Epq is the economy in the uk affected by rising levels of immigration?

Alvaro Ferreira Da SilvaCandidate Number: 4928Centre Number: 56355Alvaro Ferreira Da SilvaCandidate Number: 4928Centre Number: 56355

Extended Project Qualification

What is the truth behind immigrants, a threat to the economy?[footnoteRef:1] [1: http://www.lbc.co.uk/watch-nigel-farage-v-james-obrien-live-from-1130-90532]

Table of ContentsGlossary3Introduction4Findings6

Unemployment6Crime12Education15Housing19

Analysis and Concluding Remarks22

GlossaryAbsenteeism A habitual pattern of absence Aggregate Demand AD=G+I+C+(X-M) - Total planned expenditure in the economy known by Government expenditure + Investment + Consumer Spending + (Exports Imports)Aggregate Supply The total value of goods and services supplied in the economyBalance of Payments A record of the financial transactions over a period of time between a country and its trading partnersEconomy Growth - Growth in the economy consists mainly of consumer spending and investmentFactors of Production Land, Labour, Capital and EnterpriseFDI Investment in the domestic economy in new manufacturing plants by foreign multinational companiesFull Capacity Is when the economy operates at its Productivity Frontier (PPF)Inflation A sustained increase in the general price levelLong Run Period of time during which all factors become variable and the scale of output can changeLong term trend rate of growth The average rate of economic growth sustained over a period of timeMarginal External Benefit - The spill over benefit to third parties of an economic transaction Marginal Private Benefits The benefit to an individual or firm of an economic transactionMarginal Private Costs The cost to an individual or firm of an economic transactionMarginal Social Benefits The full benefit to society of an economic transaction including private and external benefitsMarginal Social Costs The full cost to society of an economic transaction, including private and external costsMerit good merit good are those goods and services that the government feels that people will under-consume and which ought to be subsidised or provided free at the point of use.Negative Externalities Costs imposed on a third party not involved with the consumption or production of the goodPositive Externalities A positive spill over effect to third parties of a market transactionRecession Negative economic growth over two consecutive quarters Short Run Period during which fixed costs and the scale of production remained fixedSocial Mobility Is the movement of individuals within the given category in societyUnderlying trend rate of growth The average rate of economic growth sustained over a period of timeWelfare Loss Reduction in consumer and producer surplus when output is restricted to less than optimum level

Introduction

Immigration to Britain has been an on-going process for centuries, but possibly became more apparent with the need for a larger workforce following World War II. The first arrivals of immigrants coming from commonwealth countries are now well-established British citizens (BBC History 2002)[footnoteRef:2]. More recently from 2007 to 2013, with Romania and Bulgaria joining the EU, the number of immigrants coming to the UK was five times greater. However by the last quarter of 2013 the number of immigrants entering the UK is slowing down, linked to the fall of 4,000 in Romanians and Bulgarians working in the UK[footnoteRef:3]. [2: http://news.bbc.co.uk/hi/english/static/in_depth/uk/2002/race/short_history_of_immigration.stm#1946] [3: The Economist Issue 20, Page 28 No flood after all]

Immigration is becoming a political hot potato because political parties like UKIP have managed to increase awareness in the media of the problems rising levels of immigration creates in the economy. Nigel Farage quotes rising levels of immigration is a threat to the economy[footnoteRef:4]. [4: http://www.lbc.co.uk/watch-nigel-farage-v-james-obrien-live-from-1130-90532]

However, it is difficult to ascertain how much immigration has risen by. Migration Watch UK believe that the scale of net inward migration is now so great as to be contrary to the interests of all sections of our community. The latest figure shows that 260,000 people settled in the UK in 2014 (Migration Watch UK 2014)[footnoteRef:5]. [5: http://www.migrationwatchuk.org/latest-immigration-statistics]

This report focuses on the impact of rising immigration on Eastbournes economy. This town has been chosen because it is appealing to foreigners given its southern location.

The general public have become more aware of these issues as evidenced by a recent questionnaire which highlights that 46% of those sampled are aware of at least one advantage of immigration in the economy, and 61% are aware of at least one disadvantage. The most common factors mentioned were unemployment, crime, education and housing.[footnoteRef:6] [6: Appendix A]

The questions that this report looks to answer are:

Does immigration cause unemployment? Has immigration led to rising levels of crime? Are schools experiencing overcrowding as a result of immigration? Is there a shortage of housing and an increase in the cost of housing because of immigration?

These factors will be explored in more depth in the findings section that follows.

Findings

As explained in the introduction the questions that will be explored are:

Does immigration cause unemployment? Has immigration led to rising levels of crime? Are schools experiencing overcrowding as a result of immigration? Is there a shortage of housing and an increase in the cost of housing because of immigration?

UnemploymentIn the UK the unemployment rate is 5.8% (December 2014) compared to earlier in 2014 when the rate was higher at 7.1% (ONS Statistics 2015)[footnoteRef:7]. Eastbournes unemployment rate is slightly higher than the national average at 6.6% in December 2014. [7: http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/january-2015/statistical-bulletin.html*All words in bold are defined in the glossary Page 3]

Figure 1 shows net migration and % unemployment from 2005 to 2013, suggests that there is not a correlation between rising levels of immigration and an increase in unemployment in Eastbourne.Net Migration figures and % Unemployment in Eastbourne from 2005-2014Figure 1

Between 2008 and 2009 unemployment was high at 7.6% and 7.1%. Therefore, unemployment increased by 0.7%. However, net migration was negative for both years. This suggests that immigration does not increase the rate of unemployment in Eastbourne. On the other hand, the UK was impacted by the global recession* at this time, which could be the cause for decreasing rates in net migration and increasing rates in unemployment from 2007 to 2008 as the underlying trend rate of growth in the economy declined over two consecutive quarters.

In Eastbourne the unemployment rate is above average at 6.6% therefore an estimate of 6,674 people are unemployed as of the last Census in 2011.

Overall, the figures show no link between immigration and unemployment. Stephen Lloyd, Eastbournes MP agreed with this conclusion. I do not believe that locally more people are unemployed due to immigrants working in Eastbourne. The most recent unemployment figures show that the unemployment rate is down to 6.6%.[footnoteRef:8] [8: Questionnaire completed by Eastbournes MP Stephen Lloyd November 2014]

Other research undertaken for this project reveals that current immigrants who work and live in Eastbourne work in low skilled jobs in the cleaning and caring sector, regardless of the expertise they might have acquired in their country of origin with professional qualifications, mainly because of their poor language skills or the shortage of jobs in certain sectors. This is due to the limited variety of jobs that Eastbourne offers.[footnoteRef:9] [9: Interview with Servest Primark workers 9th November 2014]

Servest a cleaning agency that provides retailers with cleaners employs mostly immigrants because of the high level of productivity in exchange for a minimum wage. 8/10 cleaners at Primark Eastbourne are foreign-born. One of the Servest employees states that he has an engineering degree back in his home country (Poland). As a result of high levels of unemployment and low living standards he decided to migrate to Eastbourne where living standards are better.[footnoteRef:10] [10: Interview with Servest Primark supervisor and polish employee 9th November 2014]

In the longer term these immigrants with industry experience and/or professional qualifications could benefit Eastbournes economy, with a rise in social mobility. Tutor2u released a useful study that shows that immigrants occupy a fifth of jobs within important manufacturing firms that have helped reduce the UKs balance of payments in the aerospace, engineering and IT industries because of the lack of skilled British graduates[footnoteRef:11]. Once language barriers are broken, the likelihood of social mobility would be expected to rise as foreign workers start to look for better-paid jobs leaving those low skilled jobs to incoming immigrants. [11: http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-mind-the-gap-skills-shortages]

A questionnaire carried out for this investigation indicates that 51% of those sampled do not think that immigrants working in Eastbourne affect opportunities for local residents to become employed. Another 22% agreed that possible job vacancies get taken by immigrants and therefore affecting the chances for local citizens to get a job. The rest of the respondents (27%) neither agreed nor disagreed.[footnoteRef:12] [12: Appendix A]

According to Eastbournes MP, Stephen Lloyd, immigrants add prosperity and growth to Eastbourne town and the UK as a whole. An increase in the foreign-born population living in Eastbourne has made the town more culturally diverse. This has led to a boost in business activities because of the increase in local shops, for instance Polish grocery stores and Turkish take-away restaurants. Stephen Lloyd is suggesting that the number of jobs created by a boost in economic activity is greater than the number of jobs taken by immigrants.

On the other hand, the UKIP political party in Eastbourne suggests that they could reduce unemployment even further if there were tougher policies to control the number of immigrants allowed in the town and the UK in general[footnoteRef:13]. Having such policies would theoretically reduce unemployment in the short term because there is an assumption that available jobs will be taken by UK citizens and the economy will operate at full capacity. [13: http://www.ukipeastbourne.com/local-policies/]

UKIP could arguably be taking too much of a short term view on immigration. The Economist found that Britains population would be flatter without immigration; from 1995 to 2015 there would have been an increase of 2 Million in comparison to the 19 Million when we include those that immigrated from EEA (European Economic Area) and non-EEA[footnoteRef:14]. However, immigrants are on average, better educated than natives. This is suggested by a recent study by Christian Dustmann and Tommaso Frattini of UCL and University of Milan[footnoteRef:15]. This is a gain because with an increase in population many would assume the government would have to increase spending on Training and Education. However, Britain could benefit from their skills without investing significant amounts. [14: The Economist, November 2nd 2013 Issue 44] [15: Christian Dustmann UCL and Tommasso Frattini University of Milan]

On the other hand, Stanford University released a study that examines how different regions attain economic growth[footnoteRef:16]. This study contradicts Dustmann and Frattinis argument because it mentions that lowering population growth contributes to a greater standard of living. They are suggesting that falling population levels (rather than rising population levels) increase social mobility and therefore lead to a healthier economy. The main worry in Eastbourne is for the immigrant population to become a burden that is difficult to employ and educate, some people already believe this is currently happening. [16: Stanford Centre for International Development Working Paper No. 478 Enjun Xia - August 2013]

Stanford University explains that a lowering of the population would be better for the economy because there is less labour competition so businesses would be forced to provide better working conditions and wages. Therefore, unemployment in the economy would only count for disabled individuals or people who would rather live on welfare payments.

A contrasting economic theory is that immigration could at times increase wages because some industries are prepared to pay a higher price for an immigrant worker if they are more highly skilled. However, low-skilled construction related jobs experience the opposite, where a large labour supply brings wages down, and even though businesses benefit from cheap labour, immigrants will eventually have children resulting in the government having to increase spending in education and on other public services so that in the long term an increased number of jobs are available in the public sector at least.

UKIPs proposed policy to implement tougher border controls would have a minimal positive short term effect in that more jobs would be available for British workers but the availability could depend on the levels of investment that the UK has experienced through FDI. The food industry in Eastbourne has soared since more immigrants have moved to the area. It is noticeable that the number of jobs available has increased because unemployment levels in Eastbourne have decreased in the past 2 years. The secondary sector has experienced a shortage in labour supply due to the lack of skills required. Most foreign workers who move to Eastbourne are more likely to get a job in the secondary sector because according to local Entrepreneur Colin Basset foreign workers are preferred to British workers. Colin Basset says that there isnt a concentration of foreign or British workers, he also states that he has previously observed that foreign workers have a higher productivity, higher motivation and less absenteeism.[footnoteRef:17] [17: Questionnaire sent to Colin Basset via Email November 2014]

Figure 2 illustrates how immigration stimulates growth. An increase in population, for example more immigrants coming to the UK, could be followed by an increase in aggregate demand (made up of: government spending, investment, consumer spending and net exports), consumer spending and investment being the largest components. At first the economy would be operating at QP. Theoretically, if immigration increased aggregate demand (AD) would increase from AD to AD1 with an increase in output from Q to Q1 and inflation increasing from P to P1. However this is only likely to happen in the short run. An increase in AD means unemployment is low and the economy is reaching its PPF (Productive Efficiency Frontier). Once the economy has reached this point it is overheating and there is no available factors of production to be exploited. Eastbourne has invested heavily in education with apprenticeships schemes where 184 apprenticeships were created in 2014.[footnoteRef:18] This should have led to a rightward shift in the LRAS curve shifting from LRAS to LRAS1 bringing the economy to P2Q2 where the available output in the economy is higher and prices are back to P2 in the long run. [18: http://www.stephenlloyd.org.uk/181_apprenticeships_in_100_days ]

Keynesian Diagram Aggregate Demand Aggregate Supply model Figure 2

Overall, immigrants stimulate growth because greater levels of investment leads to greater consumer spending meaning that aggregate demand increases accordingly to aggregate supply as real national output is higher.

CrimeThe most recent figures from September 2014 show that Eastbournes crime rate, based on recorded crimes per 1,000 people, was 18% in comparison to September 2013 when it was 14% and in September 2012 17%[footnoteRef:19]. [19: http://www.police.uk/sussex/EE1NH12/performance/ ] Net Migration figures and Number of Crimes in Eastbourne from 2005-2014

Figure 3

As illustrated in Figure 3 the numbers of crimes committed and net migration in Eastbourne have both decreased in the past 10 years. Net migration has decreased by 80% from 04/05 to 13/14 and the number of crimes has fallen by almost 70%. Therefore, this information suggests that there is a relationship between falling immigration and a decrease in crime.

However, these figures do not take into account other factors such as the reasons why these crimes occur. For example, the London bombings in 2005[footnoteRef:20] could have increased the tension between foreigners and Britons due to biased media reports emphasising the link between immigrants and terrorist attacks. This example only pertains to London, but other UK towns could have had the same impact due to the fear in society, as there was a second attempt for a terrorist attack during the same year. [20: http://news.bbc.co.uk/1/hi/uk/4543608.stm ]

In an interview with Eastbournes MP Stephen Lloyd, he confirmed there isnt a link between immigration and rising crime and even though most immigrants choose to live in the Devonshire ward (i.e. the town centre which has the highest crime rate in Eastbourne) we have coped well with the challenges this has brought, because we cant generalise that most crimes are committed by foreigners if the town centre is a central place for the whole of Eastbournes population. [footnoteRef:21] [21: Questionnaire completed by Eastbournes MP Stephen Lloyd November 2014]

Figure 4 shows a map of Eastbourne and its different wards. The last census in 2011 highlights the wards inhabited by a larger proportion of foreigners. Between those, Devonshire Ward (Town Centre and Seaside) being the most populated. 30% of Eastbournes crime occurred in the town centre and 8% in Seaside. Considering Seaside is the ward with the second highest foreign-born population the crime rate is relatively low compared to other wards such as Hampden Park and Shinewater where 11% of the towns crimes occurred[footnoteRef:22]. [22: http://www.ukcrimestats.com/Neighbourhood/Sussex_Police/Town_Centre_(Eastbourne) ]

Eastbourne Map.Figure 4

Furthermore, according to researchers at LSE, despite the rising levels of Eastern European migrants England has seen a drop in property crime and there has not been an increase in violence[footnoteRef:23]. [23: The Economists December 14th 2013 Issue 50]

On the other hand, Nigel Farage (leader of UKIP) disagrees with this statement and says that immigration does have a negative impact on crime rates. During an interview by LBC (Leading Britains Conversation) he was asked what the difference was between having a group of Romanian and German immigrants as neighbours. Mr Farage replied You know what the difference is Would I be concerned? I think I would be[footnoteRef:24]. This statement is not only racist but it has definitely affected the way many Britons think about immigration. Some of them have started to think that they would not feel comfortable living next door to a Romanian family and therefore possible racist behaviour follows to crimes such as anti-social behaviour and retaliation from immigrants. He supports his argument by saying that 7% of all crime in Europe is caused by 240 Romanian gangs underlining the impact his remark had in society after it was all over the newspapers read by British society.[footnoteRef:25] [24: http://www.lbc.co.uk/watch-nigel-farage-v-james-obrien-live-from-1130-90532 ] [25: http://www.bbc.co.uk/news/uk-politics-27474099 ]

However, is Nigel Farages argument valid? The only newspaper that has written many articles regarding Romanian criminals and suspected crimes committed is the Express newspaper. Coincidently, Nigel Farage writes a column for this newspaper every week. There are no readily-available statistics to back up his argument. Furthermore, this information does not apply to Eastbourne or any other town in the UK because whats been seen in the news is a representation of UKIP views.

Education Its obvious that with an increase in population the UK will have to increase investment in Public Services. Many think that schools and other public services like the NHS are experiencing overcrowding as the UK population continues to increase. The general consensus is that immigration stretches these services. The Balance of Payments could be affected by overcrowding of public services because it would mean that the government has to increase investment in these services in order to expand and to be able to cope with the population growth. An increase in government spending generally means the government has to cut spending in another sector such as welfare payments which is what has been happening recently but not necessarily because the government needs to expand their services due to rising immigration.

UKIP launched their policies for the election in 2015. One of them states Immigrants must financially support themselves and their dependents for 5 years. Including private education, private health care and private housing.[footnoteRef:26] Many now see this as a valid policy and what they forget is that immigrants also add to the economy when they pay their taxes. The UKs national debt will exceed 1.5 trillion by 2015; without immigrants the debt would cost each native 28,650. However, divided across Britains immigrants it decreases to 21,800 per person if immigration continues to rise at the same rate.[footnoteRef:27] [26: http://www.ukip.org/issues ] [27: The Economist Issue 44 November 2013 Page 29]

Education in the UK is known as a merit good an under consumption of a merit good such as education results in a welfare loss in the economy. Consumption of education as a service theoretically generates positive externalities, where the overall benefit for society (marginal social benefit) is greater than the benefit for each individual (marginal private benefit) Eastbourne counts with 23 primary schools, 7 secondary schools and 1 college. Eastbournes MP Stephen Lloyd was asked in a questionnaire if schools in Eastbourne were affected in any way because of immigration or experiencing overcrowding. It has been difficult in Bourne School for the last 15 or so years, but they have coped brilliantly[footnoteRef:28] he wrote. [28: Questionnaire completed by Eastbournes MP Stephen Lloyd November 2014]

Bourne School is the only primary school located in Eastbournes town centre and Seaside. Most immigrants mainly choose to live in the town centre and therefore send their children to the nearest school. This is what has caused the school to over populate with children. However, Mr. Maxwell the schools headteacher has had full support from Eastbournes MP to overcome this situation by helping families who live in the town centre approach different schools around Eastbourne by offering free bus passes to children who have to travel further than 2 miles to get to school.

East Sussex in figures shows that there are 11,927 pupils in Eastbourne from which 1,758 are students with English as an additional language.[footnoteRef:29] Like many other schools around the UK, secondary schools in Eastbourne have experienced an increase in the share of pupils getting 5 GCSES A*-C (including English and Maths). The percentage change in increase has been higher in schools that have a higher percentage of SEAL pupils (Students with English as an additional language). 4% of KS4 students at The Eastbourne Academy in 2014 were SEAL and 43% of students achieved A*-C in English and Maths. In 2013 7% of KS4 students at The Eastbourne Academy were SEAL and 53% of students achieved A*-C in English and Maths.[footnoteRef:30] [29: http://www.eastsussexinfigures.org.uk/webview/index.jsp?catalog=http%3A%2F%2Fesfigures01s.escc.gov.uk%3A80%2Fobj%2FfCatalog%2FCatalog55&submode=catalog&mode=documentation&top=yes ] [30: http://www.education.gov.uk/cgi-bin/schools/performance/school.pl?urn=136106 ]

Similarly, an article in The Economist supports this argument. Yes, schools are under more pressure because the number of pupils is increasing but overall it is not making it harder for others to learn. A school in Peterborough had an increase in their exam results from 37.2% A*-C in 2008 to 57.7% in 2009 when the school experienced a 19% increase in SEAL students.[footnoteRef:31] [31: The Economist Issue 50 December 2013]

The economic theory of merit goods suggests that consumers (like the parents of children in Eastbournes schools) are unaware of the long-term benefit their children gain from attending school. Figure 5 shows the marginal social cost (MSC) and the marginal private cost (MPC) are equal. However the marginal private benefit (MPB) such as greater earnings after education is less than the benefit for society as a whole which include rising wages, increased productivity and social mobility which in the long term should increase Aggregate Demand and Aggregate Supply in the economy as output is greater and unemployment is lowered. Positive Externalities

MSC = Marginal Social Cost, MPC = Marginal Private Cost,MSB= Marginal Social Benefit, MPB = Marginal Private Benefit

Figure 5MSC=MPC

However, having more immigrants coming to live and study in Eastbourne would require the government to increase spending on education. This should therefore incentivise consumption adding up to a greater long-term trend rate of growth as highlighted by the Actual growth curve in figure 6.Business Cycle Diagram

Figure 6

Housing In the whole of the UK, the foreign-born population has low ownership rates with only 43% being homeowners[footnoteRef:32]. Migration is the most important variant in projections about the growth in the number of new households in England. In the latest analysis by the Department for Communities and Local Government its assumed that net migration accounts for almost 40% of the annual increase in households in England. This figure is equivalent to 252,000 households each year. [footnoteRef:33] [32: http://www.migrationobservatory.ox.ac.uk/briefings/migrants-and-housing-uk-experiences-and-impacts ] [33: https://www.gov.uk/government/organisations/department-for-communities-and-local-government ]

The assumption of rising immigration causing a rise in house prices or even affecting the chances of people accessing social housing has been a popular topic over the past few years due to the shortage of available places to rent and buy in the UK. However, there is no direct evidence to support this argument besides the Theory of supply and demand, which does not take into account external factors such as interest rates, cuts in government spending or investment.

This theory suggests that an increase in demand leads to rising house prices whereas an increase in supply leads to a fall in prices. As shown in Figure 7 the market is at P*Q* (market equilibrium) and then with an increase in immigration the quantity demanded for housing will increase and will cause demand to shift to the right D1 where the market will stand at P1Q1 with higher house prices and an extension in supply resulting in an excess in demand of Q*Q1.

Supply and Demand Diagram

Figure 7

The magnitude of the impact immigration has on housing prices really depends on the elasticity of supply for houses. Brian Winn, the owner of a popular estate agency in Eastbourne outlines that house prices have remained stable for the past 5 years in comparison to other areas in the UK that have experienced a rapid increase in prices. However, house prices in places like London have risen due to the amount of FDI in comparison to Eastbourne where houses are mostly being bought to be occupied and not for investment reasons[footnoteRef:34]. [34: Phone Interview with Brian Winns 29th January 2015]

Brian Winn also highlights that there are too many tenants and not enough properties in Eastbourne in comparison to 10 years ago when there was a wider choice of residences as well as greater accessibility to mortgages.

Social housing has been another problem in Eastbourne. One of UKIPs policies outlines that incoming immigrants should financially support themselves and access private housing[footnoteRef:35] This is another issue raised by UKIP that has influenced British society in the way they perceive the impact of immigration on the economy. There is little evidence that immigrants are eligible to access social housing. The Chartered Institute of Housing (CIH) dictates each UK citizens eligibility for social housing and individuals who are prioritised for this benefit are those who are homeless[footnoteRef:36]. UKIP has made people think that immigrants come to the UK and take advantage of these services. However, Neil Fuller, a social worker who used to work for the council and now teaches at a college in Eastbourne disagrees. He clarifies that immigrants that come to live in Eastbourne have accessed private housing and brought enough financial resources[footnoteRef:37]. Immigrants do become entitled to welfare benefits like housing benefit or social housing (if they meet CIH criteria) which has led to debates about whether immigrants should or shouldnt be able to qualify for these benefits as the money comes from taxpayers. [35: http://www.ukip.org/issues ] [36: http://www.cih.org/research ] [37: Interview with Neill Fuller 27th January 2015 ]

With this in mind, Prof Christian Dustmann at UCL from the Centre for Research and Analysis of Migration, found that immigrants are 45% less likely than natives to receive benefits and rather than being a drain the contribution from immigration has been remarkably strong.[footnoteRef:38] [38: http://www.bbc.co.uk/news/uk-24813467 http://www.ft.com/cms/s/0/c49043a8-6447-11e4-b219-00144feabdc0.html#axzz3SVMmLq2r ]

Analysis and Concluding Remarks

So, what is the truth behind immigration? Are immigrants a threat to the economy?

The truth is that the economy would be affected if the government implemented tougher immigration policies, as new arrivals have made a total contribution of 25bn to public finance. This allows the UK government to increase spending to help the economy expand. Higher numbers of immigrants would certainly mean higher consumption (greatest component of AD) it would also drive investment up (component of AD) as foreigners could incentivise entrepreneurial activity like Eastbourne has experienced over the past few years which in the long run could help increase exports and reduce imports as industries expand.

Overall, each of these components will exceed government spending (component of AD) needed to sustain immigrants coming to the UK in terms of education and healthcare. Figure 8 shows how each component drives AD further up and the economy starts to become efficient in the short term therefore increasing capacity in the long term as the economy counts with a larger labour supply as well as greater levels of innovation and business efficiency which leads to low levels of unemployment as the economy promotes stability in relation to employment levels, crime rates, public services and housing.

And what are the answers to questions outlined in the introduction:

Does immigration cause unemployment?

Immigration does not cause unemployment in the economy. By looking at the findings, towns such as Eastbourne have not been affected by immigrants coming to work here. If so, it has helped the economy and increase employment as most immigrants that come to work in Eastbourne have taken low skilled jobs in the cleaning and caring sector leading to an improvement in the shortage of jobs these sectors were experiencing as people do not wish to take on these types of jobs.

Immigrants add prosperity and growth to the UKs economy. Many foreign-born workers have professional qualifications in sectors that the UK is not supplying enough like engineers. Having skilled immigrants moved into the UK improves social mobility because many of them start from the bottom and move up jobs as their language barrier breaks so oncoming immigrants can take those jobs they no longer want and help the economy expand as more industry sectors expand which in the long-term creates more jobs as output in the economy is greater. Has immigration led to rising levels of crime?

No, immigration has not increased crime rates in the UK. It is suggested that there is not such correlation between rising levels of immigration and higher number of crimes occurring in the UK, however with the general elections in 2015 political parties like UKIP have increased awareness of the impact immigration is having in the UK economy and many times Nigel Farage the party leader has blamed specific ethnicities for current crimes which therefore has led to an increase in racism or discrimination against certain races thus immigrants retaliating with anti-social behaviour so that UKIP can make themselves stand out with their policies on controlling immigration.

Are schools experiencing overcrowding as a result of immigration?

Yes, many schools are experiencing overcrowding due to rising levels of population as a result of more immigrants coming to the UK. However, Education is known as a merit good because is under consumed by society, therefore an increase in consumption enables the whole society to benefit from the outcome of individuals attending school in the long term.

A better educated workforce would result in higher wages and an increase in productivity for firms leading to an expansion in the economys capacity allowing the government to increase spending in public services like education to be able to cope with more people attending schools or using other state services like the NHS.

Is there a shortage of housing and an increase in the cost of housing because of immigration?

Yes, there is a shortage of housing in the UK, but the costs of housing and renting has not increased due to rising levels of immigration. The impact immigration has in the supply of housing depends on the elasticity for supply of housing because having a supply with greater responsiveness to changes in prices will increase the number of houses available. The UK has experienced a rapid increase in the cost of housing in areas like London due to the high levels of FDI. However, towns like Eastbourne have kept housing prices stable because houses are bought to be occupied and not for investment reasons.

In terms of social housing, immigrants do not really have an impact because the Chartered Institution of Housing has requirements citizens need in order to be eligible. However, people have started to think that reasons why they can not access social housing is due to immigrants taking up the availability when in reality the government is just prioritising those citizens who are homeless.

Appendix Appendix AQuestionnaire done by Alvaro Ferreira, responses collected via Twitter 39 Respondents

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