The news that net migration effectively halved last year, falling from 860,000 in 2023 to 431,000 in 2024, will have been received with relief in Downing Street. Is this anything to celebrate? Do we actually want fewer people in the country?
For a Labour party that now claims Reform is its main opponent, the answer is yes. The figures present an opportunity to follow in a long political tradition of taking credit for someone else’s numbers. Rishi Sunak was able to claim that he had reduced inflation, which had in fact been achieved by the Bank of England. Keir Starmer can now claim that he has steered Britain away from a period of exceptionally high net migration, which was largely achieved by James Cleverley, who as home secretary changed the rules on international students and care workers bringing their families to the UK.
The public, however, have a more balanced view. Most people are not really bothered by immigration in general, according to a poll published this month by British Future, which found that 50 per cent of people think it should be reduced overall, and 45 per cent don’t see a need to reduce it.
This is a reasonable summing up of the general underlying economic principle of immigration, which is that there is no country that produces much more intelligent or hard-working people than any other, and so the costs and benefits of more people arrive generally balance out. The high immigration of recent years has not caused a boom in the UK economy, nor has it crashed it. There are plenty of other reasons to desire immigration (or to want less of it) but in purely economic terms it tends to be neutral.
The British Future poll also shows that the public are much more concerned about irregular migration, however, and this is rational. Among respondents who wanted immigration reduced, by far the most popular choice as a priority was the reduction of “irregular migration, such as on small boats across the Channel”.
The number of people who arrive by irregular migration is a lot smaller – nearly ten times smaller – than the number of people arriving by regular routes. But again, it is fair to say that the public is making a rational choice here, because irregular migration does not seem to be falling, and it has very different results.
The number of people arriving in the UK on small boats has had a much higher growth rate than the number of people arriving by the usual routes. Before 2018 it was a very rare phenomenon, but the numbers have increased dramatically over the last five years and do not show signs of slowing. The number of small boats arrivals in the first quarter of this year is the highest for the first quarter of any year on record. The pace of this change is clearly part of the reason it concerns the public.
But in purely economic terms, the people who arrive via irregular migration – almost all of whom go on to claim asylum – also face significant economic challenges. Regular migrants earn similar amounts to everyone else (with differences between the most skilled workers and people in lower-skilled occupations, as with people who already live here). People who have arrived in the UK as asylum seekers have the lowest employment rate of any migrants.
In 2022, less than half (48 per cent) of non-EU migrant women who had arrived in the UK by the asylum route were in work, according to Oxford University’s Migration Observatory, and less than two thirds (64 per cent) of non-EU migrant men who arrived by asylum were in work.
The direct cost of processing asylum claims, and housing people who are making asylum claims, is also a very significant and rising cost. It is the source of a large chunk of the “black hole” in day-to-day spending that was uncovered by Rachel Reeves’s public spending audit last July. The cost of supporting asylum seekers had risen seven times over in three years, to £6.4 billion in 2024-25.
Much of this goes on the spiralling cost of asylum accommodation. According to the National Audit Office, the UK is on track to spend £15bn over ten years with just three companies that provide asylum accommodation. The UK will be spending about the same amount on this housing as it is on subsidising renewable energy through its Contracts for Difference scheme.
The overall cost of processing an asylum claim in the UK was found to be £106,000, according to the Home Office’s impact assessment for the Illegal Migration Bill in 2023, but this cost was also forecast to rise to £165,000 over four years. At the current rate of income tax on the current median income, this represents more than 33 years of income tax contributions.
This is, of course, why the tax system exists. According to the Institute for Fiscal Studies, 64 per cent of the population pays out more in tax than they receive in social security in a typical year. The social safety net is underwritten by people who are healthy and in work. People seeking asylum have very good reasons why they might not be able to work, or why their capacity for work might be limited. These are people who have fled war and famine; as a result they can face a higher likelihood of physical and mental health problems than the general population, and having been displaced they face additional boundaries, such as language and social connections. The UK and other countries clearly have a responsibility to offer asylum to people who need it. But it is now happening at a scale that has a greater fiscal impact than ever before, and the public concern around irregular migration seems economically rational.
[See also: Keir Starmer’s “island of strangers”]
Content from our partners
Related
