If government ministers are going to cite the economy in evidence for their policies I do wish they would think it through a bit more carefully. Here is Stephen Timms, Minister for Employment and Welfare Reform, speaking on Radio 4’s Any Questions. ‘We need immigration into the UK. We've actually done very well - economically we've done very well out of immigration.’
This is a foolish and thoughtless comment for two reasons. It is impossible to say categorically whether the UK has done well or badly out of immigration. And anybody who confuses economic growth with real progress should know better. Let us put aside the matter of whether Timms, in common with politicians from all parties, simply trotted out this line to curry favor with the immigrant population. Let us just consider the economic arguments.
The question of whether we have done well economically out of immigration is impossible to answer for the simple reason that we have no way of knowing how the economy would have done without it.
You could argue that Britain would have done very well anyway over the last thirty years. This has been a period when global trade has flourished and several new overseas economies have joined the party. The British are good at international trade. We have the benefit of historical connections, the English language and a certain self-confidence in our dealings overseas. They are good at the international languages of finance. And the UK is a hugely magnetic tourist destination, especially for countries whose history goes back for just a century or two.
So the UK economy might have done rather well anyway. But the point is that we will never know. The second economic argument presented in favor of immigration was voiced on the same program by Lib Dem MP Lembit Opik: ‘I think on balance a lot of the jobs that they do we wouldn't get done if those people weren't here.’
There is this notion that if we did not have low-wage immigrant labor to sweep the streets, nurse our hospital patients and keep the loos clean then these jobs simply would not get done. Of course if we did not have so many people in this country our hospitals would not be so full and our loos would not get so dirty. But that is not the point. The point is that the sort of free market economy that we have in this country acts as a clearing system, constantly matching the supply of labor with jobs that need to be done through the pricing mechanism.
This is just basic economic theory, and politicians should know it. Maybe if we had fewer people in the country the wages for these menial jobs would have to be higher. Is that a bad thing? But ask yourself this. If we need cheap imported labor to nurse the sick, how come we somehow managed to provide an adequate nursing service before all the immigrants arrived? And if you think that the loos will only be cleaned if there is cheap and plentiful labor to do it, then how do you explain the fact that in high-cost, low unemployment Switzerland the loos are always spotless, whereas if you go to a public toilet in a remote part of China, where there is no shortage of cheap labor, you barely survive without a gas mask. Believe me, I know!
GDP growth isn’t the be all and end all
Immigration is swelling the size of the UK population. That much is undeniable. And yes, it contributes to economic growth, as measured by our Gross Domestic Product. If you were to take two hundred thousand people from overseas and put them in a self contained city in the middle of the Yorkshire moors, with the instruction that they could trade with each other but have no contact at all with the rest of the country, they would add to GDP. Foolish politicians would claim that this was boosting economic growth. But this new city would not raise the living standards of others or the average quality of life in the UK. In fact it would simply deprive countryside lovers of an area of natural beauty.
This brings me conveniently to the confusion of economic growth with real progress and the quality of life. The debate over the expansion of Heathrow is a case in point. One reason that we need more airport capacity is because the UK population is being boosted by immigrants – who, by the way, will have a particular predisposition for air travel as they seek to keep in touch with their home land. The case for increasing Heathrow’s capacity is exclusively economic. Arguing in The Times last week that expansion of Heathrow is ‘the market’s choice,’ BA chief executive Willie Walsh said that ‘the CBI, The City, London First and other business groups have all expressed this view.’
But what about non-business groups? What about the rest of us who are under the flight path or whose journey every evening is blighted by the congestion that already exists west of London? How are these reductions in our quality of life measured by economists? They are not.
What our elected politicians should be doing is trying to improve the quality of life for the people who have voted them into office. If they actually want to turn this country into an increasingly overcrowded and dysfunctional bolt-hole for people from other countries, then they should come right out and say so. And they should stop making fatuous economic arguments to support a policy with which the majority of UK citizens disagree.
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