Migrant Miscount Could Hit Inflation, Says Bank Of England

Migrant miscount could hit inflation, says Bank of England

The Daily Mail
Last updated at 08:23am on 24th January 2008

Offical estimates of numbers of immigrants from eastern Europe are probably too low, according to the Bank of England.

The failure to count numbers coming into Britain from Poland and other new EU countries threatens to scupper control of inflation, Bank chiefs said.

And they called for the next national census to include questions in which everyone in the country will be asked to state the month and year they entered Britain, in order to try to clear up the immigration numbers controversy once and for all.

The Bank's intervention came amid growing concern in the NHS and among local councils over the way immigration has been adding uncounted numbers to local populations.

Local authorities and health chiefs have complained they have too little money to run schools and hospitals because of their under-counted local numbers.

Senior Bank officials told MPs of the Treasury subcommittee yesterday that different government figures for eastern European immigration varied by hundreds of thousands a year.

In a statement, the Bank said: 'There is a risk that current population estimates could be under-recording the true population.

'There is a risk that the official estimates of migration from eastern European countries in recent years could be too low.'

Ministers have admitted that the number of immigrants from Poland and eastern Europe since their countries joined the EU in April 2004 could be 700,000. Before Britain's borders were opened to the east, the Home Office said there would be no more than 13,000 a year.

Bank of England chief economist, Charlie Bean, told MPs yesterday that the Office for National Statistics had said 151,000 eastern Europeans came into Britain to stay for at least a year between 2004 and 2006.

But the government's Worker Registration Scheme for eastern Europeans said there had been 433,000 over the same period and 400,000 new national insurance numbers were issued to eastern Europeans during the same two years.

The Bank said there was 'considerable uncertainty' of the population levels and 'they may contribute to the level of demand and supply in the economy'.

'This may have important implications for inflation,' the Bank's statement said.

It said, if the Monetary Policy Committee that sets interest rates were to be mistaken about population levels, it 'may not change interest rates by as much – or sufficiently – as is required to keep inflation at target'.

Senior officials for both the Bank and the Treasury told MPs that they wanted the next national census – due in 2011 – to ask people when they came into the country. Everyone is required by law to fill in a census form on pain of a 1,000 fine for failure to do so.

But, in 2001, the last census, a million people failed to answer the census – many of them thought to be new immigrants.

Mr Bean told MPs: 'We would like to see the question on the month and year of UK entry included in the next census.'

MPs were also told by local authority and NHS officials that huge rises in population thanks to immigration are making it difficult to run public services.

Andrew Blake-Herbert, finance chief at Slough council, said: 'There are more children currently receiving child benefit in Slough than the ONS says currently live in Slough.'

Geoff Sanford, finance director of the NHS primary care trust in Newham in east London, said: 'The latest ONS mid-year estimates say there are 260,000 people in Newham.

'However, 330,000 people are registered with GPs in Newham. There are reasons why GP registers might have more people. But I still think there is a gap of 25,000 or 30,000 people.

'We are seeing a very rapid population increase in Newham.'

The government has acknowledged that official immigration statistics are inadequate and is trying to improve them. At present, estimates of immigration are based on a survey carried out at air and seaports that questions only a few thousand people every year.

People are counted as immigrants if they say they are coming in for more than a year. But there are no checks on whether the 200 immigrants who answer the survey are telling the truth.

Pressure from the Bank of England and the Treasury for a question about immigration in the census may not prove effective in finding the real numbers, local government chiefs believe.

The failure to count one million people in the 2001 census was largely ascribed to a number of 'hard-to-count' inner city areas with high immigrant and transient populations.

But Local Government Association chairman, Sir Simon Milton, pointed out that far more areas now have large immigrant populations.

He gave the example of Kerrier, in Cornwall, which he said now has 2,000 migrant agricultural workers living in caravans.

'There are going to be many, many more hard-to-count areas in the next census than in 2001,' Sir Simon said.