Study shows that UK benefits from immigration from European countries

UK-BordersLiberal Democrats celebrate the fact that immigrants make a substantial social contribution to UK society, and they have long suspected that immigrants make a net financial contribution as well.  That claim is now backed up by a recent study undertaken by University College London, and reported by the BBC.

In a paper for the Centre of Research and Analysis of Migration, authors Christian Dustmann and Tommaso Frattini conclude that:

Recent immigrants, i.e. those who arrived since 2000, are less likely to both receiving benefits and living in social housing than natives. Furthermore, recent immigrants, both those from European Economic Area and non-EEA countries have made a positive net contribution to the UK fiscal system despite the UK’s running a budget deficit over most of the 2000s.

In particular those immigrants who arrived since 2000, and here especially those from the EEA countries, have – through their positive net fiscal contribution – helped to reduce the fiscal burden for native workers.

Prof Dustmann told the BBC that his research had shown that:

In contrast with most other European countries, the UK attracts highly educated and skilled immigrants from within the EEA as well as from outside.

Our study also suggests that over the last decade or so, the UK has benefited fiscally from immigrants from EEA countries, who have put in considerably more in taxes and contributions than they received in benefits and transfers.

Given this evidence, claims about “benefit tourism” by EEA immigrants seem to be disconnected from reality.

* Mary Reid is a contributing editor on Lib Dem Voice. She was a councillor in Kingston upon Thames, where she is still very active with the local party, and is the Hon President of Kingston Lib Dems.

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33 Comments

  • Andrew Tennant 5th Nov '13 - 5:06pm

    ‘Immigrants, on average, are net contributors’ is not the same as ‘ all individual immigrants or groups are net contributors’. As a Lib Dem I’m in favour of free markets and free people, but let’s not pretend there’s no economic justification for being a little discerning about who we let in or welcome with open arms.

  • Richard Dean 5th Nov '13 - 5:19pm

    Many arguments in favour of immigration seem to be capable of interpretation in the exact opposite sense. These ones too.

    If immigrants pay more taxes, then they’ve got the jobs that natives would have had otherwise. If immigrants are highly educated and skilled, they are in the social class that runs the country, which implies the natives are being dis-enfranchised. Plus the availability of those skills from immigrants lessens the pressure on government and industry to provide the training and teaching and experience necessary to better educate the natives.

    I often wonder whether the people doing these kinds of studies are actually doing it for the exact opposite motive than is claimed. I hope that the new Communications Director Emma Gilpin-Jacobs will be able to help. So many LibDem arguments seem to be exercises in shooting oneself in the foot.

  • Almost no-one believes these ‘spun to order’ reports anymore. How about a differing view?
    http://blogs.telegraph.co.uk/news/douglascarswellmp/100244371/why-the-experts-are-wrong-about-immigration/
    Which of these views do you think gel with the real life experiences of the general public.?

  • In the discussion on Radio 4 this morning, the authors were very clear, the UK has benefited from EEA immigrants, but for non-EU migrants “the benefit to the exchequer is minimal or negative.”. Which, given they estimate non-EU migrants constitute two-thirds of the total, is a particularly scathing conclusion, particularly as non-EU migrants are likely to be subject to greater official scrutiny than EU immigrants…

  • @Roland – it isn’t an estimate that non-EU citizens consist 2/3 of immigrants to the UK, rather it is reality. It is almost exclusively a UK choice to admit those to the UK (save for the minority married to EU citizens).

    That though won’t stop the politicians and media from ignoring this “Made in the UK” decision and trying to make out it is all Brussels fault.

  • Or maybe, Richard, it is damning report on British society that we allowed ourselves to be out-educated.

    The fact most businesses have to be strong-armed into hiring British people over expats is a damning point in itself.

    Until British people realise that being born here does not make superior to anyone else and does not give them a pass to an easier life than others, they will continue to be outmatched by their counterparts.

  • Richard Dean 6th Nov '13 - 12:15am

    That’s right, Liberal Al, as indeed as I wrote:

    “the availability of those skills from immigrants lessens the pressure on government and industry to provide the training and teaching and experience necessary to better educate the natives”

    Arguments about the benefits or costs of immigration are all wrong, in my opinion, partly because the arguments rest on the implicit assumption that immigrants are different, and partly because immigrants are not commodities. Unfortunately, partly because the difference argument leads on to hostility, many immigrants don’t integrate well. Every rich European country has immigrant ghettos and consequent socio-political problems in one form or another, even Norway.

  • Simon Banks 6th Nov '13 - 11:26am

    So, Richard, you believe that the number of jobs is unalterable and immigrants just take jobs the locals could have got? How did countries with massive immigration like the 19th century US manage, then? The immigrants helped the economy to grow, Besides, do you believe all the jobs done by immigrants could find locals to do them? Are all those foreign doctors and dentists putting home-grown doctors and dentists on the dole? Will there be a mad rush to pick fruit and vegetables in the Fens for very low wages, or to be care assistants?

    I take your good point that the availability of trained professionals from overseas gets us of the hook from training more ourselves, and there is not a lack of locals wanting to train as doctors (though many of them are from immigrant communities). The under-supply of locally trained professionals also means we take much-needed medical professionals from countries that need them. However, to correct this would take many years, and in the meantime, I’m pleased that I can see a Zimbabwean doctor.

    As for your comments about difference, of course all immigrants are different in some ways. Catholic Irish arriving in the protestant northern USA needed churches. Bangladeshis arriving in Britain often did not understand the role of a GP as opposed to a hospital and it was in the interests of all concerned to make efforts to overcome this. Ghettoes are indeed a problem, but over the years many communities have integrated without losing their identity. Try looking for the Yemeni community of South Tyneside now, a place which experienced race riots at the start of the 20thy century. Sometimes, of course, hostility makes it difficult for them to integrate. Even where there are concentrations, these are not necessarily problems, or we’d be forever agonising about Chinatowns.

  • Richard Dean 6th Nov '13 - 12:14pm

    Simon,

    My original point was not whether I believe or not. My point was that pro-immigration people seem to make it relatively easy to use their arguments as anti-immigration ones. Many people believe that immigrants take jobs that locals would have got, so the statement that immigrants pay more taxes simply reinforces that belief.

    Your argument about the Fens is an example of this. Low wages there are a direct result of the willingness of immigrant labourers to accept low wages. Without immigrants, employers would be forced to pay reasonable wages, and that would provide more jobs that natives would be willing to do.

    Your argument about the US is another example of shooting oneself in the foot – your foot. America was a new continent 300 years ago. For 200 years, immigrants simply spread into a largely unoccupied space, the (Wild) West. Unlike the US then, the UK now is a very crowded island, so your argument morphs into “we’re too full to accept more immigration”.

    I can see that the new Communications Director really has a tough job ahead of her. People need to think before they argue – too many LibDem arguments morph too easily into ammunition for other sides.

  • Do any of the above work in the construction industry ? Not sure that many British workers in the construction industry support immigration? When there are more people than jobs , wages do down : when the reverse happens , they rise.

  • What Andrew Tenant said. Of course some immigrants make a net financial contribution – but equally many, the majority on these figures do not and we need to be more discerning about this.

    And let’s not forget that this study is only about net financial contributions which is only the tip of the iceberg. If, as asserted, around four million immigrants arrived here during the period of the last government then the impact on house prices/availability must be immense. That’s not in these figures. Then again there is the impact on infrastructure – everything from schools to power networks to railways. That’s not in these figures either.

    As with so many things you have to ask, who benefits? It’s certainly not ordinary people priced out of any prospect of buying their own place or whose earnings have been reduced by low wage competition. Plutocrats may benefit but as far as I know they are not a core Lib Dem constituency.

  • @GF – the report clearly states that migrants from the other EU member states make a net positive financial contribution to the UK economy, in other words they generate a surplus which more than pays for any additional “strain” they put on the public purse.

    LD policy should therefore focus on the issue of non-EU/EEA immigrants. The policy agreed upon by all EU member states (including the UK) years ago was employment visas should only be offered to non-EU citizens if there was no one within the EU available for the position on offer.

    Why therefore are 2/3 of the UK’s immigrants from outside the EU? That make little sense in boom times and none at all in the post-2008 financial meltdown situation all EU member states found themselves in.

  • R Uduwerage-Perera 6th Nov '13 - 6:16pm

    @Richard Dean

    So you are not in favour of immigration? You have confused me!

  • Richard Dean 6th Nov '13 - 9:33pm

    @R Uduwerage-Perera

    Perhaps you should ask the new Communications Director?

  • @Paul R
    ” the report clearly states that migrants from the other EU member states make a net positive financial contribution to the UK economy, in other words they generate a surplus which more than pays for any additional “strain” they put on the public purse.”

    I’m not so sure about this. The report seems to focus more on ‘benefit’ received from government ie. they pay more in taxes than they receive in ‘benefits’ therefore they make a net positive financial contribution to the UK economy. I doubt the report, like so many, has taken into account the thousands of homes that haven’t been built, and all the infrastructure upgrades (eg. HS2) and increased imports that go hand in hand with an increase in total population. I suspect that if we factor these costs in the real benefits become much reduced.

    This isn’t to say the report is worthless, only we need to be very careful about drawing sweeping conclusions.

  • Richard Dean 6th Nov '13 - 11:08pm

    @R Uduwerage-Perera

    Were you just looking for someone to have an argument with? Ok, I’ll try to oblige. But I won’t be explaining my beliefs. Instead, I’ll be proposing issues which seem worthy of discussion, even if I happen to personally have different views. As you may know, personalities can sometimes ruin an argument about principles. Conversations are interactive, and stating one’s position at the start can tends to cause the other person(s) to cut off some lines of their argument which might otherwise be interesting to explore.

    Well, where to start? How about with the inherent bias whenever immigration is discussed? The bias is that there is emigration too. If immigrants bring wealth to this country, do emigrants take wealth away?

  • David Allen 6th Nov '13 - 11:27pm

    Immigration is a class issue. Yes, it brings net economic benefits. Those are mostly accrued by the middle class who enjoy finacial savings, jobs done better and more cheaply. It also takes jobs and opportunities away from others. This mainly hurts the working class.

    If we held to our ideals of being a party for the whole community, regardless of race and class, we would recognise both the benefits and the problems of immigration, and balance our policies accordingly.

  • R Uduwerage-Perera 6th Nov '13 - 11:30pm

    @Richard Dean

    Sorry still totally confused. I understand simple straight forward answers that include ‘yes’ or ‘no’. My interest is not theoretical or academic on these matters but from the fact that I work with communities and individuals that suffer from intolerance as a result of their perceived or real ethnicity, and from a personal interest as I am a second generation migrant myself.

    Am I looking for someone to have an argument with, Nope! But along with other members of EMLD I am trying to assist the Liberal Democrat Party to develop a fair and equitable immigration policy that is not based on racial profiling or other erroneous discriminatory factors.

  • Richard Dean 6th Nov '13 - 11:36pm

    @R Uduwerage-Perera

    So why did you ask if I was in in favour of immigration?
    Would the reasons you gives for your views change, depending on my answer?

  • R Uduwerage-Perera 6th Nov '13 - 11:44pm

    @Richard Dean

    From previous threads you do not really appear very positive on much to do with equality matters as you appear to pose many problems but not to offer up few solutions.

    I am merely wondering where ‘liberal’ fits into the thinking, or perhaps you are not a member of the Party?

  • Richard Dean 6th Nov '13 - 11:59pm

    @R Uduwerage-Perera

    It’s ok if you want to descend to a personalized level, but I think I’d prefer not to join you there. If we are discussing a principled approach to immigration policy, that level doesn’t seem to have much relevance.

    David Allen’s point about class issues seems far more relevant. It’s well illustrated by the argument advanced by Simon, about cheap labour on the Fens – that argument is a “middle class” argumemt in the sense that it’s saying “immigration is ok because it gives the middle class cheap strawberries from the fens”.

    Immigration thereby becomes an issue in class struggle, not much to do with rights or compassion for asylum seekers, for example. The social problems that immigration and class can both generate, and the ghettos I mentioned earlier, presumably might not matter to the middle class as long as those problems don’t turn up on their doorstep?

    It seems to me that the relevance of class to the debate is something that should be relevant to the EMLD.

  • R Ud uwerage-Perera. Immigration has reduced the unskilled and semi-skilled wages in the construction industry. Labourers in the late 80s earned £35K a year at Canary Wharf. The construction industry is cyclic: people need to good money to keep themselves in the lean times. In the early 90s recession I knew Bricklayers travelling from S London to St Albans for £60/day.

    If you have several immigrants sharing a room and sending money back to their country of origin, then they can live more cheaply than a British construction worker supporting a family. When one is living on average wages 15% increase of decrease in take home pay can make a large difference to the quality of life.

    Where immigrants have poor grasp of English and form large numbers at primary school then teaching can be a problem if the parents do not assimilate . If one looks at The Kindergarten Children, the 10, 000 children who came to Britain in the 1930s, they assimilated very well- 4 won Nobel Prizes.

    When there are more people seeking accommodation available , then costs go up.

  • R Uduwerage-Perera 8th Nov '13 - 5:19pm

    @Richard Dean

    On the importance of Class we agree.

    “Class” is as Marx believed at the root off many of the social problems in the country and I can assure you that many within EMLD and certainly in the race equality arena externally are only too aware of this.

    @Charlie

    Are you not aware of the number of ‘Brits’ that work abroad and ‘take our jobs’ elsewhere? or the number of ‘Brits’ in Spain who choose not to learn Spanish and live in rather splendid expatiate ghettos?

    As for Jewish assimilation interesting the Immigration, Asylum and Identity Working Group called in my old University Tutor Prof David Cesarani OBE from University London Royal Holloway to give evidence on this very issue. David basically explained that people should not seen Jewish assimilation as a model of ‘good practice’ for it was not as ‘rosy’ as some may have us believe. A fact that some of us with Jewish ancestry are only too aware of.

  • Charlie 7th Nov ’13 – 11:54am
    Labourers in the late 80s earned £35K a year at Canary Wharf.

    Really ??? £35K in the late 80s .

    The salary of a Senior Executive Officer in the Civil Service working in Canary Wharf in 1989 was around £15k. I have just checked my own pay records,
    What is your source for “Labourers in the late 80s earned £35K a year at Canary Wharf. ”

    How many labourers (skilled or unskilled) earned

  • John Tilley. Men excavating large piles and in dangerous foundation work. Men were lowered down cages to trim the inside of large piles Tunnellers picked up £50-75K as they were undertaking physically tough and dangerous work, especially on projects such as Cairo Waste Water. Many small tunnels were hand dug. Excavating the face of a 1m diameter tunnel is hard work.

    R Uduwerage-Perera. Much depends upon why one enters another country. If one is fleeing death and torture , then anything is better. If one is fleeing and leaving a luxurious existence then a decline in one’s lifestyle is often painful. It is also depends upon how resilient one is in mind,body and spirit. There is a Buddist saying “W here expectation exceeds reality,there is un- happiness ” . Speaking to someone who had been brought up on a farm, spent 7years surviving in Eastern Europe in WW2 and then refugee camps in Germany; when he finally arrived in Australia and had to work in logging camps, he enjoyed it. Someone who had had comfortable upper middle class intellectual life in Europe may not have had such a view.

    When one is on average salary, 20% increase or decrease can make a large difference in one’s quality of life. Do you work in the construction industry as tradesman or labourer? Someone who had servants and never undertaken manual labour having to undertake such work in a new country is more likely to have problems than someone who undertook this type of work in former country. Someone who has been brought up in warm house will find life tougher than someone who was woodsman who lived in cold , draft and damp cottage.

    When someone if forced to undertake national service a persons experience depends much on one’s previous life. Those who were physically and mentally tough: boxed, played rugby or rowed, went to tough boarding schools , lived in orphanages, worked as labourers in agriculture or industry tend to cope better then those of a weaker disposition who lived a middle class life in the suburbs.

  • Richard Dean 9th Nov '13 - 3:29pm

    Charlie
    You are correct about skilled construction people. Labourers willing to put up with discomfort can earn a lot relative to office workers. The offshore industries – oil, gas, and now wind – also pay well. Mostly they are safe too, the main downside is that you’re away from home for weeks at a time.

  • Richard Dean 9th Nov ’13 – 3:29pm
    Charlie
    You are correct about skilled construction people. Labourers willing to put up with discomfort can earn a lot relative to office workers.

    I was not questioning the hard work or the discomfort (or indeed the danger). I was questioning the claim that in the late 1980s labourers were earning £35k. My guess is that the figure of £35k has grown with the telling of the tale over the last 25 years. How many labourers earned that? how often? how much overtime was required?
    If you or Charlie can provide a link which would illustrate that there were such payments in the late 1980s I would be interested to see it. In the early to mid 1980s I worked directly on pay negotiations and needed to be aware of relative pay rates at the time – it is possible that my memory is failing me but payments of £35k for that decade seems unlikely.

  • Richard Dean 10th Nov '13 - 7:36am

    @John Tilley
    See the following website for information about present offshore rates. I suspect the website is under-estimating quite a lot (I think these rates are for 2008). It also helps to have a trade or profession, rather than just being a roughneck. Remember too that these rates need not be taxed if you work out of country enough days per year. But anyway, you can compare these rates with onshore clerical jobs now and see the multiplier.
    https://www.experience.com/alumnus/article?channel_id=energy_utilities&source_page=additional_articles&article_id=article_1128902416846

  • Richard Dean 10th Nov ’13 – 7:36am
    @John Tilley
    See the following website for information about present offshore rates. I suspect the website is under-estimating quite a lot (I think these rates are for 2008).

    Yes I think your links make my point for me. Pay rate in the 1980s were a lot lower ten in 2008.
    Average annual pay rates in the 1980s were around £10k in 1980 and around £15k by 1989.
    It may be that some labourers in Canary Wharf in the 1980s were getting high pay but £35k would even outstrip what similar jobs were paying as late as 2008 !!!

  • Richard Dean 10th Nov '13 - 8:19am

    @John Tilley
    I imagine the data are available somewhere, although official statistics in the construction industry usually reflect what the tax people are told rather that what is really happening. I was getting more than you say then, and paying proper tax, while having the impression of being below average on wages. A multiplier of 2 would not be unusual for specialist jobs in construction or offshore.

  • As a LibDem voter for almost 35 years it is encouraging for me to read some of these comments, which show serious consideration of issues relayed to immigration, rather than a knee jerk holier than thou reaction that one should always be in favour of immigration to the UK. We have at least two and a half million on the dole. I am extremely unhappy about many aspects and results of immigration and its effects especially on native working class people. Small amounts of immigration don’t cause serious problems, but on the scale under labour it certainly did, and we cant just say of the native English ‘let them eat cake’. Immigration is the main issue that makes me doubt whether to vote Libdem next time.

  • John Tilley
    My comments are based upon experience of working in the construction industry and drinking with people. Basic salaries were low but bonuses were high, often paid in cash. New technology has removed many of the dangerous jobs and there are less cash in hand payments plus .

    The oil industry in the 70s was highly paid but very dangerous. The most dangerous was diving . I remember drinking with a diver who said that because of fast currents, the cold and low visibility many safety rules were broken just to get the job done. He found the job so stressful he used to take 3 months work in the Persian Gulf to unwind.

    As a friend said in the 80s, the construction industry was the last mass employer of unskilled and semi-skilled men:this is why immigration has caused problems amongst a certain section of society – not the middle and upper middle class or those employed in the public sector.

    When it comes to change , the LDs need to consider who benefits and who loses. When India became independent it was the beginning of the end of the Lancashire Cotton Industry.

  • Brian Denham 7th Jan '14 - 10:37pm

    I may not have read all the correspondence here, but has the effect on the UK’s balance of payments been taken into account when assessing the net benefits to the economy ? I can accept that working immigrants contribute to the exchequer by paying taxes, but many, if not most, remit their surplus earnings back home, so I find it hard to believe the cash-flow is in the right direction. I suppose it might be argued that if we did not employ immigrant fruit-pickers (for example), then our farms would not be viable and we would have to import the fruit instead – is that the logic?
    Talking of fruit-pickers, I have just been watching a TV programme in which (unless I mis-heard) a Polish worker said he could earn £600 per week, but the farmer said he could not get British workers to stay. We hear such stories frequently – is there something wrong with our work ethic ?

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