Britain's Real Crisis Isn't Immigration, It's a Chronic Failure to Invest
Walk into any pub, turn on any news channel, or scroll through any social media feed, and you will quickly encounter a familiar narrative: Britain’s economic woes are primarily the fault of immigration. It’s a convenient, politically potent story. It’s also a profound and dangerous distraction from the deep-seated, homegrown maladies that truly ail the UK economy.
The real diagnosis is far less simplistic and more uncomfortable. Britain’s economic stagnation is not imported; it is self-inflicted. It is the legacy of a decades-long failure to invest in innovation, a strategic blunder in outsourcing its industrial base, and a stubbornly persistent productivity crisis.
For years, the political debate has been obsessed with numbers coming into the country while willfully ignoring the capital fleeing it in the form of investment. The UK consistently ranks as one of the least productive economies in the G7. Output per hour worked has been virtually flat since the 2008 financial crisis. This isn’t a minor statistical blip; it is the fundamental reason wages have stagnated and living standards have declined. You cannot pay people more if they, and the economy as a whole, are not generating more value.
The roots of this productivity puzzle are threefold.
First, there is the cult of short-termism and the innovation drought. Compared to economic rivals, British businesses and successive governments have spectacularly underinvested in research and development (R&D). While nations like Germany, South Korea, and the US plough both public and private capital into the technologies of tomorrow, the UK’s investment has been anaemic. The result is a economy overly reliant on its dominant, but low-productivity, services sector, with a tiny high-tech manufacturing base. We have world-class universities that spin out brilliant ideas, but we consistently fail to provide the scale-up capital and industrial strategy to turn those ideas into world-beating companies and new industries on our own shores.
This leads directly to the second failure: the outsourcing of our economic backbone. Since the 1980s, British policy has been implicitly, and at times explicitly, based on the idea that we could transition to a “post-industrial” economy. To be fair, I have to own up to my own part in that working for outsources like Capita, ATOS, Fujitsu and Accenture who were loyal customers. Manufacturing was seen as a relic, something that could be efficiently offshored to lower-cost countries. What we chose to forget was that manufacturing is not just about making things; it’s the core of a complex ecosystem of skills, engineering prowess, and process innovation. When you outsource the factory, you don't just lose the assembly-line jobs; you lose the entire supply chain, the design engineers, the toolmakers, and the culture of making things better, faster, and smarter. This evisceration of industrial capacity has left our economy fragile, exposed to global supply shocks, and devoid of key skills.
Finally, this is compounded by a severe deficit of investment. For decades, infrastructure spending has been stop-start, subject to political whim rather than long-term national strategy. Our transport networks, energy grids, and digital infrastructure are creaking, creating bottlenecks that hamper business efficiency. This is not just about building new railways; it’s about the daily drag of a slow internet connection, a delayed shipment, or an unreliable power supply that cumulatively erodes the nation’s productive potential.
Blaming immigration for these structural problems is a category error. Migrants are not suppressing wages; a lack of investment in skills and capital is. Migrants are not causing productivity to flatline; a failure to modernise our economy is. In fact, a dynamic, innovative economy requires mobility of talent. The scientists, engineers, and entrepreneurs who come to the UK are often a net positive, contributing more in taxes than they consume in services and bringing vital skills.
To fix the British economy, we must stop looking for scapegoats and start looking in the mirror. The solution is not to pull up the drawbridge, but to finally get serious about the hard work of economic renewal.
It requires a modern industrial strategy that provides certainty for long-term private investment in green energy, life sciences, and advanced manufacturing. It demands a revolution in skills training, equipping our own workforce for the high-value jobs of the future. And it necessitates a government that is a confident co-investor, building the infrastructure and funding the R&D that the private sector alone cannot.
The choice is clear: we can continue the divisive politics of blame, or we can finally roll up our sleeves and address the real, decades-old problems that are holding Britain back. Our economic future depends on choosing wisely.
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