Does immigration hurt the UK economy?

Labour's arguments in favour of mass immigration were "torn to shreds" this week by an authoritative cross-party report compiled by two ex-Chancellors, a former Bank of England governor, sundry ex-Cabinet ministers and eminent economists, says James Slack in the Daily Mail.

Their combined verdict was that record levels of immigration since Labour came to power have had "little or no impact" on our economic wellbeing, while the Government's assertion that immigration is essential to preventing labour shortages is essentially flawed.

Take the Government's "meaningless" claim that immigrants contributed £6bn to Britain's wealth (GDP) in 2006, says Lord Wakeham, chairman of the inquiry, in The Guardian. The key measure of a country's standard of living is GDP per head, not in total, and that has barely risen.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

The Government also claims migrants are needed to fill the vacancies created by our booming economy, but the total number of vacancies has remained at about 600,000 since 2001. Immigrants also depress the wages of the lowest paid and place upward pressure on house prices.

True, says Deborah Orr in The Independent, and our public services are feeling the strain too. But the report implies that the influx is merely the result of liberal immigration policies, when mass migration is actually a "defining feature of globalisation". The UN estimates that globally, there are now around 200 million migrants, double the 1980 figure.

Those figures make Britain's net yearly immigration of 190,000 since 2004 look "puny". Indeed, the report's findings that "immigration has neither improved nor damaged the economy" is still positive news. Overall, we still "don't know we're born".