How to fix Britain’s immigration crisis (without leaving Europe)

The response to the Ukip surge has reached the panic stage. Just as British business and academia chorused the economic benefits of Union in the final stages of the Scottish referendum campaign, now their refrain is of the economic benefits of immigration. A letter from ten chief executives in the Financial Times pronounced that unimpeded immigration from Eastern Europe is highly valuable. The previous week economists estimated that immigration from Eastern Europe had contributed £20 billion net in taxes.

But Ukip supporters are no longer overawed by businessmen and dons, so what is to be done? Within the accepted rules of English social hierarchy, the tempting implication for the rest of us is condescension. Ukip supporters are from the less advantaged classes, but not sufficiently wretched for the status of disadvantaged. Ill-educated and prejudiced, despite their numbers they are politically marginal because they are spatially dispersed. Hence: ignore them. This would be a terminal error. Instead, we should try honesty.

On the need for foreign workers, too much has gone wrong in British business for chief executives to have retained the respectful attention of an admiring populace. Of course British business finds it cheaper to hire ready-trained and motivated Hungarians than to train and motivate British youth. Similarly, the City finds it cheaper to hire tax-privileged non-doms. Britain’s disastrous record of low labour productivity reflects this hire-cheap-and-don’t-train approach. It is clearly not coincident with the national interest.

As to tax, the £20 billion short-term gain brandished in the headlines is less indicative of the fiscal consequences than the longer-term £114 billion fiscal loss from overall immigration. Even these numbers are misleading. The impact should be estimated from the perspective of the life cycle. Over a lifetime the average person will pay in tax what they get out in public spending. Those whose lifetime income is below average are net beneficiaries: they get more from the state throughout their lives than they pay in taxes.