Could tighter border controls boost London\’s population (July 2019)

[Published on Centre for London blog, 26 July 2019]

After easing off in 2017, London’s population growth picked up pace last year to hit 83,000, with a resurgence in international immigration the principal cause of the recovery, as illustrated in Centre for London’s most recent edition of The London Intelligence.

The latest ONS population projections suggest that London will continue to grow at around this level in the coming years, adding 774,000 residents over the period 2016-26; growth of 8.8 per cent. The capital will still be the fastest growing English region, but will not be growing as fast as it did in the ten years to 2017, when growth was estimated at 1.1 million residents (15 per cent). Net international immigration outstripped net domestic out-migration by around 10 per cent last year, but the ONS forecast the net impact to be more balanced in future with natural change (births minus deaths) continuing to account for the expanding population.

Looming over these projections, however, is the spectre of Brexit. Leaving the European Union will definitely have an impact, but what will it be? It could be that the UK’s departure will lead to an even sharper slowdown in migration; certainly immigration tailed off during the two years of limbo since the referendum, and remains much lower than it was in 2015 or 2016. Given London’s high migrant population, this could hit the capital, and its economy, particularly hard.

But beyond the current hiatus, post-Brexit immigration rules could do precisely the opposite. Notwithstanding the change of government (and any deals done as part of future trade negotiations), the plan appears to be for EU and other migrants to be on an equal footing. Immigration from within the EU may fall back, while immigration from further afield may rise or at least stay steady. The London Intelligence already shows a rebalancing in the number of national insurance numbers issued to EU and non-EU nationals: the former were six per cent lower in the year to March 2019 than in the previous year; the latter were 21 per cent higher.

This matters because immigration from beyond Europe tends to have a different geographic distribution from European migration. Specifically, it is more concentrated in London and – to a lesser extent – other cities. While London has just over twice as many EU migrants in its working age population as non-urban areas of England and Wales do, it has four times the proportion of people born beyond the EU. Similarly, while the largest ‘core cities’ (Birmingham, Bristol, Cardiff, Leeds, Liverpool, Manchester, Newcastle, Nottingham, Sheffield) have similar levels of EU-born working-age residents to the rest of the country, they have twice the proportion of people born further afield.

% of 16-64 year old population born in other EU countries % of 16-64 year old population born in non-EU countries
London 14 32
English and Welsh core cities 7 16
Rest of England and Wales 6 8

So more immigration from outside the EU, and particularly from emerging economies of the southern and eastern hemispheres, may mean more concentration in London and other big cities, where people from these countries will already find settled communities of their former compatriots.

And in London, this trend may be intensified by another element of the government’s proposals, a pay threshold for jobs held by foreign workers – designed to prevent the import of cheap unskilled labour. The government has not confirmed what this threshold should be but the Migration Advisory Committee recommended maintaining the current level of £30,000 (while abolishing other requirements such as the ‘resident labour market test’, which requires jobs to be advertised within the UK before recruiting overseas).

While many jobs in London, particularly in migration-dependent sectors such as restaurants, pay poorly, salaries are significantly higher overall. Government data on earnings show that 66 per cent of workers in London earn more than £30,000 pa, compared to 30 to 40 per cent of workers in other regions. So setting a minimum pay threshold – whether at £30,000 or at lower levels, as groups such as London First have argued – could further concentrate immigration in London, where more jobs would in theory be accessible for foreign workers.

Giving preference to immigrants with higher qualifications, through a more ‘points-based’ system as advocated by Boris Johnson during the Conservative leadership campaign, could further focus immigration in the capital, as immigrants who settle in London also tend to be more qualified.

These factors, together with perceptions of London as a city that is still open to immigrants, may serve to focus future international immigration on the capital, potentially turbo-charging population growth. This may look superficially serendipitous: London, the part of England most at ease with immigration and most opposed to Brexit, may see a resurgence in immigration, while changing demographics, and tougher salary and qualification requirements may curb immigration beyond the M25.

But it may also deepen economic as well as cultural differences between London, other cities and the rest of the UK. While London continues to make the case for infrastructure to support a growing population, other regions may start seeing population decline, as their economies struggle without the migrant workforce that farmers, restaurateurs and hoteliers rely on.

We may even, in time, see a shift in the tone of national debate, with politicians making the case for immigration rather than avoiding the subject – or even seeking to implement policies to encourage immigrants to look beyond the big cities as in Canada. As with so many aspects of Brexit, seemingly simple moves can have complex, surprising and far-reaching consequences.

My thanks to Professor Tony Travers of the LSE for his insights and help with this article.

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