Lord Green is Chairman of MigrationWatch UK.
The Guardian’s splash headline a week ago today was the number 298,000 in the colours of the union jack. Below this in large bold type we were told that “This is the number now fuelling UK growth. But you won’t hear this story from politicians. That’s because it is the M word. Migrants.”
As might be expected, the story was wildly misleading. It was very loosely based on the OBR’s latest report which forecast 13.7 per cent growth in GDP over the period to 2020. Only 0.6 per cent of this was attributed to a higher assumption about immigration. It is impossible to see how this could justifiably be described as a key factor in fuelling UK growth.
Even that small increase depends on the assumption that migrants have the same economic characteristics as the working age population as a whole. No consideration seems to have been given to the fact that many migrants are on very low wages and that many also have high birth rates.
More important still, the rapid increase in our population means that GDP per capita increases by a trivial 0.1 per cent over the whole five year period. Put another way, this accounts for less than 10p per head per week for the resident population.
This sum, which the OBR themselves describe as “fractional”, has to be set against the pressures on public services and the loss of amenity resulting from further hundreds of thousands of migrants. Indeed, the OBR themselves forecast “a sharp acceleration” in cuts to day-to-day spending on public services”.
Then there is the vital question of productivity. As Professor John van Reenen from the LSE observes, “What the Chancellor didn’t mention is that UK GDP per person is 16 per cent lower than we would have expected on pre-crisis trends and that the major factor is lousy productivity growth. Productivity is important because, while the Chancellor can point to healthy GDP growth numbers and high employment figures, productivity (GDP per hour) is critical for long run economic growth”.
The OBR simply assume that productivity will improve, noting that it “remains the most important and uncertain judgement in our forecast”. They do not, however, appear to give any weight at all to the possible connection between increasing numbers of migrants in employment and continued lack of growth in productivity and earnings. This is despite a succession of monthly reports from the Bank of England which have noted that the availability of migrant workers continues to make for both easy recruitment and lack of pressure on wages.
The Guardian story is clearly absurd. It is, however, unfortunate that, not for the first time, the OBR have covered the immigration aspects of the economy in a way that seems to fall short of the balance and objectivity on which their reputation depends.