Economic Effects of Immigration in the Uk

Economic Effects of Immigration in the UK

Within the past ten years, immigration has tripled in the UK. The rising trend of immigration has led to a strongly negative perception towards foreigners within the British population. Economists have a more modest opinion on immigration; the economic impact of immigration seems crucial, but it would seem that it in fact only has a small effect on the domestic labor market. Furthermore, the Home Office has indirectly conceded that they have lost the general compendium over the number of incoming immigrants, creating objectives to manage immigration to the benefit of the UK. Firstly, an assessment of the immigration statistics will be made, giving an overview of the accrued immigrants as of 1971. Next the performance of immigrants from the A8 countries (Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia) will be evaluated and then the economic impact of rising immigration will be outlined. To conclude, an introduction to the Home Office’s reformed immigration-system will be given.

Between 1971 and 1986, net migration made a negative contribution to UK population growth. PriceWaterhouseCoopers (PWC) has published research results, which illustrate that net migration has made an increasingly positive contribution since 1996. It has doubled over the past five years, compared to the natural increase. Estimates from the Office of National Statistics (ONS) show that in 2004 a record of 582 000 people came to live in the UK from elsewhere in the world. About 494 000 immigrants were not British citizens; the remaining 88 000 were British citizens returning from living abroad. The majority of immigrants were Asian or African citizens. Net migration considerably rose as the people from the A8 countries gained the right to work in Great Britain, upon their countries joining the EU. In 2004 net migration increased to 222 600, compared to 151 000 in 2003. Dominic Casciani, immigration expert from BBC News, believes that A8 workers are thought to represent about 40% of the increase in immigration for the year 2004.3

Immigrants from the A8 countries tend to be relatively young. Evidence from the Workers Registration Scheme (WRS) suggests that 82% of the immigrants are aged 18-34 and almost half of them (44%) are aged 18-24. The recent increase of