A report from the Office for Budget Responsibility in the UK says that low-paid migrant workers cost taxpayers more than £150,000 each by the time they hit retirement age, and constitute an immediate drain on the public finances.
The British Government’s tax and spending watchdog found that a low-income arrival who came to Britain at the age of 25 cost the state more than they contributed from the moment they entered the state, even though they had not consumed education and health services before working.
“An average UK resident in our long-term projections is net fiscally negative at the early years of their life as they ‘consume’ education and health services but are not yet working and paying tax. They then enter the labour force and start contributing more to taxes than they consume in spending, so becoming a net fiscal contributor. As they grow older, people stop earning, draw on their state pension and ‘consume’ a large amount of health and social care, so their net fiscal contribution turns negative again beyond the age of around 80,” the report says.
The OBR says that an illustrative migrant worker arriving to the UK at age 25 and earning the average UK salary is a net fiscal contributor by their second year, because they have not previously consumed UK public services, particularly education and health in their childhood.
However, migrants on low wages, typically unskilled, would be a fiscal drain on public finances from moment of entry, costing the taxpayer €151,000 by retirement age, and some €435,000 by age 80, the report , which assumed a wage half that of the average British wage for this category of migrants, found.
In contrast, migrants on higher or average wages would become net contributors immediately because they had not consumed health or education resources prior to arrival, the report said.
In general, “as they grow older, people stop earning, draw on their state pension and ‘consume’ a large amount of health and social care, so their net fiscal contribution turns negative again beyond the age of around 80”, the OBR found.
David Miles, an OBR official, told the Telegraph: “I think the characteristics of migrants, in terms of their earnings and how long they stay, are as important, if not more important, than the absolute numbers”.
Mr Miles said that the wages of migrants made a “material difference” on Britain’s long-term debt trajectory. UK debt is already close to eclipsing the size of the economy.
In a scenario where all migrants earn 50pc less than average in the UK, the stock of debt would rise to 350pc of GDP by 2074, the OBR said, instead of hitting 275pc.
If all migrants earned 30pc more than the domestic population, debt would only rise to 225pc of GDP over the same period.
“The characteristic of migrants, perhaps not surprisingly, matters a great deal,” said Mr Miles.
A poll for Ipsos earlier this year found that 69% of the British public say they are dissatisfied and just 9% satisfied with the way government is dealing with immigration.