UK: Immigration has 'little or no impact' on economic well being

Record levels of immigration have had "little or no impact" on the economic well-being of Britons, an influential House of Lords committee has said.

It says competition from immigrants has had a negative impact on the low paid and training for young UK workers, and has contributed to high house prices.

The peers want a limit on immigration levels - a view backed by the Tories.

Minister Liam Byrne says migration has added £6bn to the economy and a points system is preferable to a cap.

In their report, The Economic Impact of Immigration, the peers said the government "should have an explicit target range" for immigration and set rules to keep within that limit.

'Inconsistencies'

They raised the prospect of cutting the rights of people to follow relatives who have settled in the UK.

And they rejected claims by ministers that a high level of immigration was needed to prevent labour shortages as "fundamentally flawed".

The peers also warned that the government's new Australian-style points-based immigration system carried a "clear danger of inconsistencies and overlap".

The Lords Economic Affairs Committee, whose members include two ex-chancellors and other Cabinet members, took eight months to consider government immigration policies.

Inquiry chairman Lord Wakeham said: "Looking to the future, if you have got that increase in numbers and you haven't got any economic benefit from it, you have got to ask yourself, is that a wise thing to do?

"That is why we want the government to look at it."

House price rises

Committee chairman Lord Vallance of Tummel, a former CBI president, said the government's analysis of the economic impact from immigration was "very shaky".

But Immigration Minister Liam Byrne said the report confirmed the government's assessment that migration had added £6bn to the economy in 2006.

"That's important in anyone's book," he said.

It also "echoed" the government's belief that migration had to benefit the wider community and not just business, he said.

"The key question we have got to answer is how do we make sure we only get the skills we need in this country and no more? That's why we need the points system," he told the BBC.

He said newcomers would also be asked to contribute "a little bit extra" to public services before they became British citizens and unskilled workers from outside the EU would be banned.

'Clear danger'

The report claims that if net immigration of 190,000 people per year continued over the next 20 years, it would contribute to a 10% increase in house prices.

It adds: "The available evidence suggests that immigration has had a small negative impact on the lowest-paid workers in the UK and a small positive impact on the earnings of higher-paid workers."

And there was a "clear danger" immigration had hit training and apprenticeships offered to British workers.

Of the government's new points-based system, which breaks immigration into five new tiers based largely on earning power, the report says: "It is not clear whether the new system will in fact constitute the radical overhaul of the UK's immigration system suggested by the government."

The use of GDP as the measure of immigration's economic contribution was "irrelevant and misleading".

Instead, GDP per capita - or income per head of the population - would be a better measure, the report said.

"Our general conclusion is that the economic benefits of positive net immigration are small or insignificant," it said.

'Lost track'

Sir Andrew Green, of pressure group Migrationwatch, said the report had "torn to shreds the government's economic case for the massive levels of immigration which they have actively encouraged".

And shadow home secretary David Davis said the peers had shown "unequivocally that the benefits of the current immigration policy to ordinary UK citizens are largely non-existent".

"We are delighted they say there should be an explicit target range for immigration through controls on non-EU applicants," he said.

"This is a policy that we have been arguing for, for years and which the government has consistently rejected."

Chris Huhne, the Lib Dem home affairs spokesman, said the report made clear that "the government has completely lost track of the number of people who live in this country".

"No wonder there is a total inability to manage immigration or create policies that deal with its effects."

'Motivated workers'

Ex-Tory chancellor Nigel Lawson said: "Population increases make countries bigger, but they don't make countries more prosperous.

"The increased size of the economy is neither here nor there if it doesn't bring increased prosperity. And the reason it doesn't is because
there are more mouths to feed, more people there."

But Dr Danny Sriskandarajah, head of migration at the Institute for Public Policy Research, said that to say there were no economic benefits was "simplistic and misleading".

"Recent immigration has brought immense benefits to the UK in terms of economic growth, increased competitiveness and the delivery of public services," he said.

Supermarket chain Sainsburys was among those to praise foreign workers in evidence to the committee. It said it had found foreign-born workers to be highly motivated with a strong work ethic which rubbed off on the British-born staff.

Source: BBC (English)