Respecting the choice of the British people: Immigration policy after the referendum

It is difficult to overstate the damage that has been done to UK politics and policy by the Prime Minister’s foolish pledge – made against the advice of almost anyone who knew anything about the subject – to reduce net immigration to the tens of thousands.  It has proved to be an act of economic self-harm; as well as unnecessarily excluding tens of thousands of skilled workers from outside the EU, we are actually losing global market share in a key export sector – higher education – where we have a strong comparative advantage.  But it has also reduced trust in politics and politicians; voters are not stupid, and realise that the Prime Minister’s “no ifs, no buts” promise was simply a con. And it backfired disastrously in this campaign, by handing a key attack line to Leave, who quite correctly point out that as long as we remain in the EU the target is simply pointless.

That’s the bad news. The good news is that the referendum, whichever way it goes, offers an opportunity for a fundamental reset of immigration policy.  A frequent complaint of those who oppose either a liberal approach to migration in general, or free movement in the EU in particular, is that “you can’t talk about immigration”, or “the British people were never consulted on whether they wanted mass immigration”.  Whatever the truth of these claims, they have considerable resonance over the past decade.  Not after the referendum.  We’re talking about immigration now, and the British people are not only being consulted, but they’re going to have their say – one way or the other.

But what happens next?  It has been widely reported that, before announcing his decision to support Leave, Boris Johnson wrote two articles: the one actually published, and one explaining why he was supporting Remain. I am of course impartial as regards the referendum itself.  But I thought it was worth following Boris’s example and preparing for both eventualities, by setting out what might – and should – happen to UK immigration policy after a vote to Leave/Remain [delete as applicable…]. In some ways they are very similar, in others completely different – this is of course intentional.

If we Remain..

The British people have voted that the UK should remain a member of the European Union. And, crucially, they have done so in full knowledge that staying entails a commitment to free movement of workers in the EU, both in principle and practice, and the resulting migration flows. A referendum is a binary choice – you do not (pace Boris again) get to vote to have your cake and eat it too, but rather you have to choose between two options that actually exist in the real world.  In the real world, one of those options – EU membership – includes free movement, and the other did not; and, on balance, we have chosen the former. Many of those who voted to remain would doubtless like to end or even substantially restrict free movement, but they knew full well that if they actually wanted that to happen, they had to vote to leave, and they chose not to.  Free movement is here to stay. And now it has a clear and unequivocal democratic mandate.

But that does not mean that UK immigration policy could or should stay unchanged.  The electorate has endorsed free movement, but the government’s own migration policy no longer has any credibility even with its own supporters.  As noted above, the campaign has exposed the fact that the “tens of thousands” target is not achievable within the EU, at least absent a serious economic downturn or other factors outside the government’s control. And we will have rejected the idea that the target, appealing as many of may find it in isolation, is actually a determining factor when it comes to the crunch of making a decision that actually affects jobs, wages and the country’s broader economic future. Moreover, the referendum debate has also helpfully shown that few people, on either side of the debate, are against immigration per se; the vast majority recognise the economic benefits, particularly of skilled immigrants. There could be no better time for the government to ditch it and to move on – to formulating a policy that is actually in the UK’s economic interests, while dealing with the very real pressure on services at a local level that result from free movement.

What should that mean in practice for policy? I would suggest three steps the government could take quickly to help restore confidence in UK immigration policy immediately after a Remain vote:

• It should announce that it intends to drop the “tens of thousands” target and replace it with a new policy framework, based on widespread public consultation, possibly coordinated by the respected and independent Migration Advisory Committee. This consultation should address the issue of whether there should be an overall target at all; if so, whether it should include as it does now, migrants who many think should be excluded (British nationals and students); and how, in particular, it should deal with the fact that there are and will not be any quantitative restrictions on EU migration.  The objective should be to devise a framework which commands public confidence and which government can actually deliver given the constraints of EU membership and free movement.  In particular, if there is a target, it should come from the bottom up, not the top down, as with the present one. That is, we should work out which types of migration we want to control and how, and work out what that means for numbers, not the other way around.

• The establishment of a proper, and properly funded, Migration Impact Fund (MIF). The earlier MIF (ended after the 2010 election) was both underfunded and underpublicised, and hence did little to address legitimate public concerns. A new MIF should be quasi-automatic, channelling funds to the NHS, schools and councils at  a local level, based on timely local data on the scale of migration (using, for example, National Insurance numbers and GP registrations).  Its existence and the flow of money should be well publicised. The MIF won’t be a panacea – as long as central government continues to cut overall funding for services, people in areas of high migration flows will understandably see migrants adding to extra demand, even if the net impact at national level of migrants on the public finances is positive. Nevertheless it would be a tangible demonstration of government commitment to address the issue.

• Action to reduce migration from the EU by reducing demand.  Although EU migrants don’t reduce employment opportunities for natives overall, and have little impact on wages, there is clearly a widely shared view that the structure of the UK labour market combined with free movement leads to undesirably large flows of people to work in low skill jobs.  Although we can’t change free movement, we can change the labour market.  This means much tougher action to stamp out abuse (non-payment of the national minimum wage, agencies recruiting solely from abroad). But this in itself won’t have much quantitative impact. A much wider review of employment regulation and legislation – not just zero-hours contracts, but also self-employment – is required.  This won’t be painless and won’t yield results overnight. But if we do want to reduce the number of low-paid migrant workers in the UK labour market without leaving the EU then it is the only sensible option.  

There is also a window of opportunity here. While forecasting migration is a mug’s game – so I won’t – it looks likely that net migration to the UK from the EU has peaked.  There a number of reasons for this: the slowing of the UK economy, which is no longer seeing rapid employment growth; the partial recovery of some eurozone countries; and the fact that many of the people who were likely to come here have already done so. Over the longer term, economic and demographic factors in Eastern and Central Europe may further reduce migration pressures.  If immigration does start to fall, this may make the political environment more propitious for the sort of policy change described above.

I have no illusions that these actions would solve the immigration “problem” in British politics any time soon. But they might restore both a measure of rational debate and a sense that politicians were actually saying what they meant, and doing what they said – both of which have been absent up to now.

If we Leave..

The British people have made clear that they want to “take control” of migration policy; and that they believe that leaving the EU is the only way to do that. And, to their credit, the Leave campaign have set out a clear framework and set of principles – a policy more oriented towards economic migration of skilled workers, with equal treatment of EU and non-EU migrants.

But beyond that there is little detail.  Talk of an “Australian-style points system” is vacuous at best. Many have pointed out that net migration to Australia is considerably higher in proportional terms than it is to the UK. But it is deeper than that.  All the proponents of such a system really mean is that the UK should set out clear criteria, based on skills, education, profession, etc for work-related migration. Well, as long as we have neither open nor closed borders – and neither is remotely in prospect – that’s just a statement of the blindingly obvious.  Indeed, the Leave campaign have not even been able to agree on whether the new system should be more liberal than the current one – so letting in more non-EU migrants, while reducing unskilled migration for the EU – or less so.

So turning the vision into policy will require some hard choices. Will the government simply say to sectors, from food processing to finance, who have come to rely on easy access to a flexible workforce, that they must simply adapt, even if there is a large economic cost?  At a time when migration is still running at very high levels, will the promises made both to employers and some communities of a greatly liberalised approach to non-EU migration actually be honoured?  And, assuming that some form of migration target remains, how will it be formulated?  Meanwhile, since the UK is likely to remain a member of the EU for at least two years, there will be some very difficult and complicated transitional issues.  

This policy development is likely to take place against a background of falling migration – possibly quite sharply.  While forecasting migration is a mug’s game – so I won’t – it looks likely that net migration to the UK from the EU peaked even before the referendum.  There a number of reasons for this: the slowing of the UK economy, which is no longer seeing rapid employment growth; the partial recovery of some eurozone countries; and the fact that many of the people who were likely to come here have already done so. And on top of this the likely short-term economic shock resulting from Brexit may lead to significant net emigration of workers currently here – this could aggravate and prolong the economic damage.

So what should the government do after a Leave vote? 

• First, and urgently, it needs to announce quickly the rules under which EU nationals currently resident in the UK will be granted permanent residence.  This is not just a matter of saying that people who are here on June 23rd can stay.  What about their spouses and children? What about people who came here, lived here for a number of years, then returned to their home country? Remember that given we have no population register, and that EU nationals are not require to have visas, we won’t actually know who is here on June 23rd. The only practical procedure would appear to be that suggested by UKIP’s migration spokesman,, Steven Woolf, that anyone who’d registered for a National Insurance number prior to the referendum would be guaranteed residence rights. But even this will not address the more complex cases, of which there will be many thousand. At the same time the government will need to try to address the understandable concerns of Britons abroad; of course it will have no direct control, but a generous offer to EU nationals here would help.

• Second, it should announce that it will take advantage of the two year period before we actually leave to the EU to conduct a widespread public consultation on the new policy framework, possibly coordinated by the respected and independent Migration Advisory Committee. The referendum will have been won on the basis that “taking control” means we can decide who comes to this country according to our “needs”; the consultation should address, from the bottom, what  – and who- it means.   In particular, if there is a target, it should come from this bottom up analysis, not the top down, as with the present one. That is, we should work out which types of migration we want to control and how, and work out what that means for numbers, not the other way around.  This will not be just a matter of tweaks to the current system for non-EU migration; EU migrants fill a wide variety of current jobs, by no means all low-skilled, that would not qualify under the current system.

• Finally, it needs to take immediate action to address legitimate local concerns over the impact of migration on public services. Given that public spending cuts will continue for some time, and meanwhile nothing will happen to migration policy for at least two years, there is a risk of public frustration if they see that nothing has changed on the ground. This should include the establishment of a proper, and properly funded, Migration Impact Fund (MIF). The earlier MIF (ended after the 2010 election) was both underfunded and underpublicised, and hence did little to address legitimate public concerns. A new MIF should be quasi-automatic, channelling funds to the NHS, schools and councils at  a local level, based on timely local data on the scale of migration (using, for example, National Insurance numbers and GP registrations).  Its existence and the flow of money should be well publicised. The MIF won’t be a panacea – as long as central government continues to cut overall funding for services, people in areas of high migration flows will understandably see migrants adding to extra demand, even if the net impact at national level of migrants on the public finances is positive. Nevertheless it would be a tangible demonstration of government commitment to address the issue.

After a Leave vote, there will be a window of opportunity after the referendum to reframe and reset not just policy, but the public debate. The key issue for a large proportion of the UK population who worry about some of the impacts of immigration, but who are not racist or “little Englanders” – the lack of control – will have been addressed.  That should allow politicians on all sides to make a positive case for the benefits of migration. Equally, without the excuse of the inability to control migration from the EU, we will be able to hold politicians to account for both the realism of their promises and their ability to deliver them.