Economic benefits of immigration?

The economic benefits of immigration have probably been exaggerated:

A report from the Migrationwatch think-tank says Tony Blair and other ministers are routinely citing statistics that are disingenuous at best and often wrong. These include the suggestion that immigration contributes 0.5 per cent to the nation's overall GDP and that immigrants contribute £2.5 billion more to the economy than they cost.

Such figures have often been quoted by Mr Blair and Cabinet colleagues in support of record immigration levels.

But the Migrationwatch report says they are misleading because while immigrants do add to the size of the economy they also add to the population.

Sir Andrew Green, chairman of the think-tank, said: "What the Government conveniently fails to mention is that they therefore generate considerable costs in terms of infrastructure - schools, hospitals, housing, transport etc."

When these costs are added back, says the report, the true economic "benefit" to the host population is likely to be at best the addition of 0.1 per cent of GDP, or about 14p a week per head each year. The likely true benefit is probably no better than neutral - as all major studies overseas have also concluded.

Sir Andrew added: 'It is extraordinary that this Government's principal justification for the current immigration levels is built on such shaky foundations. They seem to believe that, if their supporters repeat false claims often enough then, despite the clear evidence to the contrary, people will believe them and be reassured."

The report says that while the current levels of immigration are attractive to employers because they provide an unlimited source of cheap labour, they are extremely expensive for the taxpayer and harmful for the less skilled indigenous workforce whose wages are held down and who are more likely to end up unemployed.

Furthermore, to the extent that immigration holds down wages, it makes it more difficult to attract into the labour force the one million on incapacity benefit who would like to work.

Of course, immigration advocates will say that this report is "racist".

Around the Blogosphere:

Immigration: the study that no one will read

Lessons for Britain as Fearful Dutch Turn Their Backs on Multi-Cultural Society