Is Britain really ‘Open for business’?

By Claude Moraes MEP

Before Christmas, the UK courts struck down the coalition government’s temporary immigration cap. They did so on the basis that it was unfair, irrational and unworkable. The courts said what business and many other stakeholders have been saying for some time, that the use of an immigration cap on workers from outside the EU was a simply way of gaining some populist support from many who would like to see immigration of all kinds reduced. Of course, for those who want immigration reduced, the cap is a complete con. It works clumsily to affect the minority component of the UK’s inward immigration, while at the same time the biggest immigration numbers are still from the EU. The net result is a clumsy bar on those key workers needed to power the engine of any sophisticated economy.

At a time of austerity it is this kind of policy which shows how opportunistic the government can be in playing to the populist gallery.

As stated, the government’s stance on immigration is to set a cap on the number of workers allowed to enter the country from outside Europe. The temporary cap was imposed by border authorities in June, and the policy aims to limit on skilled and highly skilled workers entering the UK to 21,700 a year, down from 28,000 in 2009. That’s a reduction of about a fifth of the total.

At the same time, the coalition government has announced that Britain is “open for business”. Announcing this whilst simultaneously closing the door to productive economic migrants simply doesn’t add up and, for a number of reasons, any cap will fail.

First, it will have no power to limit immigrants from the EU.

If the number of skilled and highly skilled non-EU workers entering the UK is lowered by 6,300, then it’s likely that the number of such workers entering the UK from the EU will rise by a similar figure. It’s simple supply and demand. With or without a cap, the number of such workers needed by British business will not spontaneously change. Instead, the number will continue to be dictated by what it always has: the UK’s market place for skilled jobs.

About one third of people arriving in Britain come from Europe, as they are legally entitled, and the UK government cannot revise this total, either up or down, by simple edict.

Second, the cap has no bearing on large groups of migrants such as students or family members. Students account for the majority arrivals from outside Europe. Dependents and family members are another large group of non-EU immigrants, and will also not currently be affected by the limit.

Home secretary Theresa May has indicated the UK government will look at ways to tighten rules for students and family members, but there’s history here that won’t be easy to navigate. Labour’s first change to UK immigration law in 1997 was then home secretary Jack Straw’s abolition of the “primary purpose marriage rule”. That rule unfairly barred thousands of people married to UK citizens from entering the country to be with their loved one. At the time, as director of the Joint Council for the Welfare of Immigrants, I openly welcomed the move and Jack Straw was just as clear as to why the rule had gone. The rule was “arbitrary, unfair and ineffective” and divided families.

This is a state of affairs the Conservatives will not only find very hard to persuade the country to change, with future modifications to the cap, but also discover does not work in terms of promoting Britain as somewhere that is “open for business”. Not being able to relocate a family will act as a disincentive for many skilled and valuable workers that the UK stands to benefit from hosting.

Third, no discussion of immigration policy would be complete without reviewing the errors of the past. These include errors on the part of the Labour government and whilst I believe we were right to welcome the free movement of EU citizens, it is apparent now that Labour fell down when explaining the benefits of such immigration to the country as a whole. This is the danger for the new cap, as rather then explaining the critical benefits of immigration, imposing limits on non-EU workers gives off the sense that no immigration is good immigration. At a stroke, this will reduce the government’s ability to make a rational case for the immigration we know can and will continue.

If anything, a cap muddies the waters of debate. Workers will continue to come from both the EU and non-EU countries, workers that the UK needs. But what the UK doesn’t need is a return to knee-jerk responses to immigration. If Labour’s failings were clear on this issue – ID cards and an over-zealous stringency in managing immigration – there is even less reason for the current government to introduce a cap that singles out non-EU – and presumably also non-white – immigrants. Britain has rare economic opportunities in the world. One of our greatest assets is our relationship to, and location within, the wider world. This is especially true of our ties to the Commonwealth. The current government welcomes this advantage, for example calling for stronger bilateral relationships with countries like India.

I agree, but if Britain is to be “open for business”, we have to start by recognising how this arbitrary cap on immigration is a mistake.