The Immigration Situation

The emerging consensus of an immigration ‘crisis’ has no basis in fact

Across the pond, Donald Trump’s promise to build a ‘big, beautiful, powerful wall’ on the USA’s southern border makes our domestic debate over immigration look a little dull in comparison. Nonetheless, out of all the aspects of EU membership up for public debate in the referendum run-up, immigration is the most divisive, provoking the most heated arguments.

Two principal questions over immigration are relevant to the EU referendum: will the UK have full border control if it leaves the EU, and is EU immigration good or bad for the UK on the whole? Straight facts don’t provide us with a complete answer to either question, but they can certainly clarify the discussion.

It is roughly correct to claim that the UK cannot control its borders as a member of the EU. It has more control than those countries in the Schengen Area (who share a common visa policy), but free movement of workers is a fundamental principle of the single market. The UK is therefore obliged to accept any EU citizens who come for work, or who are self-sufficient, and have health insurance.

Leaving the EU relieves the UK of this obligation, meaning it could theoretically, for example, restrict the number of low-skilled immigrants entering the country. However, any new trade deals which the UK arranges with the EU and elsewhere may require it to continue to accept large numbers of all kinds of workers. Eurosceptics are convinced that Britain will negotiate a ‘bespoke’ deal for itself with the EU, retaining full border control, but reality may be harsher.

Even without controls imposed on Britain’s policy, an independent UK may still struggle to control immigration; low-skilled EU workers may be replaced with non-EU workers. Even where the UK’s hands are not tied, controlling the flow of migrants is difficult, demonstrated by the government’s failure to bring non-EU net migration below 100,000 (its target for TOTAL net migration). A Brexit will likely give the government more control, but not total control.

Whether European immigration is good or bad for Britain is impossible to definitively answer since many of its consequences are immeasurable and subjective, for example migrants’ contributions to culture and society. We can however get an idea of how it affects our economy.

The impact of immigration as a whole on public finances is low (somewhere around 1%), but some research estimates that EU immigrants specifically contribute £1.34 to the public purse for every £1 they take in benefits. The full economic impact of EU immigration goes beyond taxes and benefits. European workers contribute labour and skills, and spend their wages on British goods and services, but they also increase demand on public services, put upward pressure on house prices and potentially lower wages by increasing the labour supply.

Research gives us figures for some of these factors. Immigration from EU member states has not been found to have a significant impact on unemployment, and its effects on wages have been shown to be small (affecting mostly low-skilled workers). Evidence on house prices is mixed; Home Secretary Theresa May’s claim that immigration causes house prices to be 10% higher over a 20 year period is backed by a House of Lords report, but other research finds a low, or even negative, effect on house prices. A Bank of England assessment of A8 immigrants in Britain gives a broader view of EU immigration’s impact. This report found the influx of A8 workers after 2004 increased domestic demand, which is good for UK businesses, but increased domestic supply by even more, lowering inflationary pressure. These A8 countries are eight of the most recent to join the EU, traditionally claimed to be those whose membership puts a burden on the UK.

Immigration from the EU does have undesirable consequences. Lower wages for low skilled workers, for example, should not just be written off. The facts though do not support the current immigration zeitgeist, which requires mainstream politicians to agree that net migration must be drastically lowered. EU migration has mixed consequences for the UK at worst — not bad for one of the main ‘costs’ of EU membership.