Examination of Witnesses (Questions 280
- 293)
TUESDAY 20 NOVEMBER 2007
Professor David Coleman
Q280 Lord Skidelsky:
Would it be an acceptable summary of your written evidence to
say that you regarded the strictly economic effects of migration,
whether positive or negative, as negligible, and that the important
impacts which we ought to be considering or anyone ought to be
considering are the "uncosted externalities" such as
impacts on crime, security and health, and the costs of integration,
race relations and equality processes. If you abstract those from
the strictly economic effects, which are negligible, then these
areas are where the important impacts come. Would that be an accurate
summary of your views as you express them in your written evidence?
Professor Coleman: Yes, it would. Perhaps I
could qualify it slightly by saying that the aggregate result
which you referred to at the beginning of your comment is an aggregate
result and is a combination of a number of effects, some of which
are clearly positive and others of which are less clearly positive.
The arrival of skilled and professional workers into Britain is
clearly beneficial and, like much other migration, is a perfectly
normal part of ordinary economic life. No one is disputing the
benefit which arises from that, although there are some possible
harmful side-effects which we might go into later on. That is
counterbalanced by the effect of poor and less well skilled immigrants
who do not make this contribution and the two cancel each other
out. It is possible to imagine migration streams consisting entirely
of highly skilled people where the effect would be much more clearly
positive, but in practice this is not the case, either in this
country or in any other western country that I have knowledge
of.
Q281 Lord Skidelsky:
To go on from that, how should one determine which of these costs
and externalities to include in an overall assessment of the impact
of migration?
Professor Coleman: First of all, you have to
put a number on it, which in some cases is reasonably straightforward
but in other cases is not. That is one reason why they have not
been included because in the quite reasonable Home Office 2001
paper which reviewed, right at the beginning of this policy change,
the pros and cons of migration, it was explicitly stated that,
for example, except for the age structure, there were no differences
in education costs and no difference in health costs. So clearly
these were taken on board as being potentially important, but
for reasons of access to data, perhaps, they have not been considered.
Anything which is necessarily a consequence of migration and is
primarily or wholly a consequence of migration, and which is accountable
in costs, ought to go into that equation. That applies, I ought
to say, to positive externalities as well. I am not aware that
there are very many and I did not have time to explore them in
my rather hasty submission. But the possibility of there being
positive uncosted externalities must be kept in mind. I can think
of one or two but I do not have any idea what the measurement
might be.
Q282 Lord Turner of Ecchinswell:
Can I ask a further question about uncosted externalities, and
it refers back a little to the question about the difference between
population growth in general and immigration in particular. It
strikes me that you could have done an analysis of the uncosted
externalities of population growth per se, or the uncosted externalities
of immigration, or the uncosted externalities of ethnic diversity,
whether a recent immigrant or not.
Professor Coleman: Yes.
Q283 Lord Turner of Ecchinswell:
Most of your material here relates actually to the latter two
categories, the uncosted externalities of recent immigration or
indeed of ethnic minority diversity.
Professor Coleman: Yes.
Q284 Lord Turner of Ecchinswell:
You did not really focus on the issue of the uncosted externalities
of population growth per se, other than, for instance, a reference
to the Dutch evidence on people leaving the Netherlands because
they just feel the place is too crowded. Is that simply because
we asked you about immigration so you focused on immigration,
or if we had asked you about population growth would there have
been as much on the uncosted externalities of higher fertility
as there is here on the uncosted externalities of immigration?
Professor Coleman: I felt in concentrating on
immigration and giving subsequent generations the attention I
did, I was only obeying orders. I would very much like to have
addressed the issue of population growth as well but with considerable
anxiety as to whether I was able to do it. It is possible to point
to a number of potential, really quite serious costs arising out
of population growth itself, to do with the need to radically
increase and expand infrastructure in terms of water provisions,
sewerage, roads, railways and all the rest in an already crowded
country. It should be possible to compute the effects, other things
being equal, on the cost of land and housing of population growth.
It would be, I think, a considerable study to do that properly.
What is more, there must be some ambiguity as to how far that
extra spending should be counted as a cost and how far it should
be counted as a contributor to GDP.
Q285 Lord Turner of Ecchinswell:
Can I ask you one follow-up then, which is in the area of uncosted
externality of immigrants or of ethnic minorities? Can you perhaps
deal with a sensitive subject—you have not been unwilling
to deal with sensitive subjects? Do you think that these uncosted
costs of immigration are very different for different groups of
people of different ethnic backgrounds, i.e. as we look at these
Table 2 potential costs of immigration, would they be quite different
for the A8 immigrants than for some other categories of immigrants,
and do you have a different point of view as to the desirability
of immigration from different parts of the world?
Professor Coleman: It seems quite clear from
the data which exists, which are separated into different categories
of people, that there are such differences in the crime statistics
published by the Home Office where a very, very broad brush ethnic
categorisation is employed. The relative weight of criminality
and also the pattern of criminality is somewhat different and
is well-known anyway from other sources of knowledge, so yes to
that. In some of the other evidence, the data are not so divided
and it would be very helpful if it were. It would also be helpful
if it were divided according to people who were actually immigrants
or the children or descendants of immigrants—first or second
or higher generation. Generally speaking, these data are not available—at
least, I have not been able to find them. I have to say in the
context of that question that these comments of mine were of a
very preliminary kind. I thought it was too important an issue
not to raise but I am conscious of the fact that it is a highly
preliminary kind of exploration and a great deal more work is
required to make it more concrete and more satisfactory. From
the point of view of your googly at the end, it seems to me that
in terms of certain kinds of outcomes that we have had, the answer
is yes. It may be that if immigration had had a different pattern
in the past than certain other salient problems would have been
less great than they are at the present time. You cannot choose
migrants on the basis of race or colour or religion, that would
be quite improper. What you could do and perhaps what should have
been done over a long period of time is to require immigrants
coming to Britain for a long period of time or for permanent settlement
to sign up to some kind of declaration of rights, or to understand
a set of expectations. This has never been done, partly because
the migration we have had has not really been planned at all,
it has never been particularly intended, it has happened as a
consequence of the various undertakings entered into, through
international treaties, through considerations of human rights
and humanitarian obligations to reunite families and so on. But
if it had been done in a more systematic way, then it may be that
immigrants would have entered Britain with a clearer understanding
of how most people expected them to behave, as opposed to recreating
the home communities in Britain in a rather inward-looking way,
which has not been entirely helpful.
Q286 Lord Moonie:
You have partially answered this one, but I will ask it anyway
for the record. Given the limited data available, how confident
are you, both in the accuracy of and your interpretation of the
figures that you cite for the impacts of immigration and diversity,
particularly regarding health and crime?
Professor Coleman: It is highly mixed because
of the different categories that I have put together, which are
very preliminary. I used different sorts of data; the data on
crime and the costs of crime, for example, as far as I know, are
the only data there are. They both come from official sources
although they are different sources that I have stuck together,
I hope licitly: data from the Home Office on the costs of crime,
on the one hand, with separate data from the Home Office on the
propensity to criminal behaviour as measured at various stages
of the criminal justice system, from a different study. As far
as I know, those data are as good as they can be, which may not
be saying a great deal. But a lot of care has gone into them and
the documents supporting them are very long and detailed. Other
estimates, like the estimates of the cost of race relations activity
in local authorities, had to be based upon an estimate of the
number of individuals employed by each local authority involved
with this, which I have assumed to be 1.5 on average, the number
of local authorities and a reasonable guess at what a clerical
or higher clerical grade officer would be paid. I would be surprised
if they were grossly out, but I have been explicit that those
were the much more precarious assumptions on which I based that
estimate.
Q287 Lord Paul:
What would be the impact on the cost of border control and internal
enforcement of a policy that aims to reduce migration to Britain?
Has Britain's openness to immigration helped keep illegal immigration
lower than it would have been under a more restrictive immigration
policy?
Professor Coleman: I do not know the answer
to the first question except that I am quite sure it will be high,
and anyone advocating a more restrictive policy of immigration,
as I would if I were able to do such a thing, would have to take
on board the fact that it would involve very considerable costs,
and one must not flinch from that point. Exactly how much is difficult
to say. A recent citation for the costs of border control is about
£470 million per year if I remember correctly. There has
been some political party debate on that subject as to whether
the costs of a border police force, as proposed by the Conservative
Party for example, would be able to replace the identity card
which they cost at £20 billion and the Government costed
at £5 billion. All the Conservatives have been prepared to
say is that it would cost tens of millions more to have such a
border police force, even though it seems quite a lot of the proposed
numbers in that police force are actually drawn from existing
forces and not created anew. If you want to do this, you have
got to swallow the pill of a great deal more money. How much a
population register, together with e-borders, would cost, I do
not know, but to begin with, it would be certainly more than the
census which it would replace. In the long run it would lead to
a much more efficiently managed country and one which would run
on much more high octane statistics than is presently the case.
Of course, if we had introduced a population register back in
1753, when Parliament first debated it, then of course those costs
would be well in the past although we would have had to modernise
it in the interim.
Q288 Lord Paul:
One of the benefits of an open policy has been that Britain's
influence all over the world is much more than what it deserves.
What would happen on account of that?
Professor Coleman: That is an open immigration
policy on the part of the countries which have received British
immigrants over the last 200 or 300 years rather than openness
from outside into Britain. That has certainly been very much to
our benefit in the sense that it brought into being an English-speaking
United States, Australia, Canada, New Zealand and other parts
of the world, as opposed to them speaking French or Arabic or
whatever you care to mention. Nonetheless, I suppose the blunt
fact is that in the past many of those recipient populations,
alas, then did not have any choice in the matter because they
were numerically too small or too primitive to stand in the way.
One of their great regrets must be, for the American Indians and
the Maoris and everyone else, that their immigration controls
were not rather more effective than they had been.
Chairman: This is fascinating, but we
are getting a bit wide from the economic impact of immigration.
Lord Vallance.
Q289 Lord Vallance of Tummel:
What do you think is the impact of remittances sent abroad by
migrants to this country and how does that compare with remittances
to the UK from British people who are living abroad?
Professor Coleman: There seem to be a couple
of different views as to the economic effects of remittances and
at least three different sources of data give different numbers.
Some more Malthusian or Keynesian-minded economists take the view
that remittances are effectively taking money out of circulation
as if you had parked it under the bed and are not spending it,
and therefore this reduces the demand for goods and services compared
with what otherwise might have been the case. Others feel that
this is not valid and that the only valid consequence of an economic
kind is on the balance of payments itself, which is a negative
of course, with remittances being transmitted overseas. I have
seen, three estimates one comes from the UK Government Pink Book,
which is about £550 million per year for remittances, strictly
defined, and two others: one from a household survey gave £1.4
billion, which is the figure that I cited, and another one from
ONS suggested that it was about two point something billion per
year,[14]
so really quite a big variety of estimates and I chose the middle
one. There are also, under the balance of payments heading, as
I am sure you know very well, items for payment of salaries overseas.
The balance of payments deficit is about a billion according to
this Pink Book, but the converse, the amount received from overseas,
is about two billion and the remittances are about the same. It
is clear that remittances in the broad sense and probably the
narrow sense as well, taking all people into consideration and
both flows into consideration, are a positive benefit. But I think
that that would be an incorrect combination of flows, because
the one has no connection with the other. If the remittances from
immigrants in Britain were to be lower or to cease, then of course
it would make the advantage that at the moment we rake in from
overseas even greater.
Q290 Lord Lamont of Lerwick:
Can I just follow up on that? The two arguments, what you call
the Malthusian or Keynesian one and the balance of payments one,
they are not contradictory, are they?
Professor Coleman: They are not.
Q291 Lord Lamont of Lerwick:
You just said that some people say the first is not valid; why?
Professor Coleman: I am not sure that I can
explain that, I would have to go back to the LSE and do some more
economics to explain exactly why they were not convinced that
it was an important consideration. It seemed to me that it was,
but I was assured firmly that this was not the case by wiser men
than me.
Q292 Chairman:
Let us move on. The Government's proposal for a points-based migration
system, do you think it will be effective?
Professor Coleman: It will be effective in helping
employers to get what they want; it will be effective in probably
increasing the flows of migration; it will be effective in probably
weakening the knowledge which we have and the control that we
have over the pattern of labour migration. Whether it will be
effective in doing anything particularly good, I am not sure.
I rather fear that it will not. There are a number of reasons:
one is that the points system has no bearing on non-economic migration
at all, That, one assumes, will proceed under the present regime
for students, new spouses, family reunion and child and elderly
dependants and so on. All that is really a very important component
of migration which the points system does not touch at all. The
points system does greatly increase the influence of employers
because it is going to be a devolved system whereby employers
will apply to the appropriate ministry for recognition—forgive
me if I am teaching grandma how to suck eggs but this is my understanding
of it—as an appropriate donor of sponsorships, of which
there are two categories, A and B, and the B will be, it seems,
rather less trustworthy than the A one. Once they are recognised
as appropriate dispensers of sponsorships, they will then be able
to say each year, "we want 50 people or 30 people of this
kind to meet our needs in the coming year", and they will
be able to recruit them as long as the migrants can pass the points
required. The points required will be judged at the local level,
in Ulan Bator or wherever it might be, by the consulate there,
in several dozen or even hundreds of places around the world.
It will not be done centrally. Unless there is going to be a very
expensive centralising information system created, we will not
really know what is going on as an aggregate flow into the workforce
from one year to the next. It is interesting to note that no other
country that I am aware of is proposing to have a points-based
system for what is in theory temporary migration. Those countries
that have points-based systems—the US, Australia, Canada
and New Zealand—do so in order to acquire what they call
permanent settlement, people whom they assume will stay for good
or at least for a long time. We are doing it on the basis of what
is generally thought to be potentially a temporary migration for
labour, even though of course it may turn into settlement depending
on whether the person will stay or not. Once you have these potential
sponsorships, employers can recruit however many they want without
having to show that the market has been tested. For work permits,
at least in theory, you had to show that you have advertised in
Britain and the EU but you cannot fill the post with a suitably
qualified person. Then you can go outside the European Economic
Area and get someone. With the points-based system, you need not
do that any more, it is much less clearly related to employment
needs than was the case in the past.
Q293 Lord Layard:
You have already implied quite a bit about what you think about
the Government's courage, but if you take the Government's submission
to this inquiry do you have any comments beyond what you have
already said?
Professor Coleman: Perhaps not very much. I
am very reluctant to make adverse criticisms on something which
has clearly had a lot of thought gone into it, but I am not sure
that it has been thought of an entirely fair-minded kind. I know
perfectly well that there are a large number of sources of information,
of studies, of references which are well-known in economic and
demographic circles which seem to me, frankly, to have been ruthlessly
excluded in order to make a more positive case. The only negative
example that I can think of which is cited in this Government
report is a 1996 paper by Borjas, which is obviously somewhat
out of date. That has been succeeded by lots more papers by Borjas
and others which Professor Rowthorn cited at length in his submission.
These are simply not there, one cannot have such an unbalanced
presentation, it seems to me, coming from an official Government
source. That is rather regrettable.
Chairman: Thank you very much indeed,
you have certainly covered a lot of ground at a pretty good canter
and we are very grateful to you for that. Thank you very much
indeed.
14 Note by witness: OWS estimated the annual
value of remittances from UK to the developing countries of orgin
of immigrants' to be £3.5 billion. That includes more than
workers' remittances-it includes all transfers. Back
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