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Lord Lamont of Lerwick: My Lords, my noble friend Lord Waddington has drawn attention to the sharp increase in immigration in recent years. Net cumulative immigration has amounted to almost 750,000 between 1999 and 2003. If net immigration were to continue at the present level of 150,000 a year the UK's population would rise to 69 million by the middle of this century, which is roughly 12 million greater than it would be without immigration. It follows that during that time the composition of the population would alter considerably.

The matter deserves to be debated openly. Of course, there are benefits in multi-culturalism—rich benefits. But, as Prospect magazine has pointed out, there are also risks in too much diversity.

I want to concentrate purely on the so-called economic arguments for immigration because, from time to time, the Government have attempted to close down the debate by arguing that a high level of immigration in the modern world is inevitable and produces great benefits. Some of the arguments are questionable and some are static snapshots that ignore the longer term.

The Government frequently point out that a Home Office survey argued that in 1999–2000 immigrants contributed £2.5 billion net to the Exchequer. That is another dodgy dossier. The interpretation of that report, if it is extrapolated into the future, is distinctly dodgy. The Home Office conceded that that figure depended on Britain's position in the business cycle. That point was taken up by Professor Robert Rowthorn, the Professor of Economics at Cambridge University, who strongly disputed the Government's conclusion.

Moreover, the study ignored the higher cost of housing in the south-east, where two-thirds of migrants settle. Like many studies, it ignored the lifetime impact of immigrants and their dependants, and the fact that since the mid 1980s immigration has been adding to the population and new investment has been necessary.

The Government also try to argue that immigration will improve the balance between the old and the young, thus helping us with our pensions problem. Unfortunately, there is a problem with that reasoning:
 
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immigrants themselves grow old. That argument would hold water only if the migrants were temporary migrants to this country. The Home Office again conceded that point and went on to argue that for that argument to have any impact, net inflows of migrants not only needed to occur on an annual basis, but had to rise continuously. That issue was gone into by a Select Committee of this House, which pointed out that to stabilise the age of the population of this country, immigration would have to be at the rate of 500,000 a year. That is clearly not practical.

The more central point that high levels of immigration add to economic growth is also very arguable. Many major studies have been carried out in the United States, Canada and Holland, and none has supported the view that immigration is needed for economic prosperity. Indeed, the study in the United States was followed by a recommendation that immigration be reduced. When the Government argue that immigration increases economic growth, they forget that when dependants are taken into account the population increases by virtually an identical percentage.

The most plausible economic argument for immigration is labour shortages. I wholly agree that it is in our interests to import skilled and talented people with special skills. Whether that is in the interests of the developing world, however, is a different matter. Different questions arise with mass unskilled immigration. The benefits are not so clear, especially if immigration is permanent, not temporary.

The right response to labour shortages ought to be higher wages, more training and investment. No doubt employers and the CBI do not want to pay those costs but the local population are the losers when labour is imported. The noble Lords, Lord Young and Lord Desai, referred to the fact that immigration has increased but unemployment has not. We also need to take account of the effect of immigration on the other economically inactive groups, including the one million on incapacity benefit who, according to Alan Milburn, would like to work if the conditions were right. Mass immigration, through its pressure on wage rates, intensifies the poverty trap.

The effects of unskilled labour are felt not just in the areas where immigrants arrive but in other parts of the country. A recent study found that immigration into the south of Britain led to significantly reduced migration from other parts of the UK—from Scotland and the north—to the south. If that is correct, we should expect to see the effects of immigration showing up in those areas where there is a surplus of labour that may be deterred from moving south by competition from immigrants.

Some economists—and presumably the Government—would argue that forcing unskilled labour to compete at lower wages is desirable on grounds of national competitiveness, as costs are reduced, prices decline and, in the long run, workers are no worse off because they gain as consumers. Nominal wages are reduced but real wages are not. Of course, such an argument depends on continuing immigration.
 
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However, many economists, including Professor Rowthorn of Cambridge and, possibly the leading migration economist in the world, Professor George Borjas, have argued that any such gains from mass unskilled immigration are likely to be small. Borjas argues that a 10 per cent increase in the labour force followed by a 3 per cent fall in wages would generate a surplus of only 0.1 per cent of GDP—not 1 per cent, but 0.1 per cent. That is the boost to output of lower cost. That is not the lifetime cost with discounted tax contributions and benefits received of immigrants. That would be a very different calculation over a lifetime. The boost to output is so small because most of the benefit goes to the immigrants themselves.

It is often said—and we have heard it again today—that immigrants are needed to do the jobs that locals will not do. It is not so much a shortage of labour as a shortage of cheap labour. Again, the answer is to raise wages and to have more specific training.

It is said that the NHS would collapse without immigrant staff. We are importing 15,000 nurses and 10,000 doctors a year, which is an indictment of the Government's medical training policy, but that is not a reason for having 150,000 immigrants a year.

Martin Wolf, the distinguished Financial Times economic commentator, made the point that mass unskilled immigration to deal with labour shortages can be self-defeating. He said:

"If the response to shortages is to import labour, additional demand for goods and services, then further shortages of labour will emerge. The argument from shortages creates an open-ended demand for more immigration. If the UK had a population of 120 million it would still have labour shortages and so a demand for yet more immigration. The demand could never be justified".

Many economists argue that the main beneficiaries of immigration are the immigrants themselves rather than the host country. Of course, there is an argument for migration and immigration that is based on global concerns rather than the concerns of any one country, but the first duty of government is to the inhabitants of this country.

Mass immigration for permanent settlement is not the answer to an ageing population or labour shortages. It harms the weakest sections of our society. Ultimately, this is not an economic issue. It is a political and social one. The Government should stop trying to justify a political decision with very questionable economic arguments.

Lord Greaves: My Lords, I am grateful to the noble Lord, Lord Waddington, for introducing this debate. I agreed with perhaps his first two sentences, but he and I have been disagreeing on these issues for around 35 years, which we will no doubt continue to do.

The noble Lord referred to the "intolerable strain" of immigrants on public services. Eighteen months ago, unfortunately, I had to spend cumulatively about a fortnight in Burnley General Hospital. All the doctors who saw me were not born in this country. A lot of the nurses were local, the rest of them came from
 
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the Philippines. I was extremely grateful for their care, commitment and competence, and will continue to be so.

The consultant who carved me open on the fateful day of my operation originally came from Sri Lanka; his family was Sri Lankan. My operation had to be deferred for three weeks, which I am pleased to say was not harmful, because he had to attend the funeral of his brother in Malaysia. That is an indication of how the world has changed.

Many families throughout the world are genuinely global as families and communities. It is ironic that the English were, perhaps, the greatest global colonisers. They used to look at the globe, half of which was red, and say, "Isn't it wonderful?". Now, many of us are among the least global in our lifestyles. Far too many retreat into what used to be called "little Englandism". We can argue about whether that is good or bad, but it is a fact that will not go away. We have to come to terms with it. My view is that to be global is a good thing.

I am angry about the Dutch auction taking place between the Labour and Conservative parties on immigration and refugees in the run-up to the general election. That is not because it is being done for reasons of naked, unprincipled and selfish party advantage on both sides, although it clearly is, or because it will be particularly successful. There is a myth in this country that immigration and race issues are election winners, which goes back to Enoch Powell in 1970 and 1974. I do not think it goes much beyond that and it will not succeed.

However, I am angry because it is being done without a care in the world for all of the individual people who will suffer as a result. Most of those people are neither immigrants, legal or otherwise, nor applicants for asylum, justified or otherwise. They are members of ethnic minorities who are legally settled here, in some cases for several generations. In most cases, they are British citizens who have as much right to be here and to integrate as everyone else. But their lives and lifestyles are being put at risk.

Mr Howard and Mr Blair may take care when using words such as "immigrant" to use them correctly. But they know what they are doing. When people hear the word "immigrant", they think of someone with a skin that is some shade between black and Roma. When they hear the words "cutting the numbers", they do not think of cutting the numbers of immigrants coming through Dover, they think of cutting the numbers who live near them.

The Independent has been quoted already today and there is an article by Trevor Phillips which puts that rather well. He wrote:

"In the pre-election campaign, the language is 'controlled', 'managed' 'immigration' and 'asylum'; but much of the electorate is hearing 'stop', 'black', 'foreign' and 'Muslim'".

It is to do with "triangulation", a word which puzzles me. I read much about it, written by clever political reporters, but I do not think that most people understand what it means. It seems to mean that new Labour gets scared that some Right-wing issue is
 
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playing well for the Tories, so it neutralises it by taking over the Tory ground or even leapfrogging it to the Right. I am not sure what that has to do with triangles, but that seems to be the way in which it works.

The main effect will be to make it more acceptable to dish out the low-level racist and cultural rudeness that many people—British citizens and immigrants alike—experience day-in and day-out. You only have to talk to people to hear about the fear of crime being more of a problem for many people than crime itself, which can imprison people in their homes and restrict what they do. But the fear of racism and that kind of rudeness works in exactly the same way for members of ethnic minorities.

The noble Lord, Lord Waddington, referred to the Cantle report on parallel communities in northern towns. The more that leading politicians debate immigrants as a problem, the more ethnic minority communities will turn inwards and the more they will build defensive barriers to keep the rest of us out; and the further we will be from what I would like to see—a liberal vision of a society that is both diverse and integrated. In parenthesis, it is interesting that much of the rise of anti-Semitism in this country has been put at the door of some of the less understanding members of the Muslim community.

But that is a defensive reaction against being attacked. If minorities are attacked, in many cases some of those people will lash out and attack other minorities. I tell my Muslim friends in Nelson and Colne where I live that in this country, at least when it comes to the challenge of the BNP, fascism and so on, Jews and Muslims are on the same side and should be fighting on the same side.

The global economy and wars and repression mean that the movement of people between countries and across continents will continue whatever politicians try to do. Equally, there are pressures within society that lead inexorably to people coming together. Employers need workers. Children meet at school. Students meet at university. Politicians need votes. Customers and service providers alike have to maintain at least a minimum level of politeness if they are to sell their goods. People fall in love. People worship their sporting and show business stars despite their prejudices. Even the tabloids need to sell papers to more than just the bigots. Even the bigots need to buy their curries.

Many of us work for a multicultural society because we believe that it is right. I am very proud to have spent much of the past two years helping to get a very good friend of mine—Sajjad Karim—elected as a Liberal Democrat MEP for the north-west. He will be a brilliant MEP. The fact that he is a Muslim and from an Asian background is an added advantage, but that he is a brilliant Liberal Democrat is most important, and there are many more of them to come.

Meanwhile, a lot of individuals will suffer directly from the Blair-Clarke package that has been announced. Refugees face the prospect of being uprooted and sent back after five years. How can that contribute to their social and psychological well-being and integration into British life?
 
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Unskilled workers will not be allowed to bring families with them. How can encouraging camps of single men or women contribute to family stability or the Government's favourite buzz phrase "social cohesion"? Unskilled workers from outside Europe, mainly from the black and Asian Commonwealth, will be replaced by people from eastern Europe who are mainly white. There is only one word for this—intentionally or not—it is indirectly racist.

Both the Labour Party and the Tories are being dishonest. The Tories have upfront hard-line policies that they know will not work in the modern world and cannot work. New Labour pretends to be anti-immigration to stop the unbelievable Tories stealing xenophobic votes. But it knows that it cannot cut immigration and does not intend to do so. It has at least more understanding of the British economy than the Tories or the noble Lord, Lord Lamont, who has just addressed us.

Meanwhile, a lot of people will feel more insecure, more disliked and more unwanted—all because Mr Blair and Mr Howard appear to think that the place to slug out the coming general election is in the Right-wing political gutter in company with people like Kilroy-Silk and Nick Griffin. The prospects are appalling and it is a disgrace.

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