UK's unemployment and unplanned immigration crisis

November 22, 2024
The UK's unemployment crisis is concealed by mass immigration.

At a time when millions of people are stuck on welfare, Britain is importing workers. Yesterday, the Department of Work and Pensions' website unveiled a technical annexe that omitted one of the most significant people in British public life. Working-age individuals receiving long-term illness benefits had already reached a startling 3.2 million and were expected to reach 3.8 million within five years. This would be the same as the UK economy losing a city the size of Glasgow. 4.1 million in just four years, according to the revised post-Budget estimate. The number of sick people in Britain will soon surpass that of Croatia.This is a social and economic calamity, unaffordable on every level. The waste of lives (let alone money) is on a scale that is hard to imagine. Had this happened 20 years ago, it would trigger crisis talks: who is going to grow the economy? How to save the collapse in the workforce? But this exodus is offset by another post-Budget forecast: that net immigration will settle at about 300,000 a year for the foreseeable. This means more than enough newcomers to take the place of those we intend to sign off sick.


It is quite possible to run an economy on this basis. We’ve been doing it for some time: all of the employment rise in the past five years, for example, is accounted for by the unprecedented immigration surge. Once, mass joblessness was seen as a social evil: when unemployment hit three million in the Thatcher years, uproar followed. When sickness benefit levels reached three million recently, no one cared. If workers can be imported, the pressure to reform the benefits system is reduced. Those ensnared in the welfare trap become easier to forget about.I’ve long been a supporter of mass immigration, thinking every economy needs to be open to the world and its talents. My hunch is that Britain’s recent welcome of the Hong Kong Chinese, for example, will turn out to be the biggest skills injection of modern times. In general, immigrants flatter most social metrics and now make up one in five workers. We have managed all this with far less of the xenophobic backlash recently seen on the Continent.

But those of us who argue that immigration is a net benefit need to be honest about what we mean. Yes, we can list the advantages. But we ought to admit to the drawbacks – and who suffers them. Those who employ immigrants (as cleaners, bartenders, nannies) will have a different view than those who find themselves competing with the newcomers for housing, school places, GP appointments or jobs.

Another disadvantage is that immigration covers up a great many social problems, especially welfare dysfunction. I’ve just finished a film for Channel 4 about sickness benefits, which I regard as one of the worst scourges of our time. At a church hall serving free lunch in Boston, Lincolnshire, a woman told me that local jobs (factories and farms) once paid so much you could take out a mortgage on them. But waves of newcomers kept such wages nailed down, she said, eroding the idea of being able to earn a decent living. She had no animosity towards immigrants, but did resent an economic model that she felt was hollowing out communities.

The Brexit vote was, in large part, a vote for a new settlement. The idea was that politicians would tighten the migration taps, calm things down. Employers might have to offer more wages, training or both. They might invest in automation, rather than waste humans in jobs that robots could easily do (the UK is one of the least automated countries in the world). This was the chance to turn the Brexit vote into a new, more cohesive economic settlement.But ministers lost their nerve. A welfare system that absorbed so many in lockdown was not giving them back, leading to acute skills shortages. Immigrants solved too many problems. A million of them arrived in the last year of Tory rule.

Next week, the Work and Pensions Secretary Liz Kendall is expected to launch her welfare reform plan. She is under no doubt about the size of the problem and has told me about the need for a “revolution” in welfare. We’ll soon see what she has in mind, but immigration control will have to be part of it. It’s sometimes said that a modern economy can never return to the modest migration numbers seen before the turn of the century. But this assumption is now being challenged by a country that was, until recently, getting migration badly wrong.Not so long ago, Sweden was in crisis after taking on far more refugees than it was able to handle. But a few months ago Ulf Kristersson, its prime minister, announced that he had not just cut net migration but reversed it: the number leaving now exceeds the number arriving. Anders Hall, one of his state secretaries, is in London this week meeting British officials and sharing tips. Sweden doubled the minimum salary requirement for immigrants, upped deportations and cut the number of refugees it takes in by 80 per cent. The latest idea is to offer as much as £25,000 to migrants who agree to “remigrate”.

Perhaps most strikingly, Sweden managed all this while a member of the European Union. They just used existing powers a bit better, as the UK could have done at any stage. I met Hall this week and asked him what the overall lesson was. Efforts have to be widespread and concerted, he said: it’s not about one silver bullet, not even four or five. You need to start with a consensus that migration and the economy are linked, that the old model was heading the wrong direction – and go out from there.If Sweden can do this within the EU’s free movement rules, Britain ought to be able to manage with full Brexit powers. But it would first require the political will: and a sober look at the situation and the Ghost of Christmas Future laid out today by the DWP data. On current trends, a country struggling to build houses will be welcoming 1.5 million immigrants over the next five years while consigning 840,000 off to long-term sickness benefits.

Does this sound like a sensible way to run an economy – or society? If not, it’s time to get thinking.