July 7, 2014
By Petros Fassoulas, Chairman of the European Movement UK
The report by the government’s Migration Advisory Council (MAC) comes to add to a paramount body of scientific evidence that for years now has supported the view that immigration from EU member states has an overall positive effect on the UK economy.
The MAC report concludes that EU citizens who move to the UK to work had “not had a major impact” on pay, jobs, crime or public services.
The report also didn’t find “strong evidence” that youth unemployment is a consequence of the expansion of the EU in 2004 and the arrival of EU citizens from central and eastern Europe.
Furthermore, the report found “little evidence to support the so-called welfare magnet hypothesis”, dispelling the myth of ‘welfare tourism’ perpetuated by many.
These findings are consistent with existing research. A 2012 study by the National Institute of Economic and Social Research (NIESR) found ”no association” between rising immigration and an increase in Jobseeker’s Allowance claims.
In fact the effect of immigration on the UK economy has been positive. University College London (UCL) researchers found that immigrants from the European Economic Area (EU + Norway, Iceland and Switzerland) contributed about 34% more in taxes than they received in benefits over the period 2001-11, with a net fiscal contribution of about £22.1 billion.
A report by the Centre for Economics and Business Research argues that curbing EU immigration could cost the UK £60 billion in lost GDP by 2050 and drive up national debt.
These findings were corroborated by the government’s Office for Budget Responsibility, which concluded last year that capping immigration will add billions to the UK’s debt burden and increase our borrowing to 175% of GDP.
Coming back to the MAC report, it is interesting to note that according to its research, British workers applying for low-skilled jobs lack basic numeracy and literacy skills and have less qualifications, are less flexible and less geographically mobile, are inferior on “soft skills”, like reliability, team working and confidence, and they display an inferior work ethic.
So, whereas the jobs are there, British workers are not well-equipped to get them. Labour mobility is a result of market forces as much as anything else. It is demand and supply which determines the levels of immigration. Workers from other EU countries are here to fill skill gaps, without those skills British business will be unable to compete and the British economy would suffer.
It is easy to conclude that what is needed is better investment in up-skilling the British labour force and the MAC Chairman makes that point in his foreword, where he argues that the trade-offs between immigration levels and greater or lower investment in education and training ought to be looked at more closely.
Last but not least, is the effect immigration has locally. The report correctly argues that, whereas the overall economic impact of immigration is modest, “the economic and social impact on particular local authorities is much stronger”. Reference is made on “pressure on education and health services and on the housing market” in a small number areas that have seen a concentration of immigrants due to demand for labour on sectors like agriculture or hospitality. Even though a relatively small number of people might be affected, the effect can be big for these communities. The solution is not to reduce immigration nationally, or even locally, but to equip local authorities with the necessary resources to address such pressures. Investment is once again the key word, what’s needed is to invest resources in local infrastructure and the provision of services, an effective government plan that is able to identify local labour market needs and the way they interact with local demand for housing, healthcare, schooling etc.
The MAC report is an important contribution on a significant issue for the UK economy. Perhaps this time the undeniable facts will not be ignored in a debate usually dominated by scapegoating, misinformation and scaremongering.
Author : European Movement UK