When my family immigrated to London from the US in the early 1970s, we were going against the tide: inner London’s population shrank by a fifth that decade. But since then, we’ve become accustomed to an ever-growing population, particularly in London and the south-east of England, driven both by inflows of people from abroad and rising life expectancy. Over the past 20 years, the UK’s annual population growth has averaged about 400,000. And despite an ageing population, that has propelled growth in the labour force and the economy as a whole: in the same period, the UK created nearly 6m additional jobs.
That changed in 2020. With Covid-19 pushing the number of deaths to the highest in a century, and birthrates falling, it seems likely that more people died than were born for the first time since 1976. Alongside that, however, was a dramatic exodus of foreign-born residents from the UK. The latest Office for National Statistics figures suggest that a million people have left the country. This would represent by far the largest fall in the resident population since the second world war, with London especially hard hit.
And while collecting and interpreting the data during the pandemic is extremely challenging – that number could be out by hundreds of thousands in either direction – there is no doubt that this reversal in migration trends has been large, real and abrupt. Neither Theresa May’s hostile environment nor Brexit came close to meeting David Cameron’s foolish “tens of thousands” target for net migration; but Covid-19 has done so, and then some.
From one perspective, this shouldn’t be surprising. The UK was among the worst hit countries in the world, both in health and economic terms, by the first wave of the pandemic. Within that, London, where the UK’s migrant population is concentrated, fared worst, seeing both more deaths than any other region and a larger rise in the numbers claiming benefits. Moreover, some of the sectors worst hit by lockdowns – accommodation, food services, retail and hospitality – are also heavily dependent on workers from abroad.
And recent immigrants are far more likely to live in rented accommodation – which makes it easier to leave, and more expensive to stay. If your job is gone, or furloughed, why risk both your health and your bank balance, when – at least for some – you have the option of returning to somewhere safer where you can be with family and friends? Other types of migrants – students, seasonal workers and those here on short-term assignments – may also have returned, or never come in the first place.
But what happens next? Under one scenario, a V (for vaccine?) shaped recovery in the economy will lead to a V-shaped recovery in net migration. Just as London was, from a health and economic perspective, perhaps the worst place to be in Europe in the spring of 2020, it could be the best in the summer of 2021. Many of those who left would return, either to their old jobs or to new ones, as new businesses fill the gaps in high-turnover sectors such as restaurants.
But it’s not hard to construct a more gloomy alternative scenario. While the economy overall will probably rebound, as relatively well-off households spend the money they’ve saved in lockdown, jobs – especially in consumer-facing service sectors in cities, like coffee shops and restaurants – may not, as many former commuters decide to continue to work at home some or most of the time. Restrictions on international travel make migration more difficult and will hit businesses – hotels, arts and culture – that rely on tourism. International students, spooked by the less-than-optimal experience of the last year, may stay away entirely or opt for cheaper online-only courses.
And looming over all of this is Brexit. Brexit was not the main driver of emigration over the last year, which was very much concentrated in the first few months of the pandemic, and appears to have affected non-EU migrants as well as Europeans. But it could certainly help persuade people not to return. While many of those who left will have acquired settled status, entitling them to come back, others will have only “pre-settled status” or nothing at all, and the Home Office has been at best ambiguous on their rights. And, of course, the new post-Brexit system will make it much more difficult for new EU migrants to come here.
What would this mean for our society and economy? Some changes might be welcome. Fewer people means less pressure on housing and public services, and perhaps, at least for some, more affordable housing; indeed, rents in city centres appear to have been falling, even as the housing market overall has been buoyant. If unemployment remains high, especially for young people, why do we need or want more people?
But that’s only one side of the story. High housing costs and congested public transport are problems of success. Lower immigration might ease them at first, but it also means lower growth and less tax revenue, as the Office for Budget Responsibility highlighted in its forecast last week. We don’t depend on immigration just for agricultural workers and coffee shops, but also for tech startups, creative industries, and universities – the most dynamic sectors of the UK economy. Overall, migration has created jobs, boosted innovation and productivity – and made us all richer. As has been brought home by the pandemic, our public services – and other sectors we’ve come to realise are “essential” – are often staffed by immigrants.
Nor is this just a London problem. History suggests that London’s economy is resilient and will bounce back, albeit changed; this is less true of other parts of the country, particularly those where the population was already stagnant or falling. While, thankfully, death rates will go down as the pandemic ends, population ageing will not go away; without immigration, the UK’s workforce will shrink over the decades to come, leaving more retired people to be supported and looked after by a falling working-age population.
The wider social impacts matter too. A less open Britain will be older, less mobile, less diverse – in lots of different ways – and more insular. And ironically, this reversal comes just as our attitudes towards immigration seem to be shifting in a much more positive direction.
But none of this is inevitable. There is plenty the government can do: for example, making clear that those who have left temporarily because of the pandemic can return, and reducing the absurd and discriminatory fees for settlement and citizenship. There are opportunities – the new post-Brexit migration system should make things easier for potential migrants from outside the EU. And while its impacts remain highly uncertain, the government’s welcome and radical decision to offer settlement visas to British overseas passport holders from Hong Kong could be a huge boost. Global Britain or Little England? The choice remains ours.
Jonathan Portes is professor of economics and public policy at King’s College London and a former senior civil servant