Supplementary memorandum by Migrationwatch
INTRODUCTION
1. The government have self evidently lost
control of our borders. They have also, by their own policy decisions,
stimulated massive levels of immigration. Over the past five years
they have produced a series of highly questionable economic arguments
(Annex A). The Committee's enquiry has now obliged them to state
their case in full. This note examines the government's key arguments.
IMPACT OF
IMMIGRATION ON
GDP PER HEAD
2. The government now accept that this impact
is "small but positive".[79]
Their evidence[80]
estimates that, in 2006, immigration added £6 billion to
GDP. The UK's GDP in that year was a little under £1,300
billion, so the addition was just 0.46%. This estimate was based
on a net inflow of 185,000 migrants which would have directly
added 0.31% to the UK's population. Thus the addition to GDP per
head in that year was 0.15% which, if spread evenly across the
population, would amount to about £32 a year per person or
62p per person per week. In fact, the population increase resulting
from migration will become considerably higher as the migrant
population has UK born children.
3. The paper admits that "there is
no quantitative evidence available on the impact of immigration
on GDP per head". It continues, "Wage data suggests
that the migrants may have a positive impact directly through
their own output and indirectly through raising the productivity
of others". It is true that migrant workers, on average,
earn more than the UK born but this is very largely off-set by
lower labour market participation rates (see also para 5 below).
FISCAL CONTRIBUTION
OF MIGRANTS
4. We have already demonstrated (and the
government do not deny) that a positive result can only be obtained
if the costs of ¾ million children of mixed parentage (one
immigrant, the other UK born) are charged entirely to the host
community. The more logical approach is to split these costs 50/50
since the entry of migrants results in more dependant children.
This leads to a small negative fiscal impact. It should also be
noted that personal remittances from the UK have risen to about
£10 million a day.[81]
THE IMPACT
OF IMMIGRATION
ON PRODUCTIVITY
5. The report suggests that because the
mean wage for foreign-born workers is higher than for UK-born
workers (£424 per week compared with £395) "migrants
have higher productivity than UK workers". This takes no
account of the fact (highlighted later in the report at paragraph
5.4.1) that their employment rate is 68% compared to about 75%
for the UK-born. Taking these two measures together suggests that
the productivity per foreign-born person of working age is slightly
less than that of the UK-born.
PENSIONS
6. Since the government paper was submitted,
new 2006 based population projections have been published which
take account of the increase in the pension age to 68 by 2056.
These also assume, as their principal projection, a long-term
net immigration rate of 190,000 per year. We estimate that under
a balanced migration scenario, in which the numbers of people
emigrating and immigrating are broadly similar, the percentage
of the population of working age would fall from its current level
of 59.6% to 57.3% in 2056 as compared to 58.9% under the government's
principal projection; surely entirely manageable.
HOUSING
7. The report notably failed to comment on the
impact of a rapidly rising population. The most obvious impact
is on housing where the latest government projections showed migration
contributing an average of 73,000 households a year to the projected
rise of 223,000 each year between 2004 and 2026 (one third of
the total). The latest population projections assume that net
migration to England will increase to 171,500 a year. This is
likely to raise the number of households formed to 246,000 a year
of which immigration will contribute 96,000 or 39%. This will
add enormously to future infrastructure requirements.
CONCLUSIONS
8. The Home Office study reiterated many
of their previous arguments, most of which are either wrong, misleading
or irrelevant. In particular, they were unable to show that immigration
has significantly raised GDP per head. We conclude that the overall
economic benefit of migration is small and heavily outweighed
by the implications of adding 18 million to our population in
the next 50 years.
9. Limited, high skilled migration can of
course be beneficial to the economy. For some industries, such
as pharmaceutical research, it may be critical to the industry's
success. It should, however, be possible to attract such talent
whilst maintaining a broad balance between immigration and emigration.
This would provide some useful economic benefit whilst avoiding
the massive rise in population which current immigration policies
entail.
79 HL 211 26 Nov 2007 Col WA102 Back
80
The economic and fiscal impact of immigration CM 7237 page 11 Back
81
HL 212 19 Nov 2007 Back
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