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Mass migration and quantitative easing are impoverishing Britain

Importing millions to fill vacancies, often at lower than market salaries, boosted business at the expense of workers

vacant chairs in empty office

Growth in living standards – as any South American junta could tell you – comes one of two ways: real or artificially. The real thing is the product of getting more people into work, embracing technology, and reducing inefficiencies. But all manner of sleights of hand can conjure its illusion.

Printing money will convince people – at least in the short term – that there’s more to go around. The graveyard of economic history shows how severe that drug’s comedown is. Yet, looking back at our own recent economic picture, despite the technological developments that could have turbocharged prosperity, it is hard to conclude that our own economic growth has been any less artificial.

Today, “printing money” is rebadged (and it amounts to little more) as quantitative easing. Some £875 billion of newly minted money has been used to buy assets, flooding cash into the economy at an enormous cost. The Treasury now faces a vast bill, potentially ranging to £100 billion, to cover the losses. But as the Telegraph has reported, there have been winners: high-street lenders, in particular, made an extra £9 billion in profits over 2023 thanks to the scheme.

So there you are: taxpayers down, and the banks up. This might have been defensible had the policy driven strong growth. I see no evidence of this. Instead, it seems only to have driven dramatic growth in asset prices. The British money supply has been greatly expanded, devaluing the salaries of British workers, to the great benefit of British banks. 

The money did not appear to find its way to ordinary households. It was instead used to bail out financial institutions whose own diversion into ever more complex forms of fractional reserve banking created vast sums of fictional money which, in the first instance, fuelled inflation of real estate and financial assets, and consumer prices. Just a decade ago, this same shell game led to their downfall and the global financial crisis.

Since the 1970s, the ratio of the cost of the average house to salary has more than doubled to a full 8.8 times. Gone are the days when a single earner in a family could sustain a reasonable living. Today, families are forced to send children off to childcare to service exorbitant mortgages on the same houses their parents’ generation lived in.

Meanwhile, the Bank of England, attempting to clamp down on the runaway inflation that resulted at least in part from its own errors, is now collectively punishing the country with interest rates that hit the workers and earners hardest hit by asset price inflation in the first place.

It’s no wonder so many feel that they have fallen victim to an unrelenting decline in living standards. Yet, artificial growth hasn’t stopped there. Alongside monetary quantitative easing has been what is now dubbed “human quantitative easing”: mass migration.

By importing millions of workers to fill vacancies, often at lower than market salaries, British companies may have felt themselves to be getting a good deal. I should know. As the former CEO of one of the UK’s largest staffing agencies, I have employed more migrants than perhaps anyone else in the UK. It was profitable business but – in the end – practices like these have caused real damage to both British and migrant workers.

Domestically, the limitless flow of migrant labour appears to have shrunk British salaries, delayed investment in automation, and contributed to the growth of a permanently workless class. And like the other “quantitative easing”, which also benefited asset owners at the expense of workers, it was imposed in the absence of democratic debate.

Monetary quantitative easing was levied by the unelected chiefs at Threadneedle Street. Mass migration was firstly a consequence of the EU’s open borders. Today, levels are set in the abstract by ministers behind closed doors. Every internal Government proposal to reduce migration numbers is – as Robert Jenrick has revealed – accompanied by apocalyptic predictions of economic ruin by the faceless officials of the Office for Budgetary Responsibility.

It is telling that those that saw these shadowy practices up close are beginning to speak out. Jenrick, the former immigration minister and an old friend of the Prime Minister, resigned office to speak out on migration. As he has made clear, whilst immigration has driven overall GDP up, it has very likely sent GDP per capita – how much is produced per person – into a cycle of stagnation.

Lord King, the former Governor, has warned that a dangerous “groupthink” has fallen over the Bank’s monetary policy decision-making. He railed that not a single dissenting voice had, in recent years, checked its erroneous thinking. And, yet, despite this emerging realisation, our politicians seem strangely wedded to the policies of the past.

The Prime Minister’s approach to cutting migration has been cautionary at best. Meanwhile, this election has shown that Jeremy Hunt and Rachel Reeves share an equally dogged devotion to the policies of the quangos that run the UK financial state. If anything, Reeves – herself a former Bank of England economist – seems even more wedded to the orthodoxy.

Yet we know precisely where this will lead. It is all too obvious to the victims of these policies. It is just our political classes that seem to be the last to be catching on to the change we need.

Phillip Ullmann is an investor and businessman who for 20 years ran one of the UK’s largest employment agencies.

Credit: The Telegraph, 9 June 2024 - by Phillip Ullmann


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