Unemployment among Eastern Europeans higher than Britons, says bank report

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For men, 5.1 per cent of Britons are out of work, compared to 6.1 per cent of eastern Europeans

Unemployment among the eastern Europeans who have flooded into Britain is significantly higher than for people born here, a report by the Bank of England has revealed.

Some 6.9 per cent of female migrants say they are out of work, compared to only 3.9 per cent of British women - almost double the unemployment rate.

For men, 5.1 per cent of Britons are out of work, compared to 6.1 per cent of eastern Europeans.

The figures, compiled by Professor David Blanchflower of the bank's Monetary Policy Committee, challenge the Government's repeated claim the new arrivals are all hard-working and have no interest in taking advantage of the welfare state.

While immigrants are banned from making a claim for JobSeeker's Allowance when they first arrive, any migrants who complete 12 months in paid employment assume the same rights as Britons.

More than 100,000 Poles and other eastern Europeans who arrived in the immediate aftermath of EU expansion in May 2004 now fall into this category. The total number to have moved here is at least 700,000.

Critics say the report also raises questions over whether the migrants are claiming to be unemployed, while working illegally in the black market.

The research has been compiled from the Government's Labour Force Survey, where people are asked a serious of questions about whether they are working.

Any eastern European working illegally - to avoid paying taxes - is likely to have lied, saying instead they are out of work.

Sir Andrew Green, chairman of Migrationwatch UK, said: "It is a surprise to see such a high unemployment rate.

"The Government keeps saying they are not entitled to benefits, but a growing number will be entitled to full benefits as they complete a year's work here."

The study by Professor David Blanchflower and two colleagues, Jumana Saleheen and Chris Shadforth is the first independent attempt to assess unemployment among the new arrivals.

It also shows the eastern Europeans earn significantly less. They receive an average of £7.38 an hour, compared to £11.25 for Britons.

And they are also more likely to be in temporary work, or class themselves as self-employed.

Prof Blanchflower's report, which was published by the Bank of England, said there was "little evidence" that immigrants from eastern Europe had significantly affected the wages or employment chances of British workers.

But it added that competition from the new workers had lowered British workers' power to bargain for pay rises and increased their fear of losing their jobs.

They have also held down inflation, a key aim of Chancellor Gordon Brown.

It will fuel suspicions Mr Brown has been one of the architects of Labour's open door' immigration policy, which has allowed the economy to keep growing while wage rises remain relatively low.

The report says: "It seems that recent immigration is likely to have raised potential supply by more than it has raised demand, and thereby has acted to reduce inflationary pressures."

Prof Blanchflower said the possible explanation for the higher unemployment rate among migrants was because many of the arrivals from eastern Europeans were young people.

Overall, young people - whether migrants or British - are more likely to be out of work, he said.

But critics point to a rise in benefit claims as an equally likely explanation. Prof Blanchflower says he does not believe this is the case.

But the latest "accession monitoring report", published by the Government in February, revealed a surge in the number of eastern Europeans claiming benefits.

There are now 54,856 people in receipt of tax credits, child support or council housing.

When they arrive the immigrants are immediately entitled to child benefit, Tax Credits and housing support.

After 12 months here they can receive income-related benefits such as unemployment benefit. Prior to that, they are limited to in-work payments such as child benefit, or housing support.

There have been 533 successful applications for Income Support (worth Pounds 57.45 a week), 1,221 for Job Seeker's Allowance (also worth Pounds 57.45 a week) and 41 for State Pension Credit (which gives a guaranteed income of Pounds 114.05 a week.)

Some 45,252 claim child benefit (worth Pounds 17.45 for the first child and Pounds 11.70 for each further youngster), 22,685 are receiving Tax Credits (worth up to Pounds 5,200 a year) and 173 families have been given local authority housing.

Some 615 are receiving other homelessness support. The total bill is likely to be Pounds 75million.

Prof Blanchflower, known as Danny, was appointed as an external member of the Monetary Policy Committee last June.

Internationally-respected, he is a Professor of Economics at Dartmouth College in the US and a Research Associate at the National Bureau of Economic Research.

He is also a Research Fellow at the Centre for Economic Studies at the University of Munich and a Research Fellow at The Institute for the Study of Labor at the University of Bonn.

His book "The Wage Curve" won Princeton University's Richard A Lester Prize.

A Home Office spokesman said migrants from eastern Europe were contributing to the success of the UK economy, while making few demands of our welfare system.

He added: "But we have recognised that significant people from A8 countries have arrived in a short period of time.

"Therefore the UK's labour market has been opened gradually to citizens of Bulgaria and Romania and they have no automatic right to work.

"We have limited access and we make workers get permission first before they come here.

"We have sponsored an information campaign to help Bulgarians and Romanians understand the rules that we have put in place and that they will need a work permit before they come here."

 

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