Community, Diaspora and Immigration

Migrants contribute £25bn to UK economy, study finds

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Migrants coming to the UK since the year 2000 have been less likely to receive benefits or use social housing than people already living in the country, according to a study that argues the new arrivals have made a net contribution of £25bn to public finances.

People from European Economic Area countries have been the most likely to make a positive contribution, paying about 34% more in taxes than they received in benefits over the 10 years from 2001 to 2011, according to the findings from University College London’s migration research unit.

Recent immigrants were 45% less likely to receive state benefits or tax credits than people native to the UK and 3% less likely to live in social housing, says the report written by Professor Christian Dustmann and Dr Tommaso Frattini.

The academics also found that recent immigrants from the EEA – the EU plus Norway, Iceland and Liechtenstein – participated more in the labour market. Their study was based predominantly on official reports including the British Labour Force Survey as well as tax data and public expenditure statistics. The EEA immigrants were also more likely to have a university degree than British people.

Dustmann said: “Our research shows that in contrast with most other European countries, the UK attracts highly educated and skilled immigrants from within the EEA as well as from outside. What’s more, immigrants who arrived since 2000 have made a very sizeable net fiscal contribution and therefore helped to reduce the fiscal burden on UK-born workers. The study also suggests that over the last decade or so the UK has benefitted fiscally from immigrants from EEA countries, who have put in considerably more in taxes and contributions than they received in benefits and transfers.

“Given this evidence, claims about ‘benefit tourism’ by EEA immigrants seem to be disconnected from reality.”

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