When governments criminalise something they incur costs and lose revenue. The losses, therefore, are twofold.
Take the example of drugs. We make no duty, or VAT, on drugs; there are no drug companies paying corporation taxes, and no employees paying income tax. No shops or cafes are appearing on high streets. It isn’t a nice side-line for small pubs and off-licences.
And, the government has to pay the astonishing costs of policing the vast black market they have created, and then prosecuting the few people they do manage to catch, and then jailing the ones who are found guilty. And there are the border controls to pay for, and the NHS for people who overdose. And the effects of the crime that happens because of this black market probably lose the government more revenues.
This doesn’t make much sense. The rule of thumb is that prohibition costs money and limits opportunities. And this is equally true of immigration. Banning immigration is as silly as banning drug use: it doesn’t achieve what it says it will.
There are costs for border controls, detention, tribunal and appeals, policing, endless Home Office and Border Agency officials to do the administration – all spent to keep out people who would improve the economy.
And there’s more. We learned last week that the cost of detaining and deporting illegal immigrants has increased by 50% in four years. That is the wholly expected result of John Reid’s announcement four years’ ago yesterday that there was going to be a crack-down.
Detaining and removing illegal immigrants cost £35.5 million in 2006-07 and £51.7 million last year. The total cost since 2006 is £273 million. Small beer the anti-immigration Right would say. And that is true enough. We aren’t going to pay off the deficit by saving £200 million over four years.
But what about the lost revenue? We know that migrants diversify the labour market, allowing more specialism, enabling resident workers to earn more money – and to avoid doing the menial jobs they would rather avoid. We know that they contribute more in taxes than they use in services. We know that they make a significant contribution to GDP growth.
But the protectionist policy of limiting migration doesn’t stop there. If you come here legally to work the government requires you to have a minimum salary of £13,000 in order to bring any dependents over – such as your spouse. This is now being increased to reduce family migration by between 40% and 60%.
Despite the fact that a fifth of all the growth that occurred in 2004 and 2005 was solely attributable to immigrants, the government is making it harder for people to come here with their family.
All of this will lead to a reduction in people who would be net contributors to the economy, either through taxes, labour diversification, or contribution to growth. There is a slow recognition that banning drugs causes more problems than it solves. Hopefully people will be able to see that the same is true of restrictive immigration laws.
Henry writes the blog for Mulberry Finch.