Earlier this month, the Prime Minister visited China at the head of a major trade delegation. It’s become fashionable to scoff at senior politicians beating the drum around the world for British trade and investment. Isn’t this just displacement activity? Haven’t they got better things to do and more urgent problems to solve at home?
The reality is that securing export orders abroad, attracting foreign investment and promoting British higher education, are integral to the Government’s – any government’s – economic growth strategy. I spent nearly forty years as a British diplomat, and a sizeable chunk of that time promoting trade and investment links in Japan, where I was Ambassador for four and a half years until the end of 2012. Japan is still the world’s third largest economy, and a major trade and investment partner of the UK. A ministerial trade mission gives profile to British firms chasing commercial opportunities and sends a crucial message to foreign business leaders that their investment in the UK is welcomed and supported at the highest levels. We may have become blasé about political messages of this kind in Britain. Foreign governments have not.
So it’s doubly important that we don’t send mixed messages about just how open for business Britain is. An increasingly toxic political debate on immigration, encouraging politicians to outdo each other to reflect public concerns, plays immediately into doubts abroad about what the British really think on this issue.
This is partly about ensuring that border control policies and procedures don’t conflict with the messages of welcome being sent by other parts of Government. But it’s also about understanding the importance of legal migration as part of the Government’s economic growth strategy – and not being frightened off making that case by anti-immigration rabble-rousers.
All the evidence is that migrants put more into the economy than they take out. Only a tiny minority – around 6 per cent – claim benefits. Last month’s University College, London report suggested that migrants from Europe, including Eastern Europe, have contributed on average a net £2,610 per head since 2007. We need these contributions to help fund public services like the NHS.
We also need them to tackle our burden of public debt. The anti-immigration lobby argues that the population of Britain is out of control and that the barriers need to be drawn up. But the fact is that holding down the population below some arbitrary level risks our national well-being. The independent Office for Budget Responsibility has warned that ending net migration would mean that by the middle of the 21st century, our national debt will soar to levels higher than Greece’s today. This would mean higher taxes, deeper cuts and zero growth. The idea that we can detach our economic growth strategy from the continued need for legal migration is a fantasy.
Foreign governments and foreign companies watch these political discussions in Britain with close interest and increasing concern. Some British politicians and commentators seem to think that for a foreigner to express views – about visa regulations or about Britain’s EU policy, for example – is a bit of an impertinence. But these countries have increasingly important economic stakes in Britain. Japan, for example, has 1300 companies here employing 130,000 directly and many more hundreds of thousands in the supply chain. Foreign firms are creating jobs and prosperity here. They have the right, indeed, the responsibility, to involve themselves in the public debate.
When I was Ambassador in Japan I was often quizzed – in real time – about politicians’ statements on Britain’s future in the EU. To understand British Government thinking on this is integral to major Japanese companies’ investment plans, as Carlos Ghosn of Nissan made clear recently. The same will be true of firms in China, India and Brazil. Where immigration is a major issue in the bilateral relationship, the same scrutiny will be given to politicians’ pronouncements and what they tell foreign observers about how open a country Britain really wants to be. And I have to say that, in my experience, protestations that Britain can be a stronger country by pulling up the drawbridge and going it alone are met by polite bewilderment.
This is not a private, internal argument. It’s a debate that resonates instantly and powerfully around the world. If the UK Independence Party’s stated intention to make next year’s European elections a referendum on immigration policy is followed through, there is a danger that this debate will become more intense and more destructively polarised. That is why it’s crucial to state clearly that the benefits of legal migration outweigh the costs, and that those benefits support the Government’s strategy to get growth back into the economy. Getting that message across will reassure Britain’s economic partners worldwide that we have not had a collective rush of blood to the head and embraced a set of views that fly in the face of economic reality.