Would Ukip’s policies on immigration, tax and education work?

Researchers have pointed for some time to the paradox that while most people in the UK think that immigration is too high nationally, the number who are concerned about it as a local issue is much lower. And even stranger is the fact that, if anything, people who live in areas with fewer immigrants are more likely to think it’s a big problem.

This phenomenon was highlighted by Ukip’s by-election victory in Clacton. Not only does Clacton have far fewer immigrants than the national average, but even those it does have are not from the groups one might expect to provoke the most concern. The census tells us that, among those “immigrants” who do live in Clacton, the most common countries of birth are Ireland and Germany. Most of these have probably been here rather a long time.

Economic analysis confirms what most non-economists probably could have guessed anyway: that it’s not immigration, but much wider economic forces, that is responsible for the problems of Clacton and other places that have been “left behind” by economic growth. During the recession, youth unemployment actually rose faster in lower migration areas, for example. That’s not to say that there aren’t problems related to immigration – in London, for example, with housing, congestion, and pressure on public services. But immigration, and its associated costs and benefits, is both one of the causes and consequences of economic success, not failure.

But that doesn’t mean Clacton (or Heywood and Middleton, where Ukip also did well, and where immigration is also low) don’t have real economic problems, or that residents aren’t facing real hardships. Both have wages more than 10 per cent below the national average, and far more people on out-of-work benefits, especially disability benefits. These, and other areas where Ukip is doing well, are often places that suffered most during the recession, and have not seen recovery reflected in pay packets or living standards.

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In both cases what is going on is really the contrast between places that for whatever reason have adapted well to the opportunities and problems generated by globalisation – not just London, but other successful cities like York, or Cambridge – and those that have not. So when politicians say that reducing or stopping immigration will make things better for the people of Clacton – or anywhere else – then they’re not just getting their facts wrong, they’re actively misleading people. Immigration is not the problem, so stopping it isn’t the solution.

But then what is? And does Ukip, or any of the other parties, have the answer? Beyond immigration and Europe, Ukip’s flagship policies appear to be to cut taxes: they’d like to cut the top rate of tax from 50p to 40p, to increase the personal allowance further, and to abolish inheritance tax. To be fair, unlike the Conservative Party, who have a similar wishlist, Ukip have been more specific on where at least some of the money to fund these tax cuts would come from: ending almost all development aid, and withdrawing from the EU, although, like the Conservatives, who don’t even pretend their numbers add up, they too would almost certainly end up with a very large black hole.

But almost all the benefits of these tax cuts would go to relatively well-off people, as shown by the graph. The Conservatives’ income tax cuts would give three times as much to those in the top 10 per cent as those in the middle, while lower income groups would hardly gain anything. Ukip’s would be similar, only more so. As for inheritance tax, it is only paid on 1 in 20 estates. People who live in Clacton or Heywood or places like it would gain little or nothing from its abolition, just as they have little or nothing to fear from the “mansion tax”. And where would the money from this come from? Ultimately, much would have to come from the disability benefits and state pensions on which many of the residents of Clacton rely.

More important than tax cuts for the rich – or indeed, for the dead – for the future of deprived areas in the UK is whether young people have the education and skills to succeed in an increasingly competitive labour market. And here Ukip’s policy is indeed very clear, and very distinct from that of other parties. They want to bring back selection – a grammar school (and, presumably, a “secondary modern”) in every town, something Nigel Farage claims would be good for “social mobility”.

Fortunately, we don’t have to look far to find out what reintroducing grammar schools would mean in practice for deprived areas and disadvantaged kids. As Chris Cook (formerly of the FT) has bluntly stated, the net effect of grammar schools is to disadvantage poor children and help the rich. Look at Kent, which still has grammar schools, secondary moderns, and selection at 11: fewer than one child in three entitled to free school meals gets the basic standard of five good GCSEs including English and maths. Prosperous Buckinghamshire, also largely selective, does little better. Both do even worse on this score than Essex (includes Clacton) or Rochdale (including Heywood and Middleton), although neither of these does particularly well either.

What about London, with all the pressures of rapid, immigration-fuelled population growth, and very large numbers of kids with English as a second language? There, more than half of all poor kids achieve the standard – one of the most remarkable successes in British social policy of recent years. What achieved that? Not quick, knee-jerk solutions, but sustained effort over many years by teachers, parents and local authorities, combined with pressure and money from central government.

We cannot say to those who feel excluded or left behind by what has happened to the economy over the last 30 years, including the growth in immigration, that there is nothing we can or should do. But equally we should not give them false hope or easy answers. Stopping immigration won’t create jobs. Unaffordable tax cuts targeted at the better-off won’t help the poor. Segregating kids at age 11 won’t boost social mobility. The real answers are a lot harder than that.

The author is director of the National Institute of Economic and Social Research. David Blanchflower is away.