Migrants contribute more to tax and benefit system than they receive, report

The UK has gained economically from influx of Polish, Czech and other immigrants
23rd July 2009: Even as opinion polls claim the voters are in favour of a cap on immigration, a new research has confirmed migrants have greatly benefited the UK’s economy.

Contrary to the impression given by the pressure groups on the harmful effects of immigration, the research shows the UK has gained economically from the influx of Polish, Czech and other immigrants from 10 countries that joined the European Union in 2004.

The findings are clear — they contribute more than they receive. The study by Professor of economics at University College London Christian Dustmann says the wave of immigrants has made a substantial net contribution to the UK fiscal system. This immigration has not been a burden on the welfare system, but has rather contributed to strengthen the fiscal position.

The report comes soon after Home Secretary Alan Johnson made it clear he was in favour of bringing in more skilled migrants as they were “very important” for UK economy.

The London School of Economics also believes an amnesty for an estimated 618,000 illegal immigrants in Britain will add £3 bn to the gross domestic product (GDP) and £846 m to tax receipts.

The new study shows migrants contribute significantly more than they receive, to the tax and benefit system, even though the arrival of more than 500,000 immigrants from the eight accession countries has generated concern regarding their taking out more than their putting in.

Professor Dustmann, after carrying out the study, says it has been found the contributions and claims of those eligible for the claim benefits are 60 per cent less likely than natives. As many as 58 per cent of them are less likely to live in social housing, he adds.

Quoting figures, he says in the last 2008-09 tax year, the immigrants from accession countries paid 37 per cent more in direct and indirect taxes, than they received in benefits and from public services such as education, the health service or social housing.

Elaborating, he says the EU immigrants are younger and likely to have fewer children. Besides this, on average they are better educated, than the native population; and their average hourly wage is lower than that of native Britons. At the same time, their employment rates are high. In fact, it is 90 per cent for men of working age, and 74 per cent for women, against percentages of 78 and 71 per cent for the natives.

As their English and their understanding of the labour market registered an improvement over a period of time, they tend to see rapid wage growth. On the other hand, the UK-born individuals contributed 20 per cent less than they received.

By Monika

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