Wednesday, 27 March 2013

David Goodhart's British fantasy

David Goodhart's book on immigration and the UK, the British Dream, hasn't been released yet.  But on what I know (I've discussed these issues with David numerous times and he kindly asked me to read part of the draft) it will have a tremendous amount of sociologically interesting anecdote but a rather selective, at best, reading of the evidence. I suspect I will agree to a considerable extent with some of the conclusions on the broad approach to integration, while disagreeing violently with immigration policy prescriptions that I consider very poorly reasoned and economically damaging. 

[UPDATED 11pm 27/3 - SEE END]

But meanwhile I wanted to pick up on one point David has raised in two articles, which strikes me as not just wrong, but outlandish, and makes me wonder about the coherence of his general thesis.   In the Mail he wrote: 
"There has been a huge gap between our ruling elite’s views and those of ordinary people on the street. This was brought home to me when dining at an Oxford college and the eminent person next to me, a very senior civil servant, said: ‘When I was at the Treasury, I argued for the most open door possible to immigration [because] I saw it as my job to maximise global welfare not national welfare.’I was even more surprised when the notion was endorsed by another guest, one of the most powerful television executives in the country. He, too, felt global welfare was paramount and that he had a greater obligation to someone in Burundi than to someone in Birmingham."
And he repeated this in the Guardian
"In busy offices up and down the land some of Britain's most idealistic young men and women – working in human rights NGOs and immigration law firms – struggle every day to usher into this society as many people as possible from poor countries.They are motivated by the admirable belief that all human lives are equally valuable. And like some of the older 1960s liberal baby boomers, who were reacting against the extreme nationalism of the first half of the 20th century, they seem to feel few national attachments. Indeed, they feel no less a commitment to the welfare of someone in Burundi than they do to a fellow citizen in Birmingham"
So apparently UK immigration policy, from the Treasury downwards, has been driven by a common objective, shared by the liberal elite, of "maximising global welfare not national welfare" - with that of somebody from Burundi having the same value, from a policy-making perspective, as that of somebody from Birmingham.  
To describe this as a straw man is far too generous. It is such obvious nonsense that it is completely inexplicable that anybody as intelligent as David could possibly have got to the point of writing it down - if he were not blinded by a preconceived viewpoint that has absolutely nothing to do with the reality of UK policymaking. 
Just think about it for, say, 10 seconds. If it had been the case, what would policy have actually looked like? Well, for a start, if the Treasury cared as much about Burundi as Birmingham we'd presumably have allowed free movement of people from Burundi - they should have just as much chance to get a job in London, or access the NHS, as UK natives.   Coincidentally, we do actually know how many people born in Burundi are resident in England and Wales, from yesterday's Census release:  a grand total of 4,169 or about 0.008% of the resident population (and about 0.05% of the Burundian population).   
Moreover, we would have been spending (per capita) on aid to Burundi about what we spend on public services in Birmingham. In fact, when we had an aid programme to Burundi, it was worth about £2 per head per year; Brummies, like the rest of us, get £10,000 per head or so, very roughly.   At a more macro level,  it is hardly a secret - you would expect nothing less from a responsible finance ministry - that the Treasury, under both this government and the previous one, has done its level best to stop the 0.7% target for overseas aid being written into law. This is not how an organisation that was trying to maximise global welfare would behave. 
So what was the real goal of UK immigration policy in the 2000s? It was hardly a secret.  To state the obvious, policy-making in the Treasury, as on other policy issues, prioritised overall UK economic welfare, for which - being a quantitative department - it tends to regard GDP as being a pretty good indicator.  Now, many people would argue that for immigration policy, which affects the level of population as well as that of GDP, GDP per capita is a better measure (and I'd agree) - although the Treasury tends to point out that in the short term it's GDP that matters for the public finances.   In any case, politicians, media and the public focused on UK GDP - as they still do - as the most important indicator of the Treasury's success. Not surprisingly, so did and does the Treasury, nothing if not a political department. 
The result was that within Whitehall the Treasury,  with its focus on growth and hence the economic gains from immigration, waged a continual battle with the Home Office, whose raison d'etre was immigration control.  Meanwhile, many outside - including David - criticised the government, and especially the Treasury, for seeing immigration through an exclusively economic lens, without thinking enough about social cohesion and wider cultural impacts. 
These are perfectly legitimate debates, which I won't go into further here; but certainly they were live both in the Treasury and around Whitehall, as well as outside, in the 2000s.  Indeed, you only have to read the now notorious 2001 Cabinet Office paper (I was the lead author) "Migration: An Economic and Social Analysis", which was the basis for policy development for the rest of the decade, to see the tensions even then.  That concluded that the overarching aim should be "to promote sustainable growth and a stable, secure and tolerant society".  
But the point is that no-one - and I mean no-one, in any Department, regardless of their views on immigration policy - ever propounded the view that the interests of the UK and its economy and society should be anything other than paramount.  DFID would occasionally make the case from the sidelines that we should at least think about the global impacts, positive and negative,  of remittances, brain drain and circulation, but in this area its influence was marginal. 
David may not like the fact that immigration policy in the 2000s was driven primarily by the benefits, actual and perceived, to the UK economy, rather than by the cultural concerns that he thinks should be paramount and which he believes argue for a more restrictive policy. But to suggest that they were actually the result of a policy that prioritised Burundians over Brummies is not just a dream - it's a fantasy. 

PS. If anyone is interested in a rational, well-researched and evidence-based account of how immigration policy developed in the 2000s (done using proper research methods and published in a respected, peer-reviewed academic journal), then I suggest this, by Alex Balch, of the University of Liverpool. 


David Goodhart tweeted me shortly after this was published, saying:
"What a silly thing to say of course I don't believe, or say, that UK policy was run for benefit of Burundi - dotty non-sequitur"
"I certainly did not say that the treasury ran immigration policy for the benefit of Burundi etc this is babyish"
Here are the first three paragraphs of his Daily Mail article.  
"Among Left-leaning ‘Hampstead’ liberals like me, there has long been what you might call a ‘discrimination assumption’ when it comes to the highly charged issue of immigration.Our instinctive reaction has been that Britain is a relentlessly racist country bent on thwarting the lives of ethnic minorities, that the only decent policy is to throw open our doors to all and that those with doubts about how we run our multi-racial society are guilty of prejudice.And that view — echoed in Whitehall, Westminster and town halls around the country — has been the prevailing ideology, setting the tone for the immigration debate."
He refers to Whitehall  and Westminster here, but specifically to the Treasury later.  And, obviously, as the quotes above show, it was David, not me, who decided for some reason (mainly alliteration, I suspect) that Burundi was the appropriate poster boy (in both his press articles) for this particular supposed worldview.

If this doesn't imply directly that people in the Treasury and elsewhere in Whitehall and Westminster wanted to "throw the doors open" to Burundians, I don't know what does.  I agree that the idea that UK policy was run for the benefit of Burundi is indeed completely dotty - but I leave it to readers to decide whether it was mine or his. If you think I might be guilty of selective quotation, please do read both his articles in full. 


  1. I question the extent to which immigration policy was primarily driven by an economic perspective.

    If that is the case, why was immigration so tightly controlled?

    Surely net migration of 400k or 600k would have been much better for everyone, if the Treasury was really running the show?

    Rather I think the 2000s immigration story is that the EU forced the government to accept more migrants that it wouldn't otherwise have allowed, but couldn't really restrict. After all I don't have a figure on how much of the UK's migration over this period was from A8 countries but I assume it was a very substantial proportion. And of course low-skilled migration from outside the EU was all but banned around the same time - perhaps that's a better indicator of the government's true stance.

    1. Agree up to a point. As I say above, policy was an inevitable (and legitimate) compromise between HMT, primarily driven by economic imperatives, and other considerations (HO desire for control, political concerns etc). It certainly wasn't solely driven by economic concerns. On A8, yes, again up to a point - although note that unskilled labour migration from outside EU was never really a big deal, as I pointed out in my comment on Clegg's speech. And allowing FMOW in 2004 was a domestic policy decision, not forced on us by EU - we could have waited.

  2. Mr.Portes now says that he agrees that GDP per head is a better measure of any benefit of immigration. Unfortunately, the previous government, in which he was an influential official, repeatedly referred to the £6 billion benefit to GDP without acknowledging that, after allowing for the population growth, this amounted to about 0.1 % per year for GDP per head. Indeed the House of Lords Select Committee report in April 2008 found no evidence that "net immigration generates significant economic benefits for the existing population" - a conclusion since studiously ignored by the immigration lobby among whom he is a leading voice.

    1. Andrew.

      As you will no doubt recall, I testified at some length to the Committee on the issue of the productivity (and hence GDP per capita) benefits of migration; on which the evidence base is now much stronger, as explained in my previous blogs on this topic in some detail, with references. The Committee chose for its own reasons to largely ignore this evidence then, but there's no excuse for you doing so now.

    2. The 'evidence' is far from convincing. It might be more convincing when it has been published in a respected journal :)

  3. Aggregate GDP is, as I frequently noted at the time, a ludicrous measure of the benefits of immigration. That the Treasury used it was scandalous. Indeed, if that were the goal, elimination of controls on immigration would have been the right policy. Thus, David is quite right to point out that the implication of the government's favourite measure was indeed that immigration restrictions should be eliminated, because that would have maximised GDP.

    Leave that absurd position aside. The question, then, is what weight should be put on the welfare of future immigrants. If the weight is very much higher than zero, then one is getting ever closer to the cosmopolitan welfare position that David is describing. So what was (and now should) the weight be, Jonathan?
    To put it in the context of your debate with David, let us agree that UK immigration policy is not concerned with the welfare of Burundi. But what is the value it places on the welfare of the Burundians who will arrive, as a result of a liberal policy

    I would argue that this weight should be zero. Under a zero weight on the welfare of future immigrants (surely the position of most British citizens), the policy question becomes not what is the impact on GDP per head, or productivity per worker, but the impact of immigrants (of different kinds) on GDP per head (and its distribution) for those already in the UK. That was never the criterion used by the previous government, so far as I know.

    1. a) First, David's argument. You might argue that David would have been right to point out that the "implication of the government's favourite measure was indeed that immigration restrictions should be eliminated, because that would have maximised GDP." And if he'd just done that, I wouldn't have written the blog. But that's very explicitly not what he said in what is quoted above and his Mail article. He argued that the government was trying to maximise global welfare, and that is why it wanted to "eliminate immigration restrictions". That is, as I said, so obviously false that no intelligent person who wasn't disabled by preconceived views could possibly think it. .

      b) Leaving David's worldview aside, let me turn to your reasonable questions. What should the weight be? I agree there is a case for zero when we're talking about immigration policy decisions. But there's an obvious philosophical time inconsistency problem there. When does the weight become positive, and when 1? Let's leave that for now, and stipulate that it's zero.

      c) However, I do think that there is a strong practical argument for GDP per capita even if the welfare weight on new immigrants is zero. Given a significantly progressive tax and benefit system, then the purely fiscal effects imply that high productivity immigrants will raise net welfare of the existing population. That is even before you take into account labour market impacts (high productivity immigrants will presumably exert downward pressure on wage inequality) and productivity spillovers etc. So maximising GDP per capita looks very like maximising the welfare of existing residents.

      d) I would also note that if you don't agree with the logic in c), and think we should ignore fiscal effects, spillovers, etc, then perversely you actually end up at a more liberal position, because migration just becomes trade. In that case of course the natives benefit (on average), for the usual reasons we all agree on. Equally, like trade, there are distributional issues

      e) abstracting from this, I do find the GDP/GDP per capita argument slightly overdone. Government's objective function has many arguments, of which aggregate economic outcomes (GDP, GDP per cap, producitvity) are only one, and far from determinative. If all policies, immigration and otherwise, were directed at maximising either GDP, GDP per capita, or any other single variable, things would be very different indeed.

      f) As an illustration, it's obviously absurd to suggest the previous government didn't regard the distributional impact as a criterion alongside GDP. The government commissioned numerous papers (and I wrote several) because the unemployment and wage impacts, especially at the bottom end, were regarded as of vital policy interest. The idea that the government focuses only on GDP and ignored these distributional issues simply doesn't fit the facts.

    2. Why zero weight? We have a revealed preference for improving the lot of foreigners as expressed through a commitment to spend 0.7% GDP on overseas development assistance (also some of the EU budget, spending on global public goods and quite a bit of political capital). Would a more open immigration policy provide better value for money than some of the aid spending? It's often claimed that aid spending is enlightened self-interest - and it might be when and if it works - but a similar argument can be made for immigration: the value of Diasporas surely goes beyond GDP/capita.

      Other than that, I would agree that economic arguments would be more convincing if based on the change in GDP/capita of incumbent population, and with some accounting for the distributional impacts with some sort of equity weighting. In weighing pros and cons of immigration, loss aversion and the fear of individual loss overpowers commitment to collective national and international gain. It is the incumbents that are asked to support or oppose the policy, and incumbents that elect a government to make the decisions for them... it is obvious that their interests should weigh more heavily. As far as I can follow it, Jonathan's argument is that GDP/capita is a good proxy for the welfare gain of the incumbents.

    3. II understand Jonathan plans to write a blog, based on this discussion and my reply to his reply to me. I will respond further to Jonathan, if it seems necessary, if he does post the response I have sent him. Otherwise, I will post it here.

    4. So the distributional issues concern who are the winners and losers? e.g. those competing with new migrants lose, and business owners employing migrants win.

      Recent migrants may be the biggest losers from more immigration.

      An increased weighting on the welfare of actual recent migrants may lead to more restrictionist policies?

    5. "progressive tax"/"fiscal effects"

      One of the interesting assumptions is that migrants pay tax at the same level as similar natives. This is probably true for permanent migrants, but much less true for recent and temporary migrants.

      Many recent lower paid migrants do temporary agency work through employment businesses/staffing companies. Many of these companies have over 70% migrant workers. As HMRC found a few years ago "salary sacrifice"/"pay day by pay day" tax avoidance schemes were common. By reclassifying remuneration as expenses, the worker paid less tax and NIC and the agency saved on employer NIC.

      A similar idea is used by the 'international staffing agencies' that are the largest users of tier 2 visas. As much as 70% of 'salaries' can be tax free allowances.

      Temporary migrants are also more likely to save and return home with their savings. So any estimates on VAT (i.e. the main fiscal contribution from the lower paid) are overestimated and there is leakage.

      Temporary migration may be less beneficial.

  4. "I would argue that this weight should be zero"

    Well maybe you would, but you haven't given any reasons, unless we are supposed to deduce them from your parenthetical and unevidenced reference to what most British people think. The idea that states should only be concerned with the well-being of their own citizens is completely contrary to what the UK is signed up for in may cases (for example the Refugee Convention) and would be an insurmountable obstacle to dealing with problems like climate change.

    1. OK. What is your weight and why? One? Why not?

      If I am to be precise, I would say that the revealed weight placed by the British people on the welfare of foreigners is "close to zero"', for reasons already given by Jonathan. Less than 5 per cent of all public spending is on foreigners (even if we include net EU spending and a part of the defence budget). Since there are 60m British people and 7bn foreigners, revealed preference shows the weight placed on individual foreigners is very near zero. Climate change is not a counter-example, since it affects the welfare of British people directly. Of course, we are not showing much sign of willingness to spend much to mitigate it either.

  5. Surely one of the many problems here is the jump from some idea of this "zero weight" as an analytical tool used in relation to all migrants to a policy applied to individuals. Becasue obviously once you average it out one v rich person (a footballer?) "cancels out" lots of poor people who might need welfare. But you cannot run an immigration policy on that basis. And, of course, no-one knows what will happen to someone who migrates. The footballer may have a car crash and require permanent care, the penniless refugee found a business and contribute millions.
    The main problem I have though is that people who propose "zero weight" etc are essentially saying that a "migrant" remains different and somehow obliged to the state forever. It is an abstract way of saying it is acceptable to refuse benefits/housing/healthcare/education to anyone who looks or talks different in case they are a migrant. Thus Cameron quotes the CORE figures to say 9% of new social housing lettings last year "went to migrants". No they did not. They went to non-British citizens (who constitute 9% of the population so on the face of it no unfairness indicated there). They went to the Irishman who arrived aged 2 and finally went tinot sheltered housing aged 70 last year. They went to the Flilipino nurse who has lived and worked here for 15 years and does not have the money to pay for citizenship for herlself and her children. They went to the Somali bus driver who got refugee status in 1986. All "migrants" in the sense they are not British citizens. Saying they should not get services looks to me like old fashioned racism, just re-emerging under the cover of valuing citizenship over other factors like contribution, neighbourliness, decency?

  6. My view is that we have obligations to those who are in the UK. Those obligations do not take one-zero form. They increase with the level of attachment. Citizens come first. But others have clear rights. The nature and extent of these rights and obligations is clearly a legitimate matter for political discussion and disagreement. But I want to be clear. My view that potential immigrants have nearly zero weight in deciding immigration policy does not mean that actual immigrants have nearly zero weight. They definitely do not. I don't think someone who has been here a day is entitled to housing benefit. But I would have a very different view of someone who has worked here for 10 years.