Using the price mechanism would allow those with the most information about their likely gains from immigration to make the decisions about how much a place working in the UK is worth to them. The people willing to pay the most to live in the UK are likely to be the same people who would contribute most to our economy. This would ensure that those immigrants allowed into Britain would most closely match the skills needed by organisations.

The coalition’s current policy of allocating working visas assumes that a bureaucratic process is capable of determining how many people of exactly what skill-set and experience will be best for the UK. It means that exemptions apply for some areas such as football and clergy, yet not for academics.

If the coalition wants to have a fixed cap on the number of working visas it issues, it should allocate them by selling them off, either by auction or by setting a price and then adjusting it over the years dependent on demand. Some categories of migrant could be eligible for a loan or their employers could pay the fee. Charging a fee for immigration would meet the key aim of the coalition’s cap policy – to increase the likelihood that immigrants skills’ are the ones Britain most needs.

The people most likely to be attracted by a fee are the most economically active migrants and those with a real commitment to the UK. They would likely be the most skilled, those who are young (with a longer time to collect the benefits) and those with a cultural commitment to the UK.


Commenting on the report’s release, Mark Littlewood, Director General of the Institute of Economic Affairs, said:

“The coalition’s cap on economic migrants is a disaster for the UK. Universities in particular are being hit hard with the cap making it much harder for them to attract the high calibre of lecturers they need.

“It is absurd that we assume bureaucrats in Whitehall can know the entire skills needs of the country. The current system has produced bizarre results with exemptions for athletes, Premiership footballers and minsters of religion, yet top scientists, engineers and academics have to vie for places under the cap.

“Rather than having a bureaucracy determining whether someone is sufficiently well trained in architecture or dentistry or some other skill, we can simply let the market decide. This would be more efficient and would probably yield an income stream of several hundred million pounds a year.”