We have to wean the country off the drug of immigration
Education and welfare reforms, not imported labour, are the way to solve our mounting debt
Across the street from The Daily Telegraph’s offices lies the new gateway to Britain: Victoria Coach Station. It is there that the tired, the poor, the huddled masses arrive after their 26-hour bus journeys. The ticket from Warsaw costs £75, but once here, they stand a fairly good chance of earning it back within a week. The economy may still be on its uppers, but Britain’s appetite for immigrant workers is undimmed. Every day, some 1,100 arrive. Most not only find jobs, but tend to get paid more for them than the average native – not bad in a country nursing youth unemployment of 20 per cent.
All prime ministers need to say they are concerned about immigration levels. But the truth is that this industrious new class does wonders for the economy – at least superficially. This week, for example, David Cameron was boasting about record employment figures. But he did not quite get round to admitting that three quarters of the rise has been due to the immigration he claims to be stamping down on.
Over the past 15 years, the number of foreign-born workers here has doubled. Britain is now home to more Poles than Gdansk and more Lithuanians than Siauliai, and they have settled with remarkably little resentment or social upheaval. By Continental standards, it’s quite extraordinary, underlining our status as the most tolerant country in the world.
But there is a difference between tolerance and being addicted to immigrant labour, and this week there were signs that the Treasury has succumbed to the latter. Its economic forecasting unit, now called the Office for Budget Responsibility (OBR), is fretting about what the country would look like if those coaches stopped coming, and has drawn up a scary graph to show us. It has two visions of the future. One “low” forecast envisages 140,000 arrivals annually, equivalent to a city the size of Exeter every year for 50 years. With this inflow, the OBR says, the debt pile will be just about manageable. But without immigrants, then we ageing, unskilled, unproductive Brits will be crushed by the debt burden, ending up as the new Greece.
This sums up the lazy thinking that has reigned at HM Treasury since the days of Gordon Brown. Immigration is seen as a wonder drug, with the bright new workers bringing in far more than they take out. Certainly, under Labour, mass immigration made it possible to enlarge the economy without going through the political pain of sorting out the welfare problem. With newcomers accounting for almost all of the increase in employment, at least four million people were left on out-of-work benefits. And while David Cameron talks about curbing immigration, the number of EU workers in Britain has risen by a quarter since he has been Prime Minister.
The OBR quite likes this: it seems to see Britain’s options as immigration or bust. But there are many other ways of reviving an economy, not least improving education. Prof Eric Hanushek, of the Hoover Institution in California, recently asked how much richer Britain would be if its state schools were as good as those of our former colonies. He calculated that if England caught up with Singapore, our growth rate would double, the average Brit would be paid 40 per cent more and our debt pile would terrify no one.
This is the kind of calculation that the Treasury should be doing: working out that the biggest economic opportunity we have is not shale gas, but decent schools. Indeed, there is not much Britain can do to keep net immigration at the OBR’s hoped-for level of 140,000 a year, other than advertising for people to move here. But we can certainly ensure that state schools serve the poor as well as they do the rich. It only takes an American academic to spell this out for us because Whitehall’s economists seem to have no imagination. The sole tools they think we have at our disposal are immigration and debt.
It is also worth asking why these busloads of Poles come in the first place. A large part of the answer is that we’re still paying millions of Britons not to work – an expensive business for a government that has run out of money. Iwona Dilinskas, a Polish recruitment agent, put it very well a few months ago. If she was British, she said, she would “probably not want to work more than 16 hours a week. What for? If I work 16 hours or less, they pay 80 per cent of my rent [as housing benefit]. And all my council tax. I get working tax credit, child tax credit, child benefit. So, to be honest – why work?”
Why indeed? If low-paid Brits work more, even now, they can lose so much in welfare that they are just 15p better off for every extra pound earned. Who would work with an 85 per cent tax rate? Iain Duncan Smith’s universal credit, now being slowly rolled out, would cut this to 65 per cent. It’s still an outrageously high sum, although David Cameron seems to have stopped being outraged by it. This is, in effect, the tax rate on the poor. And it’s perhaps the most widely ignored scandal in the British economy. For as long as this rate is so crushingly high, we’ll have to keep importing workers – with the attendant pressure on school places, the NHS and housing. It is economic madness.
The quality of the debate in Britain is so poor that the situation is almost never seen from the viewpoint of the low-waged. This is not a story about lazy Brits, or porous national borders, but a cruel and purblind welfare system. The OBR should be asking itself: what would happen if the effective tax on the poor was cut to, say, 30 per cent? How many more millions would move from benefits to work? And would we still need immigrants as badly? At every Budget, the Chancellor should mention the effective tax rate on the poor, and say how much he will cut it by. The universal credit system, which should cover everyone on benefits within four years, will provide the means of doing this.
It is hard to argue that mass immigration has undermined Britain’s social fabric. Some worry about a trend suggesting that most children will be born outside of wedlock within a few years – but this has been true, for British women, for some time. When riots strike Stockholm suburbs and Parisian banlieues, it’s usually unemployed immigrants involved, locked out of the jobs market. Yet in Britain, it’s normally the natives. It is a strange advert for our status as a multicultural nation: here, immigrants are working too hard to riot.
But those in favour of immigration – myself included – have to accept that it has diverted attention from deeper problems. When I was a business reporter in the mid-1990s, I covered a bus company so short of drivers that it was advertising in homeless shelters and trying to rehabilitate likely candidates. It was argued then that unless the dependency culture was tackled, the British economy would never grow properly. Mass immigration offered a third way: skilled, cheerful labour without having to fix schools or welfare. It was, and still is, a dangerously tempting offer.
Britain has become the world’s new melting pot. Somewhere along the way, we have ended up with US levels of immigration, with a minimum of strife. The “British dream” that Michael Howard once described so movingly has never been pursued by so many of the world’s workers – but it would be a grave error to rely on them. To advocate mass immigration as a solution to the debt problem, or any other problem, is a counsel of despair. As David Cameron knows, there is so much more he can do with – and for – the population Britain already has.
Fraser Nelson is editor of 'The Spectator’
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