Immigrants' '200m cost to economy demolishes Labour claim'
By Philip Johnston, Home Affairs Editor
(Filed: 25/04/2006)
Immigrants are a net cost on the economy and not a benefit as the Government has claimed, a report says today.
The study by Migrationwatch UK challenges official figures suggesting that immigrants annually contribute 2.5 billion more to the economy in taxes than they receive in benefits and state services.
It accuses Whitehall of using “entirely false” methodology to back up its claims by failing to take full account of the children of immigrants.
Researchers for the think tank said the Home Office only apportioned dependent children to the migrant population if both parents or the sole parent were foreign-born.
Children of “mixed” households, those who had one UK-born parent and one foreign-born parent, were attributed entirely to the native population.
This meant that in these “mixed” households, the cost of all the children was attributed to the UK-born parent and none of the costs fell to the immigrant community.
As there are some 1.4 million children of “mixed” households, Migrationwatch said this had “a decisive effect” on the result.
The report says the original research, widely and regularly quoted by ministers, chose the only assumption that could deliver the “positive” result they were seeking.
“By recalculating the figures and using the more equitable method of apportioning these children equally between the immigrant and native British communities the 2.5 billion 'surplus' becomes a 200 million deficit,” it adds.
Sir Andrew Green, the chairman of Migrationwatch, said: “Our research completely demolishes the Government's last remaining excuse for the highest levels of immigration in our history by exposing a serious error in their methodology.
“The Government has used this statistic on every possible occasion but now it has been shown up as entirely worthless.”
The Home Office research paper, published in 2002, said that although immigrants cost 28.8 billion in welfare benefits and state services that year, they contributed 31.2 billion in taxes.
The figure was raised by the higher salaries earned by immigrants compared with the local population: on average, 12 per cent higher than those of British-born people.
This was enough to counter-balance the higher than average levels of unemployment and child benefit, housing and council rebates and income support claimed by many first generation immigrants.
The study acknowledged that it was based on a “fairly tentative analysis”. Some labour market economists have said that one consequence of importing many low-skilled workers is to push down the wages of poorer people
However, a report at the weekend from the Ernst & Young Item Club said Polish plumbers and other migrants from nations that joined the European Union last year had boosted the British economy by keeping interest rates down.
It estimated that the cost of borrowing would be five per cent instead of 4.5 per cent without the arrival of people willing to work. Almost 300,000 immigrants from eastern Europe have registered for work in Britain since the EU expansion in 2004.
