Here’s how to reform immigration to ensure better paid, better trained Britons
If we are clever, the new, post-Brexit, immigration system we are free to design can minimise European hostility and disruption to British business while reducing numbers significantly and righting some of the wrongs of the economy. More than 300,000 people are arriving every year for work. This scale of immigration is the consequence of decisions by thousands of employers in the private and public sector. Most employers are happy with the current arrangements. But has the average Briton benefited?
It is surely no coincidence that private sector investment in training has fallen sharply over the past 15 years. Employers have, in particular, invested far too little in the science, technology and IT skills of British citizens and then recruited tens of thousands from elsewhere.
It is not just the fault of employers. Governments have encouraged as many kids as possible to take often second-rate, generalist university courses. while allowing the institutions that produced the middling and higher skill base of industry and skilled trades to wither. And as long as the immigration crutch remains, the incentive for employers to invest more in training and governments to think hard about how to increase the prestige of technical and vocational education remains limited.
Consider nursing. We recruit thousands of nurses every year from the EU and beyond. This is usually cited as a benefit of a relatively open immigration system. But why is it happening? Partly because the number of training places fell by 20 per cent between 2010 and 2013, but also because nurses’ pay has slipped back. There was a severe shortage of nurses in the late 1990s and early 2000s and the Pay Review Body responded with big increases and the problem was temporarily solved.
This time, according to Professor David Metcalf, chairman of the Migration Advisory Committee, it is Department of Health inaction that lies behind the increase in immigration. He has very reluctantly agreed to place nurses on the Shortage Occupation List at the department’s request despite the fact that tens of thousands of Britons would like a nursing career if it offered slightly better prospects.
Responding to the overwhelming popular demand to reduce immigration, especially low-skill immigration from Europe, is compatible with a thriving economy so long as we adapt our behaviour on training, pay and public spending.
The Government can help by making sure the reduced inflow happens in an orderly way, especially in the low-skill sectors, like food processing, where business will be most affected. When Singapore decided to reduce its dependence on foreign labour, it offered grants and loans to labour-intensive businesses to smooth the process of automation or of finding local labour.
Moreover, when replacing freedom of movement we have a chance to minimise EU antagonism by crafting a “half-way house” system that acknowledges a continuing special relationship. It is widely accepted that all EU citizens should to enjoy visa-free travel for tourism or short business trips. And there is no reason to limit the number of EU students. But we could go further and offer a speedier and simplified work-permit process, a presumption in favour of accepting most high-skilled EU applicants with a job offer and perhaps give them access to the whole social state after just a two years, unlike five years for a non-EU immigrant.
That way we can keep most of the French and German bankers and other professionals, who pay in far more than they take out and do not compete with poorer Britons for jobs or social infrastructure, and gradually cut back on the eastern European building workers and cut-price IT workers from South Asia, and replace them with better trained and better paid Brits.
David Goodhart is Head of Demography, Immigration and Integration at Policy Exchange
This piece was originally published by the Daily Telegraph