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EU immigrants give UK £20bn boost

The UK Home Office’s only Liberal Democrat minister resigned last week, claiming that his Conservative coalition partner has failed to pursue a “rational evidence-based policy” on immigration and other issues, ahead of figures being released revealing highly-skilled migrants from the EU have given a £20bn boost to the UK economy over a decade.

On his resignation Norman Baker said the Conservative Party is "rather obsessed" with immigration. Photo: Liberal Democrats.

"Our new analysis draws a positive picture of the overall fiscal contribution made by recent immigrant cohorts"

Norman Baker attacked the Conservative party for being “rather obsessed” with immigration as it strives to reduce net migration – a sentiment echoed by some figures in the education sector as concerns are regularly voiced that international students are being unfairly affected by rhetoric around the ambition to reduce net migration figures.

“Very little evidence is yet available that allows assessment of how much immigrants take out of and contribute to the public purse”

In the same week as his departure, research from two University College London (UCL) showed that European migrants’ net contribution amounted to £20bn between 2000 and 2011.

EU students are not subject to the same visa controls as non-EU and it was revealed earlier this year by the ONS that it is a rise in EU migrants (workers more than students) that has contributed to the biggest incline in arrivals to September 2013, while non-EU arrivals were down by 141,000.

“Debate has been particularly fierce over recent years,” the UCL report states, “…[but] very little evidence is yet available that allows assessment of how much immigrants take out of and contribute to the public purse.”

The study is therefore an attempt to fill this void in order to create a more informed framework for debate.

It shows that the UK received £15bn, or 64%, more in taxes than it paid in benefits to immigrants from the original ‘EU-15’ countries, including France, Germany and Spain, over the 10-year period.

Meanwhile, incomers from the more recent ‘A10’ Central and East European members made a net contribution of £5bn, paying out 12% more than they received.

In contrast, the net fiscal contribution made by UK natives was negative, amounting to almost £617bn.

The paper also revealed that EU immigrants who arrived since 2000 were 43% less likely than natives to receive state benefits or tax credits and were 7% less likely to live in social housing.

The study puts the value of the education of immigrants who arrived in the UK labour market since 2000 at £6.8bn in equivalent education spending over the decade – in 2011, 25% from A10 countries and 62% from EU-15 countries had a university degree, compared with 24% of UK natives.

They also saved the UK taxpayer £8.5bn in ‘pure’ public goods contributions, which include defence or basic research.

“A key concern in the public debate on migration is whether immigrants contribute their fair share to the tax and welfare systems,” commented Christian Dustmann, the study’s co-author and Director of UCL’s Centre for Research and Analysis of Migration (CReAM).

“Our new analysis draws a positive picture of the overall fiscal contribution made by recent immigrant cohorts, particularly of immigrants arriving from the EU.”

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