Posted on November 6, 2013

How Migrants from Outside Europe Leave a £100billion Hole in the Public Purse

Steve Doughty, Daily Mail (London), November 5, 2013

Immigrants from outside Europe have taken £100billion more in benefits and services than they paid back in taxes, a major study revealed yesterday.

Over a 16-year period, the bill to the taxpayer of providing them with welfare, health and education was 14 per cent higher than the money they put in the national purse.

However, migrants from Europe–including those from Eastern Europe who came in large numbers after 2004–have paid more in taxes than they received, researchers said.

The report from academics at University College London claims to be the most far-reaching study yet conducted of the impact of migration on taxpayers.

Its findings were based on official figures, including those for public spending and tax receipts, and on the Government’s Labour Force Survey that looks at the lives of around 150,000 families each year.

Professor Christian Dustmann and Dr Tommaso Frattini said that between 1995 and 2011, migrants from European countries paid 4 per cent more into the tax system than they took out, while British-born people had on average paid in 7 per cent less than they received from the state.

However, migrants from outside the European Economic Area (EEA)–which is the 27 EU countries plus Iceland, Liechtenstein and Norway–had made a ‘negative fiscal contribution’ overall,’ their report said.

‘This is partly explained by their demographic structure–non-EEA immigrants have had more children than natives, and we have allocated educational expenditure for children to immigrants.’

The analysis comes at a point of deepening controversy over the cost of health and benefit tourism and widespread anxiety over the potential impact of a new wave of migration from Romania and Bulgaria in the new year.

Citizens of the two countries, which joined the EU in 2007, win the right to work freely in Britain from January.

The Daily Mail reported at the weekend that British firms are actively recruiting workers in Bucharest and that job agencies in Romania are already being asked how to claim state benefits in this country.

UCL’s report said the population of migrants from outside Europe grew by more than 2.2million between 1995 and 2011, reaching just under 6.15million in 2011.

It said that over the same period, the non-EEA immigrants received public services and benefits worth £104 billion more, at 2011 prices, than they paid in taxes.

Their contributions, the report said, paid just over 86 per cent of the value of the services and benefits they received.

Over the same period, the EEA migrant population went up from under two million to 2.85million in 2011. But they contributed £8.8billion more to the Treasury than they received in services and benefits, meaning they paid 4 per cent more than they took.

According to the data, migrants are 20 per cent more likely to be claiming work tax credit than Britons. One in seven people claiming the benefit is a non-UK national.

The report does not break down differences between migrants from wealthy western European countries like France and Germany and those from poorer Eastern European nations.

Migrants from Poland and seven other Eastern European states gained the right to work freely in Britain in 2004.

Professor Dustmann and his colleagues said: ‘Immigrants arriving since the early 2000s have made substantial net contributions to public finances, a reality that contrasts starkly with the view often maintained in public debate.’

However their report said recent immigrants are likely to be of working age and so make fewer demands on schools or the NHS.

But Sir Andrew Green of the MigrationWatch UK think tank said: ‘It is very interesting that this report finds that non-EU migrants since 1995 have made a negative contribution to the national budget, yet they have accounted for two thirds of foreign immigration over the past 15 years.

‘As regards EU migrants, much of the benefit stems from their relative youth but, like the rest of us, they will get older. No allowance has been made in these calculations for future pensions or for higher health costs in old age.’

Dr Carlos Vargas Silva of the Migration Observatory at Oxford University said the research suggests the net contribution of recent migrants is positive–but some groups can ‘represent a burden’.