CBI chief challenged over immigrationand economic growth claims

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April 26, 2005

Claims by the Director General of the CBI for the economic benefits of the current immigration levels have been described by independent think-tank Migrationwatch as ‘both inaccurate and misleading.’

Sir Digby Jones is reported to have claimed that “every 1% increase in immigration brings 1.5% increase in national wealth.”

This claim is taken from a Home Office study [1] which actually gives a range of 1.25 – 1.5 %. However the very next sentence of the study reads:

“It should be emphasised that this type of analysis must be regarded as suggestive at most.” (emphasis original)

In fact, much larger studies conducted in the United States, Canada and Holland have indicated that the benefit to the host community is extremely small. In the United States it was assessed at one tenth of one per cent of GDP per head per year. This would be the equivalent in Britain of £25 per head per year. The Dutch study concluded that the overall net gain in income of residents is likely to be small and may be even negative. The outcome of these studies is summarised in the attached report.

The Director General also claimed that 97% of immigrants found work straight away. Those who come on a work permit have to have a job before they come. As for immigrants generally, their composition can only be estimated from the settlement figures but the Migrationwatch estimate is that, in 2003, only 40 % came here for the purpose of work. The rest were relatives (30%), students (14%) and asylum seekers (14%). It is also the case that the foreign born workforce have had a consistently higher unemployment rate of 8.5% compared to 5.5 % for the British workforce [2].

Commenting, Sir Andrew Green, Chairman of Migrationwatch UK, said ‘It is astonishing that the chief representative of British industry should peddle such thinly based, inaccurate and misleading information.’

NOTES:
[1] RDS occasional paper no. 67 page 6
[2] RDS occasional paper no 75 Figure 13.1 Unemployment rates 1990 – 2000.