The economic case for mass migration has never looked so weak

Earlier this month, Professor David Miles from Imperial College Business School intervened in the UK’s most contentious issue – immigration. In an essay published by the Common Good Foundation, Miles argued that ‘there are serious problems with the idea that [immigration-driven] faster population growth can consistently alleviate fiscal problems’. He urged the government to prioritise getting British people into work, rather than relying on migrants to solve the nation’s economic problems.

Miles’s comments attracted particular attention because he is a prominent and respected establishment economist. He used to be on the Monetary Policy Committee at the Bank of England. Since 2022, he has been part of the three-person executive leadership of the Office for Budget Responsibility (OBR). The OBR, although only established quite recently, in 2010, has quickly assumed a key role in national economic discussion, adjudicating on the government’s fiscal plans.

For a long time, the conventional economic wisdom was that immigration benefitted the economy. Migrants were more likely to be of working age than the population in general and were therefore more likely to be working and contributing to output and the public finances. This argument would be routinely trotted out to justify denouncing anyone who questioned immigration levels as, at least, idiotic, probably ‘far right’ and certainly not worth debating.

For its part, the OBR itself often reflected these economic assumptions about immigration in its models. Yet now one of its key executives is saying that such assumptions are short-sighted and ‘uncertain’ over the longer term.

Miles correctly points out that a larger immigration-fuelled working-age population doesn’t inevitably bring about a rise in prosperity. It can increase a nation’s gross domestic product (GDP), simply because it means there are more people working. But there is no obvious reason, he writes, that migration would boost ‘GDP per capita’ – that is, the nation’s annual output divided by the number of inhabitants. And it is GDP per capita that underpins average living standards.

Miles then explains that net migration cannot be a long-term solution for strained public finances, either. Migrant workers might, in the short-term, slow down the effects of population ageing. But after a while, they will tend to increase demand for public services, such as education, by having children and health by themselves aging. Moreover, many of these workers won’t return home. This means they will retire in the UK to become pension recipients, too. Hence, any temporary fiscal benefit from working migrants ‘fades’ over time.

Miles argues that a better approach would be to help Britain’s non-working citizens, especially young people with mental-health problems, into employment. This would have a positive ‘double effect… with taxes from earned income rising and welfare spending falling’.

This is a significant intervention. As economist Liam Halligan argues, Miles’s essay shows that the establishment is changing its views on immigration, thanks in large part to popular pressure. The political and media class can no longer ignore the ‘far from positive’ impact of ‘virtually uncontrolled’ immigration on ‘much of the settled population’, he says. Halligan concludes that ‘the policymaking establishment, after years of denial, is now slowly starting to change its mind’. Similarly, writing in The Sunday Times, Josh Glancy notes how the terms of the liberal-elite discussion on migration ‘have shifted quite remarkably… [on to] ground once occupied by the likes of Nigel Farage’.

The immediate lesson from this shift in elite attitudes is that we should beware those using economic models to determine immigration policy. After all, for years, Britain’s governing class told us that immigration was an economic good. Now, as popular political pressure begins to tell, the very same people are telling us that that might not be the case, after all. This shows that supposedly ‘impartial’ economic analyses are shaped by the prevailing intellectual and political mood, rather than some indisputable set of empirical facts.

There is a broader lesson here, too. For 30 to 40 years now, the political and media classes have tended to reduce national political debates, especially over controversial issues, to technical discussions best left to economic experts. This form of government by spreadsheet is detrimental to democracy. A healthy democracy would make decisions based on public deliberations about the big questions of the day, not deference to economic models.

For far too long, successive governments have reduced what should be publicly debated political decisions – on the public finances, on infrastructure projects, on immigration and so much more – to technical questions. The practical consequence is not necessarily ‘wrong’ decisions, but decisions that have no mandate or that fail to serve a clear longer-term political goal. This also makes decisions easy to delay or reverse in the face of conflicting technical claims, be they new economic forecasts or challenges in the courts.

The managerialist political class has been especially reluctant to engage in an exhaustive public dialogue about immigration. Limiting the conversation primarily to the economic pros and cons keeps it within what our elites deem safe bounds. No doubt Halligan is right: Miles’s intervention reflects the shift in outlook being forced on to the political class by the local protests against migrant hotels, as well as by the rising support for Reform UK.

An honest public debate is certainly long overdue. By recent historical standards, the UK has enjoyed record levels of immigration since the turn of the millennium. It would be craven for the establishment to continue trying to funnel discussion about this into whether it is a good or bad thing solely for the economy. The public is now just as apprehensive about the social and cultural consequences of high levels of immigration as it is about their economic impact.

Indeed, people are worried about society’s failure to assimilate recent immigrants, driven in large part by state-sponsored multiculturalism. They are uneasy about the rise of sectarian conflict and religious extremism, and the physical menacing of women and young girls by men from other cultures. And they are rightly aggrieved that significant increases in legal immigration have proceeded without voter consent.

High migration levels do raise real economic questions, too, which politicians need to start engaging with. Such as, how many British businesses now depend for their survival on cheap migrant labour? Are governments unwilling to upset this low-wage status quo, beyond a few performative raids on gig workers? Could this openness to low-paid migrants be contributing to the weak business investment and the productivity stagnation that are weighing down our living standards?

Many around the Westminster bubble, armed with the stale economic arguments now being challenged, still want to dodge the real debates around immigration. They still prefer to brand critical views as racist. But it’s fast becoming too late for that. Immigration is now a publicly contested issue. Britain’s political and media classes continue to downplay or ignore it at their peril.

Phil Mullan’s Beyond Confrontation: Globalists, Nationalists and Their Discontents is published by Emerald Publishing. Order it from Amazon (UK)