Can the Government’s new immigration policy work?

Arguments about immigration have featured very heavily in the last ten years and more of UK politics.

The announcement of a points-based migration system with a minimum £25,600 salary level for visas shifts the system towards a structure that the Conservatives have long wanted. The immigration debate has been and remains divisive but, there is the small matter of whether this new policy can work. That rather depends on how Government, business and individuals respond once the dust has settled.

Industry groups from hospitality, to retail, to farming and employee groups such as those representing care workers have come out in strong opposition to the plans. There is little doubt that the scale of the change and its suddenness risk very significant negative impacts.

Businesses and public services could struggle to fill vacancies, seasonal businesses could especially suffer, and costs could escalate impacting business and public service viability. The UK could pull up the drawbridge to a range of talent that could be the academic, entrepreneurial, and societal leaders of the future. How many brilliant people in culture, business, academia, media, public services, community action and, yes, politics would not be here now had these restrictions been in place?

The Government has pursued a one-size fits all approach despite the very different needs and values of a Scotland or a London where there is greater acceptance of migration. Freedom of movement was acceptable in many places and very much not in others. We've now flipped; a restrictive migration policy will be imposed on many places that don't want it. Surely there is a more dextrous policy of devolving migration powers to authorities such as the Scottish Parliament and GLA? Work permits would only be valid in those areas and there could even be a residency requirement. We are slightly stuck in either-or policy land and an abrupt change is now scheduled in just a few months.

To say that the solution lies in mass automation, mass activation of non-working adults, and widespread reskilling on the timeframes we are talking about is deeply problematic. Nonetheless, there is nothing particularly unusual in the Government’s approach in principle. Most non-EU advanced nations pursue a broadly similar approach whether they call it a points-based system or not. There could be upsides over time despite short-term costs but to secure them requires a huge shift in mindset, policy, and resources. 

The framing of the new policy came across very much as ‘employers must adapt’ but it is incumbent on Government to be more imaginative than that especially given the tight timescales. There are, however, a set of appealing adaptation policies, albeit ones that will take time to bed down.

As part of its industrial strategy the Government has set four grand challenges: ageing, mobility, green tech, and AI. It could set a fifth grand challenge: technological adaptation in industries with high concentration of migrant labour (one of these is of course the care sector). Accompanying this grand challenge would come a massive investment in upskilling. Free tuition in targeted sectors could be matched by ideas such as our Basic Opportunity Fund which would give workers a subsistence to shift careers. 

RSA research has shown that the UK has been relatively poor at investing in automation. We have less than half the integration of industrial robots into workplaces than US and a quarter of Japan’s. Investment is stagnant. Of course, supply of low-cost labour may be one of the drivers in this regard (though that hasn’t held back the US in terms of technological investment suggesting cultures, institutions and mindsets matter in this regard as much as incentives).

The limitations on lower paid migrants may spur financial institutions to question business models reliant on concentrations of migrant labour. Such business models are now inherently risky. So businesses will have to shift their own behaviours and think about new applications of technology, up and re-skilling and new business models.

The public sector is the dominant player in a number of heavily impacted sectors. Governments have failed to provide necessary support for growing social care needs and, one knock-on effect, has been to leave the issue of low pay and low status in the care sector, despite the profound human skill of care workers, largely unaddressed. If workers in the sector are to gain in the context of more limited migration then these issues will need to be confronted: better valued work for care workers should now be very much on the agenda.

None of these changes are particularly concerning. In fact, there are some positive upsides from an inclusive economy perspective. But the costs are short-term and the upsides longer term. And that is the main problem here, the proposed transition is too sudden. Businesses, individuals and public services need more time to adapt.

A transition date by the end of the Parliament and greater devolution of migration powers combined with wider policy shifts with resources behind them, might enable the Government to achieve its objectives in a more sustainable way. In the absence of this approach, there will be a need for a whole variety of tactical patches and temporary exemptions which, if adopted, will undermine the stated goals of the policy. And if they are not adopted, there will be enormous harm to business and public services.

Ultimately, the policies outlined here don't require a more restrictive immigration policy to improve productivity and cultivate a more inclusive economy. A restrictive immigration policy without them, however, courts major economic and social distress.