Examination of Witnesses (Questions 536
- 539)
TUESDAY 15 JANUARY 2008
Sir Andrew Green
Q536 Chairman:
Sir Andrew, our apologies and thank you for your patience; we
are a little behind time. You may have heard me asking the previous
set of witnesses to speak as deliberately as possible and as briefly
as possible so that the stenographer and Members can hear everything.
Is there anything that you would like to say in addition to the
evidence that you have given to us or can we go straight into
questions?
Sir Andrew Green: I think we should go straight
to questions.
Q537 Lord Layard:
You argue that the impact of immigration on GDP per head is very
small. Can we expect the economic benefit from immigration to
increase as migrants integrate into the economy over time? Could
there be other dynamic events such that we talked about this afternoon
that are not currently picked up in macroeconomic data from, for
example, having a larger number of highly motivated and/or skilled
workers in the UK?
Sir Andrew Green: Chairman, if I may, I will
be fairly brief on the earlier questions which are analytical
and on which you have spent a lot of time. I would like to try
and focus on the policy issues which arise from questions four,
five and six. The short answer to Lord Layard's question is yes,
up a to point. I thought the Minister was struggling, frankly,
to get out of a situation in which GDP per head is actually rather
small compared to the impact of immigration as a whole. The OECD
have described it to you as a "very small positive balance".
The Government's own figures of £6 billion of extra production
per year works out at an annual benefit of 62 pence per head per
week. To answer Lord Layard's question, it is said that East Europeans
will become more productive because they are over-qualified, but
of course the Government claim that most of them are here in the
short term and therefore it does not arise. If you take their
number for real immigrants, net immigrants, it is only 22% of
the total, so there is an effect but it is not huge.
Q538 Lord Skidelsky:
Your calculation of the fiscal impacts of immigration allocates
the fiscal costs of UK-born children of mixed households (one
migrant and one non-migrant parent) 50/50 to migrants and non-migrants,
and not 100% to non-migrants as the Government has done. Why should
UK-born children be treated as migrants (or as "part-migrants)"
in the analysis of the fiscal impacts of immigration?
Sir Andrew Green: There are two very clear points
one needs to make on this. One is that there are three-quarters
of a million children of mixed households. That is where one parent
is a migrant and the other not a migrant. The second point is
that the answer on the fiscal balance depends on what you do with
those children. It is as simple as that. What we say is that the
impact of immigration is obviously to add to the number of parents
and therefore to add to the number of children, so you have more
children in total as a result of immigration than you would otherwise
have. Therefore we say the logical thing is to split the cost
of the children of mixed families between the two. I would suggest,
Chairman, that you ask the Government two questions. The first
is, is it correct that they have charged the entire cost to the
host community? The second is, if so, what is the effect of splitting
that cost 50/50? I think you will find that it comes pretty well
to zero. The bottom line is that the benefit to the Exchequer
of immigration on anything like the present scale is extremely
small and is certainly not an argument for large-scale immigration.
Q539 Lord Griffiths of Fforestfach:
Might I ask two questions? The first is, what would be the effects
of reducing migrant labour in those sectors which are at present
heavily dependent on migrant labour? Secondly, could this be done
without a significant cost and therefore higher taxes?
Sir Andrew Green: I think one effect would be
to significantly, and perhaps substantially, increase the incentive
for British employers to train British staff. The CBI have recognised
in their written evidence and also in their oral evidence that
immigration is not an answer to the long-term skill shortage.
I think that is a very important point. The answer is, I suggest,
to put the training facilities in place and then to allow market
pressures to raise the wages and draw people in. Much of what
you heard from the Minister seemed to ignore the existence of
a market and the effectiveness of a market over time, which surely
is very important. There is another point I would like to make
in this connection, if I may, which is that it cannot be done
overnight, there will be some disruption, but here is a question:
why is it necessary to give a virtually automatic right to settle
in Britain indefinitely to people for whom there is a temporary
need for their skills? There is no sense in that and I think this
may lie at the heart of the whole debate about immigration and
the economy. Why not, as many countries do, have a very clear
understanding that you can come here for three years, maybe four
years, give us your skills, go back to your country, and maybe
help your own country. If you want to stay longer, if you want
to settle—and of course some people will want to settle
for all kinds of reasons—right, you can do so under a points
system and under an annual quota. That would, as I will come in
a later answer to explain, help very considerably. There is no
reason why somebody who is coming for three years should then
stay for ever. The statistics demonstrate that roughly 95% of
those who apply, having been here five years, are granted settlement.
I think we need a new approach. We should have people we need
temporarily, we should have them temporarily and there should
not be an expectation that they will be here for ever. Many of
these people in the City who are incredibly valuable move on anyway,
so it is not going to do any harm there. These intra-company transfers
the Minister mentioned, again they move on, so I think there is
something there, my Lord Chairman, that the Committee might like
to reflect upon.
|
