Economic immigration contribution

By | News & Politics
Recent reports suggest immigrants from the EU are much younger, and considerably more likely to be in work, than the average Briton. Image credit - en.wikipedia.org

According to a recent European Commission report, the current UK immigration policy is mostly beneficial to the country. In the report, it explains how immigrants from EU countries paid more in taxes than they received in benefits. Polish people have made a net contribution to the UK, in economic terms, and have been readily absorbed into Britain’s labour market. Trade between the UK and Poland has grown significantly since 2005, indicating that many Poles, who returned home, have used their UK business ties to support the increase bilateral trade between the two nations.

In addition, experts have suggested that more effective regulations may be employed to ensure that net contributors continue arriving from overseas to strengthen Britain’s growth. Recent government changes to the welfare system, to limit new arrivals from claiming unemployment benefits in their first three months of arrival, go some way towards achieving this. They also suggest that more extensive German-led EU reforms may contribute to Britain’s continued growth.

Long before the UK joined in 1973, the Treaty of Rome (1958) established what was then the European Economic Community with four basic principles. The “four freedoms” were; free movement of labour, capital, goods and services. The objective was to establish a liberal market economy, where people might trade with each other across borders; free movement of labour was seen as part of that. Many economists still believe that this is the best financial situation; by having a liberal market economy and allowing goods, services, capital and people to move freely within a given area.

Over the years European reports have also suggested that free movement rights should be progressively extended to allow for people to move elsewhere to look for jobs, as well as take them. With that suggestion, especially after eight new member states joined in 2004, mobility within the EU has greatly increased. There is also little evidence that a significant number of people come here to claim benefits. When the government was asked by the European Commission to substantiate its claim that this was a real challenge to the country, its response was that the commission was placing too much emphasis on “quantitative evidence.” The government’s own figures show that migrants are about half as likely to be in receipt of a Department of Work and Pension out-of-work benefit as people born here.

The Treasury’s own economic forecasters have also said that the current immigration policy has major beneficial economic effects. The Office for Budget Responsibility (OBR) recently told MPs that immigration has a productive impact on the public’s finances. Recent Government figures show that immigrants from the EU are much younger and considerably more likely to be in work, than the average Briton. Furthermore, since most public spending goes on pensions, health care for generally older people and education, many experts believe that the overall impact aims to be more productive in the short term.

Robert Chote, Head of the OBR, said: “Immigration does tend to produce a more beneficial picture for the Government’s finances because they’re more likely to be working age and paying taxes; and unlikely to have relatively large sums of money spent on them for education, long-term care, healthcare and pension expenditure.” Mr. Chote was expanding on the OBR’s long-standing assessment that Britain needs a steady flow of migrant labour to fund public services in the coming decades.

Recent research also suggests that the presence of children from Eastern Europe improved the educational attainment of kids already here. London schools, with the highest level of immigrants, significantly outperform the rest of the country.

How might the UK attract more highly skilled EU nationals?

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