AS is becoming increasingly apparent, the number of illegal immigrants entering Britain is a drop in the ocean compared with their legal counterparts.
According to ONS data from the 2021 census, more than 15 per cent of the population were not born in the UK, a proportion which has doubled in one decade. Of course the distribution varies across the UK with some boroughs now having more than 50 per cent immigrant populations, and many having near zero.
Most immigrants are employed. The male employment rate for immigrants is higher than for the UK-born (83 per cent v 78 per cent). Female immigrant employment is a little lower at 69 per cent v 72 per cent. This means that legal immigrants are paying their way and filling gaps in the labour market which would remain unfilled. That labour contributes to growth and the delivery of services, although the benefits of ‘trickle-down’ (such as they are) may be lower, as I explained here.
The chart below from the Migration Observatory at Oxford University may surprise you.
It shows that only 12 per cent of immigrant workers are in low-skilled jobs, compared with 9 per cent of UK-born workers. A higher proportion of immigrants work in high-skilled jobs than the proportion of UK born workers. The reality is that we have immigration because there is unsatisfied employment demand across the job spectrum that UK labour can’t (or won’t) fill. Unless that can be resolved, stopping or lowering legal migration will stunt the economy and bring some sectors, notably the NHS and agriculture, to their knees (they may already be there).
How does one get more UK-born into work? Reducing the 2.5million who are long-term sick would be a start. Revisiting the number of university enrolments by subject and comparing it with demand might also be helpful. (It is a fact seldom acknowledged that there is a limit to the societal benefit of studying Jane Austen.) The chart below from Statistica is for UK university enrolments in 2020/21.
That’s an awful lot of people reading theories of business and management, as opposed to getting real experience in the workplace. And 190,000 more people to compete for a Bafta.
The third source of more UK labour could come from raising the pensions age further, and more quickly. As the head of the Office for Budget Responsibility (OBR), Richard Hughes, pointed out in a recent Centre for Policy Analysis podcast on the Budget (minute 51) no government can do much to trigger growth, let alone quickly. The capital stock of the UK is about £4trillion, so even a negligible 1 per cent increase would cost an unaffordable £40billion. It can upskill the workforce by increasing the number of undergraduates taking economically useful degrees, although that’s slow – 500,000 graduates per year in a labour pool of 30million isn’t much.
Increasing the retirement age has the side benefit of increasing the tax take and reducing the welfare spend. Unfortunately it is politically bold to the point of suicidal. That doesn’t mean that it is not necessary or achievable.
Finally it could reduce public-sector employment, thereby making more workers available to the wealth-creating private sector. The public-sector labour force growth has surged since 2019 – reversing this would free some 300,000 workers at a stroke. A fair proportion of public-sector employees are on 35-hour weeks. Switching them to the (minimum) 40 hours per week of the private sector would deliver an immediate 15 per cent productivity increase.
In short, the growth that we need can be delivered only through more people generating more wealth. The UK’s current workforce is too small and possibly ill-configured. Immigration can, and is, filling the gap. If that is culturally unsustainable (as many would argue it is) and if the immigration system is a mess (which even the Home Secretary knows to be the case) then we have to adjust the immigration system and rules.
Having left the EU, Westminster has complete freedom to do that. It needs the honesty to initiate a sensible public discussion, the wisdom to make the agreed adjustments and the willpower to ensure that Whitehall makes it work. I can see no evidence of it meeting any of those requirements.