Immigration restrictions

Based on 'How the great immigration debate could harm London' (Evening Standard)

Bars, building sites, hospitals. The capital’s economy depends on large numbers of migrant workers. So why should we restrict them?

Immigration will be at the heart of Labour and Conservative pre-election campaigns in the run up to the general election. Many economists and business groups have warned against placing a cap on visas for low-skilled migrant workers as it could send wage inflation spiralling.

When you look at bars, restaurants, construction sites, you notice that migrant workers are the lifeblood of many industries in London. Much of this cheap, hard-working labour is seen especially throughout hospitality, catering and construction. Nationally, figures in 2003, showed that about 1.4 million workers were from overseas.

Philip Shaw, chief economist at Investec, said that the restrictions set out by politicians would damage the already strained labour market and skills shortages.

“The UK economy has notched up 12 ½ years of growth and unemployment has fallen to a record low”, he said. “What has been amazing is that wage inflation has not taken off and one of the reasons has been the flexibility of the labour market and the ease with which people from abroad can get work.”

The impact of the curb on immigration depends upon where the government decides to draw the line. Preventing fraudulent immigrants should not affect the economy, however, if the curb restricts people who genuinely want to work, it could have a big impact on wage growth.

Limiting the amount of migrants coming into Britain would hit London hardest, as its economy hugely depends on this large workforce, which takes on jobs that locals cannot or will not do. Not only will London’s bars and restaurants be affected but also giants such as PricewaterhouseCoopers.

As well as wage inflation, a tougher approach toward immigration would result in implications for a host of issues, from housing and transport to health and education.

John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD) said that depends upon whether these policies can be enforced. “The real problem is not having an immigration and asylum policy, it’s making it workable”, he said.

On the whole, placing a curb on immigration would place unwanted pressure on the already tight market and it is easy to imagine pay deals rising to 4% or 5%.

Bars, building sites, hospitals. The capital’s economy depends on large numbers of migrant workers. So why should we restrict them?

Immigration will be at the heart of Labour and Conservative pre-election campaigns in the run up to the general election. Many economists and business groups have warned against placing a cap on visas for low-skilled migrant workers as it could send wage inflation spiralling.

When you look at bars, restaurants, construction sites, you notice that migrant workers are the lifeblood of many industries in London. Much of this cheap, hard-working labour is seen especially throughout hospitality, catering and construction. Nationally, figures in 2003, showed that about 1.4 million workers were from overseas.

Philip Shaw, chief economist at Investec, said that the restrictions set out by politicians would damage the already strained labour market and skills shortages.

“The UK economy has notched up 12 ½ years of growth and unemployment has fallen to a record low”, he said. “What has been amazing is that wage inflation has not taken off and one of the reasons has been the flexibility of the labour market and the ease with which people from abroad can get work.”

The impact of the curb on immigration depends upon where the government decides to draw the line. Preventing fraudulent immigrants should not affect the economy, however, if the curb restricts people who genuinely want to work, it could have a big impact on wage growth.

Limiting the amount of migrants coming into Britain would hit London hardest, as its economy hugely depends on this large workforce, which takes on jobs that locals cannot or will not do. Not only will London’s bars and restaurants be affected but also giants such as PricewaterhouseCoopers.

As well as wage inflation, a tougher approach toward immigration would result in implications for a host of issues, from housing and transport to health and education.

John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD) said that depends upon whether these policies can be enforced. “The real problem is not having an immigration and asylum policy, it’s making it workable”, he said.

On the whole, placing a curb on immigration would place unwanted pressure on the already tight market and it is easy to imagine pay deals rising to 4% or 5%.