A migration system that puts country first
The British people aren’t stupid.
For years, the Conservatives told them they would meet a cap of 100,000. Then they told them that Brexit would give them the control they sought.
They made cheap promises that they had no intention of keeping. Despite talking about it constantly, they failed to have a meaningful or honest conversation with the country about the costs and benefits of migration. If the promises were easy, if the trade-offs weren’t real, then the Conservatives would have kept them. But they weren’t and they aren’t.
Instead of engaging with the trade-offs, they retreated to a Conservative comfort zone. The freer the market the better. The same instinct that led them to believe leaving the European Union was permission to start up Singapore on Thames led them to design the most open and most permissive migration system in recent British history. They belatedly made a series of panicked policy changes in December 2023 and April 2024, precisely because they had lost control - not because they had reflected upon what migration was in Britain’s best interest.
Some on the populist right call for a hard migration cap or even net zero migration. But no country applies a strict upper cap for all migration types, for the simple reason that it is unworkable. Voters won’t fall for the same trick again. This is the politics of presentation and gimmicks, rather than the politics of facing Britain’s difficult choices. To pretend the Government can decide the precise number of people the labour market needs year in year out and that it can balance that against people’s decisions to leave the country is a fantasy.
A ‘fantasy cap’ would also not have survived contact with the British people’s desire to shelter Ukrainians fleeing from war and nor should it. It is a childish approach to governing a real policy problem.
Labour’s approach: an immigration policy that puts the country’s economic interest first
The Prime Minister set out his shock at the migration system when the true extent of Conservative failure was revealed:
Net migration hit 904,000 in the year ending June 2023
With the exception of year to June 2024, every figure since September 2021 has set new records
Pre-Brexit figures averaged 200,000-300,000 annually - three times less than current figures
The foundation of this Labour government is simple: putting this country’s interests first. That does not mean it only considers that question. But it does mean an immigration policy that is firmly rooted in Britain’s economic self interest. If businesses genuinely need skilled workers and professions that the current British labour market can’t supply, it will get them.
But that can’t be an open door. This government knows that unregulated labour markets don’t work.
A successful system can’t just consider the economic value migrant workers generate on day 1. It needs to consider whether Britain ends up ahead in the long run and the pressure on housing, infrastructure and public services that result.
Putting the country first involves making judgements about the full costs and benefits of migration.
An Australian-style National Migration Plan
Labour has committed to reducing migration. There are various ways this can be achieved.
This paper sets out one way an Australian-style National Migration Plan could work. This is the best answer we have seen to the problem of how to reduce numbers while making sure Britain’s economy gets the contributions it needs. A form of this proposal has been argued for by various experts, in particular the Institute for Government and others including British Future and IPPR. This would have the following features:
A multi-year banded target for different migration routes and visas
Processes for in-year reallocation between visa routes
An emergency break should numbers look set to exceed the overall total migration target
Rather than a tokenistic net migration target, the Plan would set credible, long-term targets that lead to sustained reductions in the levels of immigration, while ensuring that Britain’s economic needs are met. Targets that this government would hold itself to account for, explaining how they will be met and why the migration plan helps deliver on voters’ biggest priorities: economic growth that boosts incomes and the NHS.
It would be complemented by Labour’s long term strategies for getting Britain working and upskilling the nation.
What voters want
The public are united in reducing migration. On the left, even a plurality of Green voters want to see net migration come down substantially. On the right, even Reform voters would rather see visas issued to sustain our social care sector – if the alternative is taxes going up.
The same is true of the voter group that won Labour the last election - people who voted Conservative in 2019 and Labour in 2024:
Where populists seek division, there is remarkable nuance and agreement. The public has long been clear on this question. They want lower net migration, even though they are clear-eyed about the positive benefits - not least the clarity on the benefits of highly skilled migration where there is a labour shortage.
What a National Migration Plan would look like
That system will need to change to meet voters’ expectations. A National Migration Plan would achieve the following:
Provides clear, bounded targets for inward migration based on a thorough analysis of Britain’s economic needs and labour supply challenges, supplemented by analysis of study, family and humanitarian protection, including managing their social impacts.
Honestly engages with trade-offs and prioritises economic migration that makes a net positive fiscal contribution over the long term and properly values the impact on public services, infrastructure and housing costs.
Recommends a level of migration that is in Britain’s overall economic interest, with a multi-year plan for reducing certain categories as domestic labour market participation and skills increase
Sets the terms of debate with the opposition: Labour’s plan for migration, versus the opposition’s chaos and lack of control
Provides an emergency break should the overall target levels of the multi-year plan look set to be exceeded - including further Parliamentary debate and options for tightening specific visa routes
The current model is broken and uncontrolled
The current model has consistently failed to deliver the government’s stated ambition for the last few years. Different government departments, public services, and sectors of the economy ask the Home Office at different points of the year for changes to the immigration rules to make it easier to get people into jobs.
Most of the time (historically) the Home Office says no. Number 10 or the Treasury get lobbied instead. The Home Office is then sometimes forced to say yes.
These changes are often supported by the public. For example, the public supported the humanitarian routes for Ukraine, Hong Kong and Afghanistan schemes in addition to the number of international students. The health and social care visa has proven vital in keeping the NHS and care homes functional following 14 years of Conservative mismanagement. A migration system needs to be able to respond to events.
But the system does nothing to consider trade-offs or to attempt to directly manage numbers. This leads to a situation where:
Numbers are much higher than is ever going to be accepted or supported by the public
Politicians struggle to advocate for high value migration, like engineers or technologists, because of the high net migration context
Politicians are unable to articulate how the system serves the public interest because it has evolved in an ad hoc fashion rather than through serious consideration of trade-offs
Certain migrants, like low-wage workers, may be a net fiscal cost to the government from their arrival in the country already, but this is not factored into the design of the system nor is the analysis as sophisticated as it should be
Wider impacts on living standards are not considered. While there is little empirical support for the view that migration drives down wages, it is very likely to have an impact on the cost and quality of housing as well as place additional strain on some public services and infrastructure
The system could currently lead to unnecessary economic burdens to Britain, even if it is still the case that economic migration overall is positive both fiscally and economically.
A proactive new model for immigration policy: a national migration plan
It should work very differently. The system Labour has inherited is reactive, driven by response to the ONS net migration statistics, which seem to surprise the government as much as the public . To voters it can look like the government doesn’t have a grip: over the numbers; over the process; and over the migration system as a whole. To the sectors involved, it looks like a set of handbrake turns that make it impossible to plan long-term with uncertainty over what will happen to labour supply.
A new model for immigration policy should take some lessons from fiscal policy. The Budget setting process is far from perfect, but it allows control and trade-offs to happen in a way that doesn’t happen in migration. Instead of reacting to numbers, the Government would set out a long-term plan with targets for bringing migration down. This plan could include the following:
1. A structured process for migration policy and decision-making
The Home Secretary alongside the Chancellor would own a cross-government process leading up to the National Migration Plan, with support from the Cabinet Office and the Chancellor of the Duchy of Lancaster.
It would be supported by the Migration Advisory Committee and other labour market analysts in the government to set the current labour supply needs. Student visas would only be included in the analysis to the extent that they have an impact on long-run net migration (through the graduate visa/skilled worker visa routes). Such a process would take into account expected flows on humanitarian routes.
The Prime Minister would agree with the Home Secretary the headline objectives of the Migration Plan, setting the expectation that economic migration should be demonstrably in the country’s national economic interest. Departments would also be invited to make representations on behalf of services and sectors. The process would include more sophisticated analysis of the long term net fiscal cost or benefit of certain migration flows than is currently possible by external analysts.
2. Setting specific plans
Numerical targets for net migration are not workable. The flows that determine emigration are poorly measured or understood. The net migration statistics regularly get revised and are unstable due to methodological changes (the latest migration statistics were revised up more than 150,000 – which is more than net migration as a whole in some years in the last decade or two). No other country has a hard cap - all build in flexibility to their system.
But the government can set out a range it is targeting for different migration types, over the short and long term, based on its wider economic and skills strategy. For example, it could decide it wants to reduce the number of health and social care visas issued over the coming three years or it could decide the number of skilled workers coming is too high. But alongside setting out the changes to skill and salary thresholds in the immigration system, it would set out what it is doing to make that reduction in migration sustainable - through bursaries or training places in health, or tweaks to the points based system to support shortage sectors in the economy. Much of this complements long-term workforce planning already being undertaken in areas where the government has a dominant market control.
This is a particularly attractive approach as much of Labour’s plan to reduce net migration over the long term will take time to bite. Increasing labour market participation and ensuring that Skills England prioritises the right sectors and routes for Britain’s workforce will take time. This mechanism allows Labour to set out how its wider labour market strategy will lead to lower migration over the long term and gives the government accountability for progress against the plan.
3. Much more rigorous cost/benefit analysis
Estimating the long-term fiscal impacts of migration is inherently difficult and there is not a settled view among different experts. Educated guesses by the Office for Budget Responsibility and some dynamic modelling have been undertaken. The Government estimated the Hong Kong visa scheme would be a net fiscal contributor of £500m per year, while the fiscal benefits of restricting care workers’ dependents is estimated at £3bn per year. But the government could do far better than it does, particularly given how much the economic benefits of migration turns on the long run fiscal implications.
In addition to setting out the fiscal impacts, the government can be clear how different routes are contributing to its priorities: supporting growth sectors in the industrial strategy, helping the government to cut waiting lists in the NHS, or supporting the higher education system through overseas students. At the same time, it can be up front about the wide consequences: to housing, to public services and to infrastructure.
Much immigration does pass a cost/benefit analysis. But a Labour government that designs a migration system so that it serves the country’s economic interests should be ruthless in identifying areas of migration which do not pass that test. Voters will reward honesty about this, if we provide them with a clear and credible long-term plan.
4. Owning this debate in Parliament
Labour’s inheritance on migration is a car crash that the Conservatives are directly responsible for. At the moment, despite excellent foundational work by the Migration Advisory Committee and others, it is not meaningfully possible to set out the range of migration needs Britain has, because the last government never approached the question with any seriousness.
Labour can be proactive and proud about owning this question. A workable immigration system is possible: one that the government actively manages, setting targets to bring levels down substantially from current highs, on the basis of maximising the economic benefit while being honest about the costs and when routes aren’t proving cost-effective.
The government could set out, line by line, its expectations for what labour supply the country needs in what areas. This plan could be debated in Parliament.
At the moment, we do not pretend to know what the outcome of that work would be. It is possible that the system as currently stands exaggerates the economic benefits of certain types of migration, because the long-run fiscal costs and impact on housing are not considered.
But Labour would level with the public. It would look at the analysis and make a judgement: what is best for Britain’s economic interests? Labour can be the government that takes migration trade-offs seriously and convinces the public of a way forward.
5. An emergency break if numbers look set to exceed overall targets
Governments can have a plan but they cannot have a reliable forecast of the future. Caps are therefore impossible, but the government nevertheless needs a way of ensuring it is on track. This is partly why this paper recommends a multi-year planning target, which the Australian government is currently moving towards.
Therefore, the overall ceiling could be under or over achieved - particularly within a specific year. This is why the Australian government is moving to a multi-year approach. The Plan would include mechanisms for dealing with this - for example by:
Having a debate in Parliament should the multi-year envelope look set to be exceeded
Making discretionary rule changes for certain routes to ensure the envelope is not exceeded
This mechanism will give the Government good accountability incentives to ensure the targets aren’t exceeded. But British people are proud of our humanitarian efforts to welcome Ukrainians and Hong Kongers - so it also gives the opportunity to explain.