Posted on January 3, 2007

Migrants ‘Benefit Economy Little’

BBC News, Jan. 3, 2007

The contribution of immigrants to the UK economy is “very slight indeed” and the main benefits are to the migrants themselves, a pressure group has said.

Migrationwatch UK says the economic benefit is equal to 4p a week for each person in Britain.

Its chairman Sir Andrew Green accused Whitehall of trying to divert attention from the problems caused by migration.

A Home Office spokesman said there was “a clear consensus” that migrants had helped the economy to grow.

But Migrationwatch said its figures showed immigration’s benefit to the UK was far lower than claimed.

“What we have done is to look at the economic contribution of migrants, taken as a whole, taking the economy as a whole,” Sir Andrew told BBC News.

“We find they certainly do add to production, but they also add in virtually the same proportion to population.”

The benefit of mass migration to each individual member of society was “trivial”, Sir Andrew added.

He said the main beneficiaries were the immigrants themselves, who were able to send home about £10m each day.

Migrationwatch reached its conclusion by comparing the proportion of the population who arrived as immigrants in 2005 with Treasury estimates for the proportion of GDP growth coming from immigration.

The difference between these figures, it said, amounted to a 4p gain for each person in the UK per week — or about £2.10 a year.

But Susan Anderson of the Confederation of British Industry said Migrationwatch was “seeking to score a few cheap political points”.

“Migrants to the UK bring valuable skills and ideas with them and help to fill job vacancies where Britons are unable or unwilling to do so,” she said.

“Their taxes help pay for our public services and our pensions, long after many migrants have returned home.

“Their presence also helps keep inflation low at a time when there are many forces pushing the other way.”

‘Impossibly complicated’

BBC economics editor Evan Davis said Migrationwatch was right to try to assess how immigration affected an individual’s wealth, rather than relying on government figures relating to the overall size of the economy.

But he said neither the government nor Sir Andrew had tried to work out the overall economic effect of immigration, which would be “impossibly complicated”.

Last December, the Ernst and Young Item Club, an influential economic forecasting body that uses Treasury models, estimated that immigration had brought in an extra £12bn to £18bn in tax since 1998.

Eastern European workers were reducing the UK’s trade deficit by an extra £1bn every year, it said.

In the same month a fresh Bank of England analysis suggested the effect of new migrants was complex.

While they were highly-educated, they were also working in more low-skilled jobs, it said. Some of these migrants may also be replacing low-skilled UK workers in certain jobs, although more data was needed.

A spokesman for the Home Office said there was clear evidence of migration’s benefits.

“Independent research has found migrants make a net contribution to the Exchequer,” said a spokesman.

“We have seen a large movement of people from the EU coming here to work.

“There is a clear consensus from commentators, business and our own research that this has helped the economy to grow. There is no evidence that it has increased unemployment.”

David Davis, the shadow home secretary, said the Migrationwatch figures sharply contrasted to those of the government.

“Immigration can be a real benefit to the country but only if it is properly controlled,” he said.

“You need to have accurate information about its level and effects. The government patently has neither.”