Family migrants impact positively on public finances

A research paper on recent immigration to the UK has found migrants make a positive financial contribution to the UK economy, rendering the government’s target to reduce net migration useless. 

The study, produced by academics at University College London using official government data, claims migrants made a net contribution of GBP 25bn from 2001 to 2011.

Furthermore, it says migrants are less likely to use social housing or to claim social benefits than people who are already resident in the UK, and they are better educated, with nearly 40 per cent of non-EEA nationals who come to the UK holding a degree compared with just over 20 per cent of UK natives.

While EEA nationals have made the largest financial contribution according to the Centre for Research and Analysis of Migration (CReAM) paper, paying more than 30 per cent more in taxes than received in benefits over the course of the 10 years, non-EEA nationals paid around two per cent more than they received, equating to a net contribution of close to 3bn.

Recent immigrants were 45 per cent less likely to receive social benefits than British natives but just three per cent less likely to make use of social housing.

The remarkable findings in Professor Christian Dustmann and Dr Tommaso Frattini’s report complement those of another recently published discussion paper by Professor John Salt and Dr Janet Dobson, also from CReAM.

The paper, which looks at the government’s progress in reducing net migration, says the government’s aim to cut net migration to the ‘tens of thousands’ by 2015 is, “neither a useful tool nor a measure of policy effectiveness”.

"It is not clear what happens next – where further cuts would come from, what policies would be needed to maintain a net inflow below 100,000 or what happens if an improving economy requires more skilled labour," adds the paper.

In striving to reduce net migration, the government has almost exclusively targeted non-EEA nationals, in particular highly skilled migrants, students and family members of British nationals - separate groups which are often lumped together under the label: ‘immigrants’.

As part of its aim to slash net migration, the government ushered in amended family migration rules in July 2012. The rules stipulate that a British national who wishes to bring a non-EEA spouse to the UK must have an annual income of at least GBP 18,600, or more to sponsor each non-EEA child.

One of the primary goals of the rules is to reduce the burden on the taxpayer, with this economic issue probably the most significant in the current immigration debate. Despite the fact family migrants have no recourse to public funds during their initial five-year probationary period, they are often portrayed as arriving for the sole purpose of abusing the social benefits and health systems, which in turn has fueled public demand for further restrictions on immigration.

Yet the recently published CReAM papers suggest the aim of the rules to protect the public purse is not embedded in evidence.

While we are unlikely to see the government accepting the analysis that migrants are in fact not a drain on the economy but rather substantial contributors, this monumental shifting of the goal posts in the debate may eventually serves to shape future family migration policy and to end the scapegoating of family migrants by the government.

Yet family migrants, partly due to their unique relationship with British nationals, should not be looked at purely in terms of economic productivity. Their worth, and their very humanity, stretches far beyond simply their economic contribution, with many family migrants not just spouses or partners to UK nationals, but mothers and fathers to British children - the UK’s future taxpayers.

TheFiscal Effects of Immigration to the UK