London , 11 September 2000

• Introduction

• Historical Background

• Asylum

• Illegal Working

• Successful Migrants

• Benefits of Migration

• Other Countries' Policies

• The UK

• Conclusion

1. Let me first thank the IPPR for organising this event, the British Bankers Association for hosting it and Kingsley Napley for their sponsorship.
   
2. It is appropriate that we are here to discuss migration and the global economy in the heart of the City, a square mile with probably the most diverse and international workforce in Britain. A debate about what a modern immigration policy should look like has already started. It draws on complex and inter-related issues. I do not have all the answers today – but I want to set out some of the questions.
   
3. Immigration policy must protect and promote our national interest, both economically and socially. It cannot be static and must respond to changes in the world around us. Our economy is part of a global system that is becoming ever more tightly integrated. Increasingly, the global economy is driven by knowledge, and our future within it is determined by the skills of our people. Transport is cheap and accessible. An increasingly global culture raises expectations and ambitions. And international migration is a central feature of this global system.
   
4. As with other aspects of globalisation, there are potentially huge economic benefits for Britain if it is able to adapt to the new environment. We are in competition for the brightest and best talents – the entrepreneurs, the scientists, the high technology specialists who make the global economy tick. In order to seize the opportunities of the knowledge economy, and to play a constructive part in shaping these huge changes, we need to explore carefully their implications for immigration policy.
   
5. It should continue to reflect Home Office Aim 6 – which is (I quote): "Regulation of entry to and settlement in the UK in the interests of social stability and economic growth and facilitation of travel by UK citizens." But that aim is not only about protecting our society and economy from external pressures. We also need to manage the opportunities.


Historical background

6. Britain has always been a nation of migrants.
   
7. There were in practice almost no immigration controls prior to the beginning of the 20^th century. The 1905 Aliens Act was a direct response to Jewish immigration and it is difficult to deny that it was motivated in part by anti-Semitism. Major Evans Gordon, an MP, speaking in support of the legislation, said:

"It is the poorest and least fit of these people who move, and it is the residuum of these again who come to and are let in this country……Hon Members opposite do not live in daily terror of being turned into the street to make room for an unsavoury Pole."

I expect Major Evans Gordon would be spinning in his grave if he knew that their descendant would not only be Immigration Minister but would be standing before you today making this speech.

8. The nature of the debate changed after World War Two. A booming economy and labour shortages led to substantial migration from what was then called the New Commonwealth, encouraged by the Conservative governments of the 1950s. For example, as Health Minister, Enoch Powell sought the recruitment of nurses from the West Indies. 
   
9. Yet migrants often faced overt and pervasive racism and discrimination in employment and elsewhere. Limiting immigration by non-white commonwealth citizens was the principal aim of both the 1962 and 1968 Commonwealth Immigrants Acts - while at the same time Labour governments acted to promote racial equality with the 1965 and 1968 Race Relations Acts. 
   
10. The basis of the current legislation is the Immigration Act 1971. It consolidated previous legislation to allow entry only for specific purposes, set out in detail in the Rules made under the Act and subsequently. There are different categories of entry designed to meet varying needs, whether for short visits, study, settlement of family members and so on. 
    
11. The basic assumption of the 1971 Act was that numbers settling permanently needed to be tightly controlled, and that so called "primary immigration" by those without any family ties or special skills should end. The Act did not, of course, end all immigration, nor was it intended to do so.
    
12. From 1972 to 1998, an annual average of around 60,000 migrants were accepted for settlement in the UK, and in 1973 the UK joined what was then the EEC, now the EU, giving citizens of any member state the right to settle here. The 1998 Labour Force Survey estimated that there were a total of well over a million foreign nationals working legally in the UK, of whom 454,000 were EU nationals and 63,000 were from the USA. 
    
13. This is one of the strengths of the financial services sector here in the City. 1 in 7 city workers were born outside the UK, in countries such as India, Japan, Kenya, Jamaica, the USA, Australia and New Zealand. Indeed when I was a DTI minister and responsible for the Invest in Britain Bureau, foreign companies told me that one of the attractions of locating in London was that it suited their multi-racial staff better than less diverse environments. 
    
14. We should remember too that migration is not and never has been a one-way flow. For decades there was substantial emigration to the old Commonwealth and the USA. There are constant migrant flows between the UK and other EU countries, and British citizens returning to or leaving the UK. In around half of the 28 years since the 1971 Act came into force, more people left the UK than came in. The overall UK population growth in the 10 years from 1987 to 1997 – from 57 million to 59 million – has principally been generated by a greater number of births than deaths amongst existing residents, not by immigration. 
    
15. So the pattern has always been more complex than the stereotypes. 
    

Asylum

16. What has recently made immigration an issue once more is asylum. This was the principal focus of the most recent legislation, the Immigration and Asylum Act 1999.
    
17. The arrival of asylum seekers in the UK and other EU countries on the scale seen in the last ten years is a relatively new phenomenon. Until the late 1980s, the UK received only a few thousand applications each year - 4,000 in 1988. But last year we received 71,000 applications, many from people who entered the country clandestinely, and many unfounded.
    
18. This is unfortunate not least because it has skewed the debate on migration. Asylum has now become a major channel for migration and has developed in ways unforeseen when the 1951 UN Convention on refugees was prepared.
    
19. It is right that we should honour our international commitments to people facing persecution. We have both legal obligations and a clear moral duty. The British public remain sympathetic to those genuinely at risk – as responses to the humanitarian evacuation programme from Kosovo clearly showed. But asylum procedures are increasingly being misused by those who have no real fear of persecution. Many who apply for asylum – and the traffickers who exploit them – see asylum as the route for migration to the UK. 
    
20. This degrades the integrity of the asylum system, and rewards the people-traffickers who risk people's lives for profit. 
    
21. For the asylum system to work as it was intended, we need to identify genuine refugees as quickly as possible, and remove those without a well-founded claim. These are the aims of the government's procedural reforms, and the reason for its major investment in the Immigration and Nationality Directorate – some Ј2 billion extra over four years. We are getting rid of the backlog; taking rapid decisions; rolling out the new support arrangements; and ensuring we have the enforcement capacity to back up negative decisions. Restoring order to the asylum system is – and will remain – our first priority. 
    
22. Even though there is still a long way to go, we are getting there. In July, for the sixth month running, decisions on asylum applications exceeded the number of applications. The backlog of applications has fallen by a fifth since January of this year, from a peak backlog in January of nearly 105,000 to about 82,000 in July.
    
23. I fully understand public concern about the asylum system and about the wider threat to a properly regulated system of immigration control.


Illegal working

24. We are making particular efforts to combat illegal working, which often involves appalling exploitation of desperate and vulnerable people. It is a criminal offence to employ a person subject to immigration control unless they have permission to be in this country and to work here. Prosecutions are part of a wider effort to disrupt organised abuse. A good example of enforcement work is the multi-agency Operation Gangmaster, which targets illegal working in the agricultural industry. There have been a total of 31 operations in the first two years of this continuing initiative. 
    

Successful Migrants

25. But, in ensuring that we crack down where necessary on misuse, we must not lose sight of the bigger picture. Many immigrants, from all over the world, have been very successful here, bringing economic benefits to Britain as a whole.
    
26. Major businesses from the Joe Bloggs clothing company to Thorn Electrical were built by twentieth century migrants, sometimes within a single generation. The range is wide: from merchant bankers from Eastern Europe to a truly cosmopolitan array of senior doctors. And according to Eastern Eye magazine, of the 200 Asians in the UK now worth more than Ј5 million, 182 are self-made millionaires – a collective fortune of well over Ј10 billion.
    
27. They have overcome many obstacles to success, for there are always limits to the openness of any society, and the benefits of migration are not always recognised at the time. 
    
28. While the Government is certainly not complacent about the challenge of combating racism, the integration of migrants into British life has been remarkably successful, particularly when compared with some of our European neighbours. Migrants' enormous contribution is visible everywhere in modern Britain – and widely valued. There is now a welcome consensus that Britain has benefited from the post-war migration from the New Commonwealth, as from earlier waves of migration – not just economically but also from the enrichment of our social and cultural life. 
    
29. It is British openness and tolerance, and migrants' ability to adapt and thrive, that I believe will help us to meet the challenges of the 21^st century.
    

Benefits of migration

30. The evidence shows that economically driven migration can bring substantial overall benefits both for growth and the economy. 
    
31. In the United States, as Federal Reserve Chairman Alan Greenspan has commented, the huge recent inflow of migrants – 11 million in the 1990s – has been key to sustaining America's longest-ever economic boom.
    
32. In the UK we are now seeing the emergence of labour shortages in key areas of the economy.
    
33. Many will be familiar with the shortage of skilled workers in the IT sector, where there is an international scramble to attract experts and wealth creators, and I am pleased that many choose to come to the UK above other countries. But there are also major shortfalls elsewhere, for example in parts of the health sector. Nearly a third of doctors nationally are non-UK born, and nearly a third of all nurses in inner London are non-UK trained. 
    
34. There were even reports this summer that fruit was being left in the fields to rot because farmers could not find workers to pick it.
    
35. Part of the debate is also about the impact of demographic changes. Our society is ageing - by 2050, nearly 23 per cent of Britons – 14.7 million – will be over 65. Some commentators suggest that by 2040 each person of working age will be supporting twice as many pensioners as they do today.
    
36. Migration is one of a range of measures that could help ease the economic impact of such demographic change.
    
37. Another part of the solution is to ensure that all in society who can be are economically active, including those who face exclusion. That is why we have put in place a range of measures including the New Deals, better skills training and retraining, workplace learning and improvements in school standards to ensure that all those in our communities, including those who have joined us from other countries, are able to contribute to their success.
    
38. The impact of migration on developing countries needs to be considered alongside the potential social and economic advantages for the UK and for the migrants themselves. Migration, especially of skilled workers, has an impact on countries of origin. Emigration from developing countries can lead to costs such as skill shortages and labour bottlenecks. On the other hand, some developing nations have argued for liberalisation of migration policies, because they believe that remittances and network effects outweigh any initial loss. We will carefully consider the effects on development and poverty reduction when developing policy in this area.
    
39. What does all this mean for a twenty-first century immigration policy?
    

Other countries' policies

40. The historic "countries of immigration" – the US, Canada, Australia – have used migration to their advantage for years. But now the debate on migration in Europe is advancing rapidly. Perhaps the most interesting thing about the recent German scheme aimed at IT workers is not that the Germans want to attract foreign workers with IT skills – but the difficulties that they are having in doing so. The market for skilled labour is a global market – and not necessarily a buyer's market.
    
41. There is a range of different approaches. Australia, Canada and New Zealand all use forms of points-based systems, which score potential migrants according to their skills and education, as well as other criteria. In particular, it is worth noting that Canada – historically a leader in this area – is now reforming its system to focus more on the flexible and transferable skills that matter most in a globalised economy.
    
42. The German IT workers scheme meanwhile bears some resemblance to the US quota-based approach to issuing visas for skilled workers.
    

The UK

43. The UK also needs to have a policy that meets modern needs. When I spoke to the CBI conference last October I explained how our thinking on these issues was beginning to develop. I stressed then the importance of migration to business in general and entrepreneurial development in particular.
    
44. We have already made some changes to ensure that our policies and practices are meeting the needs of business. The recent work permit review has led to some welcome improvements. And we have just begun a pilot scheme to attract more business innovators to the UK. Under the new scheme, people with business experience and ideas will be able to apply to set up business in the UK. It will relax existing arrangements - they will no longer be required to use personal funds to start up their business.
    
45. And last summer the Prime Minister announced a long-term strategy to attract more international students to the UK. Overseas students make a huge financial contribution – more than Ј700 million a year – to the British university system. And their presence creates a huge and invaluable source of goodwill for Britain abroad, as well as enriching our culture.
    
46. Among other things, we have introduced more user-friendly and streamlined immigration procedures, and given automatic permission for international students to work part-time while studying and full-time during vacations. This may well have contributed to an 18 per cent increase in 1999 in applications for visas to study in Britain.
    
47. But we need to be sure that our policies are in tune with the realities of the 21st century. We must learn from experience from around the world as well as looking at new ideas.
    
48. Whatever we do, it is important that we preserve and enhance the flexible and market-driven aspects of the current work permit system – which employers generally rate highly in comparison with other countries. One approach would be to make the system even more market-based by making a work permit contingent primarily on a job offer at a sufficiently high level, rather than seeking to identify employment sectors with shortages. However, our recent changes have already gone a long way to meet labour market demand and we will want to see those changes bed down first before considering further changes.
    
49. We must also make more effort to tackle discrimination, which can deprive migrants of the opportunity to contribute economically and socially. Like other members of society, migrants have both rights and responsibilities.
    
50. We could have a programme of induction and guidance. And we could attach greater symbolic importance to the achievement of UK citizenship. These kinds of measures could ultimately prove an investment that would benefit the UK's economy and culture.
    

Conclusion

51. We must ensure that immigration policy must continue to serve the national interest. All western countries are now considering how best to respond to the changes I have described. We do not yet have the answers for Britain. What we need now is a genuine debate on the benefits and challenges of managed migration. We want to hear a wide range of views contributing to the debate. I am particularly keen to hear from members of the business community about how they think the Government can help to attract those with the skills and expertise they need.
    
52. And to inform the debate, we need more research on migration – to find out what brings people here, what their skills are, where in the UK migrants settle, how they integrate with British society, and how we can balance legal migration with social stability. Work is already underway, but there is clearly much more to be done.
    
53. Immigration policy is traditionally thought of as solely a Home Office concern. But that is too narrow a view. Migration policy needs to be joined up – we need to recognise its importance for the economy, skills, employment, trade, investment, international relations, higher education and culture.
    
54. We must have effective immigration controls. We must have a firm, fair and credible asylum system which honours our international obligations and which cannot be exploited by the racketeers. But our immigration policy must also meet real expectations and emerging needs. And if we ensure that it does, then I believe that we can face a new century of migration with confidence.