3 July 2007
Immigration keeps London business afloat
Twenty years of unprecedented migration to London from overseas
has boosted the London economy and made it more flexible and
resilient – but boroughs need responsive financing policy to
address the tensions that arise from rapid change, says a City of
London report released today (3 July).
A capital–wide study into how and where London’s 200,000 annual
immigrants work and live has found their abilities employed in both
high-skill City jobs and lower paid work in construction,
hospitality and catering.
The City of London report found that most immigrants make better
use of London’s housing. Immigrants live in fewer households and in
higher densities than Britons. The rental market, much favoured by
immigrants, has so far expanded to cope with demand, allowing rents
to remain stable.
The City of London Corporation–London School of Economics report
found three main types of London immigrant among a very diverse
range, which have brought the UK capital level with New York as a
global “melting pot”.
- highly-skilled workers, often in the financial and business
services who come from a rich country such as the USA or Australia,
stay several years for career reasons, and whose prized skill-set
helps sustain the City as a world-leading international business
centre. These represent about one third of the inflow .
- migrants (typically from poorer countries such as Poland or
African countries) who stay for a longer period, working (at least
initially) in poorly-remunerated jobs, below their qualification
level, where they tend to further depress wage levels. These
represent just over half of those arriving.
- asylum-seekers from countries suffering economic and political
breakdown, who are not initially available for work. These
accounted for about one in eight of all immigrants to London since
the late 1990s, though the proportion has been cut back to one in
thirty in the last few years.
The City of London report dispels negative historic attitudes to
immigration, finding Londoners in a “confident and expansive mood”,
coping well with the radical changes in community and workforce
makeup that now see 29% of London jobs filled by people born
outside the UK.
The majority of new migrants now arrive from a set of 15
countries, including Pakistan, France and Poland, compared with
just six main feeder countries 20 years ago (Ireland, India, Kenya,
Jamaica, Cyprus and Bangladesh). Many of the immigrants are young
(50% are aged between 20-30), over 50% were white and 20% were
non-Christian including 10% Muslim. They share characteristics of
relative youth, above-average qualifications and positive
employer-ratings.
Michael Snyder, Policy Chairman of the City of London, said
maintaining London’s openness was vital to on-going economic
success.
“Walk down a City street and you will hear five different
languages in 50 paces. London’s welcoming, multi-cultural attitude
is attracting the crème of international talent. Many of the
world’s young professionals aspire to work in London at some point
during their career,” he said.
“London has the best markets, the best job prospects and, with
some important exceptions such as transport and housing costs, the
best quality of life, especially in its cultural offerings.
Business is booming in part due to the inputs of migrants, London
must guard its reputation and sense of openness fiercely,” Chairman
Snyder said.
However, planning for migration must be more responsive to the
needs of both migrants and established households. Pressure on the
Greater London housing market will continue to increase over time
as migrants become more established. The report finds that much of
the need for additional housing, especially social housing, will
come from migrants, who will require an extra 36,000 households
during the next 14 years.
Christine Whitehead from the LSE said current pressure on the
housing market, especially at the top end comes from international
investment as much as migrants. The report finds that to maintain
competitiveness and house London’s growing population, housing
output must increase.
“Government funding needs to reflect both present and future
demands on services. At present, the Treasury enjoys the
substantial benefit – in terms of higher tax revenues – that derive
from new migrants. However, any costs – such as the need for
schools, social housing and homelessness provision – have to be
funded by the boroughs” she said.
The report makes clear that central government funding of London
boroughs is often based on imprecise or out-of-date statistics,
resulting in a potential mismatch between the needs of new
populations and the resources available.
In contrast to New York’s local authorities, London boroughs and
the GLA have no capacity to share in the growth in tax base
associated with migration. The risk is that service pressures will
build up in some areas forcing authorities to divert resources from
elsewhere. Because public finance in Britain is highly centralised,
Whitehall will often have to provide the resources needed for new
or additional services. In New York, by contrast, the city’s tax
base increases as a result of growth resulting from migrants’
economic activity.
End.
A PDF copy of the report is available here.
For further information please contact:
Cubby Fox - City of London Press Office Tel 020 7332 3451
'The Impact of Recent Immigration on the London
Economy' was prepared for the City of London by Ian Gordon,
Tony Travers and Christine Whitehead of the London School of
Economics, London Research Centre.
Ends
Notes to editors
The City of London
provides local government services for the Square Mile, the
financial and commercial heart of Britain, and is committed to
maintaining and enhancing the status of the business City as the
world's leading international financial and business centre through
its policies and services. Its responsibilities also extend far
beyond the City boundaries and include management of the Barbican
Centre, Central Criminal Court at the Old Bailey, 10,000 acres of
open space including Hampstead Heath and Epping Forest, three
wholesale food markets, as well as acting as the London Port Health
Authority.