Liam Fox delivers speech on immigration



Dr Liam Fox MP speaking at REFORM 

Monday 7th July 2014 



One of the most pressing needs in British politics is for an evidence based, grown up debate about immigration. Perhaps more than any other subject it is used as a totem for wider political views to be aired, motives impugned and facts to be distorted. When we talk about immigration we need to be aware of a particular danger and it is this: if we do not debate the issue rationally and reasonably then there will be plenty of people on the margins of our politics who will use the issue irresponsibly and unreasonably. It is the duty of those of us in the political mainstream to own this debate and not surrender it to the political fringe.



We cannot begin this more mature debate until we separate truth from fiction. Under the last government Britain’s immigration ramped up to previously unknown highs. Moving from a steady average of around 300,000 per year, it quickly escalated to almost double that figure. This meant that there was approximately one new immigrant arriving in Britain for every minute of the Labour government.

But who comes to our country? Where do they come from and why and how many go back?

The first myth is that immigration is primarily a problem relating to the European Union. The figures reveal that this is at best a partial truth.

In 2003, 66,000 immigrants arrived from the EU. By 2007, immigration from the EU had peaked at 195,000 – nearly triple the number from four years previously. Roughly 57% of these migrants came from the Eastern European countries, including Poland, Hungary, Lithuania and Slovakia, that joined the EU in 2004. Since then this number has steadily reduced down to around 158,000 in 2012, the majority of whom came from what is known as the EU15 – in other words, the original European Union member states such as Austria, Spain, France, the Netherlands, Belgium and so on. Many of these will have jobs to come to and many will leave to return home at some point.

The influx of Eastern Europeans arriving into Britain during the 2004-2011 period is a story that has often been reported in the press, yet what has been ignored is that even at the height of this period, far more immigrants were coming from outside the EU than from inside it. From 2005 to 2010, the United Kingdom gained 525,000 immigrants from the EU – 304,000 from the Eastern European member states that joined the union in 2004. Contrast this with the 1.2 million migrants from outside the European Union that remain in Britain from the same period, and you will see that EU immigration actually makes up less than a third of Britain’s total immigration figure. Despite the furore, Eastern Europeans make up barely 18% of the total figure. The truth of the matter is that whatever the future holds for Britain’s relationship with the EU, we still have a large degree of control over our borders and it is up to us to decide who we can let in and who we would prefer not to. The government has already halved non-EU net migration, making good progress towards the targets set by the Prime Minister. We have more control over immigration than is widely understood by the public. We should build on it further.

Where do we come in terms of the global league table of migration?

Countries with relatively small populations such as Qatar, the United Arab Emirates and Singapore continue to have high immigration rates to fuel their rapid economic growth. In 2012, for example, Qatar topped the list of migration destination countries with a rate of 40.62 net migrants per thousand population. Singapore was in fifth place at 15.62. The United Kingdom, with 2.59 migrants per thousand, was in 29th place below Australia, in 17th place at 5.93, Canada in 18th place at 5.65 and the United States in 26th place at 3.62. However, this still put the UK well ahead of France, in 51st place with 1.10 net migrants per thousand, and Germany in 59th place with 0.71.



Like many western countries, the UK has adverse demographic trends, particularly the projected increase in the number of retired citizens in relation to the working population. The UK population is ageing, with the proportion of over 65-year-olds projected to increase from 16 to 24 per cent by 2051. Coupled with projected increases in life expectancy, the age dependency ratio (number of pensioners per 1,000 people of working age) will increase from 300 (which has been a stable average since the 1970s) to almost 500 in 2051. We are not alone, nor are we the worst example. With an age dependency rate of 370, Japan is already dealing with this issue. It has used technological improvements to increase the efficiency of labourers, and the government is trying to mobilize more of its retired and female population. Although these measures have no doubt helped, they are not enough on their own. The UN has recommended that Japan either raises its retirement age to 77 or allows an additional 40 million immigrants over the next 40years – equivalent to third of the country’s current population. The retirement age is currently being increased from 60 to 65 – a step in the right direction but still not enough to deal with the labour shortfall.

When we look at the situation in the UK, and Europe in general, we can see that we are heading for similarly tough decisions. Currently, for every three workers contributing to National Insurance in Britain, there is one person receiving a pension in the UK. In the next forty years this will change to two workers for every pensioner. The amount of money required to meet future pension liabilities is frighteningly high, and there is no easy way of finding it. We therefore have a problem based on a structural imbalance which requires a sustainable solution. This is likely to involve similar measures to those taken in Japan, including increasing the retirement age, mobilising more of our existing population to work, and encouraging more economically beneficial labour into the country. The alternative to a viable place in the global market is managed decline – not an option we should be willing to contemplate.



Generally, there is an ageing population in the deficit countries, who need to produce more wealth (or consume less or both), and a disproportionately large number of young people in the surplus countries, who need to find employment. In a real global market with free movement of labour population flows would deal with this problem. However, in many of the world’s most powerful countries political issues relating to immigration make any solution extremely difficult.

In the United Kingdom immigration is a potentially explosive political issue. The demands of business for new skilled labour clash with issues of social and cultural balance, and one of the consequences of membership of the European Union – the free movement of EU citizens – adds another complication. Even within the UK attitudes vary enormously. While multicultural cities such as London see the debate from one angle, the issues appear very different in other parts of south-east of England, which is the most accessible region for those seeking work from Eastern Europe. In the rural shires the perspective is different again.

Immigration is never a simple issue. On the political left the temptation to characterize any meaningful debate about immigration as racist makes any mature debate very difficult and risks fanning the flames of perceived discrimination among racial minorities. On the other hand, elements on the right tend to focus solely on cultural issues, ignoring our deteriorating demographics and the need for a continued supply of appropriate skills if we are to successfully compete in a cut-throat global economy.



How are other countries in the global economy managing their immigration policies? It’s worth us having a look at two – Australia and


Australia used to be very open to immigration, providing incentives for certain categories of people to enter the country. However, since around 1970, there has been a fundamental change in policy, with millions more migrants and refugees wanting to enter Australia than the government has been willing to accept. All subsidies have been abolished, and immigration has become progressively more difficult.

Australia has moved towards a points-based immigration system. Previously open to over a hundred different skills, the new system homes in on those areas of greatest importance to the country. These include medical, mining, and engineering skills, which are particularly vital, given

China’s insatiable demand for Australia’s abundant natural resources.

Canada has always been open to immigration, with over 20 percent of the county’s population being born abroad, and immigrants accounting for half of the annual population growth. Its immigration policy focuses on ‘human capital’. The aim is to encourage immigration by young, bilingual, highly skilled workers in order to rebalance and improve Canada’s aging labour force. In order to attract the right type of migrants, Canada uses certain education and skills criteria that advantage potential migrants who have the experience, higher education and language skills it needs.

In 1967 a points system was introduced to determine immigrant eligibility with preference given to educated French and English speakers of working age, while the Immigration Act of 1976 officially made Canada a destination for migrants from all countries. The new act was constructed around three pillars of admission. First, independent applicants would be assessed on the basis of points awarded for employment skills, education and language abilities rather than national or racial origin; second, sponsorship by close family members; and third, refugee status. 

As the country debates the ability of its younger generations to support an ageing population, the size of the labour force and tax base necessary to maintain economic growth, and the population’s ideal cultural and linguistic composition, Canadians are re-evaluating the goals of the immigration system and the direction in which they want it to help lead their society.



So, how do we balance the economic, cultural and political considerations?         

I believe that for immigration to be successful, there are two human prerequisites. The first is that there is a willingness among the host population to integrate those coming into the country. The second is that the immigrant population has to be willing to integrate into the legal and cultural systems of the host population. Unwillingness on the part of either group is likely to result in hostility to immigrant groups with an increased likelihood of consequent ghettoization. Ideas of commonality need to be fostered.

There has been a tendency – rightly and understandably – to celebrate the cultural diversity of the UK, but if we only cheer diversity and ignore commonality, then we are likely to achieve little more than fragmentation. The United Kingdom has had a history of successfully integrating many different groups over many years, but the rapid increase in immigrant numbers over the past decade or so has made the process more difficult as resistance among the host population has increased and immigrants have increasingly settled in large communities, often remaining cultural separate rather than simply retaining their cultural identity. Sadly, the debate has largely revolved around numbers of immigrants rather than who they are, where they come from and what their relationship with their new home will be, including whether they will be contributing to our economic well-being or becoming passengers on the welfare train.

So it is important to look in detail at what level and kind of immigration might be relevant and beneficial to the UK. 

According to a recent UK government report, the British economy is expected to generate around 1.2 5 million more jobs in the decade ending in 2020. The employment groups expected to show the most significant increases during this period are higher-level occupations: managers, directors and senior officials (around 544,000 more, an 18 per cent increase), the professions (some 869,000 more, a 15 per cent increase), and associated professional and technical occupations (around 551,000 more, a 14 per cent increase). On the other hand, declining requirements are projected for administrative and secretarial occupations, skilled trade occupations, and process plant and machine operatives. Although direct comparisons are difficult, filling these roles from the existing UK population alone, given its demographics and skills base, does not look possible.



Of course getting the right skills from abroad is only one of the options available; the other is an educational system in Britain that does not consistently fail those in the middle and lower social groups. The current government deserves praise for beginning to turn around decades of educational failure. Many of us think it is a national disgrace that education is the fourth biggest call on government finance, yet so many of our young people leave school unable to read, write or count properly. The past failure of publicly funded education to equip our children with the skills they require to compete in the global economy, in one of the world’s top ten richest countries at the beginning of the twenty-first century, is an outrage. 

UK immigration policy needs to be rebalanced so that those who come to our country are usefully economically active. There is neither the public appetite nor an economic case for allowing immigrants to come to the UK who will simply absorb our national wealth rather than helping to create it. Equally, we must develop policy that ensures that we are not turning away workers we need. Many of these will be skilled workers, a group currently in danger of being choked off, but it may ultimately mean unskilled labour too. In short, I believe that we need to have what we might call an ‘open and shut’ immigration policy. That is, an approach that is open to those who are economically active and have the skills our economy requires but closed to those who will become dependent on the state or who possess skills we do not require for our economic well-being.

How do we construct and sell an economically effective and politically viable immigration policy in a Western country with adverse demographics and the need to produce greater wealth, all set against the background of a potentially incendiary political debate?

The key variables we have to keep in mind are the impact of immigration on national income and its distribution among non-migrants, the national labour market , the fiscal balance (including public services, social security, tax revenues, etc.); and the impact on national identity and the attitudes of the migrant and non-migrant population.

We must pay particular attention to the impact on public services. Although getting the right people into the economy as active participants should mean higher growth and tax receipts in the future, we need to be mindful of what our current infrastructure can actually handle.

One of the problems in recent years has been that an inadequate infrastructure combined with largely uncontrolled immigration has diminished appreciation of the benefits that immigration can bring – one of the reasons Britain has had a generally good record on assimilation and race relations in the past.

The impact of immigration on national identity should not be understated either. How much any society will find acceptable depends on the level of cultural diversity which it is willing to tolerate. Nations such as Japan and Korea value a homogenous culture considerably more than they value immigration and the economic benefits it brings. The US, Australia and Canada, on the other hand, are more receptive, with their history of cultural diversity and dependence on immigration. Britain’s more limited tolerance of multiculturalism has been lessened in recent years by recent high levels of immigration and highly publicised cases of some immigrants draining rather than increasing the nation’s wealth. There has been much debate on the issue of what constitutes British values. What is extremely clear is that some cultural practices cannot be tolerated within the values of this country – forced marriages and female GM, for example, are diametrically opposed to the ethical code that  underpin gender equality in Britain. 

A properly balanced approach would ensure that the UK benefited economically from immigration but that it did not adversely affect national security, public order or the social and political stability of the country. Whether or not explicit protection of existing citizens’ rights to employment (and other benefits) over those of potential citizens is required or desirable is an issue worthy of debate, a complex and contentious matter involving potentially competing ideas of the free market and national entitlements. The formulation of such policies will never be easy in a political environment which is more often knee-jerk than considered but, if done successfully, the outcomes will be better for all those involved.



There is no reason why the UK should not adopt a strict points system, along the Australian model to deal with the two thirds of our immigration that comes from outside the EU. It will build on the changes already made in a logical way. It has the merits of clarity and transparency and, I believe, would be seen as fair and reasonable by the British people.

But let’s be very frank, if we are going to ensure that those with the necessary skills for our economy are more able to come to the United Kingdom, then the corollary will be that the numbers of those who come here, as part of our social or cultural migration will need to be curtailed.  What I am proposing is, again, an open and shut policy: more open to those who have the skills that we will need to maintain our prosperity and place in the world and more closed to those who, for whatever reason, would end up placing a burden on our welfare system and national infrastructure.

There are those who say such a policy would be racially divisive. They are wrong, for it would not matter which country people are from if they fulfilled the criteria we set for entry. In fact, I would argue that it is a much more meritocratic approach than our current system. There are also those who will argue that this is just cherry picking the best talents that other countries have and will need for their own development. I think they are wrong on two counts: firstly, why should talented individuals not have the freedom to go where opportunity takes them and, secondly, as I have already argued, we may need less skilled labour at times in the future – not just the top end of the labour pool.

Of course, how we deal with the whole issue of European migration, the free movement of people and its relation to the single market is a separate issue that will be a crucial issue in our forthcoming renegotiation but it is not an issue I intend to pursue today.

We have more control over the majority of our immigration policy than most people believe. It is time to set out a credible narrative that will be equally understood by those who wish to come to this country as well as those already here. We will need to have policies that match economic need with social and cultural balance. We need to separate fact and fiction and we need, above all, to deal with this subject in a mature and reasonable way, refusing to cede it to the political margins. The prize is a great one and achieving it is not only our challenge but our duty.