Immigration drops

Back in late summer, the ever-perspicacious Vince Cable, predicted that “if we get into a serious recession, immigration will become negative, as it has before.” According to the Office for National Statistics, this has now come to pass, with data showing that immigration into Britain fell by 8.9 percent to 577,000 last year. Separate Home Office figures show the number from the eight eastern European nations including Poland that joined the EU in 2004 dropped for a fourth consecutive quarter.

At the same time, Eurostat - the EU’s statistical bureau - released immigration figures for 2006. These figures show a couple of interesting things. First, in 2006 about 3 million foreign immigrants settled in an EU country, with 1.2 million being from another EU country and 1.8 being non-EU citizens. The largest foreign immigrant groups were citizens of Poland (about 290,000 persons), Romania (about 230,000), Morocco (about 140,000), Britain, Ukraine and China (each about 100,000) and Germany (about 90,000).

So who took in the most immigrants? In 2006, the largest number of foreign immigrants was recorded in Spain (803,000 persons), Germany (558,500) and then Britain (451,700), who together received 60% of all foreign immigrants in the EU. But these immigrants primarily came from within the EU (Polish plumbers, French bankers, German auto-dealers). The highest shares of immigrants from non-EU countries were registered in Slovenia (90%), Romania (86%), Portugal (84%) and the Czech Republic (83%)
That is in absolute numbers. Compared with the population in the receiving countries, the highest rate of foreign immigration in the EU was recorded in Luxembourg (28.8 foreign immigrants per 1,000 inhabitants), followed by Ireland (19.6), Cyprus (18.7), and Spain (18.1).

What does all this mean? First, that immigration into Britain is tapering off because long-term confidence in the British economy is dipping. No surprise there. The kind of immigration Britain has experienced over the last couple of years has primarily been economically-driven. Poles thinking that they would have better opportunities in London than in Lvov. This calculus is now changing.

However, there is probably a limit to how much immigration figures will fall. A higher standard of living exists in Britain than many other countries, even during a recession. For prospective immigrants, for example from Poland, being unemployed - and having to rely on the government for support - is still often better in Britain than life in their home country. In addition, if you are a French banker, who has recently been laid off you are unlikely to go home to Paris, but will probably try to find other employment in another London-based bank.

Third, even in an economic crisis London will remain London – a teeming boomtown, equal parts shiny and gritty, rivaled only by New York for finance, food, fashion, and plain-old fun. My serious point? Migration ebbs and flows over time, but it does not tend to a perfect equilibrium, like some economic theory of free markets.

Finally, Britain is a top-three destination for immigrants - but mainly those coming from another EU country. Sure, it is high on the list of countries taking immigrants from non-EU countries, but it remains to be seen whether, as Phil Woolas recently claimed, that the government’s new immigration system means that “only those from outside Europe with the skills we need will be able to work or study here, and no more." So far, the data does not suggest that these people are currently heading towards Britain.