What's The Effect Of Immigration On London?

By Londonist Last edited 27 months ago
What's The Effect Of Immigration On London?
Photo by Richard Watkins LRPS from the Londonist Flickr pool

With net migration to the UK reaching an all-time high and a refugee crisis sweeping Europe, we wanted to know what the effect of immigration on London has been. We asked Jonathan Portes, Director of the National Institute of Economic and Social Research and a Senior Fellow in the ESRC's UK in a Changing Europe programme. Read more of his research on immigration.

Professor Paul Collier, a respected development economist at Oxford University, and author of an influential book arguing for a more restrictive immigration policy, wrote recently that “the 2011 census revealed that the indigenous had become a minority in their own capital”.

By “indigenous” he meant “white British” — apparently if you’re a black, Asian or mixed-Briton London isn’t “your capital”. With one in eight babies in London of mixed heritage, these attitudes appear quaint and old-fashioned at best to most of us. But it’s worth looking back on how we — all of us Londoners of all colours and origins — got here. When my parents and I arrived in London in the early 1970s, it was a city in decline, with falling population, rising crime and no obvious replacement for vanishing manufacturing jobs. Inner London’s population shrank by 20% that decade. It wasn’t fanciful to assume that London and New York could go the way of Detroit.

Today, of course, we live in one of the world’s great global cities, with population soaring and London’s dominance of the UK’s economic and cultural life more entrenched than ever, for better or worse. Globalisation — and, centrally, immigration — saved the city. Four in 10 Londoners were born abroad — many more, like me, have immigrant parents.

In some sense, then, it misses the point to ask whether immigration’s impact on London is positive or negative. London is now an immigrant city, for better or worse; the question is what we make of it. The economic benefits of migration are obvious: London is by far the most productive part of the UK, with particular strengths in high value, internationally traded services. There is hardly a business or public service in London which doesn’t depend on immigrant workers — from supermarkets and sandwich shops to law firms, tech start-ups and research institutes like my own.

Photo by Simon Kimber from the Londonist Flickr pool

What about the downsides? London’s labour market is very competitive. But there’s little or no evidence (PDF) immigration to London has reduced job opportunities for natives. Immigration adds both to the supply of labour and the demand for it — more people but a bigger pie. Population growth is the mark of a successful city, but it does lead to increased pressure on housing and transport. But again, a bit of historical perspective is in order. Islington — where I live — is the most densely populated local authority in the UK. But it has only just regained the level of population of the early 1970s, when I moved here.

Schools are certainly under pressure, with a shortage of primary school places and a majority of pupils in many areas not having English as a first language. The results? London schools are increasingly recognised as an extraordinary success story, with pupils from poor backgrounds doing far better here than elsewhere in the country. London is the only capital city in the developed world where this is the case — and immigration is almost certainly part, albeit by no means all, of the reason.

So what does this mean for policy? I set out some detailed proposals here. But briefly, reducing immigration by keeping out skilled workers, stopping students from staying on and generally promoting, in the government’s words, a “hostile environment” for foreigners is economic masochism, and directly damages the capital. The UK — especially London — simply cannot be “open for business” and closed to immigrants. Current government policy to reduce immigration is directly contrary to the interests of London and Londoners. A key litmus test for the next mayor, of whatever party, will be their will and capacity to reverse this.

Last Updated 18 September 2015

KenelmDigby

Complete and absolute fucking rubbish.

I'm old enough to remember the London of the 1970s, and believe me, it was a much, much better place than it is now.

People could actually afford to buy their homes.

JS

Finance saved the city - big bang, etc. That same finance is what is keeping it going, on the whole, but it's a risky game to play. Neglecting manufacturing, dockyards etc wasn't inevitable - Germany kept theirs going to a far higher degree.

London the most productive? Again, due to the City, but we've seen what putting all eggs in that basket can produce = the 2008 downturn, which hit the UK harder than any other developed nation. 95% of London does not work in the City but it skews all the figures, when it only benefits a small percentage of Londoners.

As for migrant workers - this has placed pressure on housing, pushing up rents and house prices (though far from the sole cause) which has caused a large spike in housing benefit costs. Most migrant groups also have higher birthrates - many non EU birthrate levels are at 3-4 children (source: ONS) so tax credit income exceeds income tax and NI paid in most instances. Another cost. Then there's education - London needs to find an extra £2b to fund the increase in school places. No mention of this.

He talks about Islington matching its former population - well yes, that's an inner London borough and there was a big decline post '39 in inner London, so much scope to go up in zone 1-2 (though now only for the wealthy). But zones 3-6 have also risen rapidly, and with increasing centralisation of employment in z1 this has placed huge strain on transport networks. More costs which are not being met by govt.

I suspect the author, like many others with wealth in London, benefits from an increasing demand for housing and low supply, so their own house price rises fast, and if a landlord, they get more rent. For non home-owners, and the poor, there's far less benefit from an increase of 1.1m people per decade, which is the current rate.

His final part is odd - almost no one is saying keep out skilled migrants, nor university students who contribute much. They are saying keep out unskilled migrants and 'students' at the many dodgy colleges around London.

George

There are a limited amount of resources. Can we burn trees for fuel forever or will we run out of trees and get global warming? Can we feed the world without starving the people in this country? Can we house the world without giving up our own house? Immigration that is controlled can be a benefit. Immigration for economic reasons is not sustainable on a massive scale as is happening now in Germany. These people do not need to go to a rich country to get away from war.
Overpopulation of any species within a specific area results in scarce resources and a reduction in population. Humans are included. The Germans are setting themselves up for a big fall. Watch all the people come into your home and be proud of your display of humanity NOW, later you will be feeling the sacrifice and unable to feel good about anything.

Ben Lee

London is only the most productive part of the UK because of the City (finance sector) remove that and London is no different from any other major UK city.

rickylopez

My company was established in 1978 (45+ employees) These days, for the lower skilled jobs we employ EU workers. Some make the grade and become part of the team, but if they don’t ...then they don’t. Pay rises are an option rather than something on the conscious. ie. Plenty more where you came from. The HR manager is what could be classed as immigrant ...according to this article. A Londoner to everyone that actually met in person

Jean Day

I agree....complete and absolute fucking rubbish...
Crime rate shows tenfold increase in last 40 years 1970 crimes in London 1.6 million 1990 4.4 million 1991 5.3 million...now we have gun and stabbings in London..rap, pickpockets, ect