The Treasury has been warned that immigration cuts will add to the UK deficit because migrants tend to be of working age and contributing to the economy through paying tax.
Chairman of the Office for Budget Responsibility, Robert Chote, told the Treasury committee that many migrants arrived in the UK “at a point in their lives” when they were working and paying tax rather than having to claim benefits.
Migrants actually boost the outlook for Britain’s economy by improving the UK’s fiscal forecast based on their contributions, he said.
Recent research has shown that migrants have contributed £25 billion to the UK economy since 2000. Some researchers have queried this data and the methodology used to compute the figures.
However, many migrants arrive in the UK to work in the NHS or sectors such as retail, agriculture or hospitality. While UK workers sometimes are reluctant to take jobs with long hours and relatively low wages, migrant workers are happy to do so because pay in their own countries is much lower than in the UK. Labour has pledged to end the exploitation of migrant workers being paid lower wages if it comes to power in the 2015 General Election.
Prime Minister David Cameron has recently spoken about capping annual UK migration to just 75,000. His Liberal Democrat deputy Nick Clegg said capping migration would lead to the NHS and the City of London ”falling over”.
A poll by the Guardian and ICM has revealed that 36% of those questioned thought that migration was “good” for the UK “because immigrants claim fewer benefits and help the country pay its way”.
However, 54% of those questioned said they thought immigration from the EU was “bad for Britain” because EU migrants take jobs in the UK and also push down wages in Britain. This opinion was evenly divided between men and women and across Conservative, Labour and Liberal Democrat voters.
Younger people were divided equally in their opinion of EU migration and professional classes were more likely to be in favour. Business leaders have recently called for more migrant workers in the UK because of their strong work ethic and willingness to work for lower wages, which helps boost the UK economy.
Mr Chote told the Treasury committee that migrants to the UK brought benefits to the economy:
“Because they’re more likely to be working age, they're more likely to be paying taxes and less likely to have relatively large sums of money spent on them for education, for long-term care, for healthcare, for pension expenditure.”
Mr Chote said that as a result, higher net migration resulted in a “more beneficial picture” for public finances. He added that immigration cuts would increase the UK’s debt to GDP ratio.
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