Selecting the Best: Building a Future-Focused Immigration System

• Since 1997, Britain has experienced significant levels of mass migration. In the 25 years leading up to Tony Blair’s election, the UK’s average annual net migration was 68,000. In the 25 years that followed, it tripled to an average of 236,000;

• High levels of immigration have helped to prop up the UK’s low wage, low productivity, low growth economy;

• Whilst gross GDP has been artificially inflated by a larger population, GDP per capita and productivity rates have stagnated;

• The actual fiscal impact of migration is quite small; estimated to only be between +1% and -1% of GDP;

• Research has also found that high levels of low-skilled migration has disincentivised investment in capital and machinery.

• Mass migration is not necessarily the cause of the UK’s poor economic performance- there are a number of factors at play, including our planning system, high energy costs, and over-regulation;

• But in many ways, it has been integral to propping up our current economic model, by acting as a subsidy for certain sectors, especially our universities and healthcare system;

• Using high immigration rates to counteract the change to Britain’s ageing population will be at best a short term solution. Low fertility is a global problem; by 2050, 75% of nations will not have above-replacement fertility rates;

• Mass migration is also unlikely to increase the UK’s fertility rate. Evidence shows that women’s fertility rates tend to converge with the host nation’s;

• Migration should come down to the tens of thousands. However, as this paper argues, for this to happen we must ensure that the economy can adapt to such a reduction;

• This report puts forward recommendations which would create a highly selective immigration system, attracting the best in the world, and which would accelerate our transition to a high-skill, high wage, high productivity and high innovation economy.

The recommendations include:

Selecting Fewer and Better:

• Support annual caps on visa routes informed by annual Migration Budgets approved by Parliament and informed by a Migration Book, as proposed by the Centre for Policy Studies;

• Set an overall skilled worker cap at a higher number of around of around 50,000 to 60,000 , which is informed by an annual Migration Budget agreed on by Parliament;

• Abolish the graduate visa route. The best and brightest who study in the UK will be able to enter the country via other routes; we do not need an open-ended graduate visa system. This should be mitigated through an unfreezing of student fees for UK students, alongside wider reforms to student loan repayments to prevent UK students being overburdened;

• Retire the Shortage Occupation List, and cap the number of health and social care visas, thus ending two of the most straightforward open-ended routes for mass migration to the UK.

Promoting Global Talent:

• Auction out work visas for foreign hires to employers every three months, raising much needed revenue;

• Limit standard work visas to a maximum of five years residency provided the employee has worked with the company that hired them for two years;

• Allow anyone employed for the whole five years to apply for indefinite leave to remain;

• Work and student visa holders should specifically not have access to Universal Credit or any other welfare benefits unless they become permanent residents;

• Issue extremely limited rounds of work visas for highly desirable immigration streams, including a relocation bonus and pathway to citizenship. 

Ending Low Wage Dependency:

• Scrap the BMA’s cap on the number of medical training places available, allowing the market - and educational institutions - to determine the supply of medical training places;

• Re-establish the Resident Labour Market Test for medical practitioners;

• Abolish all state-sponsored immigration schemes for low-wage occupations, including £10,000 ‘international relocation payments’ and Qualified Teacher scheme;

• Devise a range of incentives to enable domestic workers to meet public sector labour demands, including joining bonuses, part-funding courses, offering bursaries and grants, and tax incentives to the growing number of retirees interested in retraining to pursue socially rewarding roles;

• Remove the social care visa route gradually to give time for the market to adjust;

• Raise the salary threshold to £40,000 per annum and thereafter tied to inflation and/or immigration data on net contributions.

Supporting Automation

• Introduce tax credits to incentivise private investment in robotics and automation, with expanded eligibility criteria expanded to include long-life plant machinery and buildings;

• Grant National Insurance holidays for companies that automate more jobs;

• Provide tax relief for pension funds that invest in infrastructure and technological capital investment;

• Expand technical and vocational training for fields related to robotics and automation.