Immigration Is Profitable For UK Economy, Says Robert Chote

23 Jan 2014

Overseas workers in UK contribute in taxes, help public purse and are more likely to be in the working age-group said Treasury select committee.

The Independent advisers of Treasury said that Immigration is profitable to the economy because new arrivals contribute in taxes and are likely to be of working age.

The Office for Budget Responsibility’s Chairman, Robert Chote said that allowing more immigrants into the UK does provide a more profitable picture for the public purse.

With David Cameron, the Canadian Prime Minister, aiming to reduce the number of immigrants into Britain, Chote’s comments are issued at a political sensitive period over immigration to UK.

Cameron has focused on reducing benefits available to some new arrivals, due to the pressure from public opinion polls. This was particularly applied to immigrants from the European Union.

After the lift of labor market controls, the issue has increased to the top of the agenda as backbench Tory MPs and UKIP have stirred fears regarding pressure on public services if there is an inflow of Romanian and Bulgarian migrants.

However, the MPs were informed by Chote that usually, overseas workers in UK contribute to the economy, and suggested that lowering immigration can be financially unfavorable and it takes more time for the Treasury to balance the books.

The Treasury select committee was told by Chote that because immigrants to UK are more likely to be from a working age-group, they are less likely to have relatively large amounts of money spent on them for long-term care, for education, for pension expenditure, for healthcare, and more likely to be paying taxes.

OBR's perspective that the economy is dependent on overseas workers in UK and the taxes paid by them to continue funding public services, is backed by Chote’s comments.

Jonathan Portes, the former Chief Economist and the Director of the NIESR (National Institute of Economic and Social Research) shares this view, and has argued for a long time now, that immigration to UK makes a net positive contribution to the economy.