Open borders immigration is a key to growth

Open borders immigration would be a boost not only for the UK but the entire global economy

Are closed borders now obsolete?
Guy Bentley
On 7 September 2012 12:16

The past two weeks have seen an intense discussion over what is to be done about the parlous state of the British economy.

A possible third runway at Heathrow has led to an almost comical argument between Conservative backbenchers and the government.  The Liberal Democrat Party is unsurprisingly opposed to the idea.

The debate on the economy between the Left and the Right has centred on whether to stimulate demand by borrowing and spending money on initiatives such as house building combined with some temporary tax cuts.

The Right has called for more supply-side measures such as deregulation of businesses; labour market and planning liberalisation with of course tax cuts, offset by greater cuts in public spending.

Amongst all the various measures being raised and debated there is one that has been overlooked, When it is raised, it is only ever seen as a problem. The issue is immigration.

The government in the form of the Conservative Party has introduced a cap on immigration, attempting to limit the numbers to ‘tens of thousands of a year’. Government has conspicuously failed to meet this target.

In the year December 2011, net migration was 216,000. Most governments have failed to meet the targets of dramatically lowering immigration into the UK.

However the failure of the government’s attempts to meet its immigration targets is something to be celebrated.

The benefits of immigration from an economic standpoint are rarely set out in detail.

Instead of making this positive case for immigration, too many supporters of a more liberal immigration system have been eager to cast their opponents as having a nationalist or xenophobic agenda.

We all recognise that the division and specialisation of labour is a positive for any economy. The same is true when immigrants are added to the workforce.

There are usually three major objections that are raised against free immigration.

The first is that immigrants are a drag on the economy in that they use more in public services than they pay in taxes and productivity.

This is demonstrably false. A Home Office report in 2007 found that the average immigrant in 1999-2000 paid 10 percent more in taxes than they received in benefits, whilst the average UK born worker paid 5 percent more in taxes than they received in benefits.

The report also finds that ‘In the long run, it is likely that the net fiscal contribution of an immigrant will be greater than that of a non-immigrant’.

The second objection is that immigrants somehow steal our jobs.

Firstly the obvious thing to point out is that British workers do not own these jobs. It is up to respective employers to decide which employees will most benefit his or her company. Leaving that aside, the truth is that immigrants do not crowd out UK workers from the labour market.

The labour market is not one homogenous blob, but a variety of labour markets requiring different skills.

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