Our immigration system is making Britain a worse country to live in

There's a reason people keep voting for numbers to come down

For 13 years and counting, the British electorate has voted at every opportunity given to it for immigration to come down. Politicians have solemnly nodded, pledged to deliver reductions, and proceeded to design a system which saw 745,000 people added to the UK’s population last year.

The question of “why” this happened can wait for another time. Today’s point is a much simpler one: there is no political consent for this, the economic benefits are negligible, the cultural downsides are not, and it is making Britain a worse country to live in.

Arguments in favour of immigration on this scale tend to run along predictable lines. Immigration is a boon that alleviates labour shortages, and will make us more prosperous. Diversity is a uniform good, which never has any downsides. And anyway, attempting to bring numbers down could damage “Britain’s international reputation”.

The issue voters take with this chain of reasoning is that real wages are still below their level in 2008, growth in total national output is anaemic, housing is becoming increasingly unaffordable, output per person is falling, and we’ve just seen several weeks of ethnic agitation based on a war happening half the world away. If this is what it’s like to live in a prosperous and diverse society, it’s no wonder Britain wants out.

It’s not that hard to see the appeal of immigration as a fix for growth; if you add more people to an economy, you will inevitably increase output. And if you add the right ones — tech founders, doctors, bankers, scientists — you can make it more productive, too, without having to spend a penny on their training. The government gets tax revenue, the public gets richer, and everyone is happier.

This is not the system Britain has ended up with. Immigration isn’t high because we’re bringing in the world’s best talent; instead, we’re attempting to patch labour shortages for various low-skilled jobs, and offering generous terms for family members.

Of the 1.2 million people who came to Britain in the year to June 2023, only 321,000 were offered work visas (60,000 of which were low-skilled care-home workers). The numbers were made up by their 218,000 dependants, the 500,000 incoming students (and their 154,000 dependants), and the 146,000 people fleeing Hong Kong and Ukraine.

Whatever you think about the reasons for this mixture, it is not one that looks calculated to siphon off the very best the world has to offer, or that is ruthlessly calculated at bringing in only those who make a large positive contribution to the economy.

The numbers bear this pessimism out. Studies prior to Brexit generally found that the contribution of non-EU migrants (who had to meet more stringent immigration criteria) was pretty strongly negative over their lifecycle; they put in more than they took out when they were young and healthy, then retired, got their pension and healthcare, and racked up a bill. Many will end up in social housing, subsidised by the taxpayer; despite being theoretically selected for their earning potential, 18% of British residents born outside of the EU live in social housing, a higher proportion than the 16% of those born in the UK.

The total size of this cost varies by estimate. Oxford Economics put it at £9 billion in 2016/17 (EU migrants made a positive contribution of £4.7 billion). Dustmann and Frattini, looking at the period 1995-2011, estimated EU migrants had paid in £4.4 billion, while non-EU migrants had taken out £118 billion (or about 17 per cent of the deficit over that period).

Given that the primary effect of Brexit has been to significantly relax income-related restrictions on non-EU migration, with a swathe of roles put onto the shortage occupation list, it’s plausible that the effect will be even more strongly negative under the current system for post-2020 cohorts. But perhaps the most important point is that these effects are small, in the order of + or - 1 per cent of GDP.

There’s more to economic life than the state, no matter how much the Conservative party seems to think otherwise, and it’s true that by adding more labour to the country we’ve seen an increase in total input, keeping the dreaded r-word at bay. GDP per capita, on the other hand, is drifting downwards. This doesn’t mean that other people in Britain are getting poorer. It’s entirely consistent with people getting richer; if you add lots of low-skilled people to an economy to work in low-paid roles, they provide cheap services to the people already living here.

But there are downsides, too. The poorer your population is, the harder it is to sustain high quality public goods and services, or maintain a welfare state of a given generosity. Britain has a well-documented problem with building infrastructure and homes. It’s been 32 years since we built a major reservoir, while the power grid is struggling to keep pace with existing demand and the switch to a net zero system of generation. Building new train lines seems to be right out, while house prices are rising relentlessly.

Immigration isn’t to blame for our failure to build, but it isn’t making the problem better. The thinner we stretch our stock of infrastructure, the more crowded and congested it becomes, the less useful it is to its existing users. Similarly, the more people we bring in with a heavily constrained housing stock, the more we end up with desperate measures like subdividing houses into flats as a substitute for building enough houses in the first place, while prices continue to rise.

None of this is good for the people already here, and perhaps more problematic are the cultural and political consequences. Anyone who has paid any attention to the news over the last month will have noticed that Britain is not exactly united behind a common culture right now. The long term effects of immigration without adequate integration (forget assimilation) appear to have been the creation of flourishing minority cultures deeply at odds with the host population.

This isn’t totally surprising — there’s a long literature on the corrosive effect of diversity on social capital. But it also requires management. In the UK, this seems to mean effectively erecting a two tier legal system with significant restrictions on freedom of speech in order to get things to work.

There is a strain of Libertarian thought which broadly welcomes these effects as a correction mechanism for the potential fiscal costs of migration. The theory, such as it is, is that the more diverse a country becomes, the more fragmented it is, and therefore the less likely people are to support welfare payments and taxes.

For everyone else, however, it seems fairly likely that these cultural effects are negative. One estimate of the effect of immigration on local (not national) house prices is that an inflow of immigrants equal to about 1% of the local population causes roughly 0.8% of the local population to leave, with house prices dropping 1.6%. People talk a good game about loving their fellow man, but that doesn’t mean they want to live next door to them.

As Garrett Jones has noted, by shaping demographics immigration shapes the future of your country. We shouldn’t be trying to fill in a shortage of care workers, but “inviting people whose children and grandchildren are likely, on average, to become great successes”. This is not what we are currently doing. We aren’t even inviting people who will necessarily pay for themselves. And the cultural consequences do not seem to be consistent with a prosperous, stable society — the conditions that allow immigration at lower levels to work in the first place.

If the economic benefits are small, the cultural costs are tangible, and the population has consistently voted against it, it’s probably time to draw the obvious conclusion: Britain’s immigration system is making it a worse country to live in.