What’s the point?
The countries that invented points-based immigration systems have concluded they do not work
BRITAIN’S Conservative Party was languishing in opposition when, in 2005, it hit upon a winning idea. If elected, it would introduce an “Australian-style points system” for work permits. So popular was the pitch that a Labour government created such a system three years later; the immigration minister, Liam Byrne, even flew to Sydney to launch the scheme, although it did not last long. Campaigners for Britain to leave the European Union repeated the promise this year. It was their most detailed policy proposal, and may well have carried them to victory.
“There’s something deep in the British psyche about the Australian system,” says Mr Byrne. But points-based immigration regimes look most attractive from a distance. The countries that invented them concluded some time ago that they are flawed, and have tweaked them radically. They have also discovered that points systems do not completely cure xenophobia.
Canada created the world’s first points system, in 1967. Would-be immigrants who scored highest on youth, education, experience and fluency in English or French were offered permanent residency. In 1979 Australia created a similar system. Both countries were abandoning racist schemes that had favoured whites (Australia ran one called “bring out a Briton”). Henceforth, the aim would be to lure talent, wherever it was from.
The new systems soon attracted admirers. New Zealand built a points-based immigration system in 1991; Britain, the Czech Republic, Denmark and Singapore began to experiment. But it gradually became clear that Australia and Canada were much better at attracting accomplished immigrants than at using their skills.
Employers were unimpressed with the new arrivals’ qualifications and foreign work experience. In Australia, 13.5% of recently arrived immigrants who had applied from overseas under the points system were unemployed in late 2013, compared with just 1% of those who had come in with a job offer. Pure points systems “don’t work”, says Madeleine Sumption of the Migration Observatory at Oxford University.
Another problem in Canada was that the number of applicants exceeded the number allowed in each year. At the worst point, applicants for the Federal Skilled Workers programme were waiting up to eight years for a decision. Businesses complained that superb applicants were languishing behind merely decent ones.
To deal with these flaws Australia and Canada have transformed their immigration systems. Both now weigh local work experience and job offers more heavily. Between 2002-03 and 2014-15 the number of Australian visas granted on the basis of job offers rose five-fold, from 9,700 to 48,300 (see chart). In Canada, the points system has been reworked so that any skilled applicant with a job offer scores higher than any applicant without.
Both countries have also inverted the process of applying for visas. Instead of putting applicants in a queue, they now invite people merely to express an interest in migrating. Those who pass an initial points test are put into a pool, where they can remain for a year or two. Every so often the best candidates are skimmed off and invited to apply for visas. Companies and provinces can trawl the pool, looking for promising immigrants to sponsor. Anybody they pluck out is likely to get a visa quickly.
These reforms seem to have had some effect. Immigrants to Australia are still less likely than natives to be economically active, but the gap has closed—from 9.8 percentage points in 2002-03 to 6.3 points in 2013-14. Canada’s huge backlog has gone: many of those stuck in the queue were ejected and given their fees back.
Businesses are less happy, though. In Canada, a firm that wants to offer a job to a foreigner must prove that it tried and failed to hire a Canadian—a slow, costly and sometimes daft process. Kumaran Thillainadarajah, an immigrant entrepreneur who founded a firm as a student, had to explain why he and not a native should be chief executive. The system is too cumbersome, says Sarah Anson-Cartwright of the Canadian Chamber of Commerce. She looks enviously at Britain, which has a fast-track visa scheme for technology workers.
Less popular still is the surge of temporary foreign workers, many unskilled. Canada created a scheme for them in 1973, mostly targeting agricultural workers and carers. In 2002 it was expanded to other jobs, and employers were allowed to pay immigrants 15% less than Canadians. The number of temporary migrant workers rose two and a half times between 2002 and 2013, to 127,000.
Amid protests from trade unions, which argued that Canadian workers were being undercut, the government announced a clampdown. Firms would have to explain why they could not hire Canadians, and those with more than ten staff would be barred from employing lots of temporary foreign workers. But the state has quietly retreated on both reforms. Fish-processing factories in eastern Canada no longer need to prove that Canadians do not want their jobs. Meat-packers and mushroom-growers are now demanding equal treatment.
Britain’s experiment with a points-based system in 2008 was also thwarted by business pleading. The scheme was never as flexible as Australia’s or Canada’s. But at least it was simple—until the lobbying began. Firms moaned that vital foreign workers were blocked because they lacked the required qualifications. Carve-outs were duly created: butchers and ballet dancers were given special treatment and footballers were not required to speak English. What remained of the system was then bulldozed by a Tory-led government that had pledged to slash immigration.
A simple immigration system that attracts global talent, calms the natives and gives businesses the workers they crave seems an impossible dream. Perhaps it is also a foolish one. Governments cannot know what kind of immigrants their economies will require because they do not know how their economies will evolve. There will always be special pleading and exceptions. As Mr Byrne puts it: “Migration systems are complicated because people are complicated.”