Immigration: The Treasury view (but not the Business Department's)
David Cameron's speech today about immigration is mainly attracting headlines for his remarks about its social impact.
But he also spends some time discussing the potential economic consequences of reducing immigration. He concludes that through measures such as prioritising the admission of skilled workers with a job offer in the UK and raising the skill levels demanded, the government's cutbacks on immigration won't damage the UK economy.
The economic implications of different forms of migration is a complex topic, disputed by for example a free-market think tank arguing against immigration controls and a pressure group campaigning for tighter restrictions. And it's considered within the Home Office Impact Assessment for the current government policy.
If you're interested in this topic, you might like to see the Treasury's viewpoint. Under freedom of information I have obtained a copy of the Treasury's submission [5.51MB PDF] last year to the Migration Advisory Committee, a government advisory body which was examining the potential results of limits to economic migration into the UK.
The Treasury's analysis is of course subject to many caveats and uncertainties, but its broad argument is that cutting immigration of skilled workers would reduce the UK economy's potential for growth. It also states that migrants tend to make a positive contribution long-term to the UK's fiscal position.
In other words, this document shows the Treasury's unease about the economic impact of immigration curbs. Some of this is referred to in the detailed and extensive report which the Migration Advisory Committee produced. The Treasury's interest in policy is clearly primarily financial rather than social. This departmental angle is also shared by the Business Department.
Mr Cameron's speech today has been strongly attacked as "very unwise" by his cabinet colleague but party political rival, the Business Secretary Vince Cable. Mr Cable is concerned that stronger immigration controls could harm British companies and universities.
I also wanted to see the memorandum which his department, BIS, had sent to the MAC to help inform its investigation into limits on economic migration. However, while the Treasury sent me its submission (after I appealed against its initial refusal), the Department for Business, Innovation and Skills has refused to disclose the one it made.
BIS argued that releasing it would be against the public interest. It told me:
"We believe that if this information were to be made public, frankness and policy development would inevitably be inhibited and ministers would be prevented from taking decisions based on the fullest understanding of the issues involved."
Government departments often coordinate their responses to FOI requests. I was surprised by the discrepancy in this case, because it is unusual for one to reveal and another to keep secret a similar document.