Sunshine effect of UK immigration hailed

Immigration over last decade beneficial to UK economy report claims

Thursday, 24, Apr 2008 12:01

The UK economy has benefited from high levels of immigration over the past decade, a study claimed on Thursday.

The report from thinktank the Work Foundation found there has been no significant impact on unemployment from migrants, and both inflation and interest rates have been lower as a result.

The report also claims that wages have not fallen as the rising national minimum wage has protected the most vulnerable, even in key sectors such as construction and hotels.

David Coats, associate director of policy and author of the report, said: "The government has had a hard time over immigration not because it has 'lost control' of the issue, but because it has failed to tell a compelling story based on consistent high quality information. The official statistics are so haphazard that the government finds it difficult to defend otherwise good policies.

"On the available evidence, the best judgement is that the economic case for free movement in the EU is strong and the UK's ageing population, with fewer young people entering the jobs market, means that a fair and flexible policy of managed migration is essential if the economy is to continue to grow."

However, the report also warned that fewer people came from central and eastern Europe to work in the UK in 2007 than in either 2006 or 2005 and employers cannot rely on a continued supply of Polish workers to fill labour shortages in the UK.

The government insists immigration has strong economic benefits for the UK.

But the House of Lords economic affairs committee reported at the beginning of April that "immigration has had a largely neutral effect on economic well-being with the income of some groups of low-paid workers actually falling."

The committee claimed that using imported labour to fill employment gaps discourages employers from investing in staff training and new technology, while the extra demand for housing is pushing up house prices.