What is the problem?

Immigration is a heavy cost to the taxpayer

8. Immigration is a heavy cost to the taxpayer

Britain has a population of 67 million, and considerable reserves of unused labour. In 2016/17, immigrants paid less in taxes than what they received in benefits and services.

In 2016/17, immigrants cost the exchequer £4.3 billion

The positive tax contributions of some immigrants is largely or wholly offset by the negative tax contributions of others.

Based on research commissioned by the Migration Advisory Committee, immigrants in 2016/17 paid 4.3 billion less in tax than what they took out in benefits and services.

There is no doubt at all that immigrants boost GDP (the quantity of good and services), but it is less obvious that they boost GDP per person – which is what matters most for productivity.

GDP per person fell between 2008 and 2020, despite an increase of 2.5 million in the number of foreign workers.

Immigration of the unskilled may distort the economy and create dependency. For example, letting businesses import skills which Britons could themselves acquire undermines the incentive of employers to train and upskill the British workforce.

Immigration of the unskilled may also disincentivise companies from investing in new technology – or from switching to the production of less labour-intensive commodities. The result: low-wage, low productivity, low-skill enterprises flourish.

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