HOME OFFICE News
Release (167/2007) issued by The Government News Network on 16
October 2007
The Immigration
Minister, Liam Byrne, pledged a 'new balance in migration
policy' during a speech to public servants in Essex today.
Speaking to an audience drawn from key local representatives in
education, business and local Government, the Minister set out a
12-month programme of sweeping changes to Britain's
immigration systems and strategy.
Mr Byrne said:
"In 12 months time our immigration system will have changed
out of all recognition. From next year, a points-based system,
modelled on the success of Australia, will ensure that only people
Britain needs can come here to work and study.
"Three quarters of the World's population will need
fingerprint visas: a system which gives us tougher checks abroad.
A single border force with new powers will deliver tougher
policing at our ports and airports and we'll start to count
people in and out of the country. ID cards for foreign nationals
will start to make sure that migrants can prove who they are, and
help us safeguard access to work and benefits.
"We will attack the root cause of illegal journeys, which is
illegal jobs, with big new fast-track fines for employers turning
a blind eye or breaking the rules. Those who sponsor migrants to
come to Britain will need a licence to do so.
"Driving these changes forward will be the new Border and
Immigration Agency, operating with freedom from central Government
with a new powerful regulator and with much stronger links to the
communities it serves."
The Minister was speaking as the Home Office published a
comprehensive cross Government report on the fiscal and economic
impact of migration. The report has been submitted to the House of
Lords Select Committee on Economic Affairs and will be discussed
tomorrow, Wednesday 17 October, by the Migration Impacts Forum
(MIF), which will for the first time present frontline views on
the wider impacts of migration. The Home Office will draw together
both sets of evidence to inform a cabinet decision on how long to
continue restrictions on Bulgaria and Romania and in due course a
points based system.
Mr Byrne said:
"Today we begin to strike a new balance in Britain's
migration policy, weighing the economic benefits with frontline
feedback about wider impacts.
"We know migration added about £6 billion to our economy
last year, but we know of wider impacts too. What we need to do is
strike the right balance for Britain's national interest,
starting with the decision on Bulgarian and Romanian workers a
little later this year."
Notes to Editors
1. The Migration Impacts Forum (MIF), which
was established in June 2007, brings together experts from local
government, health, education, the police and criminal justice
system, the voluntary sector, the CBI and TUC to discuss with
Ministers the wider social impacts of migration.
The MIF will
help collect evidence on how migration affects issues such as
housing, employment, education, health and social care, crime and
disorder and community cohesion. It will:
* consider
information about the social benefits of migration and any
transitional impacts and requirements;
* identify and share
good practice in managing transitional or adjustment
requirements;
* bring together existing evidence about the
impacts of migration; and
* suggest areas for Government
research on the impacts of migration.
2. The Home Office is today publishing the report 'The
Economic and Fiscal Impact of Immigration' which will also be
presented to both the House of Lords Select Committee on Economic
Affairs and the Migration Impacts Forum.
3. A PDF of the report is available from the Home Office Press
Office on 020 7035 3535 and will be put on the MIF website at: http://www.ind.homeoffice.gov.uk/lawandpolicy/migrationimpactsforum/
4. A summary of the report is contained below:
The Economic and Fiscal Impact of Immigration:
The Key Facts
Numbers of migrants and trends
Over recent decades the numbers of people world-wide who live
abroad has increased markedly, and the UK has shared in this
increasing migration. Over the last ten years there has been a
steady increase in the number of people coming to live in the UK.
Most recently, this trend has been supported by the accession of
Central and Eastern European countries to the EU. Data for the
year to mid-2006 show that:
* 574,000 migrants to came to live in the UK on a long-term
basis;
* 385,000 people left the UK on a long-term
basis;
* There was therefore a net inflow of 189,000, a 28 per
cetn decrease from 262,000 in the year to mid-2005.
The National Statistician has established an inter-departmental
task force on migration statistics. Details of improvements
planned for the period 2008 to 2012 are set out in a separate ONS
Statistical Submission to the House of Lords.
The economic and fiscal impact of migrants
The rate at which migrants are employed has risen steadily since
1997. The majority of employers find migrants reliable and
hard-working. And often they have high levels of skills - higher,
on average, than the UK natives. By working here they therefore
make a very important contribution to the economy. By increasing
the numbers of people of working age in recent years they have
helped the economy to grow. We estimate that in 2006 new migration
added about £6 billion to economic growth - around one-sixth of
the total growth in the economy in that year.
The more output produced per person in the country, the wealthier
we are as a nation. The odds are that migrants add to wealth because:
(a) migrants earn more on average than UK natives, suggesting
that they are more productive on average (they earned £424 per
week in 2006, compared with £395 for the UK-born);
(b) by complementing the skills of UK native workers they are
likely to make those workers more productive directly; and
(c) by underpinning essential services that the economy needs
they leave other workers free to concentrate on what they do best,
thus raising productivity indirectly.
Because migrants earn more, it is likely that they will, on
average, pay more tax than their UK native counterparts - for
example income tax and VAT. What the Government in turn pays out
to migrants depends on their personal characteristics - for
example whether those migrants have children; their state of
health; and whether they are employed. In fact, in 2003-04 it is
estimated that migrants contributed 10 per cent of Government
revenue - more than their share of the population (9.6 per cent) -
and by contrast only used up 9.1 per cent of Government
expenditure - less than their population share might suggest.
Migrants and the labour market
(i) Employment
The idea that there are only a fixed number of jobs to go round
is so conclusively refuted by economic history that it has its own
label - "the lump of labour fallacy". UK experience over
the last decade bears this out:
* the proportion of foreign-born workers in the UK labour market
has risen from around 7 1/2 per cent to 12 1/2 per cent; whilst;
* employment is up by 2.7 million; and
* the unemployment rate (ILO measure) is down by 1.8 percentage
points to 5.4 per cent.
Academic research provides little or no evidence that migrant
labour has had a significant impact on employment prospects for
native workers. Detailed analysis by the DWP provided no
discernible statistical evidence that A8 migration has resulted in
an increase in claimant count unemployment since May 2004.
(ii) Earnings
The Low Pay Commission has commissioned research relating to
migrant flows in the period 1997 to 2005. It finds that:
* on the one hand, immigration slightly increases the rate of
wage growth for those at the top and middle of the wage distribution;
* on the other hand, immigration leads to a modest dampening of
wage growth for native workers at the bottom end of the earnings
distribution. Despite this effect, lower-paid workers still
recorded strong wage growth between 1997 and 2005. The National
Minimum Wage helps to protect lower-paid workers from the impact
of immigration;
* viewed overall, the research finds a small positive effect of
immigration on the wages of native workers. The average hourly
wage for non-immigrants increased by 29 pence per year between
1997 and 2005 (in real terms). Of this figure, immigration
contributed around four per cent.
In addition, research from DWP focused on A8 migrants shows no
discernible relationship across Local Authority districts between
earnings growth and the concentration of A8 migrants.
(iii) Sectors
Employers use migrant labour for a variety of reasons. In
particular sectors - for example construction - migrant labour
provides an effective means of meeting skill shortages.
Agricultural employers view migrant labour as crucial to the
survival of their businesses.
Migrants and demographic change
As the UK workforce ages, the dependency ratio - the ratio of
children and older people to those in work - rises. Under
GAD's principle projections, the dependency ratio rises from
61 per cent in 2007 to 74 per cent in 2056. But without any
migration, it is estimated that the ratio would reach 82 per cent
in 50 years time, implying a greater burden of taxation on those
in work.
Conclusion and policy stance
There is a range of evidence that suggests that, overall, the
economic impact of migration is beneficial for the UK. In recent
years migrants have made a more positive contribution to the
public finances than native workers; have often been highly
skilled and accordingly captured higher labour market rewards in
terms of earnings; have very little discernible negative impact on
labour market outcomes for native workers; and in all probability
have made and will continue to make an important contribution not
only to economic growth but also wealth.
Given current difficulties with data, a policy response that
recognises not only the benefits of migration but also the
presence of "known unknowns" is appropriate. In particular:
(i) the new Points-based system (PBS) will provide more clarity
on the available entry routes and, in conjunction with a test of
labour market need in some cases, ensure that the migrants
admitted are those who might sensibly fill labour market shortages;
(ii) A Migration Advisory Committee (MAC) will be established by
Autumn 2007, and be fully operational from April 2008, to advise
the Government on how migration may help fill identified
shortages. The MAC will be accompanied by the Migration Impacts
Forum (MIF), which will focus on the wider impacts of migration
experienced by local areas.