Government measure of effects of immigration is 'preposterous and irrelevant', says committee chair

A Lords committee has rejected the government’s argument that a high level of net immigration is economically beneficial.

The Economic Affairs Committee says the economic effects of immigration should be judged by its income per head of the population rather than its impact on GDP – the measure currently used by government. By this standard it argues that immigration has had a neutral effect on living standards.

It also says immigration increases the size of the economy but does not affect the level of vacancies; will lead to a high number of elderly people rather than solving the pensions crisis; and will lead to higher house prices.

The report recommends that the government adopt an explicit target range of net immigration, provide clarity on the points-based immigration system, review its immigration policies, and do more to enforce the minimum wage.

Lord Wakeham, chair of the inquiry, said: “The government’s use of impact on overall GDP as the key measure is preposterous and irrelevant because it does not reflect the economic well-being of the existing population.

“We feel the time is now right for the government to review the implications of its projection that future net immigration will be 190,000 people a year. Such a high level of immigration, and consequent rise in population, has major impacts in a range of areas from demand for housing to the use of public services. These impacts should be recognised and examined.”