Ukip policies 2014: Immigration cap “lunacy”, “intellectually and morally bankrupt” and bad for business say economists

 
Guy Bentley
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Economists slam Ukip immigration cap (Source: Getty)

Ukip has announced the immigration policy it will put before the British people at next year's general election.

Ukip's spokesman on migration and financial affairs Steven Woolfe told the party's conference in Doncaster that net migration would be limited to 50,000 a year under an Australian-style points based system.

The party also pledged to employ a further 2,500 UK border staff. Ukip argued the UK could not have an open door policy to the entire world but should instead employ a "selective and a skills based policy".

Immigration has become a central feature of British politics with Ukip gaining ground among both Labour and Tory voters.

However, Ukip's message has not received universal acclaim. Ukip's announcement has led to a host economists criticising the policy on the grounds that it will damage British businesses and is based on economic fallacies.

Simon Walker, director general of the Institute of Directors (IoD), said:

Even if Ukip were to succeed in pulling the UK out of Europe, and bar immigration from the continent entirely, it’s inconceivable this target would be achievable. Assuming it was possible, it would still be economic lunacy.

Free trade, access to foreign investment and skills from the across the world are key to the UK’s prosperity. Ukip’s immigration plan is a nightmarish vision of stagnation and irrelevance for Britain. To his credit, at least Nigel Farage is honest about his priorities, admitting earlier this year that he would rather the country were poorer, if it meant lower immigration.

The policy has also come in for sharp criticism from some of the UK's leading think tanks.

Research Director of the Adam Smith Institute (ASI) Sam Bowman said:

Ukip’s line on immigration is intellectually and morally bankrupt. Despite what Ukip claims, immigration is good for virtually everyone in society, rich and poor alike. The evidence is clear that even low-skilled immigration only hurts low-skilled native wages temporarily, and does not affect the number of jobs available to natives at all.

The reason for this is that immigrants demand services as well as supplying them: every job taken by an immigrant also means a new job will be created to supply him or her with their needs.

Bowman added that, contrary to popular belief, immigrants were a net positive to the welfare state. Because immigrants tend to be young and seeking employment, they draw few benefits from the state and have not cost the taxpayer a penny in primary or secondary education.

Furthermore, the ASI argues that immigration could play a crucial role in meeting the pensions and healthcare obligations to Britain's rapidly aging population.

Christian Dustmann and Tommaso Frattini, of the Centre for Research and Analysis of Migration, found that European immigrants paid a staggering £2,610 more in taxes than they received in benefits each year between 2007 and 2011.

Philip Booth, editorial and programme director at Institute of Economic Affairs (IEA), was also sceptical of the virtues of an immigration clampdown:

Ukip are correct to point out that we should not treat immigrants from the EU differently from those from the rest of the world. However, I believe that there are huge benefits from a liberal policy on immigration, as long as benefit systems are not designed to create perverse incentives.

Ukip's position is a stark contrast to comments made by shadow home secretary Yvette Cooper, who told a fringe meeting at her party's conference a Labour government would scrap the coalition's immigration cap. She also urged the government to drop international students from their aim to reduce immigration below 100,000.

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