The Immigration Challenge: long-term effects of our immigration policy

Boarding Plane

Researchers demonstrate the negative outcome of immigration reforms launched by UK government's ruling coalition in the longer term.

The 2010 election of the Liberal/Democrats coalition in the UK, led by David Cameron, has taken measures to counter the high flux of European immigrants in the country. The result has been a halving of the migrants population, and the goal is much more ambitious than that. The victory of the UKIP in the last May’s European Parliamentary elections is reflective of the prevailing common opinion that economic problems are caused by the high flux of immigrants, mainly from the EU, but not only.

As for those who do live in the country, this restrictive approach translates in reforms aiming at curbing benefits. According to the European Commission, the amount of Europeans looking for a job in the UK –today 600.000— had a 73% increase with respect to last year, 38.000 people claiming benefits.

The result is a trend towards conservatism which risks to bring about serious negative long-term consequences for the UK economy. At the moment, for instance, the number of unemployed British people living in the UK equals 12 million. Unemployment, however, is only one aspect. Statistics also highlight the shortcomings in other sectors, such as housing.

Politically, this trend reflects an anti-European approach. Experts have pointed out the importance –although not absolutism— of the principle of free movement, also for a opting-in/out European state like the UK.

The problem lies in the idea, ranked in the majority of the current public opinion, that economic problems are caused by the high flux of immigrants –from the EU, but not only.

There is the risk that the economic crisis which affected all European countries—and, more generally, the whole capitalistic system— might cause tendencies towards closure which could in turn decrease economic performance of involved countries. By hampering the flow of talents from Europe, in the long-term the UK economy risks losing its reputation of being a country attiring pools of talents within its territory.

It is thus important to provide evidence against such an argument in order to convince the public opinion about the need to change their views.

By examining immigrants’ net fiscal impact, a study conducted by Vox in November 2013 shows the positive contribute immigrants have been bringing about in the country, and an even more recent survey provides evidence of the consensus among scholars regarding the negativity of the most recent immigration policies undertaken by Cameron. In line with this thinking, the National Institute of Economic and Social Research (NIESR) has built a scenario projecting the results of the progressive reduction of net migration. Findings suggest a strongly negative outcome: by 2060, scholars expect a 11% GDP decrease, as tax contributions of immigrants would be limited; a 1.4% increase of public expenditure, given the majority of elderly population in proportion to the younger one; consequent higher taxation will result in lower wages.

One solution to the problem would be better integration of immigrants among communities. In a nutshell, a change of mind-set. It would for instance be useful to somehow increase population homogeneity in different neighbourhoods, as opposition to immigrants’ presence is proven to be stronger in those areas where there is a lower presence of non-British residents. The solutions can go in many different directions, and this is what the ruling coalition should focus on for the sustainability of its reforms.