Grant Woodward: We can’t build a recovery on the backs of migrant workers

Home Affairs Select Committee Chairman Keith Vaz (left) greets arrivals at Luton Airport

Home Affairs Select Committee Chairman Keith Vaz (left) greets arrivals at Luton Airport

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IT’S the economic equivalent of having a gun held to your head.

A man you are unlikely to have ever heard of, Robert Chote, has warned David Cameron that pressing ahead with his plan to cap the number of people moving to Britain from EU countries would risk wrecking the fragile recovery.

Chote is the boss of the Office for Budget Responsibility, the department whose job it is to run the rule over the Government’s finances. And he insists that we need immigrants coming here because their taxes will help pay down the budget deficit.

According to him, this is because the net benefits outweigh the costs. Migrants are more likely to be of working age, which means we don’t foot the bill for their education, and “some” (that was the word he used) leave before they start getting expensive in terms of pension and healthcare costs.

Having finally recognised that immigration is a key issue for voters, Cameron has pledged to limit numbers to “tens of thousands” a year. At the same time, he’s promising to get the public finances back to health.

Now that the Prime Minister has been told these twin targets are incompatible, it places him in a tricky position. Or does it?

There is no doubt that a cap on migrants would be a blow for businesses that rely on low-paid workers, particularly those who come here from abroad and are willing to work for less than their UK counterparts.

But understandable as it is that firms want to save money by hiring cheap labour, is this really in the country’s long-term interests?

It’s hardly surprising that economic migrants can undercut home-grown workers – for a start they’re unlikely to have the same overheads.

Viewers of Benefits Street, the Channel 4 documentary focusing on a down-at-heel Birmingham street, were treated the other night to the sight of no fewer than 14 Romanians crammed into a four-bedroom house as they struggled to earn a living, having been promised untold riches if they came to the UK.

While there will be some sympathy for their plight, the fact remains that there are British people who are unable to secure full-time jobs which pay a living wage.

How can it possibly be in their best interests to allow this flood of cheap, unregulated labour to continue unchecked?

It’s why the Cameron plan to allow lower-skilled workers to settle only if they have secured jobs from an approved list of occupations for which there is a national shortage makes complete sense.

But there are others, of course, who also have a vested interest in ensuring access to Britain from the EU remains unrestricted.

Dodgy recruitment agencies have been found to be cashing in on foreign workers through a variety of unscrupulous means. One company has been raking it in by claiming tax rebates on employees’ expenses, then keeping most of it for themselves.

When the workers concerned don’t have a decent command of English and aren’t up to speed with UK employment law, such ruses are that much easier to pull off.

There’s an entire industry feeding off immigration – and it’s money that largely isn’t finding its way into the exchequer’s coffers.

And what of the other factors that Robert Chote and his team of number crunchers don’t seem to have bothered to consider?

Chief among them are the social pressures that go hand in hand with large numbers of new people coming to an island that is already full to bursting point. If they bring their families with them it places an even greater strain on schools that, in many areas, are already over-subscribed due to a rising birth rate.

In Leeds, the number of pupils in the city’s primary schools is expected to soar by more than 11,000 in the next three years, meaning more than 4,000 new places will be needed.

Of course, many economic migrants are prepared to keep their families at home to maximise their earnings. Recently there was controversy about those Polish workers coming to the UK and sending child benefit home.

If you believe Robert Chote, this is a good thing as it at least means we’re not footing the bill for these children’s education. This, of course, is lunacy of the highest order. How on earth can money disappearing out of Britain to provide for youngsters in other countries be a positive for a country trying to haul itself off its knees by cutting funding for essential services?

It’s why many will once again agree with Nigel Farage when he says the social side of the immigration issue matters more than pure market economics. Not that the Ukip leader believes Robert Chote’s doom-mongering for a second.

And why should we?

A year ago, Chote found himself in front of the Treasury Select Committee defending himself against charges that the Office for Budget Responsibility was just making it up.

“We’ve done quite a good job at demonstrating the limitations of economic forecasting,” he joked, when challenged over growth forecasts that were so far wide of the mark as to be ludicrous.

Yet the word in Whitehall is that if it comes down to a straight choice between accelerating growth and cutting immigration, growth will win and plans to curb migrant numbers will be shelved. In other words, the PM will plump for short-term gain over potential long-term pain.

But if David Cameron is genuine about wanting to protect the interests of British workers and address the public’s real concerns about the impact of unfettered immigration, he’s in danger of backing the wrong horse.

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