There is now a clear consensus that immigration is much too high and not tackling it amounts to political suicide. That requires robust measures on both illegal and legal migration.
When it comes to the former, there are plenty of comprehensive ad complete solutions already out there. To be clear there is nothing legally stopping Parliament from enacting the necessary measures, and an overwhelming majority want to it do so. The only roadblock is political will.
However, most immigration is legal. There is a new acceptance that mass migration is not good for the economy, and certainly not good for prosperity. My own research found that the past two decades of mass migration has cost Britain’s poorest households roughly £300 a week; while all the benefits have gone to Britain’s richest corporations and individuals. This is effectively a battery farm economic model. Ramming more chickens into a barn and giving them less while taxing them more looks great for the farmer, but not the chickens.
Sunak and Cleverly’s new measures are to be welcomed, but they are only a drop in the ocean. Even with them, mass migration will still run at nearly a million a year and net migration at twice the pre-Brexit levels. The British public will not wear that.
Fortunately there are more popular ways to fix the system and bring in billions for public services. These should be our top three.
Firstly, Index migration fees and salary thresholds to GDP per capita or the median wage. Part of the reason migration has got out of hand and the contribution of migrants has fallen, is that migrants have been experiencing the inverse of fiscal drag. While British taxpayers have seen their taxes skyrocket as inflation has gone up; immigrants have seen their costs and thresholds cheapen thanks to inflation. This applies across the board: to visa costs, citizenship fees, salary thresholds, NHS surcharges and even non-dom fees. To give an example of how egregious this is, the basic non-dom fee was set at £30,000 when it was introduced in 2008, and is still £30,000. If it had risen with inflation, it would be £46700! That is a complete slap in the face for British taxpayers.
To fix this, all migrant charges and thresholds need to be referenced to per capita GDP or the median wage (currently c. £35000) so they rise gradually as the economy grows.
We could set a new salary threshold at 1.5x the median wage immediately. 1.5x the median wage is roughly £53k. The tax and national insurance on £53k is roughly £13k; and £13k is roughly UK public spending per capita. Thus, a migrant on this salary or higher will be paying at least their fair share of public spending. If they want to bring one dependent they would need a salary of at least 2.5x the median wage, two dependents would require 3.5x median wage, etc. This simple rule of thumb works beautifully to ensure all new arrivals are covering their share of public spending, with incidental taxes paid (e.g. VAT) an extra bonus.
Secondly, add a local authority surcharge to all dependent and student visas.
After Brexit, the plan was to focus immigration on high-value skilled workers. Yet the opposite has happened. The fastest growing segments are direct asylum, students and dependents. These now make up the bulk of the million-plus annual arrivals. Unfortunately, these groups almost never pay any council tax.
It is no wonder that cash-strapped local authorities are going bust every week. We have had nearly four million arrivals over three years, of which around 2.5 million are exempt from council tax! One of the core rationales for immigration is to solve our elderly and social care crises. Letting in nearly a million people a year who pay nothing to local authorities, while consuming vital services is a catastrophe for social care.
The explosion in overseas students is particularly troubling. Foreign students do not have to pay council tax, and nor do their partners or dependents. Worse still, their universities do not pay local taxes, such as Business rates.
In other words, not only have students been bringing over entire families, they have not been paying anything toward the local services they consume. Many foreign students are incredibly wealthy. Given how stretched our local authorities are, this is an absolute scandal.
It is no surprise that Nottingham City Council is the latest to go bust. It’s a classic university town where its major universities and colleges have been expanding at an eye-popping rate. Housing and local services have been especially squeezed. No wonder they cannot shoulder the extra burden with zero added contribution.
Unsurprisingly, hostility between universities and locals (town and gown) is pushing social cohesion to breaking point. As industrial-scale universities consume ever more local services, infrastructure and housing, they are squeezing out locals. Yet the students and universities themselves are neither integrating nor putting anything back.
It is not just students. Council tax exemptions for those on dependent visas are particularly unfair. Why is it that a British spouse or partner who stays home to look after the household has to pay council tax, while a partner on a visa doing exactly the same gets a discount or exemption?!
The simple solution is an annual local authority surcharge added to all student and dependent visas. This could be indexed to the average (Band E) council tax rate of roughly £2000 per year; with the pot shared among local authorities struggling with the highest population growth.
This would not only raise cash for vital services and infrastructure, it would be hugely popular, especially among the growing cohort of hyper-localist MPs. Localism is always a vote winner. It is also a timely salve for the litany of local authority bankruptcies sweeping the land.
Thirdly, Cap Settlement at 100k a year and make it reassuringly expensive.
The crux of our immigration problem is not just the sheer number of arrivals. It is that those who come tend to stay. All too often this is the vital piece of the immigration puzzle that is overlooked.
This is the lesson from the migration systems of the world’s wealthiest high-growth economies - such as the UAE and Singapore. These nations are open to highly skilled workers, but they do not let them stay beyond their visa term. As a result, they enjoy a ready supply of “super-migrants”. These are highly skilled and highly paid workers. They are generally young and ambitious. They work hard, play hard and stay only for a few years. They pay a fair share of tax and consume little in social services; with employers responsible for healthcare and dependents’ needs.
By contrast, studies have found that when migrants are granted citizenship or leave to remain, they suddenly get more expensive. Dependents appear from nowhere. A keen work ethic is often replaced by an equally keen interest in the benefits system. Settlement also turns migration from a dependency ratio solution to a demographic time bomb: proffering yet more people who will need decades of pensions and healthcare in future.
By contrast, a short-term only visa system would allow Britain to carry on cycling through up to a million migrant workers a year, while maintaining net zero immigration (because the same number would leave as arrive). We could avoid all the long-term social cohesion problems and maintain labour flexibility. This is what the Middle East has found. When the construction or oil boom ends, the foreign workers head home; meaning you’re not stuck with millions of newly unemployed migrants to look after.
The first step is to cap long-term settlement or citizenship at 100k people per annum, and charge a market price for it. There already is a global citizenship market, with passports typically costing $150k to $2m. Citizenship generally places an enormous lifetime burden on the host country. It is a national scandal that we give away citizenship for anywhere between nothing and £1300. This is like selling off NHS ambulances (worth £250k) for 500 quid each. It is a horrific deal for British taxpayers.
We could structure this as a citizenship mortgage paid over twenty years. The right structure would keep those new citizens economically active and law abiding, whilst preventing the tens of thousands of sham and abusive marriages every year that the current system incentivises.
A properly priced citizenship mortgage limited to 100,000 of the very ablest migrants would raise £15bn a year for the Treasury. Tax cuts here we come!
To see economically successful immigration in action, look to Abu Dhabi. As Abu Dhabi’s wealth exploded, it realised it did not have the skills to invest its vast savings pool, so the country recruited the best investment managers from all over the world. They were employed on short-term visas. Employers were responsible for providing private healthcare, social care and education for the new arrivals and dependents. As part of their roles, the foreign managers had to teach the locals. Once the locals had learnt, they were handed the highly paid jobs. Then Abu Dhabi politely thanked the foreign managers, paid them their notice, and sent them home.
It is very fashionable to tut-tut at Middle-Eastern dictatorships. Yet some have delivered their people enormous prosperity and a sustainable, effective and popular immigration system that actually benefits them. After thirty years of broken promises and mendacious excuses, this is something we can only dream of. Mass migration gets to the core of why voters are giving up on our politicians, institutions and democracy itself. It is a stain on western civilisation.
There is much to do, but these three simple measures would be a good start in repairing the damage.