Stopping workers coming will grind London to a halt

Among all the plans the UK may have on immigration, it has to bear in mind that throughout its history, London has thrived by attracting people from across the world to the city. At present around 40 per cent of Londoners are from another country. They start profitable businesses, work in essential industries, attend the capital’s universities, and bolster London’s reputation as a global cultural melting pot.
In short, the capital needs them. Levels of immigration have always fluctuated, but new data has revealed a worrying drop in the number of adult foreign nationals coming to London — and not just among those from the EU, as might be expected following the referendum vote.
In the year to September 2017, registrations in the city from the EU were down 16 per cent on the previous year. At the same time, non-EU arrivals fell by 5.5 per cent. More concerning, is that this drop has been sharpest among younger people. For EU nationals aged 25-34, registrations over the same period fell by over 20 per cent.
Brexit has undoubtedly been a poor piece of PR for the capital. The vote to leave and the ensuing uncertainty has likely played a significant role in the overall drop-off of EU workers. But the fact that this drop has been accompanied by a reduction among non-EU arrivals too indicates that London risks losing some of its wider international appeal.
Two notable “push” factors are at work. First, the unclear future status of EU nationals in the UK may be putting people off coming, while general perceptions of hostility towards foreigners — justified or not — may also represent a barrier to entry.
This is something London mayor Sadiq Khan has tried to counteract with his “London is Open” campaign. Second, the devaluation of the sterling has made sending money home — a major incentive for economic migrants looking to work here — less appealing.
The slowdown in foreign workers is beginning to bite. Vital sectors such as healthcare and construction, where EU and foreign workforce participation has traditionally been high, have seen large drops in new workers, are struggling to fill vacancies, and face an emerging skills shortage.
London’s unemployment is at near record low, suggesting there is little capacity for locals to fit into these jobs, at least in the short term.
As the UK edges closer to leaving the EU with a commitment to end freedom of movement, home minister, Amber Rudd must set out Britain’s post-Brexit immigration policy.
Pundits claim that immigrants depress wages, and steal jobs, yet multiple studies find that immigrants have had little impact on jobs and pay.
There is some evidence that immigrants lower wages for the lowest paid, but this impact is small at most. King’s College London’s Jonathan Portes points out that the best estimate of the impact of EU migration since 2004 amounts to a reduction in annual pay rises of about a penny an hour for the lowest paid workers.
Others worry that migrants will be a drain on the public purse, but they pay in significantly more than they take out.
The National Health Service (NHS) may be under strain, but research from Oxford University finds no evidence that migrants are the cause or that they lengthen wait times for patients to be seen by doctors.
If arrivals continue to fall, London’s economy will probably continue to under-perform — across most sectors and most skill levels — while its social vibrancy and international appeal may also be hampered.
Brexit is a challenge as well as an opportunity for a global city of London’s stature — and the decline of foreign nationals is just one manifestation of this. But there are measures that could allow the capital to continue attracting the talent it needs.
Taking students out of new migration targets would be a helpful symbolic start. Polls show there is widespread support for this, as people understand how much foreign students contribute to the economy, and that those who stay after graduation will end up making important contributions to the city.
Britain could also look to maintain the flow of migrants of all skill levels, perhaps through special work visa regimes for the capital.
Migration is essential to keeping London going. The UK must ensure that it continues to attract the best talent and show its diverse communities just how welcome they are.
(The author is our foreign correspondent based in the UK. He can be reached at andyjalil@aol.com)