There’s a thing in politics I call the ‘Swedish Fallacy’, which is the mistaken belief that because Sweden seems like quite a nice place from across the North Sea, whatever policies it has must be worth copying, too.
So you’ll see people on both sides cite some idea as the ‘Swedish model’ – which, as much as I like Swedish models, isn’t quite the same as saying it’s actually a good policy.
Brexiteers do the same thing with the Australian points-based immigration system, a phrase now so well-worn it’s easy to forget that we already have a British points-based immigration system, and whose merits Brexiteers have done virtually nothing to prove.
Alas, there is not much to it. In fact, what these people mean is that we should limit EU immigration by whatever means possible or necessary. The Australian points-based immigration system is just a way of dressing this up in the language of principle.
As Britain already has a points-based system, it wouldn’t mean a major change from what we’ve got already for non-EU citizens – but it still misses the mark. It won’t satisfy people who voted for Brexit to substantially cut immigration – and that’s a good thing, because cutting immigration substantially would be terrible for the British economy – but it’s far from the best system we could implement.
First, numbers. Remember that we already have a point-based system for non-EU immigrants, so not much will change there. As Roland Smith has pointed out, MigrationWatch claimed before the referendum that Brexit could mean cutting net EU immigration by around 100,000 – bringing total EU and non-EU net migration down from 340,000 to around 240,000 a year, based on recent figures.
Add to that the extra immigrants that virtually all Brexit campaigners said they wanted – the new curry chefs, the extra Australian and Canadian immigrants, the Indian engineers and programmers – and that 240,000 will start to creep up again. It’ll be different immigrants, but the actual numbers might not be much lower than they once were.
The Australian system isn’t really meant as a general immigration policy – it’s for people who want to move to Australia without a job offer. If an Australian firm wants to hire you, you go through a different process, similar to what we already have in Britain. In total, only 38% of migrants to Australia go through their points-based system.
And Australia has about twice as many immigrants as the UK does, in terms of share of population – 27% there compared with around 13% here. There’s no reason that we would have as open a system as them, but you do wonder what it is that people do like about the Aussie way of doing things. But remember that if our version was tighter than Australia’s, it would mean more restrictions on businesses ability to hire the workers they want and on families to stay together.
The big problem with this approach is that it micromanages the needs of the economy. We don’t have a points-based system for car or food imports, because we realise that it’s absurd to think that the government knows how many cars, or what kind of cars, we need. But points systems do micromanage the labour supply: we need 1,000 more chemical engineers, 7,000 new au pairs and so on.
That’s not the only way to control immigration. We could sell visas off – decide that we only want immigrants who are willing to pay £25,000 to be here, and let firms hire whomever they want if they’re willing to pay that cost.
Or, better, we could require immigrants to take out third-party liability insurance that covers the costs of them overstaying, becoming a burden on the welfare state, committing crimes and so on – an option that would favour the most low-risk immigrants. These would be good ways to encourage high-skilled immigration without micromanaging it or losing control altogether.
The big mistake is to think that we can costlessly cut immigration overall.
To get the most talented people from around the world, whatever their backgrounds, we could set up an ‘economic potential’ visa that approximate an IQ test and allow anyone who passes above, say, an IQ of 125 to come to Britain. To boost international development, we could set up a guest worker scheme modelled on the American Green Card, which grants visas to people from a range of countries to avoid cultural ghettoisation.
What all these systems have in common is that they allow us to target a level of immigration and get roughly the sort we want – whether it’s highly skilled to boost our incomes or low-skilled to boost theirs – without trying to centrally plan the labour market.
The big mistake is to think that we can costlessly cut immigration overall. Whatever system we have is just a means to an end: how many and what kind of immigrants do we want? Australia does things very differently to us, and focusing on their system doesn’t really answer those questions. There’s no clear reason that this is better than what we’ve got.
So what’s the appeal of the Aussie system? Honestly, I’m not sure – perhaps it’s as simple as Brexiteers having needed a tangible example of the sort of thing they wanted, and Australia appears to be tough on immigration. The Australian Fallacy, you might call it. Sometimes that’s just how the policy sausage is made.
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