If you’re not rich, you’re not coming in

by Matt Cavanagh

For a man whose avowed aim is to reduce the salience of immigration as a political issue, David Cameron spends a lot of time talking about it. Yesterday’s speech was light on new policy, so we must assume the point was to send a message: that despite growing public scepticism – a recent YouGov poll found 78% of people thinking it “unlikely Cameron will deliver his immigration promises” – he remains personally committed to doing so. The strategic judgment must be, that while he is unlikely to hit his chosen target of reducing net migration levels to “tens of thousands” by 2015, his policies will have made enough of a dent that voters will feel that, in contrast to the other two parties, at least the Conservatives tried. For now, the coalition has settled into a pattern, where it suits both parties to pretend that it is the Liberal Democrats that have prevented greater progress, rather than the deeper structural problems with their approach – though this is unlikely to fool voters for long, and there are signs that the commentariat have rumbled it too.

Turning to the detail of the speech, there were some good things; some misleading claims and unanswered questions; and a reminder of two big underlying problems.

The good things included a careful, incremental approach to the complex issue of forced marriage (though it will be interesting to see how the planned consultation differs from previous ones on the same subject); and a greater emphasis on British history and culture in the “Life in the UK” citizenship test which Labour introduced in 2005. Another proposal, to stop people bringing in more than one spouse or partner in quick succession, is an example of a policy which in an ideal world would seem unnecessary and invasive, but in the real world is sadly necessary. Finally, there was the resonant line that “immigration can hurt the low paid and the low skilled, while the better off reap many of the benefits”. This contains enough truth to hurt, and is a line which Labour really only has itself to blame for allowing the Conservatives to own.

But alongside these good things, there were plenty of misleading claims. The first was on overall numbers, where Cameron said that; “There are early signs in the most recent figures that the reforms this government has brought in are beginning to reduce the overall figure.”

Well, it is true – as I noted in my analysis of the most recent immigration statistics for Labour Uncut – that “the latest quarterly figures to June 2011 [show] a slight fall in people coming from outside the EU for work, down 2.7% compared to the year ending April 2011”. Most of this is from the closure of the Tier 1 General route, designed for highly skilled migrants who are not tied to a particular job, but qualify on their individual merits (on which more below). But this is less than 1% of total immigration. Cameron would be better advised to wait until next year, by when the changes to the student visa system, however ill-advised in other respects, might have made a more serious impression on overall numbers.

The second misleading claim concerned the skill-level of migrants coming under the previous system. In his determination to present that system as a “complete failure”, Cameron said that:

“One study showed that about a third of those sampled only found low skilled roles working as shop assistants, in takeaways, and as security guards. When this government came into office, we ignored the rhetoric, looked hard at the reality and simply closed down the whole of the Tier 1 General route.”

At best, this is a highly selective use of the available evidence. The independent Migration Advisory Committee, a Labour innovation which the new government has sensibly retained and praised, said in its comprehensive report in November 2010, that in the Tier 1 General route – the route which Cameron is talking about here – over 90% were working in highly-skilled work (see para 3.68, p.88).

Turning to the unanswered questions, the first concerns the detail of the proposal that people wishing to sponsor a foreign national to come here as a spouse or partner should be required to put up a financial “bond”. This idea has been around for years: it was in Labour’s 2005 manifesto, but was shelved in 2008. One of the problems was that it is tricky to set the bond at the right level. If you set it too low, it looks like a gimmick. But if you set it at a level that would credibly offset the costs to the public purse of a migrant who does end up being a “significant burden on the taxpayer”, that would mean a bond of tens of thousands of pounds. Requiring that upfront raises very significant issues of fairness (on which more below).

The second unanswered question relates to Cameron’s argument that:

“Confronted by a failing welfare system, shortcomings in our education system and an open door immigration system [employers] can choose between a disillusioned and demotivated person on benefits here in the UK or an Eastern European with the get up and go to come across a continent to find work.”

Even within one sentence, this doesn’t really cohere: the reference to “open door immigration system” in the first part suggests that this is something the new government intends to change; but this is undermined by the – more accurate – reference to Eastern European immigration in the second part, an aspect of our “open door system” which Cameron is now forced to admit he is unable to change.

The problem of Eastern Europe led Cameron to fudge the familiar issue of British Jobs for British Workers, with the platitudinous formulation of “not discriminating against those from other countries but making sure that the British option is once again the best option”. He should be given credit for repeating that “it is crude and wrong to say immigrants come to Britain and take all our jobs”; and it is reassuring to see him emphasise investment in training and skills, implicitly dismissing Iain Duncan Smith’s more populist but economically illiterate view that if only the government would clamp down on immigration, the long-term unemployed will be magically sucked into work. But investing in training and skills is the same approach that Labour tried – and struggled to make a big impact – so we need to see far more detail before we can have any real confidence that this will work. Besides the unfavourable context, with unemployment and youth unemployment at historic highs, there was no detail at all on what he called “new ways to encourage employers to do even more”. The one new proposal trailed before the speech, that employers would be required to list their foreign employees, was hurriedly ditched after a predictably negative response from employers.

Beyond these detailed points, the speech reminded us of the two biggest problems with the Cameron government’s approach to immigration: first, the crude over-emphasis on total numbers; and second, the crude over-emphasis on how well off migrants and their families are. Neither of these aspects is irrelevant; but both are starting to crowd out other considerations across the broad range of immigration policy.

Numbers do matter – I have argued that the Labour government failed to accept this until it was too late – but we have now swung to the opposite extreme. There are just too many areas in which the question of overall numbers is dominating other considerations, and this may get worse as wider trends beyond the government’s control – emigration and migration from Europe – push the target further out of their reach. The risk is that this will make them bear down even harder in those areas which they at least theoretically control, including skilled workers, foreign students, and now foreign spouses or partners.

Cameron criticised the points-based system he inherited as based on “weak minimum thresholds”. But if that was the problem, one obvious solution would be to strengthen the minimum thresholds – rather than moving to a quota-based system. To take the Tier 1 General route as an example, it is possible to argue that it was not restrictive enough (though there is no need to massage the evidence in doing so), but the basic idea that some migrants are worthy of admission not tied to a particular job, but based on their individual qualifications and talents is surely an attractive one, as well as having a sound economic basis. Again, the answer is to tighten the criteria, not simply close the route down. Similarly, in relation to foreign students, Cameron once again focused in his speech on “bogus” colleges and students, and Labour should support the government in taking tougher action in this area. But if they succeed, and manage to restore public confidence that the great majority of those coming on student visas are genuinely here to study, there would be a strong case for separating foreign students from the numbers game of the net migration target – especially since only a small minority stay permanently anyway.

The second big problem is the crude over-emphasis on how well-off migrants and their families are. Yesterday’s speech focused on the rules for admitting potential spouses and partners, noting that 70% of those sponsoring such applications are earning less than £20,000 per year after tax, and arguing that:

“when the income level of the sponsor is this low, there is an obvious risk that the migrants and their families will become a significant burden on the welfare system and the taxpayer”

Some commentators have suggested that this shows Cameron to be out of touch, in describing what is in fact the median post-tax income level as “low paid” and dangerously close to welfare dependency. (According to the most recent ONS figures, median gross annual earnings were £25,900; allowing for 2.5% wage inflation and deducting tax and NICs, assuming only a personal allowance, incidates median net earnings of £20,400.)

But while the words may have been carelessly chosen, the emphasis on income and wealth is a deliberate and consistent feature of the new government’s approach to immigration policy. It shows up again in other changes the government is currently working on, to the rules governing which migrants are allowed to stay permanently. There, the proposals are that virtually all economic migrants will be told to go home after five years unless they are earning more than £150,000 a year, or have £5 million to invest.

Again, I don’t think progressives should suggest that money is irrelevant to economic migration. Many progressives have argued for immigration based on its positive net fiscal impact, and obviously this will be higher for wealthier migrants. Moreover, particularly in the current fiscal climate, it doesn’t seem unreasonable to ask whether, if someone is destitute or entirely dependent on benefits, they should be allowed to bring in a spouse or partner who is likely to end up in a similar position.

But the present government’s approach takes things much further. Essentially their approach to immigration is, if you’re very wealthy, you can come, you can bring family, and you can stay as long as you like; but if you’re not wealthy, you can’t – and we’re not talking about people who are destitute or living on benefits, we are talking about people who are working and getting an average wage. They will still be invited to come and work and fill jobs where we lack the skills or where nobody here wants to do the work, but they won’t be allowed to sponsor a spouse or partner or other dependents to join them, and after five years they will be asked to leave, regardless of whether they are still making a positive contribution, paying their taxes and playing by the rules.

In most people’s eyes, this is unfair. A recent international survey showed a majority in the UK, as in most developed countries, believing that migrants who come legally to work should be given the opportunity to stay permanently. But this approach also misunderstands the nature of immigration, and its potential, human as well as financial. In today’s Independent, Dominic Lawson eloquently puts the case for the amazing entrepreneurial contribution which migrants have made in America, Britain and elsewhere. Cameron and his cabinet claim they are determined to attract the “brightest and best”, but their interpretation of that category is narrow and entirely unimaginative. They should reflect on the two Russian scientists whom George Osborne praised in his conference speech, and ask themselves whether under the new approach, these scientists would have been invited to come to Britain, let alone stay – not as they are now, as senior faculty and nobel laureates, but as they were five or ten years ago, as junior research scientists on modest salaries.

It is not possible to identify the next generation of entrepreneurs or nobel laureates – certainly not by looking at how much they are currently paid. The history of migration is one of talented, motivated people who often start from fairly humble beginnings, and spend years working hard and making sacrifices for themselves and their family. It can take many years to pay off, but when it does, it can do so spectacularly, for them and for the society which has offered them a home.

Immigration remains a difficult issue for Labour. The leadership clearly believes the party is stuck at the stage where it needs to show humility to earn the right to be heard, rather than coming up with radical new policies. But as the shape of the government’s agenda grows clearer, there is an opportunity to set out an alternative approach: one that is fair as well as strictly controlled, which values potential rather than pre-existing wealth, and which is rooted in our traditions of openness and global influence, rather than shrinking into the reflex of insularity and fear.

Matt Cavanagh is an associate director at the IPPR

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4 Responses to “If you’re not rich, you’re not coming in”

  1. Nick says:

    Here is a simple solution.

    Migrants can come here.

    1. You have to pay a year’s worth of tax up front.
    2. You can stay so long as your tax bill comes to more than the average spend by the government, per person, per year. (per migrant)
    3. If it drops below that you have to leave.

    That way the BNP or other’s can’t complain about immigrants getting something for nothing.

    After all, if you pay tax at that level, you aren’t on benefits are you?

    No need for civil servants to decide who can and can’t come.

    Administration is via the tax returns each year.

    Ah yes, what’s the flaw?

    Well, per migrant, you need to earn over 40K a year for the country to break even. Family of 4, with one wage earner, and that’s 160K a year.

    That’s says more about government spending, and the mess that its in, than it does about the migrants.

  2. Nick says:

    It is not possible to identify the next generation of entrepreneurs or nobel laureates – certainly not by looking at how much they are currently paid. The history of migration is one of talented, motivated people who often start from fairly humble beginnings, and spend years working hard and making sacrifices for themselves and their family. It can take many years to pay off, but when it does, it can do so spectacularly, for them and for the society which has offered them a home.

    And for the millions of others where it doesn’t. Why should people on minimum wage lose 2,500 pounds a year in taxes so that the migrants can get benefits?

  3. Emma says:

    This news items very saddens me – it indicates further human rights issues on UK citizens who marry a foreign national – as well as on the foreign nationals themselves. I married my husband in January 2011 – the main stumbling block to processing his settlement visa application has been acquiring an English test certificate. The principle of this is fine and am 100% supportive of it -but in practice, it’s actually very difficult to obtain an actual test. Resident in Japan until after the Tsunami, the only available test that we could apply for there in English (he doesn’t read and write Japanese) was at a substantially higher level than legally required – and unfortunately he didn’t get the higher level mark. He returns to his native country, we apply for family visitor visa which gets rejected, because they don’t believe he’ll return to there to submit the settlement visa. Then we try for another English test – only three options – one organisation does tests twice a year, the other the higher level test again – and a third option we took. Took test in mid July – and still test papers not marked and certificates received. Where do my rights come into all this? Settlement visa’s are long and rigourous applications. And now they are thinking of adding a bond?! Where will it stop?!

  4. David Gardner says:

    A good analysis by Matt. Reading the PM’s speech between the lines there was some subtle ground shifting going on. Less focus on the highly-skilled migrants coming in under Tier 2 (who make a tremendous positive contribution to the UK economy but have taken the brunt of the Coalitions’ tough talking) and more focus on “bogus students”, overstayers and marriages of convenience.

    From Cameron’s perspective, this will deliver much higher numbers, but will prove logistically difficult. But the negative rhetoric remains of a country closed for business and closed for people. And, more dangerously, moves afoot to make the permanent settlement route much more difficult for those winning permanent jobs. This means compnaies (or universities) will appoint their executives or professors to permanent positions but they may then have to beat a retreat after 5 years! Then it sounds like their dependents will have to speak English. Is the dependent of a UK-high flyer in Tokyo mean to speak japanese?

    And still talk of reducing the cap for highl-skilled Tier 2 professionals further. This is a squeeze on UK comoeteitiveness and a squeeze on UK jobs, as each tier 2 migrant also means direct and indirect jobs for UK resdients. Multinationals will thuis find the UK less attractive as a base, and we will all suffer. The Tories cannot understand Global mobility, they are still trying to get their heads around the labour market fallacy (the nonsense notion one foreigner employed displaces a UK worker!) and they cannot appreciate that both the UK’s USP and our future tradining strenght and positon with the emerging market corridors depends on that openness.

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