University College London (UCL) prides itself – rightly – on being “London’s leading multidisciplinary university, with 11000 staff, 35000 students and an annual income of over £1bn.”
UCL is the third largest university in Britain in terms of undergraduates and the largest in terms of postgraduate enrolments – because it is famous for its public research programmes. It has more than 100 departments, institutes and research centres.
Research from UCL departments is world class and their findings are used to inform public policy not only in the UK but internationally. Prominent among these is its Centre for Research and Analysis of Migration – known as CReAM – headed by Professor Christian Dustmann.
In November 2013, CReAM published a discussion paper on the fiscal effects of immigration to the UK. Such papers are published ahead of major studies to give other experts a chance to comment on the work and to criticize or support its findings before final publication.
It’s not uncommon for discussion papers of this kind to provoke dissent and sometimes even heated discussion, but it is exceedingly unusual for research of this kind to be accused of publishing the reverse of its own findings.
CReAM’s 2013 paper, written by Professor Christian Dustmann and Dr Tommaso Frattini, found that in the period 1995 to 2011, immigrants to the United Kingdom paid more into the British economy than they took. That they are a net benefit to Britain – indeed an indispensably necessary part of our economy. The central part of the findings, said UCL, was that;
UK immigrants who arrived since 2000 are less likely to receive benefits and less likely to live in social housing than UK natives. What’s more, over the decade from 2001 to 2011, they made a considerable positive net contribution to the UK’s fiscal system, and thus helped to relieve the fiscal burden on UK-born workers.
The positive contribution is particularly evident for UK immigrants from the European Economic Area (EEA – the European Union plus three small neighbours): they contributed about 34% more in taxes than they received in benefits over the period 2001-11.
These findings were used by David Cameron as a central part of his general election campaign in 2015 and as part of his government’s campaign to remain in the EU – proof in terms of hard cash that immigration was good for Britain and that to restrict the flow of immigration in any way, would harm our economy.
It was this piece of research, these claims, that perhaps more than anything else provoked a backlash against “experts” and their research findings. For – incredible though it sounds – the authors of the research had completely ignored the facts contained in their actual study when they drafted their conclusions. It was left to other academics and scientists outside of UCL to point out how badly they had misrepresented their own research. [See references below].
What the report’s authors claimed it shows
Dustmann and Frattini’s report claimed to “provide an in-depth analysis of the net fiscal contribution of EEA immigrants in each fiscal year since 1995. Its main findings are that:
Recent immigrants (those who arrived after 1999 and who constituted 33% of the overall immigrant population in the UK in 2011) were 45% less likely to receive state benefits or tax credits than UK natives over the period 2000-11. They were also 3% less likely to live in social housing.
Over the same period, recent EEA immigrants have on average contributed 34% more in taxes than they have received as transfers. Recent immigrants from countries outside the EEA have contributed 2% more in taxes than they have received as transfers.
In contrast, over the same period, the total of UK natives’ tax payments were 11% lower than the transfers they received.”
The authors described their work as based on “precise” and “robust” estimates, unlike many previous attempts to quantify the economic impact of immigrants.
What the report really shows
Critics of the discussion document pointed out that it was impossible to square these conclusions with the data given in the study which in reality showed that:
Between 1995 and 2011 the fiscal cost of migrants in the UK was at least £115 billion and possibly as much as £160 billion according to CReAM’s own figures
The report claims that migrants who arrived in the UK since 2000 had made positive contributions throughout the period from 2001 to 2011. But the figures in the paper show that the contribution from these recent migrants was negative in each year after 2008.
The following bar chart is taken from CReAM’s own report and clearly shows a net annual cost of migrants.
The authors also claimed that between 2001 and 2011 recent migrants from Eastern Europe had made a net contribution of £5 billion. But this estimate is the highest of four estimates based on different assumptions and the £5 billion figure is their most optimistic. All four alternative scenarios were lower – as little as £0.066 billion – a sum within the margin of error of such calculations.
The bottom line was, quite simply, that the authors had failed to point out that – on their own findings – there was no positive fiscal impact from migration in any year from 1995 to 2011.
As a result of widespread criticisms, the authors changed their final report – but not by much. They dropped their claims to be “precise” and “robust”. But the introduction to the final paper still states that EEA migrants have made a positive contribution and that non-EEA migrants have made a negative contribution. This fails to make clear that the non EEA negative contribution was nearly thirty times greater than the EEA positive contribution, and that the overall fiscal cost during the period resulting from immigration to the UK was – on their own calculations – more than £115 billion.
More recent findings
Since the original CReAM report with its inexplicable failure to point out that immigration has cost Britain many billions, there have been three more recent attempts to measure the cost and benefits of immigration. All show the same finding – that immigration costs the UK many millions each year.
Major recent studies have assessed the net fiscal impact of migrants in the UK over different but recent periods. The OECD found an average annual net fiscal cost of £4.3 billion in the years 2007 to 2009. Thus, on average, migrants paid £4.3 billion less in taxes than they received in benefits and services.
Dustmann and Frattini of CReAM looked again at the single financial year 2011/2012 and this time found that all migrants were a net fiscal cost of £14.8 billion.
Using similar methodology to CReAM, research by Migration Watch UK found that all migrants were a net fiscal cost of £13 billion in 2014/15.
None of the studies referred to here has attempted to estimate the effect that immigration has had on infrastructure and public services, in areas such as health care, housing and education where, clearly, additional costs are being incurred because there is a continually increasing number of people requiring these services, none of which is keeping pace with demand.
What conclusion can we draw from this? It seems certain that those who claim immigration is a net financial benefit to Britain are mistaken in their belief and that immigration has cost Britain between £115 billion and £160 billion over the past twenty years.
Is there an explanation for Dustmann and Frattini failing to draw attention to their key finding of the cost of immigration to Britain of many billions, even when the mistake is pointed out to them? Of course, we all make mistakes and academics are no exception. Indeed Professor Dustmann made a very similar slip of the pen in 2003 when, with others, he wrote a study for the Home Office entitled The Impact of EU Enlargement on Migration Flows, in which he predicted that, between 2001 and 2010 immigration to the UK would rise to about 100, 000. In fact it increased more than five-fold to half a million.
In completely unrelated news comes the press release issued by UCL on 17 February 2016 entitled “UCL excels in securing EU research funding”, in which the university actually boasts.that it is the UK’s most successful university at securing EU cash. The press release reads:
“UCL has retained and strengthened its position as the top performing university in Europe in the major EU funding scheme Horizon 2020, securing more than €103 million so far.
In another significant funding success, UCL researchers have recently been awarded nine highly prestigious European Research Council (ERC) Consolidator Grants, totalling around €15 million and placing the university as the second-placed higher education institution in Europe for number of grant awards under this scheme.
UCL has also been awarded 27 Marie Curie International Fellowships, worth around €6 million.”
Recent immigration to the UK: New evidence of the fiscal costs and benefits
Migration Watch UK ‘An Assessment of the Fiscal Effects of Immigration to the UK’, March 2014,
Nigel Williams, ‘Responding to ‘the Fiscal Effects of Migration to the UK’, December 2013,http://www.civitas.org.uk/pdf/RespondingtotheFiscalEffects.pdf
Mervyn Stone, ‘Plain Assumptions and Unexplained Wizardry Called in Aid of ‘The Fiscal Effects of Immigration to the UK’, December 2013
Robert Rowthorn ‘A Note on Dustmann and Frattini’s Estimates of the Fiscal Impact of UK Immigration’, April 2014 http://www.civitas.org.uk/pdf/rowthorndustmannfrattini.pdf
Robert Rowthorn ‘Large-scale Immigration-Its economic and demographic consequences for the UK’, August 2014 http://www.civitas.org.uk/pdf/LargescaleImmigration.pdf