Labour's inbox: immigration issues

Boosting growth and changing Home Office priorities

On Monday I took a look at four key asylum issues facing the new government. Today I’m looking at immigration issues. These are less politically immediate problems but they are important nonetheless. The fact they are less immediately urgent doesn't mean they can be ignored. That, after all, was the downfall of the last government.

The stand out immigration issue of recent years has been overall inwards immigration. By its nature this isn’t a single issue, although it is routinely presented as if it were. This thinking dates back to David Cameron’s net migration target. If Labour can find a way to focus attention on different forms of immigration that would be a huge benefit to everyone.

There are plenty of other important immigration issues. There’s a lot of potential to contribute to the incoming government’s mission of economic growth, for example. Boosting skilled migration is often discussed, although some have questioned whether this really helps much with GDP per person for existing residents. I’d like to see some focus on empowering those who are here to realise their potential and on reducing the deadening regulatory burden imposed by the Home Office. And that is where I’ve decide to start…

Boosting growth

There are three significant contributions the Home Office could make to the government’s new mission to boost economic growth, none of which involves the entry of any new migrants. All three involve the Home Office doing less, not more.

The first is to empower migrants already in the country to realise their potential. There are several things the Home Office currently does that hold them back.

The very high immigration fees migrants have to pay when renewing their visa or applying for settlement or citizenship are cripplingly expensive. For a family of four skilled migrants, the cost at today’s prices is estimated at over £30,000 over seven years. For a spouse or partner it is something like £12,500 on the five year route or £20,000 if on the ten year route. Migration Observatory have a brilliant fees calculator you can use to see for yourself. These fees are a form of taxation. Those who have to pay those taxes could do something else with the money. They could spend it on their kids, on holidays, on house extensions, on consumer goods, on whatever they want; all of this would boost economic growth. Instead, they are funding the Home Office, because these fees are far in excess of the cost to the Home Office of processing the applications. Freezing or, even better, reducing or restructuring the fees would free up more money so that migrants could spend it how they choose, not how the Home Office chooses for them.

The Home Office impinges very heavily on migrant lives. One thing Keir Starmer has talked about is politics treading more lightly on all our lives. Perhaps the Home Office could learn some lessons here. The number of points of contact between migrants and the Home Office could be reduced, for example. This would mean less work for the Home Office and more freedom and more security for migrants. The number of visa extension applications could be reduced and the time to achieve settlement also reduced. Only the data that the Home Office actually needs should be collected. At the moment, for example, it is routine for any person released on immigration bail to be tagged. This produces vast amounts of data. The Home Office almost never seems to use it. They impose the tags and gather the data because they can, not because they should.

The second contribution the Home Office could make is to reduce the regulatory burden it imposes on public services and private companies and individuals through the hostile environment. I return to this issue in a moment. The Home Office has deputised all sorts of people to carry out immigration checks. It all costs money. The Home Office doesn't care, though, because it’s not their budget. It’s all someone else’s money. Employers, landlords, universities, schools, hospitals, banks and others all have to spend valuable time and effort checking immigration status and complying with various Home Office requirements. Conducting the checks isn’t simple because there’s no single form of status like an ID card (see below). And failure to carry out the checks leads to disproportionate penalties: up to £40,000 per worker for employers, for example, and/or total loss of the ability to employ foreign workers.

I’d love someone to do a credible calculation of the total cost of these deputised controls; it must be immense. I see some on the right complain about the regulatory state and the dead hand of the state; how about the dead hand of the Home Office?

There’s a third way the Home Office could boost growth and help existing residents realise their potential. So far I’ve talked about migrants lawfully present in the UK. There’s also a substantial unauthorised population of migrants already here. I’ll look briefly at this issue below. It has sometimes been mooted in the past, for example by Boris Johnson, as a way of increasing tax revenue for the government.

One other way to talk about what I’m suggesting here is integration. The Home Office could help rather than hinder migrant integration. You can frame it how you want; it’s the same thing.

Inwards immigration

Inwards immigration was as high as 1.2 million migrants in 2023. I’m liberal on immigration but that’s a lot of people in a short space of time. However, that rate is already falling now. The new government doesn’t really need to do anything for total immigration to end up being lower than the record level they inherited.

On which routes have these migrants entered? I’m short on time so haven’t updated this donut chart I put together a while back. The proportion represented by Ukraine and Hong Kong has almost certainly fallen both because of falling absolute numbers and also because the number of workers (their family members are included as workers on this chart) has risen fairly dramatically.

The measures taken by the last government to reduce inwards immigration are pretty unappealing. Basically, some workers have been prevented from bringing family members with them. That forgets the maxim which forms the title to this Substack: “we wanted workers, but we got people instead.” Preventing workers from being with their families while they do jobs that are too low paid and difficult for British citizens to fill all vacancies isn’t respectful even if people are willing to do it - which sufficient numbers probably will be. It is hard to reverse that policy without finding other possibilities for reducing overall numbers, though.

Ukrainians and Hong Kong residents make up a significant proportion of recent migrants. The number of Ukrainians entering seems likely to decline naturally, unless Russia starts winning some significant victories. The number of Hong Kong residents wishing to enter also seems likely to fall further over time, as it already has. Most of those who want to move here may well already have done so. Neither of these is certain, though. That leaves us with skilled workers, students and family members.

Skilled migration and students

Reducing the number of skilled workers entering sounds to a lot of us like an obviously Bad Idea. We need skilled workers, right? And businesses wouldn't go the hassle and expense of recruiting from abroad, getting and maintaining sponsorship licences paying the £1,000 per year per worker Immigration Skills Charge if they didn’t need those workers, surely? Plus, recruiting skilled workers increases GDP and tax take? And by keeping costs low benefits consumers and reduces inflation?

I don’t know. The tied nature of most work visas — the worker cannot change employer — means that employers have the upper hand in industrial relations. Foreign workers must be meek or they risk losing their visa. Some employers are aggressively exploitative, some more passively so, with the threat of their “claw back” clauses for the costs of recruitment. Perhaps training up local workers is even more expensive and time-consuming than recruiting from abroad. Investing in skills and training takes a long time; recruitment needs are right here, right now. Some businesses and managers focus on short term profits not long term investment for the future. Growing GDP doesn’t necessarily grow GDP per capita, arguably the more important measure when it comes to how people feel about their prosperity. Improving productivity through investment would also keep costs low and reduce inflation.

What does seem for sure is that reducing reliance on imported skilled workers would force a change in business behaviour in some sectors of the economy. Whether the changes would be beneficial or detrimental in the long term is unclear. To me, at least. There’s certainly a case for reviewing whether the current approach is the right one and considering whether there are viable alternatives to reliance on imported labour.

Students

The United Kingdom’s universities are a jewel in our crown. They drive investment, productivity, skills, exports and regenerate towns and cities. They are hugely reliant on the high fees paid by foreign students, the income from whom is used to subsidise the education of British students. They also leave at the end of their courses if required to do so. Significantly reducing the entry of international students would at a stroke bankrupt a lot of our universities.

There are alternative funding models potentially available. These are generally going to be pretty expensive either for the government or for British students. Increasing the fees payable by British students would enable universities to reduce their reliance on the fee income from international students. That’s not likely to be popular with students or their parents, though.

I’ve seen no serious alternative proposals for funding. This isn’t an area of expertise for me, though; perhaps there are viable proposals out there. In the meantime, it seems likely that international students will continue to be needed in significant numbers if university closures are to be avoided. Some Conservative MPs seemed to relish the prospect of university closures. Only on a NIMBY basis, though: Not In My Back Yard. It’s always the universities in some other constituency which must close.

Family immigration rules

Family immigration — by which I mean family members of British citizens and long-term residents — represents a pretty small proportion of overall inward migration. The rules for the entry of family members therefore do not really matter, quite frankly. If the rules were liberalised then some more people would qualify for entry, but nowhere near enough to make an significant impact on overall numbers. Similarly, tightening the rules might make “good” headlines (if you like that sort of thing) but will merely ratchet up expectations while not really moving the needle on the dial.

It’s an example of an immigration policy that is tough on migrants but not really on immigration, something I’ve discussed previously.

What politicians either forgot or ignored over the last fourteen years is that changes to the rules might not affect overall numbers but the people who are affected are affected profoundly. It’s not just the migrant but the British or settled sponsor as well. The impact is disproportionate. A small number of families are separated, with devastating personal consequences to them. Or otherwise they struggle to stay together by fighting an exhausting and expensive battle against the Home Office in which the only beneficiaries are lawyers like me.

Somehow the conversation became about net lifetime contribution to the economy rather than the quality of life of citizens who might be separated from their loved ones.

I would therefore strongly advocate reforming aspects of the family immigration rules.

The rule that attracts the most attention is the minimum income threshold. This was fixed at £18,600 in 2012 then increased to £29,000 in April 2024. It is due to rise to £37,500 at some future point. By comparison, the minimum wage currently works out as about £22,000 annually for a full time worker, depending on their exact hours and age. This means you can earn the minimum wage, work all the hours there are but you still cannot live with your family. The administration of it makes things worse because the partner’s earnings cannot be taken into account and the wage must be earned for a minimum period before an application can be made. I’d like to see the minimum income requirement tied to the minimum wage and reforms made to the way that earnings are taken into account.

The other stand out family immigration rule I would like see changed is the rule on elderly dependent relatives. It is basically impossible for a parent to qualify for entry under this route since it was reformed in 2012. It means that those who have moved to the UK and have perhaps lived and worked here for a long time must either try to care for their parent at a distance as best they can or must leave the United Kingdom to do so. I’ve long wanted to see this changed but my own personal circumstances have recently brought home to me how cruel this rule must be for those affected.

Rightly or wrongly, it may make a difference that a lot of EU citizens living in the UK are going to start finding they are affected by these rules.

Hostile environment

The hostile environment is the system of deputised in-country immigration checks imposed by the Home Office on other public and private services. I co-authored a journal article about it if you’re really, really interested in its genesis, scope and operation.

I’ve already looked at one argument for reforming the hostile environment: it imposes a massive financial and regulatory burden on public services and various private services. There’s very little if any evidence that it actually saves any money. Nor is there any evidence that it forces anyone to leave the country. On the contrary, voluntary departures have fallen quite dramatically since 2013, as we saw in my asylum inbox piece. The real driver for the hostile environment was values: those who devised it felt it was morally wrong for illegal immigrants to enjoy the benefits of citizenship. I mean “citizenship” in the widest, civic sense here: jobs, houses, banking, driving, healthcare and other essential, everyday activities. Other rationalisations for the policy were cooked up later or projected onto the policy by others, I have belatedly realised over time.

For me, the main argument against the hostile environment is that it is discriminatory. The way it has been designed makes the immigration checks strongly advisable for those who understand the system but non-mandatory. Those who are from an ethnic minority, young, female or move between jobs or accommodation frequently are more likely to experience the checks. An older, home-owning, self employed or job-for-life male will rarely experience or notice the hostile environment. And because the hostile environment is explicitly and solely about immigration, those from ethnic minorities may experience the checks as questioning their belonging.

Personally, I cannot see the hostile environment being totally dismantled. The values that drove it are quite widely shared. It therefore barely matters that it doesn’t “work” in the sense of saving money or forcing people to leave the country. I would like to see landlord checks simply scrapped, though; the risk of discrimination is so high in our fragmented housing market that this totally outweighs any possible benefit. That pillar of the hostile environment is also so unworkable that it’s largely pointless: those without the necessary proof of status can probably find low-quality accommodation anyway.

I’d like to see the rest of the policy reviewed and reformed. Parts could be devolved from the Home Office to local authorities, for example. This would have the benefit of reducing the functions of the Home Office to enable them to focus on actual immigration control instead of social policing, removing the direct immigration-enforcement element and making enforcement more sensitive to local context. In Lincolnshire enforcement might look rather different to enforcement in a London borough, for example. What is now immigration enforcement could become more akin to proper labour market regulation or food safety checks, with the emphasis on penalising defaulting employers not rounding up exploited workers.

The system of checks could be reformed to be more universal in nature; more inconvenient for some but at least everyone would be treated equally. For that reason, I’m not necessarily opposed to ID cards. If the emphasis became mandatory checks on identity and entitlement, with immigration enforcement a by-product, the whole process would be potentially less toxic.

Unauthorised population

There are an unknown number of people living in the United Kingdom without authorisation. Sometimes called illegals immigrants, sometimes called the undocumented, they don’t have permission to be here but need it. There are estimated to be something like 700,000 people in this position, although such estimates are by their nature hard to conduct. Brexit is likely to have increased the numbers both because some EU citizens living in the UK will not have applied for status and EU citizens have had visa-free access to the country since Brexit and a proportion will have overstayed.

This unauthorised population is not an urgent inbox issue. But the existence of these people is important. They are already here. Many will have very strong links here. They are surviving, somehow. Their precarious situation makes them very exploitable and some are exploited. They are also largely impossible to remove. The infrastructure and level of coercion required to remove them would be considerable given that enforced removals have never exceeded about 20,000 per year, and that was twenty years ago.

Regularisation should therefore be considered. There are some good ideas floating around about how to do this. A ‘big bang’ amnesty event is simplest but politically very unpalatable and it also does not deal with the underlying problems that caused the unauthorised population to develop in the first place. It would be better to introduce durable new regularisation routes targeted at segments of the unauthorised population.

Quite a lot of immigration policies and rules are predicated on the false premise that rule-breakers will be removed. The reality is that it is very hard to remove people who don’t want to go and quite small numbers have in fact been removed in the past. Instead of leading to removal, rule-breaking often merely results in increasing the unauthorised population further. This is not to say “rules get broken therefore abolish rules”. Rather that adoption of more sensible and flexible rules would stop shunting people into illegality for what are sometimes quite minor infractions.

Windrush aftermath

One of the few concrete immigration policy commitments made by Labour in the run up to the election, which was perhaps only partially reflected in the manifesto, was to follow through on the Windrush Lessons Learned recommendations proposed by Wendy Williams which had been formally abandoned by the previous government. The flagship policy here is to establish a “Windrush Comissioner”, which I think is a reference to Wendy Williams’ proposal for a Migrants Commissioner. Labour have also said they will ensure the Windrush compensation scheme runs properly, which it certainly hasn’t so far.

The commissioner, whatever title is ultimately used, is a good idea. One of the cultural and structural problems at the Home Office is the lack of knowledge of or interest in the effect of immigration rules and policies on immigrants themselves. Simply introducing a commissioner would not address this problem overnight but it might help, if accompanied by further internal reforms.

The Wendy Williams recommendation I would most like to see implemented is a review of the hostile environment. Any such review should look at the sorts of issues I’ve outlined above about the unauthorised population and the design of the existing hostile environment.

Changing the conversation

The government — any government — would benefit politically from changing the conversation on immigration. Cameron’s net migration target still looms large. Aside from the politics, policy would also benefit.

One pinch point is the quarterly immigration statistics. For years now this has provided a focal point for journalists and others, including me. It is when the quarterly figures are published that we dive in and hold the government to account. Adverse news stories abound because of the relentless obsession with numbers.

This may seem counterintuitive, but how about publishing the statistics more often, say monthly? That way the changes would be more gradual, less remarkable and less news-worthy. Newspapers can’t go bananas about immigration literally every month can they? Um, can they? Hmm.

Or find a different way to focus attention on the different components of immigration. Sunder Katwala from British Future — for whom I have a lot of time — has suggested an annual immigration “budget” and even a statutory requirement for a debate. Normally, as a lawyer, I would be dismissive of such suggestions. The government can change the rules at any time with no need for debate, can update its own policy at any time and a debate can be triggered by parliamentarians any time there is a change to the rules. What would this additional spectacle really add?

Well, it might conceivably focus more attention on the specific forms of immigration rather than just the overall numbers. It might perhaps leads to a better quality of debate and discussion, force parties to take a position on different routes and answer for that position. Or it might not. The parliamentary debates triggered by Theresa May’s major reforms in 2012 were hardly inspiring.

The next article from me will take a look at changing the approach and culture at the Home Office, hopefully on Friday.