Jonathan Portes, Director of the National Institute of Economic and Social Research (NIESR), talks to SRtRC about the economic impact of immigration.
"What most research finds, including the research that we have carried out, is that the majority of immigrants are likely to put in more than they take out – they are more likely to contribute than they are to ‘drain’."
Jonathan Portes, Director, The National Institute for Economic & Social Research
In the first part of this three part series, Jonathan discusses the impact of immigration on public services including the NHS.
Can you give us some information about you and your role with the National Institute of Economic and Social Research?
"I am the Director of the National Institute of Economic and Social Research and we do economic research into a wide range of topics including what is going on the economy generally, unemployment and welfare reform, but myself and a number of others have a particular interest in the economics of immigration, and also the economics of integration, that is; what are the economic and social impacts of what has been a quite significant increase in immigration to the UK over the last 15 years. We are interested in how immigrants are doing within the labour market and how the process of immigration affects people who are already residents in Britain, as well as how it affects schools, public services and other aspects of society."
"No. The important thing to remember about immigration’s impact on all public services including the NHS, but also the benefits system or the education system is that immigration contributes both to demand and supply. If you have an increase in immigration then of course that puts increasing pressure on schools, hospitals and the benefits system, but equally, the vast majority of immigrants work, they pay taxes, they often work in public services and so they contribute towards making those public service available to everyone, at the same time as being users of those services."
"What is most frustrating in this debate is not when people say ‘Immigrants make demands on public services’ – of course they do, they’re people! It’s those people who say that and then completely ignore the other side of the coin; immigrants contribute to the finances of the country and so contribute towards the financing of services like the NHS as well as helping to maintain them."
"In order to get a proper picture of whether immigrants are a ‘drain’ on public services, you have to look at both sides of the balance sheet and what most research finds, including the research that we have carried out, is that the majority of immigrants are likely to put in more than they take out – they are more likely to contribute than they are to ‘drain’ and it isn’t hard to see why that is the case."
"Many if not most immigrants come to this country to work or possibly in the case of students they come here to study and so are paying to be at our universities so they are making contributions in a variety of ways including through taxes, and remember that taxes are not just income tax, its also taxes on things that people buy like VAT."
"Generally speaking, the great proportion of public sector spend tends to go on care for the elderly – the NHS spends the biggest proportion of its resources on the older people, the benefits system overwhelming spends more of its budget on the elderly and to some extent on disabled people than it does on younger people and unemployed people. So its not surprising that overall, immigrants are likely to be a gain rather than a drain in net terms."
"Of course, immigrants get old too so we need to be looking at the longer term impacts too and some of the work that we have done, which is consistent with work done by the government, has found that even in the long term, immigration is a positive thing. So the bottom line is that our analysis and the analysis by the Independent Office for Budget Responsibility which looks at these numbers on behalf of the government show that if you were to succeed in reducing immigration you would have to increase taxes by quite a significant amount over in order to maintain the same level of public services."
"The idea that things would be better; that there would be more to go around if we had less immigrants actually has no economic evidence whatsoever to support it."
What about the concept of the ‘brain drain’? Another commentator on the BBC documentary you took part in quoted figures ‘c.25% of NHS doctors are non UK born’ alluding to the idea that the UK can take the cream of international talent to the detriment of other countries. What are your views on this in the context of immigration?
"Well, that is clearly an issue, but it is not a problem of immigration, it’s a specific problem for European countries like Greece which is in the throws of a really nasty economic and political crisis and has been for the last five years or so. Not surprisingly, those with marketable skills, like doctors, try to leave but it is just a reflection of the problems facing some small African countries like Malawi where a significant proportion of trained medical professionals leave."
"This is not a problem created by immigration and is not something that immigration policy can tackle; if people want to get out of Greece or Malawi then they will. The only solution is to create the conditions domestically that ensure that people, especially skilled professionals, want to stay and help build their own country and that is fundamentally a task for the country’s government."
"More broadly, the question of the NHS ‘stealing’ people from overseas is often exaggerated. It is true that there are some people from countries like Malawi working here and in an ideal world, the conditions in Malawi were such that these people would choose to stay at home and would arguably be of greater benefit there, however most of the doctors and nurses who come from overseas to work in the UK are not doing so to the detriment of their own country."
"For example, India produces and trains a lot of doctors and it is not a problem for India if doctors move to the UK, in fact they regard that as a beneficial form of migration; people send money back which benefits the economy in India, some go back to live and work in India after a time – it is a beneficial, two-way relationship."
"Similarly, there are a lot of Philippino nurses working in the NHS. The Philippines has a quite explicit export strategy which involves training far more nurses than it has demand for domestically; they’re good at it and those nurses want and expect to move abroad to work so it does not impact negatively on the country."
"That figure comes from a study carried out by colleagues of mine from University College London which did conclude that immigrants contributed £25 billion more than they cost over a ten year period, however because those figures differ depending on what period you are looking at and because there are various assumptions made and different ways of calculating them, we shouldn’t get too hung up on that specific number."
"I think that the important thing is that immigrants probably contribute somewhat more and cost somewhat less than average Britons, probably because the are mostly young, are motivated and mostly working which is supported by all of the evidence which suggests that if we didn’t have these levels of immigration that taxes would have to be raised or public services cut even further."
"It is also important to remember that immigrants are all very different; immigrants who come here as students for example contribute in the sense that they are paying money to UK universities which are also UK businesses, and they cost us very little because they are young, healthy and studying and immigrants who come here, stay for a long time, end up having children and retiring are not really immigrants any longer but are part of the native population so the longer term effect becomes directly comparable with British natives."