Why zero net migration may not be possible or desirable

Nigel Farage has a point.

Immigration was at the heart of the Brexit debate. A desire to control the number of people arriving in the UK is what drove the vote to leave the EU.

The fact which got lost in the heat of the referendum campaign was that most of the immigration was not from the EU. Today that’s even truer.

There are strong feelings about immigration and some of it is easy to understand. The increase in immigration has been very rapid in Britain and, at the margins, some of it may have been regressive.

First generation immigrants tend to take lower skilled jobs and the evidence suggests that may have had a small dampening impact on wage growth for the lowest paid.

Overall population growth in the UK, much of which is down to immigration, has also outpaced the number of new homes being built. This has probably put upward pressure on property prices.

More clearly, public services in some parts of the UK have also struggled to respond to sharp increases in demand, whether that’s access to GP care or school places.

Nigel Farage’s solution to the above is to reduce net migration to zero.

The most obvious challenge with such a pledge is delivering on it is much, much harder than it sounds.

You are essentially promising to balance the number of people arriving in the UK each year with the number leaving. And you only have control of the number of people arriving.

“Zero Net Migration” isn’t that different to David Cameron’s pledge in 2010 to reduce net migration to the “tens of thousands”.

His government failed to do it and suffered enormous damage to its reputation as a result.

Conceivably, Cameron’s government could have come closer to hitting the target than it did but ultimately it decided that doing so would have created a set of other problems that voters probably wouldn’t be prepared to accept - not least a deterioration in public services.

And that’s the problem with immigration. It affects huge parts of our economy in complicated ways, far more complicated than politicians present. And a single target ignores that complexity.

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If Zero Net Migration were somehow achieved, it would also leave the UK’s population in slight decline.

The birth rate fell to 1.49 children per woman in 2022, well below the 2.1 needed to maintain a steady population without significant immigration.

A shrinking population need not be an economic disaster but there would be consequences for how long people work and what sort of care they can expect the (smaller) state to provide as they age.

Farage never talks about these trade-offs. He also rarely speaks about the benefits of immigration but they exist too.

Businesses in some sectors of the economy - in hospitality, retail, construction, agriculture in technology and communications - will tell you that they depend on migrant labour.

Migrant labour keeps the show on the road for the NHS and in care homes across the UK.

Almost one in five workers in the UK were not born here.

The evidence collected by The Migration Observatory, of the University of Oxford, shows that migrants are less likely to be unemployed than people born in the UK and less likely to claim unemployment benefits if they are.

Migrants workers are often well educated and, compared with those born in the UK, are more likely to work in jobs for which they are overqualified.

The government’s economic forecaster, the Office for Budget Responsibility (OBR), says higher net migration reduces pressure on servicing the government’s debt over time.

The logic is that migrants are more likely to be of working age and therefore more likely to be paying tax and contributing to the public finances.

The OBR is more cautious about the impact on overall living standards. Higher net migration “has been a key driver of economic growth in recent years”, it concludes but “may not have a substantial impact on output per person”.

In end care, when we think of measures of our economic prosperity, we should care more about Gross Domestic Product Per Capita (per person) than aggregate GDP.

And GDP per person is not necessarily improved by having more people in a country. If you increase the number of people by 10% and the economy grows by 10% then on an individual basis no one is better off.

The evidence shows that migrants have been coming to the UK to work and, by and large, there have been jobs for them to do.

Today, the UK has a low rate of unemployment and, in recent years, there has been an increase in the number of organisations in the public and private sector complaining they can’t get the staff they need.

The government has tried to solve this problem domestically.

It has sought to reduce low-skilled migration, arguing there are people living in Britain who could and should be filling vacancies.

The number of UK born people who are economically inactive has risen since the pandemic and a record number now say ill-health prevents them from working.

Supporting people to move off benefits and back into the workforce is perfectly sensible but it takes time.

Why? Because once again, it’s complicated. Although Nigel Farage does make everything sound very straightforward.

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