Rishi Sunak is making us ever more reliant on mass immigration

It’s almost seven years since the country voted for Brexit – and a new economic settlement. For Europhiles like me, who loved the idea of a borderless future, it was time to let go of an old dream. The fall of the Iron Curtain had brought plenty of opportunities, but the gains had been too lopsided. It wasn’t a vote against mass immigration or globalisation but a vote to manage it better, in a way that had carried greater democratic buy-in. Everyone imagined immigration would fall, and by quite a bit.

Everyone got it wrong. David Cameron had famously tried to get net immigration down to the “tens of thousands” but the figures due later this month will show it well into the hundreds of thousands. New arrivals may encounter more friction: queues can be longer in airports, the paperwork more of a headache. But never have more people settled these islands than are doing so now, in these post-Brexit years.

If British unemployment was low, as in the postwar years, this would be a good sign of a growing economy. But we have an unemployment crisis, with over a million vacancies across the UK, yet a near-record five million on out-of-work benefits. Brexit was an opportunity to wean employers off the drug of cheap foreign labour, force them to offer better pay and training and lure Britons back to work. It would be painful, but it would be necessary. A new economic model would have to be built.

Boris Johnson, for all of his faults, anticipated this post-Brexit power struggle. The employers would howl in protest at the lack of immigrants, saying that the British would not do the jobs. To which the government would respond: pay more, and they will come. Invest in automation. Don’t waste humans on jobs that machines could do. Don’t expect politicians to procure cheap workers, that was the whole point of Brexit. And if this means slower GDP growth, even higher prices: so be it. An important readjustment needs to get under way.

Then Covid came, lockdowns scrambled everything, and immigrants played a full role in getting the country working again – making up a record 19 per cent of the workforce, higher than even the United States. But the failure to nudge Britons back into work has still meant huge, painful worker shortages. Employers held their nerve, care home pay actually fell relative to the average salary, and eventually the government buckled. The migration tap is being turned on fuller than ever before. Attempts to get Britons back to work, it seems, have been all but abandoned.

Rishi Sunak would vigorously reject this analysis, saying the last Budget was designed to be pro-work. But his own officials have given up on this and are quietly preparing to pay the price of massive failure. Their figures – which have never been reported – envisage £1.9 billion a week now spent on welfare for working-age people, up 52 per cent on pre-pandemic levels. Up 13 per cent since last year alone. And scheduled to keep rising for the foreseeable future.

The Prime Minister is lucky that Labour has not cottoned on to this, because it really is the kind of failure that could be added to a poster with his signature on it. Since Sunak arrived in Downing Street as Chancellor, welfare costs for the working-age have risen by £33 billion – more than the combined budgets for the Home Office and Foreign Office. Not tackling this problem is easily the most expensive decision that has been taken. And it’s one that has had almost no discussion.

Set aside the financial cost: the human cost is on a scale that, still, has not properly been taken in. Before the pandemic, 2.3 million working-age people were claiming disability benefits. The working assumption of the Department for Work and Pensions is that this rises to 3.7 million in five years’ time. What will become of these extra 1.3 million? That’s equivalent to a city the size of Birmingham exiting the national workforce after claiming a disability. It represents a staggering, unexplained and devastatingly expensive economic change.

This scandal hides in plain sight. A quarter of Hartlepool and almost half of those in central Blackpool are on out-of-work benefits, in spite of local worker shortages. But such places are easily ignored in the national political debate. The Tories don’t want to draw attention to their own failure and Labour still struggles to regard high welfare numbers as a problem. A conspiracy of silence might very well hold.

So net immigration is expected to stabilise at an average 250,000 a year – the equivalent to a city the size of Stoke-on-Trent – for the foreseeable future. This will cover the impact of the 200,000 now expected to sign on to disability benefit each year. Politically, it marks a line of least resistance: welfare reform is a tough, thankless task. Economically, it’s eye-wateringly expensive. Socially, it’s no way to run a country.

You can argue (as I do) that immigration has enriched Britain and that we have good claim to be the world’s most successful melting pot. But if we are to welcome two million more over the next five years, it raises certain questions – such as where they all might live. It strengthens the case for planning reform. At the last count, the new housing stock (200,000 a year) was barely enough to keep pace with net migration (500,000 a year). More homes will now, of course, be needed – so at very least, Michael Gove might want to stop vetoing new housing schemes on the grounds that he finds them too ugly.

One of the benefits of Brexit was to make Britain the only country in Europe without populists in Parliament. Voters thought that Labour and Tories, who both campaigned for Remain, had changed: they understood the need to discuss demographic change. It was never a vote against immigration, just to manage it better. And not use these industrious immigrants as cover to duck difficult discussions about wages, welfare or economic reform.

Brexit was never, on its own, going to make Britain better or worse. It simply meant the retrieval of powerful tools: all would depend on how they are used. If there ever was a plan to use immigration controls to force economic reform and raise wages, we can now safely declare it abandoned. Mr Sunak may have to hope voters don’t notice before the next general election.