Coffee House

Immigration and the cost of living

31 July 2012

31 July 2012

The average disposable income is at its lowest point since 2003, according to figures released this afternoon by the Office for National Statistics. The statistics for the first quarter of this year show that take home income was an average of £273 a week, while real incomes per head fell by 0.6 per cent to £4,444 in Q1, which is the lowest since 2005.

The ONS points to rising prices as the primary cause of these falls, and there are obvious points to be made here about the cost of living. It’s currently one of the major reasons voters are giving for turning away from the Conservative party, and Labour’s Chris Leslie has already used the ONS’ stats to attack the government’s tax and benefits policies. He said this afternoon: ‘These figures show the harsh squeeze facing families and pensioners, which the government’s unfair policies are making worse. While millionaires will soon get a tax cut, millions of people on middle and low incomes are paying more because of the rise in VAT and cuts in tax credits.’

But there’s also an interesting paragraph in today’s ONS report about one of the causes of this drop in disposable income. It says:

Subscribe from £1 per week

‘Finally, sustained population growth led to incomes being spread across a greater number of people, and therefore further reduced the growth of actual income per head over the period.’

The Home Office has been quick to point out that population growth is largely fuelled by immigration, and is arguing that today’s figures therefore undermine the arguments that the pro-immigration lobby make that high immigration leads to a stronger economy. Damian Green put out a statement saying this:

‘ONS have today confirmed that the population growth caused by Labour’s uncontrolled immigration has reduced incomes. This Government is reforming all routes of entry so we can bring net migration back down to sustainable levels in the tens of thousands. Labour have opposed all our reforms and Ed Miliband still refuses to admit that immigration was too high when he was in government.’

Note, though, that ministers are not explicitly linking the Conservatives’ drive to cut net migration with the cost of living. Though the two issues are vote-winners, combining them would be too fraught with political difficulty: ministers will rightly want to steer clear of any statements that suggest they are pointing fingers at immigrants for ‘stealing our disposable incomes’.

More Spectator for less. Subscribe and receive 12 issues delivered for just £12, with full web and app access. Join us.

Show comments
  • downwithneoliberalism

    Last night I watched a documentary about shoplifting which has increased during the recession. The shoplifters who were interviewed claimed work no longer pays. Why does work no longer pay?

  • downwithneoliberalism

    I have been banging on about this obvious fact for the last 10 years after Labour opened the door to the world. Obviously the closeted elite and to an extent middle classes were protected from this income fall. Put simply the economic immigration to the UK in the naughties lowered wages and increased rents. This affected the poor first, after the bust of 2008 more people were affected and the middle classes started to suffer. No one cared about the nasty little chavs because they were demonised by society with hard working immigrants held up as the new heroes.
    I’m really glad to see articles like this coming out now, showing people who live in liberal fantasy land the true damage immigration has done to the UK.

  • Hexhamgeezer

    When the self loathing stooges like Straw, Blair and Brown came up with the idea of ‘rubbing the right’s face’ in diversity what the spineless sh!tes really meant was ‘rubbing the white’s face in it’

  • Justathought

    At Cabinet on 3rd February 1954 the then PM discussed the attraction of the welfare state as one of the negative drivers of immigration. Then as now Sir Winston identified that strict immigration controls would offend the Liberals. With the passage of time the issue is not the colour of the immigrants.

    Christians are being persecuted in countries that have been liberated by the Arab spring and the media has been silent. It is defacto religious clensing. The brotherhood demand superiority not co-existance. Even though they have donned their suits and trimmed their beards and speak softly, the prognosis for the Christians is determined. The thought that that mindset exists in some quarters of the immigrant population here is simply too awful to contemplate much less discuss. To address it as simply an economic issue is verging on the bizarre.

    The threat from Iran has been sidelined because it is politically inconvenient to take action before the US Presidential election while all the time the Iranians build their weapons of mass destruction.

  • Gerry Dorrian

    This argument has been put forth for years, but the Labour Paty was running of ideology. We need some degree of exchange of people to facilitate free movement of goods and ideas, but what we have in reality is people picking up part of their home countries and bringing the pieces here. That’s not immigration, it’s colonialisation. However, I suspect the real reason behind the ONS press release is to convince former Tory voters that the Lib Dem tail isn’t wagging the Tory dog any more. Before I swallow that I’ll need to see real results – as well as a fall in migration, a prosecution of the G4S guard who called the soldier a baby-killer at the Olympics would help.

  • Daniel Maris

    Well every time a Spectator commentator has referred to GDP growth, I have pointed out that if you take in an extra 250,000 people every year, then at a minimum you need to grow another 0.5% just to stand still. Has any Spectator commentator ever picked up on that blindingly obvious point? No! You had to wait till the ONS told you it was so!
    Sorry, but I find it frustrating that no economics commentator in any part of the media has even touched on this up until now.
    Why the government are trying to make it “their” issue I don’t know – they are letting in just as many people, probably more than Labour and the Lib Dems are positively keen on immigration.
    One obvious conclusion from this is that we need to have the per capita GDP figure published at the same time we have the global GDP figure published. Then people will begin to understand that we are not being enriched by mass immigration.

    • Noa

      Well said Daniel.

    • tele_machus

      Danny boy your simplistic economics fly in the face of the facts
      You too will have read last weeks analysis showing we need immigration for growth
      There are also analyses projecting progressive GDP contraction as the birthrate continues to fall and they begin to deny immigration
      wise up

      • Fergus Pickering

        Tell me, old son, how criminal Somalis help in the dash for growth.

        • Daniel Maris

          They have increased our kat imports one thousand fold – will that do? :)

      • alexsandr

        we don’t need more immigration. we need to get those that are here now working first.

      • Daniel Maris

        Tele –
        I generally try avoiding responding to your posts which are more slogans than reasoned argument, however you are claiming evidence in favour of mass immigration.
        Of course you may get growth – of a kind – with mass immigration. You will perhaps get some increase in global GDP that wouldn’t otherwise be there, but the per capita figure – the figure that matters to individuals – goes down. Also the growth you get will be in capital expenditure (to build the housing and other infrastructure for your migrants) rather than in disposable incomes and will result in the destruction of our greenfield countryside in the south east.
        Morevover, the economic contribution of immigrants is always grossly over-inlfated because there will be a large minority of them who will be making huge amounts of make-believe money in the make-believe world of the London-based financial sector, which benefits a tiny corner of the country and sucks in yet more immigrants to clean offices, clean homes, watch undergound car parks and so on. Their mega salaries bring the overall average up.
        None of the analyses you are touting really define the costs of immigration. I defy you to show me one study that has a debit entry for the 14 Female Genital Mutilation clinics now required in the NHS. That of course is just one example of the debit side.
        We don’t need millions of migrants – they have children who themselves require an army of social workers, health workers, teachers and so on to look after them.
        In any cases over the last 20 years the number of people aged over 90 only increased about 80,000 if I recall correcty. It’s not a crisis. It certainly doesn’t require the importation of 5 million new citizens (not temporary workers).
        Another point: you are completely underestimating the effects of robot technology. Amazon is already in the process of fully automating its shelf-stacking and picking. Honda have produced an amazing robot called Asimo which can potentially take on lots of mundane tasks. Millions of workers are going to be freed up over the next 20 years to do the work of looking after the aged and infirm. The problem will be lack of
        employment opportunities not lack of people to do the work.

  • Allectus

    The economic benefits of mass immigration have been much exaggerated and the wider economic and social costs denied or downplayed by those with a vested interest – economic, political, (multi)cultural or demographic – in its continuance.

    Working immigrants tend disproportionately to take low-paid, low-skilled work, and so tend to take up jobs which might have been performed by the large pool of UK-born unemployed, whose benefits still have to be paid. Working immigrants also consume so-called “working welfare”, social housing and housing benefits, and place a heavy strain on other public services, such as health and education. And this is before we consider the strain that the cultural values of some migrant groups place on their host communities.

    Moreover, research published by University College London in June 2008 showed that unemployment rates for non-OECD male immigrants in the UK were “considerably higher” than those of OECD immigrants and native Britons. This is a fortiori true of poorly socialised fanatics from some war zone – with no English, no skills, and no assets, and hordes of economically inactive dependants – and also continues to be true, for example, of second and third generation immigrants from Pakistan, Bangladesh, the Caribbean and much of sub-Saharan Africa.

    Some immigration will always be necessary; but we should accept only those who bring wealth or who fill genuine skills-gaps, and they, their prospective employers or universities should be prepared to pay for the privilege of their residence, work or study permits.

    Then we’ll see how much they’re really worth to the economy.

  • Misty

    Instead of putting out press releases, maybe Damien Green should actually implement policies to stop or drastically reduce immigration. I personally support EU migration and think the UK should abide by the ‘free movement of people’ principle, however the two thirds who come from outside the EU are the ones who we need to really clamp down on.

    Phil Woolas wrote a good article in the Daily Mail about how this Government & Labour are not facing up to the immigration problem in any meaningful way:–tackle-immigration-lose-civil-liberties.html

    • Fergus Pickering

      Further to my remark about Somalis, ditto Romanian gypsies, and Irish gypsies come to that.. I think a racist immigration policy is required, don’t you?

    • dorothy wilson

      But wasn’t Woolas Immigration Minister under Labour? Talk about being two faced!

    • Mark Thompson

      Fancy a minimum wage job in Poland? Thought not.

  • Jim

    “ministers will want to steer clear of any statements that suggest they are pointing fingers at immigrants for ‘stealing our disposable incomes’.”

    Er, that’s exactly what Damian Green is doing when he says that “Labour’s uncontrolled immigration has reduced incomes”. It’s a nasty ploy from a party desperately seeking scapegoats for their own failures.

    • Nicholas

      No, the finger is pointing firmly at Labour and no amount of trolling in their favour will change that. New Labour’s immigration “policy” was both malignant and reckless.

    • Fergus Pickering

      Nasty, but true.

  • tele_machus

    This is a classic case of 2 and 2 make 5.
    I look at this post as a classic case of scaremongering that would not be out of place in British National Party Literature

    • Nicholas

      I look on this post as a classic case of trolling on behalf of the socialists who caused the problem in the first place. And your accusation is typical of the hyperbole and slander used to try and shut down debate. When you impose something unpleasant on a proud and independent people don’t expect them all to be happy about it.

    • Noa

      Your apologies and excuses won’t save the Left and Labour from being hoist, like the counter-revolutionaries they are, on the lamppost of infamy.

    • Dogsnob

      Rather, yet another – if lamentably late – recognition of the true facts, followed by horrified obfuscation from those who cannot face the fact that their sheepish belief in left-wing givens is now being shown for what it always was.

  • BalhamBugle

    The stagnation of average incomes has nothing at all to go with migration (which has more to do with uncontrolled lending and poor economic policies in most of the developed world). While immigration has increased population growth, it has also increased economic growth. Indeed, as most immigrants or of working-age, and are mostly working, the increase in the economy from their presence is greater than the increase in the UK population.

    • tele_machus

      We are actually fortunate that we have acquired skills expertise and intellect from round the world

      • anyfool

        What skills, what expertise and intellect do third world peasants bring to the table.

        • alexsandr

          and if they have skills surely they are better uses in their native country. Why do we have the right to import skilled doctors and nurses, for instance, from the 3rd world where their skills are sorely needed just because we cannot be bothered to train doctors and nurses here?

      • Dogsnob

        Yeah and we get to have a booming rise in cases of tuberculosis as well.
        What’s not to like?

    • Nicholas

      Utter rubbish and I am sick of hearing it from stupid lefties who have destroyed my country. Go away and peddle your obnoxious propaganda elsewhere.

      • BalhamBugle

        Amused to be called a lefty, I supposed there a first time for everything. Also, I’m not sure how something (immigration) that is pro-business, was supported by Milton Friedman (least we forget it’s 100 year since his birth) and is essentially equivalent to free trade is now socialist.
        But you could tell me why basic arithmetic and economics 101 is sudden propaganda? If you increase the numbers of workers in an economy, doesn’t the size of the economy increase?
        The damning fact about the last government wasn’t it’s migration policy, it was that there was little growth in the UK economy since the mid-2000s beyond migration.
        The damning (New Labour) fact is that the only source of significant economic growth in the mid to late 2000s was migration.

        • Daniel Maris

          The truth is that both capitalists and socialists support mass immigration. The former believe it increases their profits (which it does in the short term) and the latter see it as a recruting sergeant for their ranks (which it is to some extent in terms of voting, but they are at the same time importing people strongly opposed to their progressive values).
          You’ve got absolutely no evidence for your claims about the economic impact of mass immigration.
          Let’s test one simple point:
          Do you accept that each net immigrant has to be provided with housing, and their share of the health, welfare and transport infrastructure – but immediately, not having contributed to it over time ?

          • james102

            Yes, as I have written before the left (other than national socialists like
            the BNP) believe in open borders and to the free market right we are merely
            bipedal work units.

          • BalhamBugle

            Surely, if immigrants have an impact on profits (even in the short-term), then they have an economic impact? And is it worth pointing out that your test seem less to be about economics and more about a sense of fairness (as well as noting that most immigrants have contributed to our infrastructure both now and in the past, often directly as labour or indirectly as taxpayers).
            As for evidence on economic impacts of migration, I could suggest the November 2005 edition of the Economic Journal, as well as work at the Centre for Research and Analysis of Migration at UCL, or more broadly the work of David Card (Berkley) or George Borjas (Harvard). There’s plenty of analysis and evidence, whether you find it compelling after reviewing it is another question.
            But to return to the original point, the assertion that immigration had more than a marginal effect (either positive or negative) on the UK’s average income is facile. Fortunately or unfortunately, the factors that drive incomes, such as our skills, technological progress and enterprise, are primarily in our own hands.

            • Nicholas

              The part you are also ignoring is the impact on the indigenes. The government weasels out of this by failing to recognise the UN Declaration because it says it can’t decide who are indigenes here, after promoting and imposing multi-culturalism without consent. That multi-culturalism has undermined the sense of indigenous nationality, heritage and culture – deliberately so. English people are told, in effect, to host the arrival of hordes of foreign societies within a short space of time who import their languages, cultures, dress and racial/religious discrimination, who compete with them for houses, schools and medical treatment. Then the English are told that they are just one more culture within that multi-culti free-for-all and one that is often characterised in the most scornful tones as “white middle-class” or “Little Englanders”, etc. How can that be fair, or just or equitable? And the idiots who decided that really thought there should be no backlash, no ground swell of mightily pissed off Englishmen? And then, in a supreme act of the most staggering arrogance, they complain when those Englishmen get angry and call them racist, then impose repressive laws to shut them up? Outrageous.

        • Nicholas

          Immigration won’t be pro-business when infrastructure sustainability collapses and law and order finally break down. How is business in Mogadishu these days? The imperative was classic short-termism but the part you are wilfully ignoring is the Neathergate aspect – that mass immigration to “rub the right’s nose in diversity”. Where was the “pro-business” angle in that plan directly in breach of the UN Declaration on the Rights of Indigenous Peoples?

          Business have shown themselves utterly incapable of delivering balance here and immigration was just more exploitation, with a hefty side dish of benefit, er, I mean “asylum”, seekers from the Third World.

          Everything you write is eminently debatable, including Friedman, who also said:-

          “Why is it that free immigration (into the USA) was a good thing before 1914 and free immigration is a bad thing today? Well, there is a sense in which that answer is right. There’s a sense in which free immigration, in the same sense as we had it before 1914 is not possible today. Why not?
          “Because it is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both. If you have a welfare state, if you have a state in which every resident is promises a certain minimal level of income, or a minimum level of subsistence, regardless of whether he works or not, produces it or not. Then it really is an impossible thing.”
          And maybe you wouldn’t be called a lefty if you didn’t sound and smell so much like one. Or are you one of those Trojan Horse “reconstructed”, “modernised” Tories? You know, the ones who are socialists in all but name.

        • Allectus

          The dynamics of “open door” immigration has nothing to do with the free market and everything to do with social engineering by the left and political lobbying by special interest groups.

          Working immigrants tend disproportionately to take low-paid, low-skilled work, and thus rely on so-called “working welfare”, social housing and housing benefits, placing a heavy strain on other public services, such as health and education. Moreover, research published by University College London in June 2008 showed that unemployment rates for non-OECD male immigrants in the UK were “considerably higher” than those of OECD immigrants and native Britons, further swelling the welfare bill borne by the taxpayer.

          No wonder certain business groups were so enthusiastic about Labour’s “open door” immigration policy when they stood to reap the benefits, while the burden of its social and economic consequences fell mainly on others.

          Some immigration will always be necessary; but we should accept only those who bring wealth or who fill genuine skills-gaps, and they, their prospective employers or universities should be prepared to pay for the privilege of their residence, work or study permits. That way we can be sure that their presence will benefit everyone, not just the Labour Party, special interest groups, and corporate donors.

        • BalhamBugle

          “The part you are also ignoring is the impact on the indigenes.”

          Yes I am. That’s because I was commenting on the statistical sleight of hand attempted by Damian Green which should have been flagged by a enquiring journalist with any interest in either migration or economics. The Minister was linking the growth in population due to migration to the stagnation/fall in average (note not indigenous) incomes, which is only possible if the Minister conveniently forgets that immigrations contribute to the economy as well as the populous. As I assume that Green is reasonably clever, this strikes me as a deliberate misrepresentation of the statistics (and possible naivety by the Spectator journalist).

          The impact of immigration on the indigenous population is a more complex question which is probably beyond a blog comments section. For interest, my reading of the economic literature of that immigration as an overall positive impact on the country (both in terms of GDP and GDP per hd) as well as overall positive impact on average incomes (GDP per hd) of indigenous population (which is typically defined as British born). However, there can be sections of society which are negatively affected, and the negative impacts can be more focused and impact poorer people than the broader positive impacts. Effectively migration as the same economic effects are international trade. Moreover, immigration has a positive fiscal impact in the short-term and broadly neutral in the long-term, though that depends on how the children of immigrants (or more importantly mixed couples) are classified and there can again be local variations. There seems to have been little good analysis on social impacts. And, within a fairly small and open country like the UK, the main determinants of someone success, whether immigrant or indigenous, is their own ability and drive (which is further affected by background)

          • Nicholas

            “The impact of immigration on the indigenous population is a more complex question which is probably beyond a blog comments section.”

            Good. But where is it being answered at all, bearing in mind that the British government cannot define who are indigenous British, let alone English? This question appears to be being ducked on the basis that it raises further awkward questions about the multi-culturalism imposed on us that are always conflated with racism and/or xenophobia. I am an Englishman, born in England from many generations of English before me. Like every other national in the world I believe I have a right to a national identity that my government will value and protect. I don’t want to be an expat in my own country, thanks, just because a bunch of Labour politicians and bien-pensant Tories think it is jolly to enjoy vibrant multi-culturalism in London. The UN Declaration on the rights of Indigenous Peoples poses very serious questions for the British government and especially for New Labour 1997-2010. Those questions go unanswered and instead Englishmen are threatened with repressive legislation and being described as “extremists” or “radicals” in their own land.

        • Mark Thompson

          Size per capita? China has a massive economy, but I dont see their average wage being much cop. I couldn’t give a flying monkeys about absolute GDP.

    • Daniel Maris

      Your assertions are based on dodgy analyses that never include all the costs of immigration (net or gross). For instance, there are 14 FGM clinics within the NHS. How much do they cost to service per annum? That is an additional cost of immigration. How much does second language English teaching cost? How much does it cost to house an immigrant and their children in London and the South East?

    • TomTom

      Is that because an Immigrant buys more imports and more consumer goods or because he works for peanuts, claims no benefits and makes iPhones for export ?

      • james102

        And sends money, including part received in welfare, back to
        their home countries not to mention the £1billion a year spent as part of the
        so-called Equalities industry costs. (Ignoring for the moment the destruction
        of personal liberty this industry has been responsible for)

Can't find your Web ID? Click here