UK a net beneficiary from immigration

EU migrants to the UK paid more in tax than they received in benefits in the past decade, according to a report that threatens to stoke the political debate over immigration.

People who moved to the UK after 2000 contributed £20bn (€26bn) to the public finances between 2001 and 2011, the study by UCL Centre for Research and Analysis of Migration showed.

Migrants from the 10 mostly eastern European countries that joined the EU in 2004 accounted for £5bn. Immigration has become a key political battleground as Prime Minister David Cameron seeks re-election in May. With his Conservatives losing votes to the anti-EU Ukip, ministers are intensifying their rhetoric. Michael Fallon, the defence secretary, talked of towns and communities being “swamped” by migrant workers.

Cameron’s push to restrict freedom of movement, a key principle of the EU, is putting Britain at loggerheads with Germany. “The idea that those EU immigrants have been a drain is clearly not something we find in this report,” said report co-author Christian Dustmann .

“The net fiscal contribution was clearly positive. There was a huge demand for particular jobs which could be addressed through immigration and much of that had a positive impact on the British economy.”

Cameron’s hardening stance has prompted German chancellor Angela Merkel to start considering a British exit from the EU, according to Der Spiegel magazine. The German government said this week that freedom of movement was “non-negotiable”.

Merkel’s resistance sparked clashes in the British parliament yesterday as opposition leader Ed Miliband accused Cameron of lacking allies in Europe as he tries to win better terms for Britain before an in-or-out referendum should the Tories win power next year.

“I want Britain to stay in a reformed European Union, but we need reform,” Cameron told Miliband during their exchange in the House of Commons. “We have a plan. He has no plan.”

EU migrants’ worth in terms of human capital would have cost the UK £6.8bn in spending on education, according to the UCL report. European immigrants from the 14 other older EU member states paid 64% more in taxes than they received in benefits between 2001 and 2011. Those joining in 2004 contributed 12% more than they got.

Over the same period, the net fiscal contribution of UK-born citizens was negative, amounting to almost £617bn, the study found. The report also found immigrants who arrived after 2000 were 43% less likely than native Britons to receive state benefits or tax credits, and 7% less likely to live in social housing.

Ukip, which says Britain can only control immigration by leaving the EU, said the report covered only a narrow part of the migration policy debate.

Bloomberg


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