Transcript Background - THE BRUGES GROUP

The outlook for migration to the U.K.
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Presentation for
The Bruges Group
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Historical background
• Little migration into Britain (other than Irish) until 1950’s
• Main inflows were:
 c100,000 Huguenots (c. 2% of existing 4-6 million England
population) in the 16th and 17th centuries.
 c100,000 Ashkenazi Jews (c. 0.25% of existing 40 million UK
population) in 19th century.
 c70,000 Jews (c. 0.15% of existing 46m UK population) from Nazi
Germany in 1930’s.
• New Commonwealth immigration of c70,000 – 75,000 p.a.
balanced by emigration of British citizens until early 1990’s.
Current net inflows are equivalent to about 0.26% of the UK population each year.
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Race and immigration have again become
important issues for the public
35
30
25
20
15
10
5
0
74
78
80
83
85
87
89
91
93
95
97
99
01
03
Source: MORI: What would you say is the most important issue facing Britain today? Percentage
saying Race relations/immigrants/immigration. (Figures mainly at April except for 74,77, 78 and 82
and Mar 04)
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Net non-EU migration into the UK
‘000’s
250
200
150
100
50
0
92 93 94 95 96 97 98 99 00 01 02
Source: ONS
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Net migration into the UK
'000's
250
200
150
Non-EU
100
50
Total net migration
0
-50
92
93
94
95
96
97
98
99
00
01
02
EU
British
-100
-150
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Source: ONS
GAD net immigration assumptions – and reality
200
150
GAD PP
GAD PP
GAD PP
GAD PP
Actual
100
50
1996
1998
2001
2002
10
08
06
04
02
00
98
96
94
92
0
-50
…….the scale of future migration has been consistently underestimated.
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Population projections (millions)
68
67
66
Continuation of
actual - 158k p.a.
Principal Projection 103k p.a.
Natural change - no
migration
65
64
63
62
61
60
59
2002
2011
2021
2031
Source: Natural Change and Principal Projection from GAD. 158k projection
derived from GAD principal and high migration projections
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Impact of migration
• Where do migrants settle?
• Impact on London
• Impact on housing
• Economic impact
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International migration to UK Regions 1992 - 2001
Scotland
-41,000
Northern Ireland
(-5%)
-28,000
(-3%)
Rest of England
181,000
(21%)
Wales
+18,000
(2%)
Source: ONS
London
South-East
+101,000
(12%)
…… three-quarters of all international migrants head to London
+645,000
(74%)
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Migration flows to and from London
Source: London Analytical report – Downing Street Strategy Unit
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Housing and immigration
Homes required
1996-2021
Due to net migration
Current plans
3.8million
700,000
(18%)
Current migration
projections
4.5 million
1.4 million
(27%)
Migration continues at
158k p.a.
4.85 million
1.75 million
(36%)
… in contrast no. of homes planned for 4 development areas in South-East is
803,000.
Source: derived from household projections data published by the ODPM
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Fiscal impact of migration
The Government claim that migrants contribute to the Exchequer £2.5bn
more than they take in benefits.
But
– In the year chosen public accounts were in surplus. Correction for this
removes £1.3bn.
– Corporation Tax from shareholders resident abroad was wrongly attributed
to migrants. Subtract £0.8bn.
– No adjustment was made for life cycle costs.
– Careful qualifications, repeated six times, in the original Home Office
report were ignored.
In reality the net fiscal contribution is minimal, if not negative.
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E c o n o m ic G ro w th – T h e U K E x p e rie n c e
P ro fe sso r M a rk K le inm a n , w ritin g in th e P o litica l
Q u a rte rly, co n clu d e d th e fo llo w in g :
“In b ro a d te rm s, th e e co n o m ic im p a ct of m ig ra tio n is
p o sitive fo r th e d e stin a tio n co u n try: b u t th e size o f th e
im p a ct is n o t g re a t, a n d th e re a re d istrib u tio n a l
co n se q u e n ce s to co n sid e r.
… . T h e e co n o m ic
a rg u m e n ts a lo n e w ill n o t b e (a n d sh o u ld n o t b e )
d e cisive .”
In th e F in a n cia l T im e s of 1 4 A p ril 2 0 0 4 , M a rtin W o lf
w ro te “th e d e sira b ility o f size a b le im m ig ra tio n is a m a tte r
m o re of va lu e s th a n o f e co n om ics. It is n o t a ch o ice
b e tw e e n w e a lth a n d p o ve rty, b u t o f th e so rt o f co u n try
o n e d e sire s to in h a b it.”
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Working age to pension age ratio
3.4
3.2
3
Low migration - (53k
p.a.)
Principal projection (103k p.a.)
High migration (153k
p.a.)
2.8
2.6
2.4
2.2
2
1.8
2002 2011 2021 2031 2041 2051 2061 2071
Source: derived from GAD principal and variant projections
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S ta tistics o n F e rtility a n d P o p u la tio n C h a n g e in th e E u ro p ea n U n io n
C o u n try
F ertility R a te
P o p u la tio n
in 2 0 0 0
in 2 0 0 0 (0 0 0 s)
P ro jected P o p u la tio n
in 2 0 5 0 (0 0 0 s)
E U 15
F ran ce
1 .9
5 9 ,3 8 2
6 1 ,0 1 7
G erm an y
1 .4
8 2 ,1 8 8
7 3 ,6 0 7
Italy
1 .2
5 7 ,7 1 9
5 0 ,3 9 0
S p ain
1 .2
4 0 ,0 1 6
3 5 ,5 6 4
UK
1 .7
5 9 ,5 2 2
6 3 ,9 7 7
A ccessio n 2 0 0 4
C zech R ep u b lic
1 .1
1 0 ,2 7 0
8 ,5 4 0
P o lan d
1 .4
3 8 ,6 4 6
3 3 ,7 8 0
S o u rc e : U S C e n su s B u re a u o n lin e
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Main components of migration
• Asylum (c77,000)
• Family formation – spouses and fianc(e)es (c50,000)
• Work permit employment (c66,000)
• Other measures (c 40,000)
• Illegal immigration
(Figures are MWUK estimates of approx. nos. of net non-EU immigrants in 2002)
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Economics of unskilled labour migration
• Tax benefit limited (top 10% of taxpayers contribute 50% of
revenue).
• Must offset costs of infrastructure and congestion costs for
these additions to our population.
• “Huge amount of evidence that unskilled immigration reduces
unskilled wages and increases unskilled unemployment rates.
Employers gain from immigration. The unskilled do not”.
Professor Lord Layard 20th May 2002
• Aim should be high wage, high productivity economy. Not the
opposite.
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Economics of skilled labour migration
• We should rely primarily on training and re-training native
work force.
• Temporary need for workers not a reason for large scale
permanent immigration.
• “It is hard to see a clear pattern of shortage (of skills)…. As a
share of the whole workforce the number of unfilled (skilled
vacancies) is around 0.6% The Economist 7 Feb 04
• Must offset costs of extra infrastructure and congestion.
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E c o n o m ic G ro w th – T h e C a n a d ia n E x p e rie n c e
Q u o ta tio n s from a re s e a rc h re p o rt p re p a re d fo r th e
E c o n o m ic C o u n c il of C a n a d a in 1 9 9 1
O v e ra ll e c o n o m ic e ffe c t o f im m ig ra tio n
“A h is to ric a l p e rs p e c tiv e g iv e s little o r n o s u p p o rt to th e
v ie w th a t im m ig ra tio n is n e e d e d fo r e c o n om ic p ro s p e rity.
th
th
In th e 1 9 a n d e a rly 2 0 c e n tu rie s th e fa s te s t g ro w th in
p e r c a p ita re a l in c o m e s o c c u rre d a t tim e s w h e n n e t
im m ig ra tio n w a s n il o r n e g a tiv e .” ( p a g e 1 9 )
“W ith re s p e c t to p e r c a p ita d is p o s a b le in c o m e s , a n
in c re a s e in im m ig ra tio n h a s a p o s itiv e e ffe c t, b u t it is
v e ry s m a ll.” (p a g e 1 3 1 )
“T h e e ffe c t of im m ig ra tio n in fillin g
th e re b y e n h a n c in g e ffic ie n c y, a s
a lte rn a tiv e p o s s ib ility o f fillin g g a p s
a d ju s tm e n ts , is a lm o s t c e rta in ly
(p a g e 1 3 1 )
la b o u r m a rk e t g a p s ,
c o m p a re d w ith th e
b y d o m e s tic m a rk e t
e x c e e d in g ly s m a ll.”
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E c o n o m ic G ro w th – T h e A m e ric a n E x p e rie n c e
A stu d y b y th e N a tio n a l R e se a rch C o u n cil in 1 9 9 7 fo u n d
th a t th e b e n e fit o f im m ig ra tio n a d d e d a b o u t o n e te n th o f
1 % o f G D P p e r h e a d p e r ye a r.
In th e p e rio d stu d ie d , im m ig ra tio n to th e U S w a s
co m p a ra b le to th a t w h ic h is n o w ta k in g p la ce in th e U K .
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Im m ig ra tio n a n d E c o n o m ic G ro w th
“A c c o rd in g to th e T re a s u ry, o u r e c o n o m ic g ro w th ra te w o u ld b e a lm o s t 0 .5 % lo w e r fo r th e n e x t tw o
ye a rs if n e t m ig ra tio n c e a s e d .”
(M r B la ir’s s p e e c h to th e C B I 2 7 A p ril 2 0 0 4 )
A m o re p re c is e fig u re is 0 .4 % .
(F in a n c ia l T im e s
2 8 A p ril 2 0 0 4 )
N e t m ig ra tio n is 1 5 8 ,0 0 0 o r 0 .2 5 % o f th e p o p u la tio n
S o g ro w th p e r h e a d w o u ld b e a b o u t 0 .1 5 % p e r y e a r
“M ig ra n ts c o n trib u te 1 5 % o f p ro je c te d e c o n o m ic g ro w th ”.
(H o m e O ffic e M a rk e tin g a n d M e d ia S tra te g y le a k e d 2 3 M a y 2 0 0 4 )
T re n d g ro w th is c u rre n tly 2 .7 5 %
0 .4 % is 1 5 % o f 2 .7 5
S o th is is th e s a m e c la im , e x p re s s e d d iffe re n tly
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