Boris Johnson’s New Immigration Rules Will Harm Britain’s Economy
The U.K.’s new points system will keep low-skilled non-English speakers out, pleasing pro-Brexit voters but devastating entire sectors—from agriculture to health care.
Britain’s decision to leave the European Union was motivated in large part by a desire to “take back control” of immigration. The voters in northern English towns who switched to the pro-Brexit Conservatives in last December’s general election, providing Prime Minister Boris Johnson with his decisive parliamentary majority, are particularly hostile to immigrants. They accuse low-skilled Eastern Europeans in particular of depressing local wages and straining public services such as health care. So the political rationale for the U.K. government to cut migration from the EU and deny entry to low-skilled foreigners is clear. But the economic cost of its new skills-focused, points-based immigration policy is likely to be large.
The British economy is reliant on immigrants to do jobs that not enough locals are able—or willing—to do. Overall, long-term immigration for work has averaged more than 200,000 a year since 2010. More than one-third of doctors, pharmacists, and dentists in the U.K. are foreign-born, as are more than 20 percent of nurses. Seven in 10 workers in the meat-processing industry are from the EU. Structural demand for types of workers in short supply in the U.K. is compounded by a cyclically tight labor market. Even though the economy has stagnated since the Brexit vote in June 2016, the unemployment rate fell to a mere 3.8 percent in the final quarter of 2019.
Immigrants’ growing contribution to Britain’s economy and society has largely happened despite successive governments’ immigration policies, not thanks to them. As any foreigners who have had to apply for a U.K. visa can testify, Britain has a particularly dysfunctional immigration system. It is unduly slow, costly, burdensome, and restrictive—not to mention economically misguided and politically mismanaged.
But until now, the harmful rigidity of the system for migrants from outside the EU was partly offset by the flexibility it offered to EU citizens coming to work in the U.K. Poles, Portuguese, Romanians, and other Europeans didn’t need to jump through bureaucratic hoops to obtain a U.K. work visa; they could just turn up and apply for any job of any skill level, or start working on a self-employed basis, almost as easily as Californians moving to Colorado can.
A comprehensive study by the British government’s independent Migration Advisory Committee found that these much-maligned EU migrants typically do not take local jobs away from residents or depress local wages. Nor has their hard work led employers to skimp on training British workers. EU migrants also pay more in taxes than they receive in welfare benefits. And they are particularly large contributors to public services such as health and social care, both financially and as workers.
Beginning next year, however, the U.K.’s Byzantine immigration system for non-EU migrants will also apply to those from the EU. While the admission criteria for skilled workers are set to be loosened somewhat, government proposals published earlier this week would make it impossible for almost all low-skilled migrants to obtain a work visa. One exception is a scheme that would admit 10,000 seasonal agricultural workers a year, far fewer than British farmers currently hire.
Sold as an “Australian-style points-based system,” because this plays well with voters who think it sounds tough and fair, the new British system is actually very different from Australia’s. To obtain a work visa, skilled migrants will need to speak sufficient English and have a job offer at an appropriate skill level from an approved U.K. sponsor. This will need to pay at least 25,600 pounds ($33,000) or the “going rate” in their sector, if this is higher. The salary threshold is lower—a minimum of 20,480 pounds ($26,000)—for jobs in designated shortage areas (such as nursing) and for applicants with a Ph.D., especially in a science or technology subject.
At the very least, the shift will be disruptive for sectors such as food processing and hospitality that rely on a churn of relatively low-paid, less-skilled migrant workers. While EU citizens who arrive in the U.K. before the end of the year will be allowed to stay permanently if they apply for the requisite “settled status,” those who leave again, as many do each year, will not readily be replaced.
Among the hardest-hit sectors will be care for the elderly. With the number of British seniors in need of care continuing to soar, care work is the occupation with the most projected employment growth in coming years. These workers are already in short supply, with care homes bemoaning that they receive scarcely any suitable local applicants. That’s because wiping seniors’ bottoms, shaving white beards, lifting frail people in and out of bed, and other crucial but menial tasks are not what most young Britons aspire to do.
Glibly, the government has insisted that instead of relying on immigrants, employers should invest in “staff retention, productivity, and … technology and automation.” Yet in the care sector, budgets are largely determined by government funding, which is not being increased. That leaves little scope for wage increases, which would probably need to be large to attract local applicants for jobs they currently deem undesirable. As for automation, while Japan is pioneering the use of robots to care for the elderly, these solutions remain prohibitively expensive, because machines cannot perform many simple tasks that human carers can, and they have so far complemented human carers, not replaced them.
The bigger picture is that under the guise of creating a future-focused and fairer immigration system that seeks to attract the “brightest and best” foreigners and treats EU and non-EU migrants equally, the U.K. is actually seeking to turn away ever more of the industrious and enterprising individuals who help power its economy and provide for the basic needs of its graying population.
That is perverse. Thanks to their youth and diversity of skills and ideas, both less-skilled and high-skilled migrants tend to boost GDP per person in receiving countries, and thus the living standards of locals across the income spectrum. Research by the International Monetary Fund, which found that a 1 percent increase in the foreign-born population raises GDP per capita by 2 percent, suggests that immigrants to the U.K. have made British people nearly 30 percent richer.
As Conservatives who believe in free markets purport to know, government bureaucrats are rarely any good at picking winners—not least divining immigrants’ potential. Take Sushil and Anjana Patel, who arrived in the U.K. in the 1960s from Uganda with few qualifications. Had they been required to apply for a U.K. work visa under the proposed new immigration system, they would have been denied entry. They wouldn’t have gone on to build a successful chain of newsagents across the country, and their daughter Priti would not have become Britain’s home secretary—and the architect of a new immigration system that would have kept her own family out.
“The policies are changing,” Patel said, when confronted with the irony. Indeed, they are.
Philippe Legrain is the founder of OPEN, an international think tank on openness issues, and a senior visiting fellow at the London School of Economics' European Institute. Previously economic advisor to the president of the European Commission from 2011 to 2014, he is the author of five critically acclaimed books, most recently Them and Us: How Immigrants and Locals Can Thrive Together. Twitter: @plegrain