The Colossal Price of Theresa May’s Immigration Obsession

The continuing saga of what appears to be a disaster in slow motion:

Cracking down on immigration is how Theresa May has chosen to interpret the Brexit campaign’s promise to “take back control.” As a result, the U.K. prime minister has ruled out one of the more plausible alternatives to her own EU withdrawal deal: The so-called “Norway-Plus” idea, which would keep Britain in the European single market and force it to accept freedom of movement from other countries in the bloc.

Indeed, control of British borders is probably the most indelible of May’s red lines in the Brexit negotiations. Even though she voted remain, she was always the fiercest champion of the Conservative Party’s promise to cut yearly net migration to the “tens of thousands” during her previous incarnation as home secretary. Ivan Rogers, the former U.K. ambassador to the EU, said last week: “The entire EU knows that where we have now reached derives from her putting the ending of free movement of people well above all other objectives.”

But while May was right about immigration being one of the driving forces of the leave vote, she should note that British public opinion on the matter seems to be softening. As Rogers suggests, May’s withdrawal deal can be seen as trying to end freedom of movement from the EU at almost any cost, including a weaker economy, being a rule-taker from Brussels and swallowing demands for guarantees on the Irish border. She may no longer be totally in tune with her electorate.

Brits increasingly think that Britain should prioritize staying in the single market over ending freedom of movement, according to the pollsters Opinium. That fits with other surveys which put worries about the economy and public services above immigration. The numbers are still close, but the trend is clear. In early 2017, the split was 40-30 in favor of prioritizing an end to free movement. Recently it has flipped to 40-35 the other way.

None of this is to say that Brits have become sanguine about controlling immigration. But there does seem to be rising concern about whether it’s worth the price of leaving the single market. And the cost of Brexit is already apparent. UBS economists reckon the British economy is 2.1 percent lower than where it would have been without the leave vote, equating to about 40 billion pounds ($50.4 billion) of lost GDP.

At the same time, we’ve also seen a drop in net migration since the vote as EU workers avoid Britain. The yearly number has fallen from about 336,000 at the end of June 2016 to about 273,000 at the end of June this year: a reduction of 63,000.

If you take UBS’s 40 billion pounds of lost output over the past two years and divide it by the number of fewer migrants, you get to 635,000 pounds. Now, no one is suggesting that this is the direct cost of losing each of those migrants. Most of the lost output since the Brexit vote comes from factors such as consumer fear, curtailed investment and the weak pound. But it still begs the question of whether this is all a price worth paying for “taking back control” of the borders?

Looking further forward, the Bank of England’s forecasts suggest that May’s Brexit plan would cut yearly net migration to about 100,000 by 2021, while the long-term GDP cost relative to pre-2016 trends would be between 1 to 3 percent in the most optimistic scenarios. These figures suggest a cost of about 40 billion pounds over a six-to-seven-year-period, for a policy that delivers 236,000 fewer net annual migrants. That’s 169,500 pounds per non-arriving migrant. A smaller figure than the previous one, but still one that asks a question.

May is essentially telling the U.K. that you can control EU migration, or you can have the economic benefits of the single market. You cannot have both. She’s right; there’s no Boris Johnson fantasy of having cake and eating it here. But if her deal has become all about killing freedom of movement at any cost, Brits need to know what that price is.

Source: The Colossal Price of Theresa May’s Immigration Obsession

About Andrew
Andrew blogs and tweets public policy issues, particularly the relationship between the political and bureaucratic levels, citizenship and multiculturalism. His latest book, Policy Arrogance or Innocent Bias, recounts his experience as a senior public servant in this area.

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