Net-zero migration: a how-to guide

Auctioned, tradable visas with migration insurance

Britain’s decades long, cross-party pursuit of unselective migration to this country on a massive scale has turned out to be an unmitigated social, economic, and political disaster. There were warnings that this would be the case, and they have mostly proven to be true, if still — with the benefit of hindsight — severely understated. There are plenty of facts, and if you’re reading this article you’re almost certainly well acquainted with many of them. There will be plenty more grim facts to come, but here we will turn to the question that really matters: what is to be done?

There is much to be said about the need for the mass deportation of illegal immigrants and an end to the unconstrained right to claim refuge; and certainly, the number of resident illegal immigrants is not small or insignificant, as some might claim. But Britain’s immigration policy has proceeded primarily through allowing easy settlement for millions more people on a legal basis. Whether initially through work, study, or family reunion, most of Britain’s migrant population arrived with the full (in fact, enthusiastic) approval of the state. It is in Britain’s legal system of migration that the largest part of the problem lies, and that is what we need to change.

Most restrictionist proposals suggest that tweaking a few of that system’s parameters, reorganising the agencies, and hiring a few more Border Force officers will allow us finally to deliver on the old Cameron-era pledge (never once close to being fulfilled) of net migration back down into the ‘tens of thousands’ each year. And yet, time and again, the system has shown that it is incapable of controlling Britain’s borders in any real way, even with as few demands from ministers as have been seen in recent years. Every time a minister announces a new control mechanism, immigration seems to rise, and rise, and rise. This is perhaps no surprise given that Home Office bureaucrats brazenly display their contempt for their own work, but the rot running so deep offers no real reassurances when it comes the system’s capacity for change.

No: incremental reform is not sufficient to the task. We need to rethink entirely how we manage new arrivals as well as past immigrants, ensuring institutions and accountabilities exist to enforce our political goals, and we need to ensure that they will be able to accommodate not only a slowdown, but potentially even a reversal of the mass immigration we have seen in recent years.

A successful immigration system

We should start by defining the features of a successful system, in contrast to our present failed system. It goes without saying that enacting a new system depends on removing the legal barriers to responsible government found in the Human Rights Act 1998, repealing the Equality Act 2010, and ending Britain’s direct participation in the European Convention on Human Rights and the 1951 Refugee Convention. Beyond these basic prerequisites to change, I think there are seven crucial features that must be included, and I will list them in turn.

First. Direct political control and accountability, not vague direction. That means that if the Home Secretary sets a quantitative limit to immigration, there should be the machinery for this to be converted directly into decisions over how many visas are to be issued or withdrawn. This is where proposals for an ‘immigration cap’ can often ring hollow: how will the system credibly commit to stopping visa issuance if a cap is breached?

Second. Control should be measured by stocks, not flows — and certainly not net flows. Although it was always in bad faith, the target under Cameron, May, and Johnson of ‘net migration in the tens of thousands a year’ was never a good target. The Government does not control emigration, and so cannot genuinely control net migration. The rising turnover associated with increased international mobility means that even net migration in the tens of thousands a year would be compatible with what is, for some, a nonetheless uncomfortably rapid rate of demographic change. Instead, we should set immigration goals in terms of the share of foreigners within the resident population, which is the quantity that matters.

Third. Immigration will happen; it can’t just be controlled at the border, and immigration needs to be managed on this basis. The very same rise in international mobility means that millions of people arrive in Britain each year, far more than the number actually migrating. Many will be tourists; some will be here temporarily on business. Moreover, an advanced economy buying and selling goods and services across the world sometimes requires people to move on a more permanent basis — be they Premier League footballers or specialists in new technologies — and British people also do fall in love with and want to marry foreign people. Practical considerations alone will dictate that people should be able to come into Britain as visitors and make decisions with immigration implications, and a successful system needs to be able to respond effectively to these decisions.

Fourth. Quantity matters, but quality matters an awful lot too. The Johnson-Patel immigration boom of 2022/3 is notable not only for the sheer numbers involved, but the total collapse in migrant quality: an explosion of low-skilled migrants on low wages; an influx of students at bottom-tier universities; and skyrocketing use of dependant provisions. An immigration system needs to have strong safeguards: not only to avoid this collapse in selectivity, but also to encourage those previously admitted to Britain to return to their country of origin where that would be a better outcome.

Fifth. Slowing mass immigration will not be enough: the voluntary return of some immigrants to their country of origin needs to be an option. Today’s system fails in part because it operates as a ratchet: hundreds of thousands can apply to live and work here each year, and some must be accepted to arrive and settle, but nobody — even those who represent a serious long-term fiscal drain — can ever be asked to leave, except the most serious of rule-breakers (and in practice, given the pathetic number of deportations in recent years and the major legal hurdles to enforcement, not even them). Once you are here, obtaining Indefinite Leave to Remain, and even British citizenship, is not especially difficult. In 2024, it should be clear to all with eyes to see that past intentional admissions have included many mistakes, and reversing some of those mistakes should be a policy option. This is not straightforward: even if we ignore the issue of those who have acquired British citizenship, unilaterally cancelling legitimately acquired residence rights (including Indefinite Leave to Remain) is legally tricky, and so ways to encourage the voluntary exit of undesirables is clearly preferable.

Sixth. Relying on mass bureaucracy to enact large-scale, complicated restriction is pointless. It’s nearly twenty years since the Home Office was declared ‘not fit for purpose’, and there have been few visible signs of regeneration. Even the smallest moves in a restrictionist direction have been opposed politically and undermined administratively from within the Home Office and its agencies; the regular return of ‘points-based systems’ to the discussion is a reminder of just how useless incremental reform can be. We know that British officialdom specialises in layering in ever more complexity and creating loopholes to be exploited. Any proposal which relies on greater processing and enforcement by Home Office bureaucrats needs to reckon with these institutional realities.

And finally, seventh. For that reason, the immigration system will need to be radically simplified. The current system involves a wide range of visas, with specific schemes for Ministers of Religion, Domestic Workers, High-Potential Individuals, and many, many more. Every scheme has its own rules and processes, and creates a secondary market of rent-seeking visa specialists who work to ensure that people — especially those in the Third World, with the most to gain, relatively speaking — can work the system to their best advantage. Complexity is the fuel for bureaucratic dysfunction and rent-seeking, and any system needs to avoid replicating or increasing complexity; another reason why ‘sticking plaster’ incrementalism won’t work.

The immigration transaction

Radical simplification suggests we need some kind of analysis of what immigration looks like, and how we can optimise around it. In the most elementary terms, immigration happens because, at the margin, some foreign nationals see opportunities to be in Britain rather than in their own country. In economics jargon, there are rents obtainable from moving to Britain.

Those rents may appear in different ways. Compared to the global average, Britain benefits from much greater accumulations of physical and social capital, giving people living here higher wages or better lives. For many people, especially those from the Third World, the gain from moving to Britain can be large, even if some of the rents are shared with an employer, i.e., the employer gains relatively cheaper labour, and the immigrant gains more in wages than they would at home. Beyond increased wages, immigrants might also value living in a more orderly society, increased opportunities for their descendants, access to public services (including education and healthcare), and welfare benefits (whether permanently or as security against future misfortune).

We know these rents are large because of the efforts migrants expend to secure them even in their most limited form. In the past year, we have seen multiple stories of people paying legally dubious immigration brokers large sums of money to secure minimum wage work in Britain’s care sector, where visas have been easy to come by. To give just one example:

In each case, the worker said they heard about a job opportunity in the UK, either through friends or social media influencers who referred them to an immigration agent in India. They said the immigration agent then charged them between £8,000 and £20,000 to process their visa, with some promising the money would cover flights, airport transfers, and a month’s accommodation too.

Even those crossing illegally, where their best hope is likely to be a life on benefits, perhaps with some work in the grey economy, are rumoured to pay criminal gangs thousands of pounds to live here. Immigrants are paying these sums, and often making journeys that carry a serious risk of injury or death, because the rents available to those able to settle in Britain are, in their mind, so high that they are more than worth both the direct financial costs and the potential dangers involved in making it here.

These rents are available because Britain has accumulated more physical and social capital than most other countries. As such, they should be captured for the British people who accumulated those stocks of capital in the first place, preferably before they are exhausted by accepting too many new arrivals. The price mechanism is the natural way to do this, but our immigration system instead relies on rationing through visa schemes. (Although there are some costs involved in legitimately acquiring a visa, these are tiny compared to what the market price would be.) Allowing immigrants access to Britain unpriced, so long as they can meet the visa requirements, encourages rent-seeking behaviour not just from migrants, but from all those who stand to gain domestically, be they the employers of cheap labour, landlords looking to crowd more tenants into HMOs, legal advisers looking to ‘work the system’, or outright criminal gangs looking to take their money to get them here.

Using price to regulate immigration is not a new idea. In 2008, Nobel Prize-winning economist Gary Becker set out a proposal to the Institute of Economic Affairs, a pro-migration think tank, to charge for visas, and many other economists have also discussed the idea. There are three main benefits to this system: firstly, price mechanisms allow for the removal of most of the bureaucracy involved in the current system; secondly, by capturing the rents, the incentive on immigrants and those with interests in their arrival to engage in rent-seeking behaviour is removed; and thirdly, it creates a new revenue source. Price mechanisms allow the market to set the terms for who gets to come into Britain, without needing a sprawling, yet ineffective bureaucratic mess of salary thresholds, points-based systems, or resident labour market tests.

Auctioned, tradable visas with migration insurance

The proposal is that for all new immigration, all current visas will be removed and replaced with a single visa regime for all (or almost all) adult migrants (we will discuss some potential small variations on the general scheme in certain tricky cases below).

Under the new scheme, in order to obtain settled status in Britain, there will be three requirements:

• Registration on a Home Office ‘fit and proper’ listing, which is a precondition. You can be removed from the register for breaking any law, becoming a public charge, or if the Home Secretary deems your presence in the country undesirable for other reasons (we must emphasise here that, if you are a non-citizen, it is a simple fact that you have no inherent right to remain here if the British state does not want you to).

• Holding a visa, which will be available for purchase from a new agency, the Visa Authority, through regular online auctions.

• Purchasing ‘migration insurance’ from a commercial insurer, which will indemnify any substantial costs — including, but not limited to, criminal injuries compensation and healthcare costs — on the public purse, as well as some kind of liability for removal if either ‘fit and proper’ status is lost, or if a visa expires.

Visas are to be issued solely by the Visa Authority, and will be sold at public auction on a regular — most likely monthly — basis. Visas allow a complete range of economic rights in Britain, similar to those of residents, but with no political rights, which are reserved for citizens. At each auction, the Visa Authority will release visas with a range of maturities up to ten years, and award them to all bidders (who could be employers or individuals) offering at or above the single market-clearing price, giving an incentive to price higher to ensure success. With a visa in hand, a successful bidder can link it to anyone with both ‘fit and proper’ registration and a migration insurance certificate — whether their own or someone else’s — covering the duration of the chosen person’s planned stay (a visa holder can have insurance for a shorter period than their intended stay so long as they pre-commit to resell their visa at that date).

An important part of the scheme is that visas can be resold, so that if plans change, visa holders under the new scheme can cash out their remaining stay and allow somebody else to take their place by submitting their visa for sale at the next Visa Authority auction. Given what we know of the prices paid by even low-skilled and illegal migrants, the value of visas is likely to be high. Visa sale revenues earned by the Visa Authority will be a new source of revenue to HM Treasury, after subtracting the (most likely relatively low) operating costs of the system.

Migrant insurance, purchased from commercial insurers, represents an important additional part of the scheme, because it helps to separate the rents generally available from being in Britain from the external costs imposed by less desirable migrants; that is to say, it applies direct price discrimination. We know from the Office for Budget Responsibility that even among working immigrants, those on low pay represent a net fiscal drain to the taxpayer. We also know all too well that many migrants are in social housing, that some are involved in crime and terrorism, and that many refuse to leave when their visa expires. While these problems merit direct action in their own right, we don’t want the rents available to bad actors to artificially drive up the visa price for migrants with more to contribute to this country. Insurance means that the costs are imposed directly on migrants with high risk profiles, making immigration much less attractive to them.

An advantage here is that the Home Office bureaucracy does not have to define and evaluate these risk profiles: that is left to the insurance market. In the same way, by making insurers liable for the cost of deportation, they will price in the risk of poor compliance. The point is that by moving the risk elements to an insurance system, we allow visas to capture the positive rents available to immigrants while the potential for negative externalities from low-quality immigrants is priced by insurers, with only a minimal role for government in the transaction — namely, to maintain the ‘fit and proper’ register, which is primarily a publicly accessible database. By making this database publicly accessible, we will also be able to take a ‘no excuses’ approach with employers and landlords, who will be held liable for contracting with those without a right of residence.

Overall, the new system allows for the elimination of most visa bureaucracy, the elimination of rent-seeking, and the creation of robust disincentives to low-quality or ill-intentioned immigrants, while also creating a new revenue source at a time of fiscal constraint. At the same time, the Visa Authority has a direct mechanism to control the number of migrants allowed in Britain at any time, because only the Visa Authority can issue visas, and only up to the number that has been authorised by the Home Secretary. In that sense, the system allows the immediate achievement of net-zero migration if that is what is desired, with the Visa Authority only rolling over old visas for new ones and not creating any net new supply. Conversely, in the event that a government wants to increase immigration, it could do just that. However, unlike in the past, the decision would be have to be made openly; it would be transparent for all to see. Politicians will have the levers, and politicians will also be more easily held accountable for their decisions.

Adapting the old system to the new

But what do we do with the millions of migrants already in the current system? We want to achieve the same goals as with new immigrants. Given that we want the voluntary return of migrants to their country of origin to be a serious option, we want to make sure that some of the same incentives start to work on them as well. The easiest cases are those whose visas are about to expire, as they will have to move into the new system — and if they can’t afford the market-clearing price of a visa or their migrant insurance premium, then that means they will have to return to their country of origin. Indeed, should we so wish, it would also be possible for the Visa Authority to be instructed to allow for ‘natural wastage’ in visa numbers as existing visas expire, such that it doesn’t replace all of them, allowing migration flows to move into consistent net-negative territory.

For other migrants, including those with Indefinite Leave to Remain, their visas will be converted into those on the newer system where appropriate, with the necessary maturities and their identification on the new consolidated ‘fit and proper’ registration. The difference is that their right of resale will be limited. Reflecting the fact that they are not currently obliged to have migrant insurance and have not paid for their visa through an auction, they do not have an existing claim over the value of their visa.

But we should give them some consideration, and allow them to keep half of any sale proceeds, and up to ten years’ maturity if they have Indefinite Leave to Remain (EU Settled Status holders should be allowed to receive up to the number of immediately recent years they have actually been resident). This will encourage many settled migrants to consider whether their access to considerable sale proceeds by making the decision to return to their country of origin will be better than their option to stay. More controversially, we could also allow citizens — or at least those with dual nationality, to avoid the problem of creating stateless people, even if voluntarily in this case — to sell their citizenship at the value of, say, fifteen years’ maturity. For migrants with lower earning potential and/or short time horizons, the substantial sums on offer when there are migrants with higher earning potential seeking to buy visas will create a natural turnover of migrants which favours a higher average level of skill and quality.

The other half of existing migrants’ sale proceeds can either go direct to HM Treasury, or alternatively, go to the Home Office to act as a buyer at auctions, conducting ‘visa buybacks’ to persuade more migrants at the margin to return to their country of origin. If all of the proceeds were ploughed back into ‘visa buybacks’, every time two existing migrants opt to return to their country of origin, the Home Office could enter the market to pay for another to join them. Along with natural wastage, this would allow a rapid reduction of the numbers of low quality migrants in Britain, while also pushing towards higher average quality in the migrant stock. If the government wished to accelerate the process, further funds could be made available by HM Treasury.

Conditions for success

The new system relies on robust border enforcement, including the elimination of other routes which will allow for rent-seeking behaviour. Visa market value will be maximised if there are no other ways to achieve settlement. It goes without saying that we must bring to an end the brazen employment of illegal immigrants on a massive scale, especially by companies like Deliveroo. We have already touched on how a publicly accessible ‘fit and proper’ register will make it much more difficult for employers and landlords to contract with illegal immigrants, allowing for us to move towards a ‘no excuses’ approach to the problem.

The new system also relies on rapid removal for those losing status, and border control to avoid those removed returning. If your visa expires or you become ‘unfit or improper’ in the Home Office’s eyes, then there needs to be an immediate exit, enforced if not voluntary. Some of this can be encouraged by fining insurers for their customers’ failure to comply. Although some degree of direct state involvement in this is probably unavoidable, it is also worth considering whether some of the enforcement steps could be delegated to insurers to further minimise bureaucratic involvement.

Obtaining citizenship allows an exit from the system’s incentives, as a citizen no longer has to buy a visa or hold insurance. At present, Britain’s citizenship requirements are lighter than many other countries in terms of the residency requirement, the openness to dual nationality, and the minimal requirement to be a contributor to society (in fact, even criminal convictions are certainly not much of a barrier). While it should still be possible to obtain British citizenship, requirements should be made significantly more stringent on each of these dimensions than they are currently.

In the background, the British state has a number of features which create rents that attract undesirable immigrants. These should be addressed to ensure that migrants are attracted to the country for the right reasons, and so that existing low-quality migrants are further encouraged to consider whether selling their visa might be a better option for them. Moving to a more contributory benefits system, marketising social housing, and cracking down on the cash-in-hand society could all be valuable steps in this direction. While immigration interacts with and exacerbates many problems of British social policy, immigration reform is no substitute for tackling those problems directly.

Some special cases

Although simplicity is a virtue of the new system, there are options to accommodate some of the varied real-world immigration cases to be considered.

Refugees

This special case is mentioned only to say that it should not receive special treatment. The current refugee model is not fit for purpose: it was created in a world with much less international mobility and a much slower spread of information across borders, and its interaction with the ‘human rights’ revolution in lawmaking has been disastrous. The evolving approach of British law seems to suggest that refugee status should be available to anybody with a life materially worse in their country of origin than in Britain. As long as Britain is still relatively prosperous and successful, that means giving most of the world the right to claim ‘refuge’ here.

The advantage of the new system is that we can leave the question of who deserves refuge in Britain to politics and civil society. If refugee charities want to allow more benighted souls into Britain, they can finance the visas and the insurance premiums — the latter of which, given the risk profile of many supposed ‘refugees’, will likely be very high — for them under the new system. Similarly, if the Ministry of Defence suddenly declare that they ‘promised’ refuge for foreign mercenaries twenty years before, they also can finance the visas and insurance premiums involved in this out of their budget, and thus be held financially accountable as a department for that decision. The system needs no special provision for refugees — only that those concerned for their plight are willing to back their passion with their funds.

Foreign spouses and child dependants

This is a much more difficult case, and deserves special consideration. It is perfectly reasonable that British people marry those from overseas, especially in a world that is as internationally connected as it is today. Our current immigration system has become hugely distorted because of a wish to prevent particular cases, especially those related to Pakistan, and these distortions (such as the income or asset tests) aren’t even successful in achieving this. While the reason for the total failure of these restrictions to achieve their goals remains somewhat unclear, it seems likely that this is because extended families club together in some way at the point of application, defeating the Home Office’s checks.

Rather than playing a game of ‘whack-a-mole’ with these communities — having to find new, increasingly complex checks every time they work out how to defeat them — the new system allows for us to implement a relatively straightforward mechanism to manage foreign spouses. They will not need a visa for all the time that they are married (and demonstrably cohabiting), but they will need to be ‘fit and proper’ and to have migration insurance. Providing that the couple stay together long enough to allow for naturalisation (and as in most countries, marriage should allow accelerated progress), that should be sufficient. Those looking to abuse the marriage route should be deterred by higher insurance premiums.

Child dependants should have a fixed fee addition to go along with an existing visa holder, covering also the cost of any state support. Other dependants will be required to obtain their own visas through the auction process. This would help eliminate the worst elements of the phenomenon of chain migration, where an initial arrival on a work visa gradually brings over a large number of relatives, who are often older and/or do not work. The phenomenon of chain migration means that even immigrants who individually are a fiscal boon can in fact become a fiscal drain once the immigration of their relatives is accounted for.

International students

In the long run, the simplest route here would be to require international students to go through the very same visa process as all other immigrants, and make the choice for themselves as to whether they want to work or study (as the same visa would give them the right to do either). This would, however, destroy most of the international student business overnight, bankrupting a very large number of universities, as only very well-resourced students would compete successfully in visa auctions with those looking to work in Britain. While this approach has its attractions, for many this would be too radical, at least in the short term.

An alternative approach, which would add a small, but manageable layer of complexity to the system, would be to create a separate study visa. With no right whatsoever to work in Britain attached and timed specifically around the academic year, these would be issued as a fixed quantity each year and auctioned not to migrants, but to universities to package up with their internationally-marketed degree programmes. This would restore direct political control and accountability over the number of international students, allowing for a managed reduction in numbers. It goes without saying that an automatic right to work in Britain for a certain amount of time after graduation would not be included with the study visa: after graduation, international students would have to acquire a work visa like anyone else.

By restricting study visa issuance, it would be easy through the price mechanism to make it so only those universities that are sufficiently prestigious to attract high fees from foreign students would be able to cover the cost of purchasing study visas, with no right to work attached, from the Visa Authority. The current model, which allows universities the freedom to (in effect) write visas with significant working periods, would rapidly draw to a close. This would still have the potential to bankrupt many universities — something which, to be clear, is hardly an entirely bad thing — but with a separate study visa from the main work visa, the damage would be more controllable.

Simpler, faster, more selective

The proposed new immigration system has many advantages. It allows for a radical simplification of law and policy, and the removal of a large, dysfunctional bureaucracy. It is more transparent in the decisions that are made, and as a result, more accountable to the public. It restores direct political control over the number of foreign nationals staying in the country, and creates sharp incentives for those who are staying to contribute more and to present fewer risks to public security and the British taxpayer. Rather than getting into ridiculous ‘picking winners’ discussions about what kind of qualifications we should accept, or what sort of salary levels we should make migrants prove, the system allows the market to decide within the basic parameters set by government.

Though, it should be added, should a Department wish to intervene directly in the visa market to achieve more specific aims than merely controlling overall visa issuance, it can: for instance, if the Department for Culture, Media, and Sport decides that Britain needs more opera singers than are arriving on the open market, it can ask for taxpayer money from HM Treasury to fund the purchase of visas and migration insurance, and then assign the visas to opera singers it itself has chosen through whatever means it wishes. Yet even in the case of outright providing taxpayer money to intervene in the visa market to achieve certain ends, this would not mean that a hard cap on visa issuance could simply be ignored by a Department.

Regardless of your political inclinations, the new system has the levers to achieve whatever you want on immigration, at least when it comes to numbers. The levers are there for net-zero migration to be achieved, should the government so wish, and the regular turnover of visas will create a revenue stream for taxpayers. A more radical government could even go for net-negative migration through recycling revenue from the sale of existing visas back into auctions via ‘buybacks’, including the 2-for-1 system described above. Yet the levers are also there for those who favour positive net migration, even at high levels. They should support the proposed system because it allows for more rational selection, less bureaucracy, less rent-seeking, and a new source of revenue for the Exchequer.

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Image credits: Katrina.Tuliao, Creative Commons Attribution 2.0

This article was written by regular Pimlico Journal contributor Thdhmo. Have a pitch? Send it to pimlicojournal@substack.com.

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