Crazy May’s immigration policy will make us all poorer

Alex Hern covers the claim by 15 leading economists in the FT that the Home Office plans to send home poor migrants will cut 0.29% from growth over five years.

The speech bubble is not actually what a clearly impressed Theresa is saying to Gideon when she hooks up with him - we’ll leave that to your imagination...

A group of leading economists has today written an open letter urging the Home Office to reconsider its decision to send economic migrants who aren’t wealthy enough home after five years.

The Financial Times reports (£) the expected proposal:

…is expected to limit economic migrants from outside the European Union to a five-year stay. After this, those who did not earn a sufficiently high salary would have to return home.

Although the Home Office is yet to make its final policy announcement – one of a range of measures designed to reduce annual net migration to under 100,000 by 2015 – an independent committee that advises ministers on immigration has suggested that the salary threshold should be set between £31,000 and £49,000.

The independent migration advisory committee, which is in charge of the plans, has concluded (£):

a £35,000 minimum salary would reduce the number of non-EU migrants and their dependants granted settlement by two-thirds but would cut 0.29 per cent of the UK’s gross domestic product within five years.

The letter’s signatories, which include economics professors from Oxford, Cambrige, UCL and the LSE, argue (£):

“Had such a policy been in place when some of the signatories to this letter were considering coming to the UK, they might have chosen not to come at all, or would not have been allowed to remain. As economists and researchers, we believe that this would be deeply damaging to the competitiveness of the UK science and research sectors and to the wider economy.”

And referring back to the acknowledgement that such moves would depress growth, the authors conclude (£):

“Three months ago, George Osborne, the UK chancellor of the exchequer, said: “This crisis provides an opportunity to make some difficult trade-offs in favour of growth that might get parked in the ‘too difficult’ box in calmer times.” Here is his chance: by insisting that the Home Office completely rethink these proposals, he and business secretary Vince Cable can, at no fiscal cost, make a clear choice for growth.”

Instead of looking at the merits and downsides of this scheme, and deciding whether the UK can take the hit it will inflict, the government is seemingly set on going ahead with it, and attempting to mitigate the damage it will inevtiably cause.

Nowhere is this clearer than with Eric Pickles’s Curry College:

The communities secretary, Eric Pickles, is to make a UK curry college to teach British workers the secret of perfect pakoras, a showpiece of the government’s integration strategy to be published shortly.

Pickles’s “curry college”, as it is being called, would see the government backing a school to train British people from all backgrounds to become chefs specialising in Indian food as an answer to the crisis in the £3.2bn curry industry triggered by the Home Office’s ban on bringing in chefs from Bangladesh, India and Pakistan.

Unfortunately, training up curry chefs is slightly easier than training up future Nobel Prize winners. If the government decides to stop throw them out, that’ll be a loss for the nation.

See also:

New student visa system turning prospective entrepreneurs away from the UKWill Straw, November 18th 2011

May “looking shoddy”, but not toast yetAlex Hern, November 15th 2011

Kellner: May’s immigration rhetoric “seems to have backfired with public opinion”Shamik Das, November 14th 2011

UK set for among slowest growth in EUWill Straw, November 11th 2011

FT slam dog-whistle May’s “preference for popular pandering over rational policy”Shamik Das, November 8th 2011

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  • Anonymous

    a £35,000 minimum salary would reduce the number of non-EU migrants and their dependants granted settlement by two-thirds but would cut 0.29 per cent of the UK’s gross domestic product within five years.


    So why should people on less that 35K pay money for migrants to come to the UK?

    There is a simple rule that needs to be applied. Migrants to the UK have to pay more tax than the average government spend per citizen. That way they increase GDP rather than decrease it. It’s also simple to administer. Just check the tax forms at the end of the year. Above the threshold, a thank you letter. (would be nice for UK citizens too). Below the threshold, an offer to top it up, or leave the country. That way we know they are a positive benefit.

    What you’re analysis misses out is that lots of migrants submit money overseas. That doesn’t benefit the UK. Low skilled migrants compete for jobs with low skilled benefit claimants resulting in a large negative effect on UK GDP, as well as health and other issues such as drug use, …

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  • Watford_till_i_die_810

    Small beer.

    As ever, economists fail to recognise social cost. 0.29% against a stabilised population? Thank goodness the government, for the moment at least (and, in all probability, it’s merely populist rhetoric), has made a sensible choice.

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