In a way, it’s refreshing that Yvette Cooper’s speech on immigration today has identified ‘free market liberals’ as the main advocates of freer immigration policies. There aren’t many of us, though, so we usually have to rely on immigration liberals on the left to win the argument over there for decent reforms to take place. Unfortunately, it looks as if they’re losing too.
Cooper’s main claims are that immigration reduces native wages and job opportunities, puts public services under pressure, and low-skilled immigrants are exploited by British firms.
The first two of these claims are basically wrong and the third is a little dubious, as I’ll try to show, but even if they were true they would only justify restricting low-skilled immigration. There is basically no decent economic argument against skilled immigration, and I’m doubtful whether even the most wild-eyed worrier about the cultural ‘Islamicization’ of Britain has Pakistani doctors in mind. But, without any explanation, Cooper says that Labour will keep the cap on skilled immigration (despite her admission that “top businesses are worried they can’t get the high skills they need”). Oh well.
On low-skilled immigration, the main focus of the speech, Cooper suggests that liberals support immigration “as cheap labour to keep wages and inflation low”. Ignoring that this is a straw man worthy of the Wizard of Oz, it’s also untrue. According to the impact assessment published by the Home Office last month, low-skilled immigration has, at most, a minor impact on native wages, which in a flexible labour market like Britain’s is temporary anyway. And on the ludicrous idea that anyone supports immigration to keep inflation low, see Lars Christensen – under inflation targeting, a positive supply shock like immigration will lead to more inflation.
The public services point is old and well-worn, and it hardly needs repeating here that immigrants pay more in tax than they cost in services – a phenomenon which over the next few decades will mean the difference between a national debt of over 180% of GDP (in a zero net migration scenario) and just over 50% (in a >260k/year net migration scenario). Presumably nobody really thinks that more high-skilled immigration would have a negative fiscal effect, but I suppose it’s possible that liberalizing low-skilled immigration a lot could change this. In that case, charge immigrants a fee to reside in the UK or restrict access to public services. There is no problem with immigration to which strict immigration controls are the best solution.
The final point is the one that Cooper focuses on the most, maybe so that the dreary conservative orthodoxy of her policies is less obvious. Undoubtedly, some genuine exploitation does take place – Cooper gives the example of agencies advertising in Poland for jobs that turn out not to exist, virtually forcing the victims into grim jobs that they did not sign up for. It may be that the law needs to be strengthened to punish people who defraud immigrants in this way. But there will be negative consequences too – by raising the risk for legitimate employers of employing immigrants, this kind of law will make it harder for immigrants to get legitimate work. The danger is that, as in the case of the Modern Slavery Bill, laws designed to prevent truly terrible crimes will end up curbing whatever legitimate work the government decides it wants to stop as well.
To be fair, there are two positives in Cooper’s speech: taking students out of the net migration figures would be good for the education sector, and taking refugees out is humane. But the fact is that Labour has accepted the “logic” of the net migration cap, is making no reforms to high-skilled immigration, and is basing low-skilled immigration policy on anecdotes instead of evidence. Liberals beware: the ‘progressive’ approach to immigration is starting to look an awful lot like the conservative one.