Sunday, March 15, 2009

Economic benefits of mass immigration are close to zero', Lords told

By Ian Drury

Last updated at 2:04 AM on 15th November 2008

Claims that mass immigration has benefited the economy have been 'wildly overstated' by the Government, experts said yesterday.

Record levels of migration have brought virtually no economic benefit to Britain, the House of Lords was told.

Ministers have repeatedly insisted that newcomers contribute £6billion a year to the country's balance sheet.

But an authoritative report by the Lords Economic Affairs Committee, debated yesterday, blew apart Labour's claims that the wave of immigration from Eastern

Europe had enormous benefits.

Instead, it was worth just 58p each week on the living standards of the native population – about the price of a Mars bar.

Last night the authors of the report – including former Chancellors Nigel Lawson and Norman Lamont, Bank of England directors and captains of industry – were embroiled in a race row.

Labour peers said it hinted at 'racist views' and did not recognise the contribution of immigrants to the UK. More than 700,000 have arrived since 2004, when former Soviet Bloc countries joined the European Union.

Critics have warned that public services, including schools, hospitals and transport, have struggled to cope with the influx.

But the Government has insisted the immigrants had filled jobs that British people were unwilling to do and paid more taxes than native workers – because they earned more on average. It was also claimed that the extra workers would defuse the pensions timebomb.

Lord Wakeham, the Tory former Cabinet minister who chaired the inquiry, said: 'We found no evidence of these large economic benefits.

'What we did find was serious flaws in the Government's arguments and we concluded that on average the economic benefits of immigration were small and close to zero.'

Any benefits had been 'wildly overstated' by ministers, he said in a highly-charged debate. He also reiterated the report's finding that those on low pay, some ethnic minorities and young people looking for employment had lost out. Some had seen incomes fall because immigrants forced down wage levels.

Lord Wakeham stressed that Britain 'as a whole' was not worse off because of immigration.

But academics have calculated that almost £8.8billion has had to be found to bolster the asylum system, teach English to new arrivals and treat illnesses. The report urged ministers to set an 'explicit target range' for immigration – and stick to it.

It called on ministers to cut the number of family members allowed to settle in Britain with a relative. Peers also warned the much-trumpeted points-based system carried a 'clear danger of inconsistencies and overlap'.

Last month the Tories said the Government's policy was in 'chaos' after Immigration Minister Phil Woolas suggested a population cap of 70million.

He was later forced into a humiliating climbdown.

A Commons cross-party group on balanced migration has also said immigration rules should be tightened during the economic downturn.

Liberal Democrat Lord Vallance, the former BT chairman, said the economic 'shoe will begin to pinch' when large numbers of immigrants arrived in the same location.

Labour's Lord Haskel said 'racist views' could be detected in the report.

'While I'm sure it wasn't intentional, the impression is that the politics of the committee is antiimmigration,' he said. 'And, if they want, a reader can detect racist views in the paper.'

Home Office minister Lord West said the report had been 'flawed'.

He said the Government believed the benefits of immigration had made a positive contribution to economic growth, with no 'significant evidence of negative employment effects'.


Another 1,350 illegal immigrants have been cleared for sensitive jobs by a Home Office agency.

Last week the Security Industry Authority, which licenses security guards, was found to be employing staff who were not properly vetted.

Now it has emerged that thousands of three-year licences have been issued to applicants – even though their right to work was due to expire within months.

The oversight is likely to have misled businesses over the status of employees, allowing them to hold on to jobs by showing valid licences.

Previously, the Authority cleared 7,000 illegal immigrants for security jobs – including one man charged with guarding the Prime Minister's car. The Authority's systems were meant to have been overhauled last year after it was disclosed that applicants' right to work was not being checked.

But last week its chief executive was forced to quit after confirming that his own staff had not been properly vetted.

The latest loophole was identified by officials last month. A spokesman said 2,000 licences currently in force, where the right to work may have expired, had been identified. Some 1,350 have had their licences revoked. The Tories said it was more evidence of 'systematic incompetence'.

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