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Analysis

Spend money EU citizens bring to UK on local communities

by Hugo Dixon | 18.12.2018

As Theresa May prepares to publish a White Paper tightening up on free movement, it’s easy to forget that European citizens make a big contribution to the public purse – as well as to our culture, health service and economy.

Migrants from the European Economic Area made a positive contribution of £4.7 billion in 2016/17, according to ​research​ for the government’s Migration Advisory Committee. This is because most EEA citizens are young and well-educated, and tend not to need so much healthcare or receive as much in pensions. As a result, they pay more in taxes and consume less in public services than UK nationals.

The problem is that the money they bring to the public purse doesn’t end up where it is needed.

One solution would be to put a large proportion of the EU citizens’ contribution into a “Migration and Communities Fund”. The money would be channeled to those parts of the country which have experienced sudden or significant population changes – showing that free movement has tangible benefits for local communities and making a real difference to people’s quality of life.

The money would go not just to areas where EEA citizens have arrived; but also to areas which have seen large migration from outside Europe (which is now nearly ​three and a half ​times greater on a net basis than that from inside Europe).

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The Migration and Communities Fund would be ring-fenced within the public finances. The Treasury would not be able to raid it for other purposes.

The money would be given to local authorities. It could be used for a wide variety of purposes:

  • to relieve pressure on GP surgeries, so the ratio of doctors to patients is at the national average;
  • to boost the number of teachers in schools;
  • to invest in local infrastructure;
  • for sports or youth centres;
  • and for programmes to help migrants who, for example, want to learn English.

Local people would decide exactly how the money was spent, letting them have some measure of control in their communities.

The UK used to have a small Migrant Impact Fund. But it was scrapped in 2010. Communities have been starved of investment for eight years. There is therefore a strong case for a one-off multi-billion pound injection into the new Migration and Communities Fund to cover the eight-year gap.

We don’t need to leave the EU to set up such a fund. Quite the opposite. If we stay in the EU, the public finances will be in a much better state and we will be able to afford such a fund. This would be just one of the ways, albeit an important one, of tackling the causes of Brexit without cutting off our nose to spite our face.

This is an excerpt and adaptation from Tackling the Causes of Brexit, a report by CommonGround.

Edited by Luke Lythgoe

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