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24th Sep 2017

UK makes €25 billion profit from EU migrants

  • The UK treasury received €25 billion in surplus receipts from EU migrants. (Photo: EnvironmentBlog)

EU migrants paid €25 billion more in tax to the UK treasury than they received in welfare benefits, according to new research.

The €25 billion was accumulated between 2001 and 2011 the paper, published in the Economic Journal on Wednesday (5 November), said. It is the latest project by the Centre for Research and Analysis of Migration (Cream) at University College London.

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The UK economy benefited most from migrants from the EU-15 countries who contributed 64 percent more in taxes than they received in benefits. However, migrants from the 10 central and east European countries (A-10) who joined the bloc in 2004 contributed 12 percent more than they received.

The study also contends that migrant workers were more likely to be in work and to be better educated than native Britons. Four in five eastern European migrants had a job, compared to 70 percent for Britons and people from the EU-15 countries.

Meanwhile, 62 percent of EU-15 migrants held a university degree, and 25 percent of A-10 migrants, marginally higher than the 24 percent rate among British nationals.

Overall, EU migrants contributed 10 percent more to the UK's coffers than natives, while contributions from immigrants from the rest of the world were almost 9 percent lower.

The paper comes at a sensitive time. Public fears about a rise in 'welfare tourism', where migrants move to countries to access welfare benefits, has seen London threaten a tightening of EU rules on free movement of labour. The German government has also presented draft legislation setting a six month deadline for EU migrants looking for a job and cracking down on abuse of the welfare system.

However, there is little empirical evidence that to suggest that 'welfare tourism' is a widespread phenomena.

"A key concern in the public debate on migration is whether immigrants contribute their fair share to the tax and welfare systems," said Professor Christian Dustmann, director of the centre and co-author of the study.

"Immigration to the UK since 2000 has been of substantial net fiscal benefit. This is true for immigrants from Central and Eastern Europe as well as the rest of the EU," he added.

UK prime minister David Cameron is under pressure from his Conservative party to demand a cap on EU migration in a bid to head off rising support for the UK Independence party ahead of next year's general election.

However, other EU leaders, led by Germany's Angela Merkel, have made it clear that any restrictions on the principle of free movement within the bloc are non-negotiable.

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