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Migration Watch distort UCL research

by Sam Ashworth-Hayes | 17.05.2016

Given the focus the Leave campaign is putting on immigration, it is unsurprising that a report from Migration Watch purporting to show that immigrants from the European Economic Area* (EEA) are a drain on the public purse has grabbed the imagination of the eurosceptic press.

In a paper it says “extends” research from University College London, the anti mass-migration pressure group says the Treasury spent more in 2014/15 on public services for recent EEA immigrants than they paid in taxes. The original research found that EEA immigrants in the UK paid made a positive contribution of more than £4 billion between 1995 and 2011.

Migration Watch says that it made “some slight differences in assumptions”. If you undo these changes and stick to UCL’s methodology, the Migration Watch paper actually shows that EEA migrants made a positive contribution.

The key difference between the papers – there are others – is how they treat taxes paid by businesses: corporation tax, business rates and the like. Working out who actually pays a business tax isn’t as simple as looking at which party hands over cash. According to standard economic theory, part of the tax falls on a company’s owners and part on its customers, because firms often react to higher taxes by pushing up prices.

As some EEA migrants will hold shares, the UCL researchers reasoned that it was reasonable to assume that immigrants would pay about the same amount per person as the rest of the population.

Migration Watch took a different view. They took a second scenario used by the UCL researchers as a “robustness check” and described as “potentially extreme” – and ran it as their main set of figures. This essentially assumes that any immigrant who has been in the UK for less than 10 years pays no business taxes.

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This makes a big difference. Under Migration Watch’s assumption, EEA immigrants took out £1.1 billion more than they paid in. Stick to the UCL method, and it’s the other way around: EEA immigrants paid in £365 million more than they took out.

When a change of assumption makes such a large difference to the result, it’s misleading to describe it as a “slight difference”.

UCL’s research was peer reviewed and appeared in a top academic journal. The same cannot be said for Migration Watch’s report. Nor was any author named, meaning no individual is accountable for it.

Migration Watch said: “The different assumptions on business taxes …. represent different ends of a spectrum of how much business tax is attributable to each group.” But assuming that EEA migrants pay roughly the same as natives doesn’t seem an extreme view, whereas assuming they pay nothing for a decade does.

The authors of the original UCL paper have since commented on Migration Watch’s research, noting that the assumption that EEA migrants pay roughly the same as natives is “more realistic and grounded in economic evidence”.

* EEA is the EU plus Norway, Iceland and LIechtenstein

This piece was updated on 23/05/2016 , changing the description “anti-immigration pressure group” to “anti-mass-migration”, and on 02/06/2016 to include a link to the comments from the UCL researchers.

Edited by Hugo Dixon

2 Responses to “Migration Watch distort UCL research”

  • You people just STILL DONT GET IT.ITS more important than money or business .ITS BEING SWAMPED by foriegners.People are sick of it,sick of feeling a stranger in your own country and we want it back,bit to late now but at least we can stop another major influx from Turkey and the other 4 impoverished countries you have lined up to join your STINKING SUPERSTATE..AND thats what its all about,to create this giant state,and hem Russia in with the conivance of the USA,WHICH has allready provoked Russia by its attempted cou in the UKRAINE and its enticement of Russian satelite countries into the maw of the european unalected undemocratic superstate,and by placing missile systems in Poland.conducting nato usa uk german etc vast military excercices on its borders and yet RUSSIA is demonised in the western media as the aggressor??????FRACK you empire builders you have ruined the economies of Greece Ireland and you are tottering on the brink of economic meltdown.you are ROTTEN CORRUPT AND UNACOUNTABLE.I hope when Uk leaves it will start the rot which will destroy you,what mad mercel has done to Europe is criminal and traitorous to the ordinary hard working people of EUROPE?NO ACOUNTABILITY FOR FINANCES AND A LOT OF QUESTIONS(UNANSWERED OF COURSE AS TO WHERE THE MONEY GOES..CHRISTINE LE GARDE????????OUT ASP IF NOT SOONER..

    • Migration from the EU is 4%. You are clearly mathematically challenged in your assumptions.
      The rest is just nonsense and bile.