Net Migration Targeting: Bad Policy, Bad Politics

Ever since 2010, cutting net migration to the ‘tens of thousands’ has been government policy in the UK. It isn’t much of a vote winner. Indeed, just 12% of the British public believe it will be achieved by 2022 according to a British Future study. That’s probably because after eight years of trying, the government has not come close to reaching it.

The public isn’t even particularly in favour of reducing immigration generally. Most desire a reduction in unskilled migrants but are happy for as many or more skilled workers or students to continue arriving. In the aforementioned study, 63% said they would rather see different targets for different types of immigration. This increases to 72% when asking Conservative Party voters.

It’s clear the target isn’t doing much to help the popularity of the Conservative Party. So what of the policy’s economic value?

Most of the evidence around immigration’s effect on the economy shows it is strongly positive. Low skilled immigration has been shown to have a (small) negative impact on wages for low skilled workers. Perhaps then it makes sense to cut low skilled immigration. The thing is, low skilled immigration from outside the EU is already near zero.

Even from within the EU, there are only around 50,000 low skilled arrivals annually. Some are needed to perform jobs which would not otherwise get done. Even cutting all of it would not come close to reaching the net migration target.

Another type of immigration often talked about as prime for reductions is family reunifications. Yet the criteria for these have already been tightened significantly, and court rulings indicate they could not get much tighter. So reaching the tens of thousands would mean cutting immigration of skilled workers or foreign students.

Looking first at skilled workers, to cut arrivals in this area would make no sense. A larger pool of skilled labour reduces costs for firms, letting them be more globally competitive. As our government intends to liberalise trade with post-Brexit deals, we should be as competitive as possible. Cutting skilled immigration would reduce global competitiveness and be detrimental to the economy. It is well documented that institutions like the NHS rely heavily on foreign skilled labour.

Skilled immigrants are also good for the Exchequer, contributing more in taxes than they take. There is basically no real economic argument in favour of significantly reducing skilled immigration. If anything, the more the better and we should welcome as many as possible.

We are left with cutting student arrivals to reach the target, then. Yet this would achieve little. According to the Migration Observatory at the University of Oxford, just 19% of foreign students admitted in 2010 had leave to remain in 2015. In other words, the vast majority of students go home after finishing their studies. Restricting foreign students is deeply undesirable for other reasons too. Foreign students pay much higher tuition fees than UK students. This funds the UK’s universities for UK students and funds our world class research. Rather than reducing numbers, the UK should position itself as an even more attractive destination for international students post-Brexit.

There are some who argue that net migration targeting should remain but students should be excluded. In theory this would be a step in the right direction. In practice it is unviable. ONS net migration figures have a large margin of error, which gets larger when looking at subgroups like students. Using current measurements, excluding certain groups is implausible.

As demonstrated, it is very difficult to make a credible economic case for significant cuts to arrivals in the UK. As emigration is practically impossible for a (non-totalitarian) government to control, the UK’s net migration target is frankly useless.

In current form, the Conservatives’ net migration target simply provides a stick for other parties to beat them with when they miss it. Given it is nigh impossible to hit, that’s a lot of beatings. Some would argue scrapping the target is bad optics in the wake of Brexit. After all, if Brexit was a vote to reduce immigration, scrapping targeting would look weak. In truth, it has become increasingly clear since June 2016 that the vote was not for reducing immigration but for increasing control over it. Control does not have to mean strict targets.

There is a case for retaining targeting but upping the number. Targeting in general though is an unhelpful policy – migrants should always be assessed on a case-by-case basis. The process should consider whether they will benefit the economy or not, and little else. Due to the nature of the economic cycle, this will mean very different numbers will be allowed in each year. There isn’t, and never will be, a single yearly number which is best for the economy.

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