The Immigration Panacea: How The Middle East Got It Right
Updated: Nov 3, 2022
How a simple, market-based solution to UK immigration can:
Raise over £30bn annually for the Treasury - instantly wiping out the government's financial blackhole, without costing voters a penny!
Boost British prosperity and productivity.
Lower the country's dependency ratio and halt the demographic Ponzi scheme.
Drastically increase migrant quality and productivity.
Reduce immigration to Net Zero.
Re-engage Red Wall and Grass-roots Tories, while uniting free market liberals and social conservatives.
In the end it was immigration that did it for Truss. She was pounded by markets and pummelled into U-turns, but it was a bust-up with Braverman over increased migrant numbers that finished her off.
The idea that mass immigration can benefit the economy is a hugely controversial idea. And one that has been dismissed (most notably by the House of Lords Committee on Economic Affairs) as often as it has been expounded. Given that government debt is up sevenfold since mass migration began twenty years ago, the thesis that more migrants equals lower debt is clearly not that simple.
What Hunt and Truss fail to appreciate is that with many migrants, the lifetime costs imposed on the host state far exceed their economic contributions. This is particularly so for those bringing dependents.
This explains the uproar surrounding certain cohorts of foreign students bringing three or four dependents each. On arrival, many access a full range of educational and social services, discounted healthcare and all the background services taxpayers must pay for (policing, transport, etc). The same issue crops up with low wage workers. A worker on £25k pays just £4131 in income tax, but a spouse with diabetes (c. £2600 per annum) and a school age child (c. £5000 per annum) would far exceed that contribution.
The other big cost is settlement. What studies have found is 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 the future.
Thus, if you can find a solution to dependents and settlement, you can fix immigration. It’s that simple. And as usual, the best solution is market-based: that is, all migrants should pay the full economic value of what they receive.
This would mean charging all dependents the per capita value of public spending (roughly £14k per annum); plus a top-up for dependents with special needs. Alternatively, dependents (or the employer) would need to pay for their own private health insurance and private education, plus a flat fee to cover other government services (police, transport, environment, infrastructure etc), and a contribution to the benefits system and charitable sector. Either way, migrants would pay their fair share, plus a fair contribution to look after Britain’s vulnerable.
And for those who wish to remain beyond their visa, settlement can also be charged at the market price. There already is a global citizenship market, with passports typically costing $100k to $1m. 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 tax payers.
The value of British citizenship would likely be at the top end of the scale; but even if we charged less (say £200k) that would bring in a fortune, while reducing demographic pressures and creating a more flexible labour market.
We could structure this as a citizenship mortgage paid over 30 years. The right structure would keep those new citizens economically active and law abiding, while preventing sham and abusive marriages.
The above is not an original idea. It has been successfully employed for years by wealthy Middle Eastern economies, such as Qatar, the UAE and Saudi Arabia. What this model delivers is a ready supply of ‘Super-migrants.’ These are highly skilled and highly paid workers. They are generally young and ambitious. They work hard and 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.
Because these economies can cycle through migrants rather than retain them, they enjoy a flexible labour force. For example Qatar was able to attract the construction workers it needed for the World Cup and Saudi can get the engineers it requires during an oil boom. But neither is left with the social problems of unemployment and integration when the boom winds down.
This is what free trade migration looks like. It is a myth that open doors immigration is anything to do with free trade. As we have seen, millions of migrants receive far more in state benefits than they or their employers contribute. That is the exact opposite of free trade: it is in fact a massive subsidy to foreign nationals, universities and big employers at the expense of British taxpayers. Worse still, it is terrible for government finances (sorry Jeremy). A free trade migration system ensures that every single migrant pays at least their fair share.
So, that’s the Panacea: charge all migrants (or their employers) a full and fair price for any dependents; and charge the full market value for citizenship or settlement. Then, the economic social and political benefits will flow in.
For starters, the UK would no longer be a magnet for low skilled, low wage migrants. That means employers would have to invest more in skills, automation and productivity improvements: at last we would begin to solve the productivity puzzle.
Secondly, we could lower the country’s dependency ratio, and stop creating a demographic pyramid scheme.
Best of all, these simple policies would raise a fortune for the treasury. Assuming the number of dependents and those settling were to halve form current levels, the two schemes would raise over £30 billion annually while reducing the stress on our overwhelmed public and voluntary sectors. At a stroke we could solve our government’s financial black hole without asking voters for another penny!
And thanks to much higher productivity per migrant, government could easily hit its pledge of migration in the tens of thousands, and perhaps even net zero. Doing so would re-engage all those Red Wall and Tory Supporters who feel betrayed. Not only that, we can at last ‘Unite the Right’ on immigration. Free market liberals can get behind these policies because they represent a market-based solution; while social conservatives can support them because they drastically reduce immigration while raising quality.
Now there’s something even Suella and Liz could agree on.