was surprised by last month’s revised data from the Office for National Statistics (ONS). As a source of information on the economy, the ONS has become about as reliable as a number 16 bus – so much so that the Bank of England has come to prefer the reports of its own agents in the field to the official ONS data when assessing the economy’s true state of affairs.

In any case, it has been obvious for a long time now that the ONS has been wildly understating the extent of the surge in net migration. You only need to look around you to see the transformation that has occurred in the size and mix of the population.

It should therefore come as little surprise that after re-examining its methodology, the ONS now reckons that no fewer than 1.3m migrants entered the country in the year to June 2023, far higher than previously reported. How it could have missed the visas issued to Ukrainians and the large number of individuals transitioning to new visas – the main explanation for errors in the original estimate – is a wonder to behold.

You’ll be pleased to know, however, that thanks in part to reform of the immigration regime in the dying months of the last government, net migration – if not the overall number of migrants entering the country – is now on the way down.

That it fell in the year to June 2024 to a level which is only slightly lower than the 740,000 originally estimated for 2023 is an indication of just how whacky the whole business of migration statistics has become. And also, just how intractable the problem is. Already it is clear that the last government’s belated crackdown on work visas doesn’t go nearly far enough.

Even more shocking, in some respects, were separate Home Office statistics showing that the cost of accommodating and financially supporting the backlog of asylum seekers surged by more than a third to a staggering £5.4bn last financial year, enough to pay for Labour’s politically damaging cancellation of the winter fuel allowance several times over.

Conveniently for Sir Keir Starmer’s Government, most of these statistics cover a time that pre-dates the election, so can be used as another stick with which to beat the Tories. Whatever doubts there may be about Labour’s resolve in getting a grip, there is no quarrelling with the contention that the Tories completely lost control of migration, adding to the tale of abject incompetence that floored them at the ballot box.

The admission last week by Kemi Badenoch, the new Conservative leader, that mistakes were made, doesn’t begin to undo the damage that this failure has done to the Tory brand. It takes a special kind of genius for the party that championed the “take back control” messaging of Brexit to have ended up with a more liberal immigration policy than we had when members of the European Union.

The notion that voters don’t care about uncontrolled migration as long as it is our own politicians who are presiding over it has proved completely delusional, as last summer’s outbreak of anti-immigrant riots demonstrated.

In the event, it is hard to be confident that Labour will fare any better. The number of asylum seekers being put up in hotels has continued to surge since Labour came to power.

The Government promises a white paper soon to address the skill shortages that supposedly cause employers to seek migrants to fill key positions, but where have we heard that before? “British jobs for British workers” has been a recurring political goal ever since Gordon Brown first promised it more than 15 years ago.

What makes the politicians so impotent? Mainly, it’s because they worry about the economic consequences of a fully fledged crackdown.

It’s not just that our universities have become dangerously dependent for their funding on the “graduate route” to work visas, to the extent that many of them would be bust without it. It is also because officials fear that the economy would stall without the prop of migrant-driven population growth, and that the public finances would be even further in the mire if the tax revenues generated by migrant labour were removed.

Based on (don’t laugh) ONS projections, the Office for Budget Responsibility expects net migration to average around 350,000 a year in the medium term, much lower than today’s inflated levels, but still extremely high by historic standards and a far cry from the “tens of thousands” promised by successive Tory-led governments.

Net migration of this magnitude would result in net borrowing per annum £7.4bn less than otherwise, the OBR said in its March Economic and Fiscal Outlook. If, on the other hand, net migration were 200,000 a year lower, or just 150,000 per annum, then borrowing would be £13.1bn a year higher than otherwise, equal to 2p on the rate of income tax, and the national debt 2.5 percentage points of GDP bigger.

By the OBR’s own admission, these forecasts are simplistic and highly uncertain. Yet former Cabinet ministers complain that numbers like these were constantly dangled before them every time they tried to do something serious about migration.

What is now abundantly clear, however, is that many of the long-held assumptions about migration in terms of productivity growth and rising living standards no longer hold water.

It may once have been true that the influx of new blood that immigration delivers was an economic good; think of the Huguenots from the 16th to the 18th century. These refugees from religious persecution on the Continent brought with them new skills and ways of thinking that were genuinely transformative. France’s loss was Britain’s gain. Or more recently, the influx of Ugandan Asians, and perhaps also Hong Kong Chinese.

But it is hard to argue such a gain from today’s wider and unprecedented levels of mass migration, where the effect on productivity and wages seem, if anything, to have been negative.

The numbers have also stretched public services to breaking point, contributing to the perception of crushing austerity. Revisions in the migrant data suggest that the recent revival in GDP per capita growth was, moreover, no more than a mirage.

Things cannot carry on like this. Labour will find it hard enough selling planning reform to the British public, but if all the extra housebuilding it is meant to unleash is merely to accommodate growth in the migrant population, then today’s political backlash will be as nothing compared with what is to come.