Select Committee on Economic Affairs First Report


APPENDIX 3: CALL FOR EVIDENCE

The Economic Affairs Committee has decided to conduct an inquiry into 'The Economic Impact of Immigration'.

Evidence is invited by 30 September 2007. The Committee will welcome written submissions on any or all of the issues set out below.

Immigration rose much faster than the Government expected after May 2004, when the citizens of eight Central and Eastern European countries gained the right to work in the UK. Over 600,000 have registered to work in the last three years from these eight countries. The unexpected increase has thrown up many questions about the impact on the UK, the quality of data on immigration and the Government's migration policy.

The Government has argued that immigration has helped Britain achieve its long-running economic boom without triggering high inflation. It also argues that immigrants fill gaps in the labour market.

But others have voiced concerns that not everyone benefits from immigration. Some claim that low-skilled workers in the UK face greater competition for jobs from immigrants, which holds back or even decreases their wages and/or causes more unemployment. Some local councils have warned that the rise in the number of immigrants has put pressure on public services such as schools and hospitals.

Assessing the economic impact has been difficult as precise data on immigration are hard to come by. Last year, the National Statistician unveiled plans to improve estimates of migrant numbers which are "inadequate for managing the economy, policies and services".

Nonetheless, the unexpected increase led the Government to pursue a less open policy as new countries joined the EU this year. Citizens of Romania and Bulgaria, which joined the EU in January, can visit Britain without a visa but their access to Britain's labour market remains restricted.

Whilst immigration from Central and Eastern Europe has dominated the headlines, official estimates for 2005 suggest it accounts for under a fifth of immigration into the UK. For migrants from outside the EU, the Government is introducing a new points-based immigration system. Those with more skills and qualifications score higher, which increases their chances of entry into the UK. The Government will give preference to skills where it believes there is a shortfall in the UK.

Immigration has, of course, not only an economic impact on the UK, but also social, cultural and political implications. It is well recognised too that it can have major economic and other implications for the countries of origin of the migrants.

However, this inquiry will focus on the economic impact on the UK. It will seek answers to questions such as:

1. What are the numbers and characteristics of recent immigrants—age, gender, country of origin, immigration status, duration of stay, skills and qualifications? How do the characteristics of EU migrants differ from other migrant groups? What are the expected future trends for immigration from within and outside the EU?

2. In what sectors and occupations are immigrants employed? How do migrants' labour market outcomes—including their employment rates and earnings—compare to those of local workers? What determines migrants' performance and integration in the UK labour market?

3. Why do employers want to hire immigrants? Which sectors and occupations in the UK economy are particularly dependent on migrant labour and why? What is the impact of immigration on mechanisation and investment in technical change? What are the alternatives to immigration to reduce labour shortages?

4. What impact has immigration had on the labour market, including wages, unemployment and other employment conditions of the UK workforce, and has it differed for skilled and unskilled employees? How does the minimum wage affect the impact of immigration?

5. What is the economic impact of illegal immigration, including on employment, wages and the fiscal balance?

6. What is the economic impact of a net change in the UK population? If there is a net increase, does the impact differ when this comes from higher immigration rather than from changes in birth and death rates?

7. What has been the impact of immigration on key macroeconomic indicators: GDP and GDP per head, unemployment, productivity, investment, inflation and asset prices especially housing? Do the economic effects of immigration vary over time?

8. How does immigration affect the public finances? Do immigrants contribute more in taxes than they use in public services? As the UK population ages, does immigration affect the shortfall in pension funding?

9. How has immigration affected public services such as health care, education and social housing? How has this varied across the country?

10. How does the impact of immigration vary across different regions of the UK?

11. Are there any relevant parallels and lessons for the UK from the economic impact of immigration on other OECD countries?

12. How do differences in migrants' skills affect the economic impact of immigration? Does immigration fill skill gaps? What impact, if any, has immigration had on education and training? What is the relationship between the Government's migration policies and labour market policies?

13. How can data on immigration be improved? What improvements are already being put in place? To what extent have "inadequate data" affected public policy? How confident can we be in forecasts of future immigration and how important is it that such forecasts are accurate?

14. How do the Government's policies, including immigration and labour market policies, affect the scale, composition and impacts of migration? How will the points system for immigrants from outside the EU operate? How will the Government decide where there are skill shortages in the economy as the basis for its points system? What has been the international experience, e.g. in Australia and Canada, of such a points system? How will the Government respond to employers asking for non-EU workers to fill low-skilled jobs?

15. Should more be done to help immigrants boost their productivity in the UK?



 
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