There’s nothing better than a few statistics to fuel the debate on immigration and I’m always drawn to any mention of positive or negative fiscal impact on this topic. The BBC’s recent article ‘More or Less: Calculating how much migrants cost or benefit a nation‘ is very informative, but does it give the full picture?

Reporting on a recent study by Professor Christian Dustmann and Dr Tommaso Frattini from of the Centre for Research and Analysis of Migration at University College London, the BBC’s Ruth Alexander highlights this data:

  • EEA migrants contributed 34% more in taxes than they received in benefits and services in the decade up to 2011; and
  • non-EEA migrants also put more into the public purse than they took out, though by just 2%; but
  • overall, immigration has been a drain on the public purse to the tune of about £95bn (for the whole of the period under study, 1995 – 2011).

The BBC points out that this last figure needs to be seen in the context that it relates not just to those that arrived in the UK during that 16 year period but also those who have been here, in some cases, for decades.

Crucially, however, it omits another of the UCL report’s key findings – that:

the net fiscal balance of overall immigration to the UK between 2001 and 2011 amounts … to a positive net contribution of about £25 billion, over a period over which the UK has run an overall budget deficit.”

But ‘£95 billion’ is clearly the more news-worthy statistic and will, no doubt, be constantly quoted as part of the ongoing immigration debate, even though it includes a much wider group than those who have entered the UK relatively recently under the stringent 2008 Points Based System (PBS) and further restrictions imposed by the current government from 2010 and so is in no sense a proper reflection of the economic equation going forward.

I am also concerned about how far this ‘£95 billion’ will negatively influence (even indirectly) future policy on Tier 2 PBS visas for skilled migrants. This group (often referred to as ‘work permit’ holders) are valuable to the UK economy because they fill gaps in the labour market, are generally highly educated, cannot claim public funds (which includes, amongst other things, job seeker’s allowance and child and housing benefit) and are likely to be paying higher rate tax. A large proportion (those on Tier 2 Intra-Company Transfer visas) will be unable to settle here permanently and are likely to be here on generous ex-pat packages including private medical insurance and other taxable benefits. Unfortunately, this group is frequently but erroneously bundled up with others under the cloud of the UK’s ‘immigration problem’. Increasing public awareness of the fiscal benefits of these particular immigrants is therefore vital for an informed debate on the future policy of work-related immigration.