EU migrant workers contribute £2,300 more per year to UK than average British citizen, study reveals

'If the UK’s new relationship with Europe involves reduced migration, this analysis suggests the tax burden on others will have to rise'

Taxes will have to rise if Brexit brings strict curbs on EU workers because they pay far more to the public purse than British-born residents, a study warns today.

Migrants from the EU contribute £2,300 more to the exchequer each year in net terms than the average adult, the analysis for the government has found.

And, over their lifetimes, they pay in £78,000 more than they take out in public services and benefits - while the average UK citizen’s net lifetime contribution is zero.

Oxford Economics, which carried out the assessment, said this meant the value of EU citizens to the economy was the equivalent of slapping 5p on income tax rates.

“When it comes to the public finances, European migrants contribute substantially more than they cost, easing the tax burden on other taxpayers,” said Ian Mulheirn, the lead researcher.

The conclusions were published as the government’s advisers called for the post-Brexit immigration system to make it easier for higher-skilled workers to come to the UK, while limiting access for those in lower-skilled jobs.

The Migration Advisory Committee (MAC) also said EU nationals should be subject to the same rules as migrants from the rest of the world after free movement ceases to apply.

However, it recommended that policy only if it was decided “in isolation”, because immigration was not part of the negotiations with the EU.

On the huge value from EU workers, Mr Mulheirn added: “What’s more, this strongly positive average contribution persists over a lifetime: most migrants arrive fully educated, and many leave before the costs of retirement start to weigh on the public finances.

“If the UK’s new relationship with Europe involves reduced migration, this analysis suggests the tax burden on others will have to rise.”

“What’s more, this strongly positive average contribution persists over a lifetime: most migrants arrive fully educated, and many leave before the costs of retirement start to weigh on the public finances.

“If the UK’s new relationship with Europe involves reduced migration, this analysis suggests the tax burden on others will have to rise.”

The conclusions were published as ministers received the long-awaited MAC report, to help steer a decision on how to replace freedom of movement rules after Britain leaves the EU, including Oxford Economics’ analysis.

There has been growing criticism of Theresa May for failing to put forward a new immigration policy in more than two years since the Brexit referendum.

The policy remains a blank piece of paper despite being a crucial part of the Brussels negotiations, with the UK likely to have to agree to liberal rules to secure a preferential trade deal.

In recent days, both the prime minister and Sajid Javid – a more hardline Home Secretary than his predecessor, Amber Rudd – have both suggested there will be no preference for EU workers.

However, ministers have also conceded that compromises on migration will be necessary in all future trade deals – including with the EU.

Mr Mulheirn said the Oxford Economics study, requested by MAC, was the first measure of the total contribution of the “class of 2016” migrants who arrived in the UK over the entirety of the expected stay.

It calculated that non-European migrants will make a positive net contribution of £28,000 - £50,000 less than the £78,000 for EU arrivals – when the budget is balanced.

In total, the net benefit from the class of 2016 was expected to be £26.9bn, with £19.3bn coming from EU migrants and the remaining £7.5bn from migrants from the rest of the world.

On an annual basis, while EU migrants contribute £2,300 more than the average, each non-European migrant contributed £800 less than the average – and each UK‑born adult £70 less.