Economy suffers brain drain as Britain’s population takes flight

24 November 2007

WE all know of the millions of Mexican emigrants who have left their country in the hope of a better life, usually to head to America.

As America understands well, states must now compete for the right kind of worker. So while Britain is planning to milk the non-doms, other countries are dangling incentives. Sweden offers not to tax the first 25% of certain immigrants’ income. Those coming to Quebec for R&D purposes are given five years tax-free status. South Korea offers tax-exempt status for five years to some immigrants. Even France offers ex-pat workers five years of tax-free bonuses.

It is no mystery why they do this. The Home Office last week calculated that immigration adds 0.4 percentage points each year to economic growth. But how much economic potential has been lost by Britain’s extraordinary loss of high skilled emigrants? There is no figure for this. It may be no coincidence that most emigrants leave by Heathrow Airport. Conditions there epitomise the state of the country being left behind.

So here is a phenomenon that nobody predicted: Britain has become a nation of mass emigration. The Institute for Public Polic Research (IPPR), a left wing think tank, calculates that there are now 13.6m people living abroad who would qualify for a British passport (2.07m in Australia and 1.38m in America).

When Tony Blair was trying to make a virtue of the collapse of British immigration controls, he observed that the mark of a strong country is whether people are trying to enter it or to leave it. He had a good point. Since 1997, emigration has risen by 45%. Much of it is the property prices, some of it will be retirement, some will be immigrants returning to their home countries. The IPPR found eight cases of emigrants who had successfully claimed asylum from Britain.

But the British brain drain is, officially, the largest in the developed world. So before ministers launch the next phase of their “skills agenda” they should ask why, for so many people, such skills are used as a passport to get out of Britain.