Study highlights economic benefits of immigration

10 Sep 2013 | Posted by Carl Thomas

Research has highlighted the economic benefits of immigration, flagging up the risk posed to public finances by restricting EU immigration.

Conducted by Harvey Nash and the Centre for Economics and Business Research (Cebr), the study found that tighter UK immigration controls could result in a loss of two per cent from GDP by 2050. In real terms, this amounts to around £60 billion.

In addition to the decrease in GDP, government borrowing was predicted to rise by 0.5 per cent if the migrants from the EU didn't move across to help the country off-set its ageing population.

Previous studies have shown similar findings when all immigrants, including those on UK visas from outside of the EU, are factored in. The Cebr research confirmed once again that migrants tend to bring more than they take from a country, with “little evidence that EU migrants are having a negative impact on wages or unemployment”.

Charles Davis, head of macroeconomics with the Cebr, commented on the findings: “If the UK were to leave the EU, the incumbent government may be tempted to tighten immigration controls.

"While exiting the EU may allow the government greater freedom in deregulating further the UK labour market, for example reducing the impact of European regulation in the form of the Agency Workers Directive, and paving the way for the removal of other red tape in the market, the benefits of which would likely be offset if significant EU migration controls were imposed.”

He added that non-UK EU-born workers earned £39 billion last year and brought “a wealth of skills and experience to the UK workforce”.

The report used Office for National Statistics projections. It took the base to be a long-term net migration level of 140,000 a year and a rise in working population of 7.9 per cent by 2050 so long as the UK remains part of the EU.