Immigration: Quick fix with side-effects
July 17th 2012
Immigration is said to boost the economy and public finances, but it does not do so for long, and the costs are felt by all.
The Office of Budget Responsibility has said in its latest report that immigration can contribute to economic growth and reduce the public sector deficit, particularly as the population ages. Their report states that “higher inward migration would tend to increase tax receipts and not add much to age-related spending pressures, even whilst allowing for an increase in GDP from extra employment”.
However, one questions who benefits from that additional growth. Clearly, the immigrants do themselves. Employers benefit from lower training and wage costs than they would otherwise have to pay. However, that can be to some extent at the expense of existing citizens who remain unemployed or on lower wages that they would otherwise receive, as a House of Lords report found. The government also benefits, in the short and medium term, from immigrants who pay taxes but do not have dependents and have a long working life ahead of them.
However, the OBR itself says that “higher migration could be seen as delaying some of the fiscal challenges of an ageing population rather than a way of avoiding them”. The reason is that migrants themselves will age in turn. Moreover, many migrants, once settled, seek leave to bring dependents to join them and typically have an above average birth rate.
The consequence of all of this is that the population will continue to grow. England is already Europe’s most densely populated country. The costs we bear from our rising population include rising property costs, lack of affordable housing, smaller homes, loss of green spaces and biodiversity, longer commutes, road and transport congestion and increasing resource issues for everything from energy supply and water disposal to food and water. Public sector costs will inevitably rise to provide the services for a growing population. A report sponsored by Population Matters found that the projected increase in the UK population of 10 million over the next 22 years could add £one trillion in gross public sector expenditure and one billion tonnes of CO2 emissions.
Commented Simon Ross, chief executive of Population Matters, “Vested interests are fond of talking about the benefits a persistently high level of net migration brings to Britain. The related costs, more significant and longer lasting, are routinely ignored and this has to change.”
Notes for editors
Office for Budget Responsibility
House of Lords report
Anastasaki, Erasmia – Running Up a Down Escalator: UK Population Growth to 2033 – the Taxpayers’ and Planet’s Bill