It’s a dangerous myth that mass migration is good for the economy

There is no clearer example of the broken Westminster consensus than the last three decades of immigration policy.

Successive governments have failed to tackle illegal migration. And as I have set out in these pages, the latest attempt – the Safety of Rwanda Act – will shortly join the graveyard of policies that haven’t re-established our southern border.

But as offensive and dangerous as illegal migration is, the bigger scandal is the story of legal migration because the numbers involved are so much greater. Last year, there were about 30,000 illegal small boat arrivals, but this was dwarfed by the 1.2 million people who arrived here perfectly legally.

Legal migration policy has a far bigger impact on the public’s day-to-day lives. As just one example, our housing crisis is increasingly an immigration crisis. As housing secretary, I managed to drag up housing starts to almost a quarter of a million (the highest level since 1986), but we would need to build an impossible 515,000 new homes every year in England alone just to cope with current levels of immigration. This unmatched demand will continue to cause rents to spiral and homeownership rates to dwindle.

For nearly three decades, politicians of all stripes have promised to control and reduce legal migration, only to allow it to balloon to extreme levels. The numbers we have experienced are jaw-dropping. In the 25 years up to Tony Blair’s election, cumulative net migration was 68,000; in the next 25 years to 2022, it was 5.9 million – almost 100 times the previous 25 years.

Until we left the EU and ended free movement, politicians knew full well that they couldn’t keep their promises. Since we took back control of the levers of migration, these were promises that politicians deliberately broke by liberalising our system even further by lowering salary thresholds and creating new routes with lax rules.

Frankly, those decisions were two fingers up to the public who haven’t forgotten or forgiven. A plurality of almost every voting group agree that immigration has been too high over the last 10 years, including 53 per cent of Londoners, 49 per cent of Lib Dems and 43 per cent of 18-24 year olds. Most in the SW1 bubble are blissfully unaware of the deep well of anger from voters that they have, yet again, had their express wishes betrayed.

Those in power who are aware choose to do nothing as they cling to the last remaining argument the pro mass-migration camp can muster: the orthodoxy that immigration is an unalloyed economic good and that our public services would collapse without it. This myth needs debunking, which is why I have partnered with Neil O’Brien – a first-rate minister and former Treasury special advisor – and the Centre for Policy Studies – the pre-eminent centre-Right economic think tank – to confront it head on.

It stands to reason that, if all this migration is rocket fuel for our economy, growth would be booming and wages rising. But since 1998, the first year net migration passed 100,000, GDP per capita growth has averaged 1.2 per cent a year, barely half the rate in the four decades before that. There are other factors at play, but it’s undeniable that mass migration has diluted our capital stock and that far too many of the migrants who have come have been net burdens on the Exchequer over the course of their lifetimes.

Policymakers take the economic contribution of the “average” migrant, but the employment rates, earnings and fiscal impact of different migrant groups vary massively. For instance, our report reveals that a migrant from Poland is 50 per cent more likely to be in work than a migrant from Somalia or Bangladesh. This is cause for concern, not least because, since leaving the EU, we’ve seen migration from Europe radically decrease and an enormous increase in non-EU migration.

Clearly, the post-Brexit liberalisations need to be unwound swiftly. Before I resigned as immigration minister, I managed to secure a reduction in annual arrivals of an estimated 300,000 per year, but I saw that as an important first step, not job done. We need to create a far more restrictive system that establishes the UK as the grammar school of the Western world, focusing on attracting the high skill, high wage migrants who will be net contributors to the economy. If we were to do so, combining the current levels of migration from the EU with our historic, pre-Brexit levels of immigration from outside the EU, this would bring net migration comfortably back into the tens of thousands.

But well-meaning policy isn’t enough. The state has consistently shown itself to be astonishingly bad at forecasting the consequences of its immigration politics. Take the social care route, which the Department for Health and Social Care forecast to have 6,000 main applicants, but ended up with 146,000 and 203,000 dependants last year. Excluding the pandemic, annual net migration has exceeded the forecasts used in OBR projections 93 per cent of the time.

The only way politicians can look voters in the eye and guarantee they can meet their promises to reduce net migration is to introduce a cap which would serve as a democratic lock on numbers. We propose that this cap should be voted on by all MPs in Parliament in a Migration Budget Debate, alongside forecasted impacts of immigration on housing, infrastructure and public services.

The road back to having any credibility on immigration will be long and hard. The Conservative Party must repent, and even then voters would perfectly reasonably decide that all is not forgiven. But regardless of the party-political implications of these reforms, they are so clearly in the national interest that they should be delivered without delay.