The Chancellor Philip Hammond has an opportunity to get Britain’s immigration system into a more Brexit-ready shape if he has the political courage – and economic nous – to do it. We will find out either way tomorrow, but here’s the issue. Whatever Brexit will mean in terms of any final deal, there is a strong likelihood it could profoundly impact how the immigration system works. This is no bad thing. The Home Office requires urgent reforms and public support for new immigration controls helped win the referendum for Brexit. Change is needed.
But these changes come at a cost. Britain will need to find funding support – and fast – for more border agents and new border controls, especially if the UK is out of the EU single market and customs union. No free movement from Europe means restrictions to and from Britain must work differently. Only yesterday, the Independent reported the Home Office might be forced to hire European workers to register EU nationals without increases in staffing. Yet problems remain for where the funding might come from without increasing taxes on the public.
I recommend the Chancellor takes a bold step by making the immigration system fully self-funded on a sustainable footing. If the system could stand on its own feet funded entirely by fees set on immigration-related applications, this could help raise the profile of migrants by ensuring they do not take a penny from taxpayers – any funding for immigration-related activities is created within the immigration system.
The system’s fees are big business. Immigration-related income raises over £2 billion each year. At least £106 million was raised and spent on non-immigration matters in a consolidated fund according to the Home Office’s annual report of accounts for last year. If Hammond is looking for cash that could help pay for more agents or new controls post-Brexit, the current immigration system could pay for itself in a sustainable way at a critical time.
Home Office figures show how reliant it has become on immigrants to fund non-migration services. For example, the annual surplus earned from border, immigration and citizenship services in 2014-15 was more than £468 million. This was enough to absorb an overall deficit of £266 million leaving an overall surplus of £200 million or more. The truth is that immigration isn’t just helping sustain the British government, but their application fees keep the Home Office afloat with much of the funding earned spent on anything but migration. This is a mistake.
The public has voiced concerns about immigration for being uncontrolled long before the vote for Brexit. Britain’s leaving the European Union will impose costs at least in the short-term for border management and security whatever the new deal in place might be. The UK must be prepared and part of its plans must include funding reserves that can enable the delivery of a new immigration strategy.
The Chancellor has an opportunity he should grasp to ring fence immigration as a self-funded zone that must live within its means on a sustainable basis with no recourse to public funding. This is a promise he can make for a system that needs more of the funding it is already generating to support significant reforms in the short-term. The only question is whether there is enough political will to act now before it is too late. The biggest cost to be paid is to ending the view of migrants as a cash cow to be milked benefiting other pet projects. This is a price worth paying.