Nailing the myth of immigration's economic 'benefits'

March 07, 2005

The government's claims for the economic benefit of the present large scale immigration are, at best, ‘disingenuous,’ says a new report
out today.

In a second paper examining the economic consequences of immigration think tank Migrationwatch says that it is important to nail once and for all the Prime Minister's favourite, but misleading, claim that immigrants contribute 0.5% to trend GDP and the other ‘dodgy’ statistics, such as that migrants contribute £2.5bn more to the Exchequer each year than they cost, which they use to support their case. (Read)

‘There is no doubt that immigrants do add to the size of our economy but they also add to our population. What the Government conveniently fails to mention is that they therefore generate considerable costs in terms of infrastructure – schools, hospitals, housing, transport etc,’ said Sir Andrew Green, chairman of Migrationwatch.

When these costs are added back, says the report, the true economic ‘benefit’ to the host population is likely to be at best + 0.1% of GDP, or about 14p a week per head each year, with the likely true benefit being no better than neutral – as all major studies overseas have also concluded.

‘It is extraordinary that this Government’ principal justification for the current immigration levels is built on such shaky foundations. They seem to believe that, if their supporters repeat false claims often enough then, despite the clear evidence to the contrary, people will believe them and be reassured,’ he said.

Sir Andrew said that, while the current record levels of immigration are attractive to employers because they provide an unlimited source of cheap labour, they are not only extremely expensive for the taxpayer but are also harmful for the less skilled indigenous workforce whose wages are held down and who are rendered more likely to be unemployed. Furthermore, to the extent that immigration holds down wages, it makes it more difficult to attract into the labour force the one million on incapacity benefit who would like to work.

The report also says that the claim that migrants contribute to pensions is dismissed by the UN as requiring “virtually impossible” rates of immigration. The House of Lords economic committee concurs.

Said Sir Andrew: ‘The Government is at best being disingenuous. No wonder 70% of the public simply do not believe what they say on immigration. A range of serious commentators have concluded that the issue cannot, and should not, be decided on economic grounds alone. The government should give the full economic picture and take account of the very strong public opinion on this matter.’

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