Government confirms new migrant tax

The Government said cash from the new "migrant tax" starting later this year will go to areas of the UK depending on how many migrants they attract.

But the £70 million it is expected to raise over the next two years was dismissed by critics as "a drop in the ocean".

Communities Secretary Hazel Blears, who is due to address a conference on migration being hosted by the Equality and Human Rights Commission in London, said that the long-term benefit to the UK from migration is "significant" and will play a vital role in the country's recovery from recession.

But she acknowledged that migration can impose short-term pressures on local public services including councils, schools, the NHS and police.

The new Migration Impacts Fund could be used to pay for extra teachers in schools in areas with high migrant numbers, targeted support for policing, English language lessons for migrants or measures to increase GP registration, she said.

Ms Blears said: "Migration brings significant benefits for this country. But it is a complex area never far from heated public debate. That is why we need an honest discussion about it, that acknowledges the local pressures which migration can create in our communities and on our public services."

But Migrationwatch UK, which campaigns for lower migration, said that the fund would raise only 7p for every pound spent by the authorities on schemes to help immigrants, which the pressure group estimated at more than £500 million a year.

Also the left-of-centre thinktank the Institute for Public Policy Research warned the Government that it risked fuelling anti-migrant sentiments by suggesting that immigrants place strains on schools, the police and the NHS.

Ms Blears and Home Secretary Jacqui Smith are also to publish a paper entitled Managing the Impacts of Migration, which will set out Government actions to crack down on illegal immigration and control numbers of economic migrants.