Monday, February 07, 2005

Little Britain

A very sad announcement in the UK today on the tightening of immigration to the UK.

Immigration is always a hot subject, and one where economic reasoning rarely seems to match the country's mood. But mostly governments hold a delicate balance - they talk tough and recognise the need, giving out visas quite liberally.

The UK seems to be reversing that, and, for a Brit that is very sad. Why? Because I truly believe that the country should be encouraging immigration not discouraging it.

The UK scheme seems loosely based on the Australian one - a points based one to encourage the 'right' skills. Student visas and low-skill visas will be reduced.

What is the reality?

First the demand is not just strong at the top but also at the bottom (I wrote about this before). This is not just in the UK but many other developed countries. Localisation of low skill labour is increasingly needed as an economy grows more wealthy, or old. What happens when you make visas harder for these people to acquire? Well the ILO quite correctly states that you don't cut immigration, you just cut legal immigration. My own Canton recently asked for an amnesty on illegal immigrants - Walk around Geneva, talk to it's residents and you realise that the area depends on a large influx of (illegal) immigrants. By cutting this you also increase the cost of living and reduce economic growth for all.

Secondly, the UK seems to be having a net emigration of young men according to official statistics. It is hard to accurately assess this but given both anecdotal evidence (I know quite a few, me included) and the fact that they have gone to other economies with strict visa controls for qualified labour it would suggest that the UK has a drain of highly educated young men.

Given that many students stay where they graduate does a policy of discouraging students seem a good one? The UK is losing its educated young and blocking one of the best potential solutions.

Third. Is modeling your immigration strategy on a country with an overheated labour market such a great one? Australia's economy needs more workers in many sectors.

Finally, companies are being faced with a very simple choice. Import in workers or export jobs. Stop immigration and guess which it will be?

I could go on but I won't. It's a very sad day.