Friday, June 15, 2007

Immigration And Economic Growth

Seriously upgraded service

Driving back from the choccie box yesterday, I struggled to stay on the road listening to the abysmal Ruth Kelly being interviewed about the final report from her Commission on Integration and Cohesion.

As the Report confirmed, most people think there are too many immigrants in Britain. After the influx of 2m+ since Labour came to power, the Commission's polling says that 68% of us agree there are"too many migrants in Britain". Even more strikingly, 47 per cent of Asians and 45 per cent of black respondents also agree.

Msgr Kelly wittered on about something or other, and how nobody could possibly have anticipated the tidal wave from Eastern Europe. But what really stuck in my craw was that familiar assertion about economic growth: migration is good for Britain because it boosts economic growth.

The truth is that while it does seem to have boosted aggregate growth, it's done virtually nothing for per capita incomes. Higher growth is offset by having more mouths to feed. Net net it's a wash- or even a small loss. And that's without even considering the frightening social tensions from forcing ever more gerbils into our already crowded cage. Especially when some of the newcomers eject existing home-grown gerbils from the feed bowl (see this blog on the problems in Slough).

So how do the overall numbers look? There's a good summary at Migration Watch. They examine a number of published estimates, including one published last year by the mainstream and highly respected National Institute for Economic and Social Research.

It found that migrants arriving between 1998 and 2005 raised GDP by 3.1%, a huge amount. But that needs to be set against the huge numbers arriving, which totalled 2.249m (net). Since that was an addition of 3.8% to the population, the net impact on GDP per head was negative.

This is a fairly typical result from UK studies, and it's confirmed by experience elsewhere. Even for the US land of opportunity (and lo-cal welfare), a leading study reckoned immigration in recent years increased per capita GDP by a minimal 0.1% pa. In Holland, the official study concluded "the overall net gain in income of residents is likely to be small and may even be negative".

Nobody denies that some migrants- like the Swedish bankers beavering away down on Canary Wharf- do contribute mightily to UK GDP. And despite their high pay, they almost certainly boost per capita incomes for the rest of us.

But many more migrants are not doing that. They are taking low paid jobs, displacing existing British workers onto welfare, bringing in their kids to be educated, and sending £10m per day to their families back home.

Fair enough. In their situation I'd probably do the same.

But next time some government minister claims it's making us Brits richer, maybe the interviewer could point out the lie.

PS After extensive investigation, I can report that virtually all Cotswolds hotel staff are now Eastern Europeans, mainly Poles. They are excellent. Friendly and efficient, they knock your traditional surly British hotel waiter into a cocked P45. So what's the problem, you ask. No problem at all... so long as you can think of some scheme for getting shot of the redundant surly waiters without paying them welfare or having them join the BNP. Maybe they've got room in Poland.

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