After the MPs voted to rule out no-deal Brexit on Tuesday (Jan 29) many let out a sigh of relief. However, the vote is not legally binding, and several EU governments have started preparing for the no-deal scenario – with just two months left until Britain leaves the EU, some believe there isn’t enough time for an agreement to be reached.
But what basis is there to expect Armageddon in the no-deal aftermath? In other words, is immigration really that crucial to Britain’s economic prowess?
In short, YES. There are many different statistics done around the subject, but we have picked a few to illustrate the impact of immigration.
1) Immigrants pay a lot more in taxes than they claim in benefits. In fact, 85% of EU migrants in the UK are employed, according to the Economist.
2) Britain’s population is ageing. This puts a huge strain on the economy in ways of welfare and pensions. Pensions will continue to become increasingly costly, their benefits to be squeezed. Thankfully, most migrants are working-age (34 years old, on average in 2011) which helps keep the UK ratio of retirees-to-workers lower.
3) Open labour markets benefit all British regions. The reverse - the nationalist raising of labour barriers against foreigners - has the same effect as trade tariffs: it disfigures the market, reduces wage efficiency and harms the economy as a whole. Ironically, attempting to secure “local jobs for local residents” has the effect of shrinking the economy.
4) Skills and education. According to Office for National Statistics, there were an estimated 853,000 job vacancies for October to December 2018. Many unemployed Britons aren’t actively seeking employment, thus making employers turn to EU and Overseas candidates to find skilled workers. Migrants tend to be working-age, meaning that the UK doesn't have to pay their education costs, but benefits from their existing skills and they are often better educated that the UK average - "while one-fifth of the home-grown population have degrees, one-third of migrants do”, reports Gordon Brown in his book Britain: Leading, Not Leaving: The Patriotic Case for Remaining in Europe.
All in all, the prospect of a decrease in migration is a scary one for Britain – and businesses will continue looking to EU and beyond for skilled talent. The UK government’s latest announcements, such as considering lifting the immigration limit on high-skilled overseas workers, shows the determination to keep the immigration levels at a steady high.
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Thanks for reading,
Mason