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Speech

Home Secretary Speech on Immigration

Rt Hon Theresa May, Wednesday, December 12 2012

Theresa May

Two and a half years ago, the Coalition Government was formed, and we made a clear promise to the British public.  After thirteen years of uncontrolled mass immigration, this Government would reduce and control immigration.

As yesterday’s census statistics show, the legacy we’ve been left with is a substantial one.  Between 2001 and 2011, more than half of the growth in the population of England and Wales was accounted for by immigration.

Since we came to government, we’ve taken action across the board.  We’ve capped economic migration, reformed family visas, and cut out the widespread abuse of the student route into the country.

And the results of those changes are beginning to show.  Official statistics, released two weeks ago, show that in the year to March, we cut net immigration to Britain by one quarter – that is, by 59,000 people.  That’s the biggest fall in net migration since 2008.

And we can expect immigration to continue to fall.  Home Office visa statistics, which are more recent than the net migration figures, show falls of four per cent in work visas, fifteen per cent in family visas, and 26 per cent in student visas. 

The benefits are beginning to show.  The number of people in work is up by more than half a million compared to last year.  But in contrast with what happened under the last government, 87 per cent of that increase was accounted for by British-born workers.

So our policies are beginning to bite – but we are not yet all the way there.  With annual net migration still at 183,000 we have a way to go to achieve my ambition to reduce that number to the tens of thousands by the end of the Parliament.

I want to talk today about the measures we’re taking to make sure that the immigration system truly works in our national interest, by bringing down net migration to sustainable levels, while still attracting the brightest and the best talent from around the world. 

In particular, I want to talk about measures we’re taking to make us more discerning when it comes to stopping the wrong people from coming here, and even more welcoming to the people we do want to come here.

But before I do that, I want us to remember why it’s important that we do control immigration.  I believe there are three main reasons: its effect on social cohesion, on our infrastructure and public services, and on jobs and wages.

First, social cohesion.  The debate around immigration often focuses on its economic costs and benefits, but the social consequences are often ignored.  This is a big mistake, because not only is the social impact significant and important in itself, it’s often what bothers the public the most. 

As Martin Wolf, the chief economics commentator of the Financial Times, says: “The desirability of sizeable immigration is a matter more of values than of economics. It is not a choice between wealth and poverty, but of the sort of country one desires to inhabit.”

The point is quite simple.  It takes time to establish the personal relationships, the family ties, the social bonds that turn the place where you live into a real community.  But the pace of change brought by mass immigration makes those things impossible to achieve.  You only have to look at London, where almost half of all primary school children speak English as a second language, to see the challenges we now face as a country. 

This isn’t fair to anyone: how can people build relationships with their neighbours if they can’t even speak the same language?  After years of mass immigration, we now face the enormous task of building an integrated, cohesive society.  Allowing more and more immigration would make that impossible. 

The second reason we need to control immigration is its impact on infrastructure and public services.  It seems obvious that immigration should have an impact on things like the availability and cost of housing, the transport system, the National Health Service or the number of school places.  But in the past, government impact assessments didn’t measure the effects of more immigration or determine where its effects would be felt the most. 

That’s something I plan to fix – but in the meantime we are left to deal with the consequences of more than a decade of uncontrolled, mass immigration. 

One area in which we can be certain mass immigration has an effect is housing.  More than one third of all new housing demand in Britain is caused by immigration.  And there is evidence that without the demand caused by mass immigration, house prices could be ten per cent lower over a twenty year period. 

Facts like these need to be carefully considered, and I look forward to seeing the results of the work we’re doing in the Home Office, but I think we can already be confident that mass immigration puts pressure on infrastructure and public services. 

Even if you accept that immigrants contribute to an increased tax take, there will be a ‘congestion effect’, that is, a significant lag between the increased demand for services and the distribution of those funds.  And services in the parts of the country that experience the most sudden and sustained increase in immigration will suffer the most.

The third reason we need to control immigration is its effects on jobs and wages.  Again, when we arrived in government, we found that the official impact assessments assumed that the job displacement of British workers by immigrants was zero. 
 
Now, we all know that the ‘lump of labour’ argument – that there is a fixed number of jobs to be divided up and handed round – is wrong, and that things are far more complicated than the idea that all immigrants come to Britain and ‘take British jobs’.  But it was surely wrong that those impact assessments assumed absolutely no job displacement of local workers. 

So we asked the Migration Advisory Committee to look at the effects of immigration on jobs, and their conclusions were stark.  They found a clear association between non-European immigration and employment in the UK. 

Between 1995 and 2010, the Committee found an associated displacement of 160,000 British workers.  For every additional one hundred immigrants, they estimated that 23 British workers would not be employed. 
So, there is a ‘lump of labour’ fallacy in the immigration debate, but there is also a ‘zero displacement’ fallacy.  And government must never again make the mistake of falling for it.

There is evidence, too, that immigration puts a downward pressure on wages.  Drawing on several academic studies, the Committee found that immigration can increase wages for the better-off, but for those on lower wages, more immigration means more workers competing for a limited number of low-skilled jobs. 

The result is lower wages – and the people who lose out are working-class families, as well as ethnic minority communities and recent immigrants themselves.

So uncontrolled, mass immigration is damaging to social cohesion, puts pressure on public services and infrastructure, and can lead to job displacement and undercut wages, particularly for the lowest paid. 

And yet one of my predecessors used to talk about the “purity of the macroeconomic case for migration”.  As a result of that mistaken belief, the last government presided over total net immigration of 2.2 million – the equivalent of two cities the size of Birmingham. 

That is evidence of an immigration system that does not work in the national interest.

But to say we want to reduce and control immigration is not to say that we want no immigration.  We have always been clear that we want Britain to attract the brightest and best talent from around the world – the top academics, brightest students, the best businessmen, investors, skilled workers and entrepreneurs who will contribute to our society, our economy and our way of life.

So when we reformed family visas, we introduced a new requirement to the immigration rules.  If you want to sponsor a spouse or partner who wishes to come to Britain, they will have to prove they can speak English, and you will have to prove that you can provide for them.  A minimum income level for family visa sponsors – of £18,600 for a spouse or partner with additional requirements for children – will protect the taxpayer by making sure that family migrants pay their own way.
Work visas

We wanted to make sure that economic migration works in the national interest too.  But that is not what the system we inherited did. 

To be frank, that system was a joke.  Tier One of the Points-Based System – supposedly reserved for high-skilled immigrants only – allowed people to work in unskilled jobs.  I remember the ‘highly-skilled’ immigrant who we discovered was working as the duty manager at a fried chicken restaurant.  But he was no one-off – we found that thirty per cent of people here on a Tier One visa were working as shop assistants, security guards, supermarket cashiers and care assistants.

That’s why we closed down the Tier One general route and said if you want to come to Britain on a work visa, you need to have a proper job offer with a minimum salary.  Business told us they prioritised the Tier Two route – for skilled workers with specific job offers – and we listened. 

So even though we delivered our manifesto promise to cap economic migration, and bring the overall numbers down, by clamping down on the abuse of Tier One we were able to set the Tier Two limit at 20,700, higher than the number of people who came to Britain through Tier Two the year before.

Business also told us they valued intra-company transfers, and we took the decision to exclude them from the limit.  But to make sure that these transfers would not be abused, we raised the salary limit for intra-company transferees coming to Britain for more than a year to £40,000. 

As a result, ICT numbers have remained steady and business tells us that our ICT system is one of the most user-friendly in the world.
 
And, to make sure that we could still attract the best experts, scientists, artists and performers, we created a new route, consisting of a further 1,000 visas for people of exceptional talent.  Take-up in that route has been low, and I’m looking forward to working with UK Trade and Investment to encourage more exceptional people to take advantage of it. 

But I also want to build on the principle of appealing to exceptionally talented people, so I intend to add a further 1,000 places a year for MBA graduates who want to stay in Britain and start up businesses.

We also want to be more proactive in attracting the wealth creators of the future.  We have made changes to the investor and entrepreneur routes to make it easier for major investors to settle in the UK. We have introduced a new prospective entrepreneur visa and a graduate entrepreneur visa.  And last week, the Chancellor announced that we will work with UK Trade and Investment to extend the Graduate Entrepreneur scheme to the best overseas talent.

And we want to make sure that people in emerging markets continue to see Britain as a place to visit and do business. 

That’s why we’ve made it easier for Chinese visitors to come here, by simplifying documentation requirements, establishing a new Business Network across China, extending our express visa service, and introducing a new passport pass-back scheme for visa applicants.

So our reforms to economic migration have struck a balance, and they send a clear message.  If you have skills we need, and a company is willing to give you a job, come to Britain.  If you have an investment to make, do it in Britain.  And if you have a great business idea, bring it to Britain. 

But we are also clear that Britain doesn’t need any more unskilled immigration.  The abuse of Tier One has been ended.  And work visas are capped, with the number of visas down by four per cent in the last year. 

The principles we applied to work visas we have applied to student visas too.  Again, the system we inherited was a mess, and it was abused on an industrial scale. 
 
Students were coming to Britain not to study but to work.  Many colleges were selling not an education but immigration.  And students, supposedly temporary visitors, were staying here permanently in huge numbers.

When the last government capped unskilled economic immigration at zero, all that happened was student visas rocketed by thirty per cent to a record 303,000.  The surge in numbers meant that in some parts of the world the Border Agency had to suspend student applications altogether. 

When we came to government, we found ‘students’ turning up at Heathrow unable to answer basic questions in English or even give simple details about their course.  We found colleges that sent students on ‘work placements’ hundreds of miles away from where they were meant to be studying. 
 
And of course, in each case we’re not just talking about one bogus student working in Britain – often they would bring their whole family with them, who would also work here, use public services here, and accrue the legal right to settle here.

These students weren’t the best and the brightest, they weren’t coming to Britain to study, and they weren’t making a meaningful contribution to our economy.  So we changed student visas to make sure that while we still attract the brightest and the best, and we still protect our world-class education establishments, we eradicate this kind of abuse from the system.

The first thing we did was to require any institution that wanted to bring foreign students to Britain to pass inspection checks to prove they were selling education, not immigration. 
 
Overnight, more than 150 colleges – one third – chose not undergo the checks.  To date, almost six hundred institutions have been removed from the Tier Four sponsor register.

We also took action to make sure that students who want to come to Britain really are students.  So the new immigration rules make clear that if you want to study here, you have to be able to speak English, support yourself financially without working, and prove that you are studying a legitimate course at a genuine college or university.  In addition, there are new restrictions on the right to work and bring dependants. 

To prevent switching courses – a tactic that kept some students here for years – we set maximum time limits for study.  And to make sure that only those who contribute can stay at the end of their study, we set a minimum salary level of £20,000 and a requirement to get a real graduate job for students who want to work in Britain after their studies.

Our policies are starting to bite, and they prove the massive scale of abuse in the student visa system.  Just by cutting out abuse, we have reduced the number of student visas by 26 per cent – that’s almost 74,000 – in the year to September.  And what is more, we have cut the overall numbers at the same time as the number of foreign students coming to our universities has increased.

Because we have always been clear that in cutting out the abuse of student visas, we want the best and the brightest minds in the world to come to study in Britain, and we want our world-class universities to thrive. 

So today I can announce a further measure to encourage top students to come to Britain and, if they have something to contribute, to stay in Britain. 
 
In future, all PhD students who have completed their studies will be allowed to stay here for longer to find skilled work or set up as an entrepreneur within the rules.  From April, all such students will be allowed to stay in Britain for twelve months after they have completed their PhD before having to find a job or start a business.

We want to work with our universities to continue to protect not just the integrity of the immigration system but the reputation of the British education system around the world.  We will continue to monitor strictly the adherence of universities as well as colleges to our rules that make sure only legitimate students come here. 

Where universities don’t meet those standards, we maintain the power to suspend highly-trusted status, as we did with the Teesside University and Glasgow Caledonian University, and even where appropriate to revoke a university’s right to sponsor foreign students, as we did earlier this year with London Metropolitan University. 

Since then, as a result of their compliance checks, colleges and universities have informed the Border Agency of some 90,000 notifications about foreign students whose circumstances have changed and who may no longer have any right to be here.  We will work with those universities – and indeed the whole sector – in a system of co-regulation to make sure we enforce student sponsorship obligations and protect the interests of legitimate students.

Welcoming legitimate students and identifying and rejecting bogus students is at the heart of our changes to the student visa regime.  And I want to announce today a further change in the Border Agency’s operational policies to make sure we get even tougher on bogus student applications. 

Last year, I instructed the Border Agency to undertake pilots in which high-risk student visa applicants would be interviewed, rather than undergo the usual paper-based checks.  Starting first in Pakistan and moving to other countries, more than 2,300 prospective students were interviewed.  The lesson from that pilot was clear – abuse was rife, paper-based checks weren’t working, and interviews, conducted by entry clearance officers with the freedom to use their judgement, work.

So I can announce that, from today, we will extend radically the Border Agency’s interviewing programme.  Starting with the highest-risk countries, and focusing on the route to Britain that is widely abused, student visas, we will increase the number of interviews to considerably more than 100,000, starting next financial year.  From there, we will extend the interviewing programme further across all routes to Britain, wherever the evidence takes us.  I believe this new approach will help us to root out the abuse of British visas, and improve the integrity of our immigration system.

So, as with our changes to economic immigration, so our changes to student visas strike a balance, and send a message.  If you can speak English, and you can get a place on a proper course at a proper university, you can come to study in Britain.  There is no cap on the number of students able to come here – and there are no current plans to introduce a cap.

But we are also clear that student visas are not a backdoor route into working in Britain.  We are clamping down on that kind of abuse.  Colleges have lost their right to sponsor foreign students.  Bogus students have been turned away.  And, through more and more interviewing, we are getting better at identifying and rejecting people we don’t want to come to Britain.

The official statistics show that we are achieving what we set out to achieve.  The number of student visas issued is down, while the number of successful applicants to study at British universities is up.  That success means we can now look forward to a period of stability on student migration policy.
 
But those statistics also show that there are some misconceptions about our immigration policies that need be corrected.

One, that all foreign students coming to this country are good for the economy.  In fact, many so-called students have been applying for low-grade courses at bogus colleges in order to work here in low-skilled jobs.

Two, that foreign students are only temporary visitors, so they’re not really immigrants.  In fact, one in five foreign students are believed to stay here for more than five years. 

Three, that our student visa regime is damaging Britain’s universities.  In fact, while we have cut the number of student visas, just by tackling abuse, the number of foreign applicants to British universities is up.

Four, that the cap on economic migration is hurting British businesses.  In fact, because of the abuse of the old Tier One system, we’ve been able to set a reasonably generous limit for Tier Two visas, and that limit has not yet been reached.

Five, that you can’t control immigration without hurting the economy.  In fact, uncontrolled, mass immigration displaces British workers, forces people onto benefits, and suppresses wages for the low-paid.  Controlled immigration means you can attract the brightest and the best who genuinely contribute to our economy and society.

Six, that wanting to control immigration in future is an attack on people who have already settled here or their children. In fact, the evidence suggests that recent immigrants and ethnic minority Brits are amongst those who lose the most from mass immigration.

Seven, that you can’t control immigration because you can’t do anything to restrict European immigration.  In fact, net British and European migration is broadly in balance.  And we can introduce transitional controls on new member states, we can take action to restrict the demand for European workers from British employers, and we can be smarter about the benefits and services we provide for foreign nationals.  These are all issues I plan to return to in the new year.

But overall, the biggest misconception is that by saying some immigration can be good for Britain, we shouldn’t try to control it at all.

Our record is disproving that false belief.  We’re proving that it is possible to get the immigration system to work in our national interest.  We are bringing down the numbers to sustainable levels, and we are continuing to attract the brightest and the best talent from around the world.  And we are doing that by making the system much more discerning – we’re welcoming the people we want to come to Britain, and we’re stopping the wrong people from coming here.

With family visas, the applicants must speak English, and the sponsors must prove they can provide for them. 

With work visas, if you have the skills we need and a proper job offer, you can come to Britain.  If you have an investment or a business idea to bring here, you can come to Britain.  But we don’t need any more unskilled immigration, and we are closing down the routes – both formal and informal – for unskilled workers to come to Britain.

And with student visas, there is no cap on the number of legitimate students able to come here to study legitimate courses at genuine institutions.  But we’re cutting out abuse and stopping the student visa system being used as an easy route to working in Britain. 

The evidence is vindicating the Government’s policies.  The rise in employment over the last year has benefited British workers, not migrant workers as has happened in the past.  Net immigration is down by one quarter in a single year.  The visa statistics suggest further falls in net immigration to come. 

Two and half years ago we made a clear to the promise to the British public.  We still have some way to go, but we’re delivering on that promise. 

Thank you very much.

 

Rt Hon Theresa May

Theresa is Home Secretary.

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