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IEA releases report on the costs & consequences of restrictions on migration

Political posturing, anti-immigration campaigns and the media have, for too long, perpetuated the myth that immigration is inherently bad for the country. Based on false claims and flawed theories, the beliefs that migrants ‘take away local jobs’, are ‘a cost to our economy’ and a ‘drain on our welfare system’ are commonly held, but fundamentally wrong.

A new report from the IEA calls on the government to scrap the arbitrary migration target and maintain bilateral free movement with the EEA block, whatever our future relations with the EU. Evidence shows that over the years freedom of movement has been hugely beneficial for Britain both economically and culturally. Migrants’ diverse skills increase productivity; they are willing to do low-skilled and unpopular, but necessary jobs; and their contributions to the public purse widens the tax base relieving debt burdens by as much as £2,000 per person.

With Brexit negotiations in full-flow, the report examines both practical and more radical policies. In the short term, a system similar to Sweden’s should be considered where companies are granted visas to employ migrants for those with a job offer, irrespective of skill level. Full bilateral free movement with the EEA block should be maintained.

Recommendations

We need a more open, better regulated, simpler and non-discriminatory migration policy. While a unilaterally open migration system is ultimately the best policy economically, it may not be politically possible straight away. In the meantime the government should:

• Scrap the arbitrary migration target.
• Scrap bureaucratic practices like visa grants and move to a skills-neutral, work-permit system.
• Automatically grant student visas.
• Maintain bilateral free movement with the EEA block.
• Look to establish two-way free-movement deals with other countries in time that will discourage protectionist domestic instincts and raise the political cost of erecting future trade barriers.
• For other countries, establish a similar system to that of Sweden where companies are granted visas to employ migrants on a renewable two-year visa that is skills-neutral.

Benefits of immigration

• Migrants pay taxes and are net contributors to public finances. Their taxes paid can help to service and repay government debts providing a big fiscal boost, spreading the burden over a wider tax base. Net public debt in the UK is around £20,000 per person. If the population increased by 10 per cent by 2027, this would reduce the debt burden by about £2,000 per person.
• Migrants complement local workers’ efforts raising productivity and wages and do the jobs locals can’t or won’t do.
• Their diversity in skills, experience and ideas boost entrepreneurship, complement ever-changing local resources and result in greater economic dynamism.
• Their willingness to move helps the economy to adapt to change.

Common misconceptions concerning immigration

• The UK is not experiencing ‘mass immigration’ – relative to the UK population of 65 million, the net migration rate was 0.51 per cent in 2015.
• There is no evidence that migrants deprive British workers of jobs – they are different from existing workers and therefore do not compete directly with them for employment.
• It is a fallacy that there is a fixed number of jobs – migrants can create jobs as well as take themjust like any other UK citizen.
• Immigration cannot be blamed for straining public services. Migrants more than pay their way to use public services and disproportionately provide public services, particularly in the healthcare sector. The real problem is an inefficient allocation of resources.
• There is no evidence that immigrants are ‘benefit tourists’ – they are typically educated abroad, young, healthy, employed and most likely will leave before claiming a pension.
• The UK is not ‘full’: three quarters of the country is agricultural land.

Commenting on the report, Mark Littlewood, Director General at the Institute of Economic Affairs said:

“Politicians should have the courage to stop fighting a counterproductive war against migration and instead treat the ability to move to the UK for work as the valuable growth-enhancing freedom that it is. 

“A liberal migration policy would bring with it significant economic benefits, but currently misguided negative perceptions of recent migrants and our overly restrictive policy for non-EEA countries damages our prosperity.”

Notes to editors:

For media enquiries please contact Stephanie Lis, Director of Communications: 020 7799 8909 or Nerissa Chesterfield, Communications Officer: 020 7799 8920 or 07791 390 268.

The IEA’s report Free to Move: The costs and consequences of restrictions on migration can be downloaded here.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.