Sunday, September 11, 2005
Any talents to declare, sir?
Posted by David Smith at 10:59 AM
Category: David Smith's other articles

Is immigration benefiting Britain or is it a drain on our resources? A brief look at the economics of immigration.

Who are Britain’s immigrants and where do they live? How many have been coming here? Are they all asylum seekers or do they make a genuine economic contribution? According to the government, immigration is an economic necessity. Tony Blair says that without immigrants job vacancies would go unfilled, the public services would be starved of key workers and Britain’s growth and prosperity would suffer.

The Treasury estimates that net migration adds 0.4% a year to growth in the labour force and gross domestic product. The Home Office argues that migrants contribute £2.5 billion a year more in taxes than they take out of the system through benefits.

Tony McNulty, the immigration minister, last week attacked Sir Andrew Green, the former UK ambassador who runs Migration Watch, insisting: “We need the numbers . . . for economic success. The notion that we have to pull up a drawbridge and say no one else is allowed in is complete nonsense.”

Is it really that simple, and how much would the country really suffer if immigrants stopped coming? Thanks to some detailed research by the Institute for Public Policy Research (IPPR) published in Beyond Black and White: Mapping New Immigrant Communities, some of the questions about immigration can now be answered. The BBC has even set up a special website.

The proportion of people born outside Britain is rising, from 5.75% at the time of the 1991 census to 7.53% in 2001. Of the 57.1m people living in Britain (excluding Northern Ireland) at the time of the last census, more than 4.3m were born in other countries. The numbers of non-British exclude those born in the island of Ireland.

The number born abroad and settled in Britain has nearly doubled over the past three decades and has accelerated in the last 10 years. Between 1971 and 1981 there was a 360,371 rise; in the following decade the figure rose by 402,245.

In the 10 years to 2001, however, the number born abroad soared by nearly 1.15m and accounted for more than half of the total rise in population.

The biggest single group among immigrants is Indians at 466,416, followed by Pakistanis, 320,767; German-born, 262,276 (swelled by children born to British servicemen based there); Caribbean, 254,740; Americans, 155,030; Bangladeshis, 154,201 and South Africans, 140,201, Nearly 95,000 French have also settled in Britain.

The fastest growing groups, however, have been from Albania, the former Yugoslavia, Sierra Leone, Greece, Zimbabwe, South America and China. The dominant area for immigration is the economically vibrant London and the southeast. Of London’s population of just over 7m, 1.78m, or nearly 25%, are foreign-born. By contrast, northeast England, which has a poor economic record, has an overseas-born population of just 67,259, under 3% of the total.

While this would suggest that immigration is meeting the country’s economic demands, detailed figures on the economic performance of immigrants suggest this may not be so.

The British-born population has an employment rate of 73.5%. Some foreign-born groups do better than this. Of “new” immigrants — those who have arrived since 1990 — more than 90% of New Zealanders and Australians are in jobs, as are over 80% of those born in Bulgaria, Canada and the Philippines. Most nationalities, however, have lower employment rates, often strikingly so.

Only 12% of Somalis, 30% of Angolans and 32% of Ethiopians are in officially recognised work. Well under half, 42%, of Britain’s Bangladeshi population has a job. Of those that do, most are low earners. Britain’s immigrant population has plenty of success stories, but for every Lakshmi Mittal, P Y Gerbeau, or high-rolling American or German banker, there are many dozens who are either not working or are stuck in low-paid jobs.

“These figures are very much in line with our experience,” said David Coleman, professor of demography at Oxford University and honorary consultant to Migration Watch. “It emphasises that immigration is a very heterogeneous process. Some migrants are economically very beneficial but the benefits of getting high-skilled migrants are cancelled out by having unskilled migrants.”

Low employment among much of the immigrant population destroys the argument for further arrivals, he argues. Labour shortages should be met from the indigenous population and the existing pool of unemployed or economically inactive immigrants.

A detailed analysis Coleman carried out with Professor Robert Rowthorn of Cambridge University, The Economic Effects of Immigration into the UK, published in Population and Development Review, was damning.

It stated: “We conclude that the economic consequences of large-scale immigration are mostly trivial, negative or transient; that the interests of more vulnerable sections of the domestic population may well be damaged; and that any small fiscal or other economic benefits are unlikely to bear comparison with immigration’s substantial and permanent demographic and environmental impact.”

The IPPR, however, concluded in a report earlier this year that the net annual fiscal contribution of immigrants was proportionately greater than for the indigenous population. But it did concede that different groups of immigrants varied hugely in their contribution.

Danny Sriskandarajah of the IPPR said one reason for low employment was that the government did not allow asylum seekers to work. “It’s important to understand the economic contribution migrants make, but also important not to judge migrants in terms of their economic contribution alone,” he said.

From The Sunday Times, September 11 2005


One trouble with these analyses is that they exclude Home Office-imposed economic inactivity.

Asylum seekers are forbidden from working (legally). As employers face prosecution for employing those without rights to work, those with other immigration statuses (such as Indefinite leave to remain, humanitarian protection and discretion) which may apply to former asylum seekers not granted refugee status are likely to be faced with barriers to gaining employment, even if they are legally allowed to work. Employers may simply not take the trouble to investigate whether an applicant is allowed to work.

The nationalities with the lowest employment rates are also the nationalities with the most recent history of asylum seeking.

Therefore, the figures simply show that those who are not allowed to work have very low employment rates. This is a very big surprise.

I am not surprised that MigrationWatch omit this crucial point, as this is typical of their work. However, more serious analysts should take the Home Office and its activities into account when considering employment of those subject to immigration control.

Posted by: Paul Bivand at September 12, 2005 12:22 PM

Thank you for the useful links and info. I enjoyed reading it.

Posted by: Genie at December 21, 2005 09:07 AM