Conservative MPs are demanding a cap on immigration from EU countries as part of whatever renegotiation of membership the government manages after the next election. David Cameron is making the sort of noises that will appease his backbenchers though I wonder if he really believes what he’s saying.
The Financial Times reckons he’s gotten himself into a right muddle:
The prime minister has repeatedly declared that the UK is in a global economic race and must boost its competitiveness if it is to emerge victorious from this contest. At the same time, Mr Cameron has pledged to reduce net migration: the difference between the numbers entering and leaving the UK. He would like to see it return “to the levels of 1990s – tens of thousands a year, not hundreds of thousands”.
A year before the general election, the flaw in this approach is evident. The prime minister wants Britain to be open for business but also be closed to immigrants. This is a difficult stance for any leader operating in a global economy – let alone one in a country facing skill shortages who advocates the need for competitiveness at all costs.
A few weeks ago, when the employment statistics came out, a succession of Conservative MPs stood up at Prime Minister’s Questions and, repeating a rote-learned figure, boasted about the number of jobs created since they came into office.
Trouble is, though, of the 1.6 million increase in employment since the first quarter of 2010, more than half of it has come from workers born outside the UK. (See table EMP06 here.)
Now it’s true that the rise in employment among non UK born workers goes back much further than the last four years. As Michael O’Connor said a few weeks ago, much of the net increase in employment over the last decade has come from foreign-born workers.
Employment among the UK born seems to have peaked sometime around the middle of 2005 and has only recently started to recover. Another of those trends we associate with the recession but which actually started well before it.
Look into the figures a bit more closely though, as Michael has done, and an even more interesting picture emerges.
Close to half the increase in employment since David Cameron took office has come from people who have arrived during the Coalition era. When it comes to full-time employee jobs, the figure is even higher. Those who have come to the UK since 2010 account for around 75 percent of the rise.
Many of the migrants who are fuelling the job growth are very recent arrivals.
Now, of course, some will say all this proves we need a cap on immigration and that migrants are coming in and taking jobs that would otherwise be done by British people. It’s difficult to say what might have happened if we had allowed fewer migrants into the country but the research suggests that, even where immigration does have an impact on the employment of the existing population, it is usually small and temporary. As the economy recovered, some new jobs would have been created if immigration had been lower but it’s unlikely that the increase would have been as high. Without migration, especially from the EU, many of these jobs would probably not have been created in the first place.
All of which suggests that the rising number of immigrants in the workforce is simply another indicator of the changing character of our economy. Closing the door might, as the FT suggests, choke off the flow of talent just when we need it. That said, these figures are a bit surprising (well they are to me anyway) so I’d be interested to hear from anyone who can explain why recent jobs growth has been so migration dependent.
Next week, when the July employment figures are released, loyal government backbenchers will probably stand up again in the commons and repeat the number of jobs created since 2010. We may well see some of the same MPs demanding restrictions on immigration a few weeks later. Bragging about the increase in jobs but saying you want to lock out a lot of the people working in them is hardly fair though. Much of the Coalition’s employment increase has come, and continues to come, from foreigners who have moved here to work. If there really is a British jobs miracle, it’s a migrants’ jobs miracle too.
Couple of things to add.
Michael has also looked at where the post-2010 arrivals have come from.
Jonathan Portes points out that the migrants’ share of jobs has kept pace with their share of the working population for the past few decades.
It’s also worth remembering that there are lots of British people working elsewhere in the EU too. The traffic isn’t just one way. As Bill said in the comments thread, globalisation is not a la carte. You can’t pick the bits you like and reject all the rest.
Update 2: I had no idea when I posted this that the Migration Advisory Committee was just about to publish a report on migration and skills. Will comment once I’ve had time to read it.