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Edward Miliband: I am listening carefully to the right hon. Gentleman's speech and I feel that he is tilting at a straw man—the straw man of completely open borders. I do not think that either side of the House advocates the extreme position that he is taking in his argument.
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Mr. Lilley: I am merely pointing out the logic of the Government's position. The hon. Gentleman may say that as the Government are not logical we need not do that, but that is the inherent logic. If he had given a logical reason for restricting immigration—the Government may not have vouchsafed it, but he in his influential family position can tell us what it is—I would have welcomed it, but he has not done that.

Edward Miliband rose—

Mr. Lilley: I shall certainly give way to the hon. Gentleman—he is about to reveal all.

Edward Miliband: I am grateful to the right hon. Gentleman for giving way again. The question is whether we set an arbitrary limit, which is the idea of a quota, or whether we have an approach, such as the set of policies that the Government propose, so as to shape the number of people who come into the country—something that can be reconsidered and revised. I do not see an inconsistency in our position.

Mr. Lilley: If there is no logical reason for having a limit, any limit will be arbitrary, but if the hon. Gentleman will not give us his reasons for having a limit, whether by process or by number, he is behaving irrationally or is advocating irrational policies.

Dr. Cable : Will the right hon. Gentleman give way?

Mr. Lilley: May I make a little progress? The hon. Gentleman may then find that I have answered his question, or at least added more substance and fuel to it.

The main problem—certainly the one that brought me to the issue—the main cost, as it were, of large-scale immigration is the pressure of housing and land. The hon. Member for Doncaster, North (Edward Miliband) denied that that was a serious problem, but the Government themselves admitted, in an answer in the other place, that a third of all the households expected to be formed in future, for which housing will be necessary, are the result of net immigration to this country. Obviously, that excludes the figures for illegal immigration; if we made some estimates based on the recently published figures for illegal immigration, the number would probably be nearer 40 per cent. of all households in the United Kingdom. Net legal migration only is running at the rate of two constituencies a year, so two constituencies a year are being created in this country as a result of immigration.

By 2031, the Government expect—again, excluding all illegal immigration and assuming a slowdown from the current level of immigration—an extra 5.2 million people net in this country, solely as a result of legal migration. Those are substantial numbers, which play an enormously important part in the housing pressures in southern England, because obviously the figures are suddenly more important. Of course the bulk of migration does not go directly to Hertfordshire, where I come from, or other home counties; it goes primarily to London. But the people who would have occupied the houses that are let, allocated or sold to the newcomers to London, move out to the home counties to get housing—they have to get it from somewhere. They do not leave because they do not like the newcomers—they
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themselves are Londoners of all ethnicities moving out to us. That is the process: a net inflow of about 150,000 a year, mostly into London; and a corresponding outflow to the home counties, requiring very substantial house building, about which the Government refuse to talk. As my hon. Friend the Member for Orpington (Mr. Horam)—

Madam Deputy Speaker (Sylvia Heal): Order. I have been listening with some interest to the right hon. Gentleman's remarks, clearly setting the background to this debate, but it would be helpful if he would now confine his remarks rather more to the context of the Bill under discussion.

Mr. Lilley: I shall certainly follow your ruling, Madam Deputy Speaker. The Bill is about controlling immigration, and I am trying to find reasons for doing it. If we cannot find them, we cannot have a Bill, so I am sure that you would agree that we need to do so.

I was hoping to find in the Bill a fulfilment of the promise that the Government made just before the election: that they would establish an independent commission to advise on how much immigration was necessary and desirable. Sadly, I can find no such reference in the Bill, but such a commission would, I hope, analyse the arguments in favour of more large-scale immigration and see whether they were justified. If they were, we would have that advice; if not, we would obviously have even more need for the controls and restrictions inherent in the Bill.

The Prime Minister said that according to the Treasury, our economic growth rate would be 0.5 per cent. lower a year if net migration ceased. Lower growth, he said, means less individual prosperity. But economic growth is the sum of the growth in the number of workers and the growth in output per worker. The Treasury model, about which the Prime Minister was talking, says that immigration will add 0.5 per cent. to the growth in the number of workers, but will not increase output per worker, and it is only if output per head goes up that we get richer. So even on the figures that the Prime Minister quoted, he merely showed that we shall have a bigger economy, not a richer economy, and when he said that growth meant more individual prosperity, he was simply treating the facts with his normal discombobulation.

The hon. Member for Liverpool, Riverside (Mrs. Ellman) asked about the study that showed that the immigrant community makes a net fiscal contribution to this country. The report that she mentioned, which I happen to have, says:

for the rest of us. When we look at the figures, we find that that was a year when the Budget was in surplus. Not just immigrants were paying more in than they were taking out; the whole population was paying more in than it was taking out. When we allow for that fact, half of that £2.5 billion disappears. The other problem was that the study attributed to both immigrants and non-immigrants in proportion to their shares of the population the taxes paid by foreign owners of companies. If we take that out, and if we also allow for
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something that the authors of the study wholly ignored—the biggest single item, probably: the accruing pension liabilities of members of the immigrant population who are disproportionately below retirement age—all that gain disappears and turns into a net deficit.

But I am not particularly arguing that immigrants are a burden, just that it is absurd to say that they are reducing the tax burden on everybody else. Rich people pay more taxes than they receive in benefits from the state, whether they be immigrants or previously resident people. Poor people, on the whole, pay less in to the state than they take out, whether they are immigrants or are born here. It is silly to aggregate them all. If one wants to use immigrants as a fiscal milch cow, one will obviously limit those coming here to high earners, but that is on the whole a rather unattractive policy.

Mrs. Ellman: Does the right hon. Gentleman discount the contribution made by immigrants to the economy generally by providing skilled services, which are often scarce, and their wider contribution to society as a whole? He seems to be relating his comments only to fiscal matters and discounting the general contribution that immigrants can and do make to society.

Mr. Lilley: Everybody in society makes a contribution to everybody else. In a free market society we are all exchanging goods and services and we are all mutually interdependent, and that is a wonderful thing. But if the hon. Lady is referring to the shortages argument—effectively to the Prime Minister's statement that

she is referring to the same misunderstanding of how economies work. Since the Prime Minister first referred to there being half a million vacancies which we need immigrants to fill, half a million immigrants have come to this country, and there are still half a million vacancies to be filled. That is not a coincidence; it is inevitable in a well-working economy, because immigrants not only produce goods and services but consume them, and the value of the goods and services that they produce is equal to the value of the goods and services that they consume. Also, in consuming goods and services they create demand for an equal net further inflow of workers, and that is why, in countries like our own where we have had a net inflow, there is still the same level of vacancies. The same is true of California, and of west Germany.

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