What's The Effect Of Immigration On London?

By Londonist Last edited 38 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