The rise of anti-immigration rhetoric in the UK has left the country divided. But with plummeting birth rates and an ageing population, policy-makers must question whether the country can afford to turn away migrants.
Former UK home secretary, Suella Braverman, frequently made headlines, warning the country of a ‘hurricane’ of mass migration causing an ‘unbearable strain’. In a bid to end reliance on ‘cheap’ foreign labour and ‘get serious about skills and training’, policies to reduce visas for students, workers and their dependents have been implemented.
But the Office for National Statistics has highlighted an increase in job openings, with vacancies rising to 20% above pre-pandemic levels in September 2023. If the domestic population cannot fill the labour supply gap, people may end up facing Christmas without turkey as well as empty shop shelves.
Essential sectors such as transport, agriculture, health and social care are struggling to recruit and retain workers. Research by the National Farmers Union shows that almost half of UK farmers will be forced to reduce production levels if current trends persist.
The union is calling on the government to expand the ‘shortage occupation list' to plug labour gaps. Otherwise, costs could inflate in many ways, from people’s weekly grocery shop to their bi-monthly haircut. Bottlenecks in one production system also have costly effects on other reliant firms, which may be forced to charge more and shrink their services and workforce due to the increased economic uncertainty.
Public discourse, swayed by various political agendas, may risk falling into the ‘lump of labour fallacy’. This is the idea that there is a fixed number of jobs in the economy and allowing more immigrants decreases jobs available for native workers.
But it is dangerous to assume that businesses have the infinite time and resources that are indispensable for investing and retraining the domestic workforce. Since many firms are still recovering from the pandemic, if they are forced to wait for a technically skilled labour force, they may not be able to stay afloat financially.
But with a stable supply of skilled workers, businesses can enjoy greater stability, perhaps then achieving stronger profits (which can be reinvested into the company, expanding the job market for both UK and non-UK nationals).
In 2016, a cost-benefit analysis of immigration by the Migration Advisory Committee showed that migrants made a net fiscal contribution of £1,500 per head more than the average UK adult. While governments must account for discrepancies in demographics, such as age and gender, these figures highlight migrants’ positive net tax contributions versus their public services consumption (on average).
Since migrants are more likely to be of working age than the population as a whole, similar data have been seen in recent years. Stronger government finances mean greater investment in education and healthcare, benefiting local living standards.
Arguments for free trade – made famous by Adam Smith – hold true for human resources. The UK holds a powerful global position as a politically stable country, which, if exploited could see the country welcome more economic migrants with skills that the local population currently lacks. Liberal migration practices could help the UK to reap the benefits of globalisation by promoting knowledge diffusion into the country.
This will be key in supporting the NHS. In early 2023, there was the largest staff walkout in the health service’s history, shining light on the basic problem of poor pay and/or working conditions. But for an underfunded institution already failing to keep up with the needs of an ageing population, meeting demands for a 35% pay raise for junior doctors, for example, is a daunting task.
The UK therefore faces the threat of a ‘brain drain’ – the prospect of a mass exodus of skilled healthcare professionals. Net migration numbers are crucial in this case. To protect essential services and offset a potential decline in trained professionals, the UK must look to keep bringing in skilled migrants (who already make up one-fifth of the NHS staff).
Of course, it would be naive to argue that increased migration is a sure solution to generalised labour shortages. The government needs to be careful not to become too reliant on outsourced labour, and it must apply sufficient pressure on businesses to push for greater investment in people and skills. But attempts gain votes off the back of anti-immigrant sentiment have interfered too much in the economic debate surrounding immigration.
The UK’s post-pandemic economy needs the support of a strong labour force provided by dynamic immigration policies. Not only will the country then see benefits in both the public and private sectors, but these effects will be translated into better living standards for UK citizens. Turning away skilled migrant workers might just be unaffordable right now.
