UK split on costs and benefits of immigration

A recent study by a migration NGO has stirred up the debate on the economic effects of labour migration from eastern Europe suggesting that gains were only marginal. But the UK government and industry federations disagree with the finding.

The study by Migrationwatch UK, published on 3 January 2007, argues that labour immigration from Eastern Europe and other countries brought little benefit to economic growth. It finds that “the benefit to each member of the native population of the UK from immigration is worth about 4 pence a week – or less than the equivalent of a Mars Bar a month.” The document suggests that the costs might even outweigh the benefits from immigration. It further stipulates that migrant workers were pressuring wages to lower levels which seem unacceptable to many unemployed.

Nevertheless, the Labour government stresses that immigration has largely benefited the UK economy and argue that it had a positive effect on employment. The Confederation of British Industry (CBI) said migrant workers brought in valuable skills and filled job vacancies that UK citizens were unable or unwilling to take on.

A study by the German Ministry for Business and Technology found that the situation of skills shortage is worsening as more highly skilled Germans leave the country and fewer immigrants arrive. Germany continues to apply a “closed-door policy” on labour migrants from eastern Europe.

Germany, which holds the EU Presidency from 1 January 2007, intends to promote a European approach to attract skilled workers as part of reviving the Lisbon Agenda.

Migrationwatch UK argues in its study: "Immigration is not essential to our economic growth. Wages should be allowed to rise to make lower paid jobs worthwhile and to encourage productivity. Increasing productivity is the only way that a nation can become richer."

Labour government spokesperson said: "Migration accounts for between 10-15% of trend growth, and independent research has found that migrants make a net contribution. There is no evidence that it has increased unemployment."

Tory spokesperson David Davis said: "Immigration can be a real benefit to the country but only if it is properly controlled."

Susan Anders of the Confederation of British Industry (CBI) stated: "Their taxes help pay for our public services and our pensions, long after many migrants have returned home. Their presence also helps keep inflation low at a time when there are many forces pushing the other way."

Popular concern over the large increase in migrant workers from eastern Europe following the 2004 EU enlargement has caused the UK to take up a more cautious approach.

The UK has changed its “open-door policy” and imposed restrictions on workers coming from Bulgaria and Romania, which joined the Union on 1 January 2007.

  • The German Presidency aims to relaunch the Lisbon strategy at the Competitiveness Council on 19 February 2007 and the spring Council on 8-9 March 2007.

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