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by Bob Lyddon

EU ECONOMIC MIGRATION represents a £30 billion per annum cost to the UK. Since there are estimated to be 2 million EU migrant workers in the UK and 1 million non-working dependents, and average UK public spending per head is £10,500, so the consumption of UK public services by the 3 million citizens of other EU Member States comes with an annual cost of £31.5 billion.

The new jobs created during the UK’s so-called recovery from the 2008 economic crisis are concentrated in low-wage/low-skill jobs, and specifically in the “tax-efficient” UK supply chains of multinationals. This means there is no Corporation tax take for the UK, any net VAT belongs to Brussels, and the payroll taxes can be as little as £500 per employee or indeed, depending upon personal circumstances, non-existent.

Two million employees delivering £500 each means a tax take of just £1 billion per annum, to set against the £31.5 billion cost of providing public services. The take-home pay of these employees is not such as to create any meaningful blip upwards in UK economic growth, so in effect the UK is simply subsidising multinational companies and their EU migrant workforce to run a business model that drains money out of the UK.

The UK government seems to be blissfully unaware of this, and continually postpones the date when the public spending deficit is eliminated and the national debt starts to come down, whilst rejoicing at the anaemic level of GDP growth but the strong growth in numbers of jobs.

The point is that the public finances – and the UK as a whole – would be far better off if these jobs did not exist at all. A £30 billion annual cost is just under half the annual public spending deficit of £68.2 billion. Add the lost taxes due to EU “tax-efficient” business models and our EU Member State cash contribution – each being £10 billion per annum – and we have £50 billion per annum as a potential saving.

Brexit provides a perfect opportunity to both put a stop to the business models that drain money out of the UK into other EU Member States, and to introduce a migrant worker regime that works for the country as a whole and not just for the employer and employee. UK sovereignty means that the UK public interest in this area is no longer automatically overridden by the opinion of the EU authorities as to the interests of the EU as a whole.

Over the same period as the Institute for Fiscal Studies has predicted a £60 billion ‘black hole’ in the public finances due to Brexit, there is actually a £250 billion opportunity. What it needs is determination and leadership to grasp it.

For the full Brexit Report ‘How the £30bn cost of EU migration imperils our pensions & benefits’ that this article is based on please go to the pdf here.

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