The new immigration proposals are economic and political nonsense

We have become illiberal and lowered quotas at a time when we have an acute shortage of labour.” So observed the cabinet minister Richard Crossman in his diaries in 1966, after the Labour government, fearful of public hostility, slashed Commonwealth immigration into Britain.

The conflict between those who see immigration as an economic necessity and those who fear its political consequences has long shaped immigration debate. One consequence has been incoherent policy. That’s as true of the home secretary Sajid Javid’s white paper on immigration published last week as it was in Crossman’s day.

The white paper has two fundamental aims: to end freedom of movement and to prioritise skilled migration. What it lacks is what has often been missing from the immigration debate: a nuanced understanding of the economic and political considerations.

Some commentators see immigration as a good because it boosts economic growth. Others insist that what business leaders really want is to use immigration to lower wages. Both claims are true.

Most studies show immigration boosts GDP. There is little evidence that it increases unemployment or drives down wages. Immigration can affect the wages of those at the bottom of the ladder. But the impact is tiny and more than compensated for by the benefits, for instance, taxes from migrants helping to protect public services.

Yet, while immigration might be economically beneficial, it is also the case that businesses often try to exploit migrants as cheap labour and as a means of reducing workers’ bargaining power. This can be as crude as hiring migrants below accepted rates or as subtle as the call in Germany to suspend the minimum wage to help asylum seekers “integrate”.

The response should not be to see migrants as enemies but to organise with them against attempts to lower living standards. From the 1960s onwards, migrant workers have been central to the trade union movement in Britain. Today unions such as the IWGB are playing an increasingly important role in protecting the rights and living standards of all workers, particularly within the gig economy. In such organisations is embodied the link between defending migrants’ rights and workers’ rights.

Immigration has become the most potent symbol of a world out of control and of ordinary people having little say in policies that affect their lives. Economic and social changes – the decline of manufacturing industry, the imposition of austerity, the growth of inequality – have combined with political shifts, such as the erosion of trade union power and the transformation of the Labour party, to make many feel economically marginalised and politically abandoned.

The white paper estimates that it will lower GDP by ‘between 0.4% and 0.9% ’ by 2025
Immigration has played almost no part in fostering these changes. It has, however, come to be the means through which many perceive the changes. Hostility towards migrants only makes it more difficult to build the kinds of solidarity movements that can truly “take back control”.

Against this background, Javid’s white paper gives us the worst of all worlds. Its aim to restrict low-skilled immigration will have a deleterious economic impact; the white paper estimates that it will lower GDP by between 0.4% and 0.9% by 2025.

The white paper does not mention the Conservative manifesto commitment to reduce net immigration to “tens of thousands”. It proposes instead a new arbitrary line – a minimum annual salary to define a “skilled worker”. It floats the idea of a £30,000 threshold, first suggested in a Migration Advisory Committee report.

The divide between “skilled” and “unskilled” work is hazy. Many skilled jobs pay less than the threshold. The salary floor is set more by the desire to be seen controlling immigration than by the need to make policy coherent.

For unskilled workers, the white paper proposes one-year, non-renewable work visas. This will increase the “churn” of foreign workers and may deepen hostility towards them. It will certainly make it more difficult to unionise or build the kinds of solidarity that come with living in a country over time. It provides not protection for workers but a gift to exploitative businesses.

Nor will the proposals in the white paper reduce political fears about immigration. Those fears have been generated not by immigration itself but by wider economic and social changes that have created a sense of dispossession and voicelessness. Until we address those wider issues – from rising inequality to the erosion of working-class communities to a system in which ordinary people’s voices seem unheard – it will make little difference at what level immigration is set – the world will continue to feel out of control.