Immigration, housing and inequality

2 Nov 2007 by Karl Hallam

David Cameron's essay into immigration policy comes at a time when both main parties are aware of public anxiety on the subject, says Jeremy Cushing, part of the Cadence Network. He suggests that inequality and housing are more pressing, but associated problems that need addressing. 

The Tories are doubtless conscious that although talking tough on immigration pleases their core ‘nasty' vote, it doesn't actually improve their election prospects. On the other hand, they can't afford to be seen to be less tough on immigration than Labour.

There obviously isn't much difference between the two parties: they are both conscious that the UK is hooked on immigration as a source of workers who aren't forthcoming from the native population (at least at the sort of wages UK employers want to pay) and probably also to redress the imbalances of an increasingly ageing population. They both know that voters who encounter difficulties in accessing public services (or who fear increasing levels of crime) are looking for someone to blame, and clearly hope that they can deflect this blame onto immigrants. They both say that they will limit immigration, install border checks and set up independent agencies to advise politicians. Neither will say by how much they will limit immigration, probably because business interests won't let them. Each party, of course, would like us to believe that the other one is ‘soft on immigration', while being anxious to avoid seeming racist.

Both parties reassure us that immigration has delivered economic benefits, and it is probably true that it, along with house price increases, has been one of the main factors behind continued economic growth since 1997.
However research in the US suggests that immigration delivers its benefits to an economy in a very unbalanced way. There is a very small net benefit to the whole economy (£6bn is a recent estimate for the UK). However this is made up of very large benefits to business alongside quite significant losses to employees, and especially the poorest. In effect, the most significant effect of immigration is that it tends to increase inequality in the receiving society. It makes the rich richer and the poor poorer.

Inequality has been growing in the UK since the 1970s, and we now have a significant section of the population who are almost entirely excluded from the benefits of economic growth. It is these sections of society who suffer most from immigration. The young - more immigration, more NEETS - the old (especially those with few qualifications), low-paid workers and poor families with children are all likely to be in the front line. The government is reluctant to admit that immigration pushes down wages or that it puts pressure on public services, but recently more and more evidence has begun to make their denial seriously unconvincing.

One of the most sensitive topics for voters is the availability of housing and the stubbornly high levels of homelessness. In a recent survey of the geographical impact of immigration, seven out of eight regions reported pressure on housing, the highest number for the five key areas included (housing, crime and disorder, community cohesion, education and health). Housing shortages have for years been one of the most serious causes of social inequality in the UK, and the Government has not done anything that seems to have been effective at addressing this issue.

What all this adds up to is that immigration has adverse effects on that section of the population which is serially neglected by governments. It is not a solution to pander to the real resentments of voters by suggesting that limiting immigration will cure the ills of inequality. The real solutions to the adverse effects are to reverse the neglect which causes inequality in the first place. This would require a radical and strategic change in government policy, focusing massive resources on removing the causes of poverty in the UK. This is a question beside which immigration is relatively trivial.

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