Sep 10, 2026 · 49 min · 10 segments
**Immigration is one of the most debated issues in British politics. But what impact does it actually have on the economy and the public finances?** We speak to Madeleine Sumption, Director of the…
Madeleine SumptionGuest
Max WarnerGuestHelen MillerHost'Cause one of the, one of the places this story has popped up, the story about small boats, asylum seekers, is around the public finances and the costs and the cost of this system.
Um, Max, I think it's worth sort of doing different buckets of this, isn't it? I want to talk about the ta- immigration and tax revenues, then we'll come on to immigration spending and, and bring it all together because there's interesting differences in different bits of this, of this story.
So maybe try and start, help people understand, you know, we have immigrants coming in, it changes over time, the composition is changing.
So I guess, I think an, a useful place to start is recent immigrants into the UK, and actually immigrants out of the UK too, are much more likely to be working age than the average kind of British population.
You know, and all else equal, people who are working age tend to pay more in tax, they're more likely to be in work.
Importantly, though, there are just really big differences between different types of immigrants.
So for some immigrants, you know, those on work visas, having a job, often having a high-paying job, is kind of a requirement to come to the UK.
And indeed, when you look in the data, you see that these are people who are more likely to be employed and have higher average earnings than, say, a British-born person of the same age.
You know, international students where, are, are less likely to be in work, and indeed, there, you know, are restrictions on how much they can work.
And at the other end, we have asylum seekers who, you know, aren't legally allowed to, uh, work until they've been given, um, refugee status.
So we have these big differences, more likely to be working age, but you know, different groups of migrants can have really different impacts on tax revenues.
And I think, and we can kind of keep coming back to this, it's also important to distinguish, you know, the short and the longer run.
Some groups come and stay for a long time, and as they age, again, probably not dissimilarly to British-born people, their earnings will probably increase with age and then start to fall as they retire.
Again, students might come initially and not work, but then move on to work groups where they are gonna work.
You know, in a way, it's just more people in the country, more people, even if they're not in work, you know, paying VAT, paying other things too.
And it's maybe worth just, you know, as an a- as, as an aside as well, of course, there are- Visa fees as well.
In practice, they're not an insignificant sum, but they are much smaller than the overall, you know, tax revenue that we get from, from migrants.
So picking up on, on that point about composition, Madeleine, I mean, obviously, we just talked about how composition has changed a lot, and one of the things we drew out was that, and I'm gonna paint with a broad brush here, but there used to be more migrants coming on routes related to coming here and working, and now there are more migrants on routes related to either humanitarian issues or, uh, student visas.
'Cause one of the, one of the places this story has popped up, the story about small boats, asylum seekers, is around the public finances and the costs and the cost of this system.
Um, Max, I think it's worth sort of doing different buckets of this, isn't it? I want to talk about the ta- immigration and tax revenues, then we'll come on to immigration spending and, and bring it all together because there's interesting differences in different bits of this, of this story.
So maybe try and start, help people understand, you know, we have immigrants coming in, it changes over time, the composition is changing.
So I guess, I think an, a useful place to start is recent immigrants into the UK, and actually immigrants out of the UK too, are much more likely to be working age than the average kind of British population.
You know, and all else equal, people who are working age tend to pay more in tax, they're more likely to be in work.
Importantly, though, there are just really big differences between different types of immigrants.
So for some immigrants, you know, those on work visas, having a job, often having a high-paying job, is kind of a requirement to come to the UK.
And indeed, when you look in the data, you see that these are people who are more likely to be employed and have higher average earnings than, say, a British-born person of the same age.
You know, international students where, are, are less likely to be in work, and indeed, there, you know, are restrictions on how much they can work.
And at the other end, we have asylum seekers who, you know, aren't legally allowed to, uh, work until they've been given, um, refugee status.
So we have these big differences, more likely to be working age, but you know, different groups of migrants can have really different impacts on tax revenues.
And I think, and we can kind of keep coming back to this, it's also important to distinguish, you know, the short and the longer run.
Some groups come and stay for a long time, and as they age, again, probably not dissimilarly to British-born people, their earnings will probably increase with age and then start to fall as they retire.
Again, students might come initially and not work, but then move on to work groups where they are gonna work.
You know, in a way, it's just more people in the country, more people, even if they're not in work, you know, paying VAT, paying other things too.
And it's maybe worth just, you know, as an a- as, as an aside as well, of course, there are- Visa fees as well.
In practice, they're not an insignificant sum, but they are much smaller than the overall, you know, tax revenue that we get from, from migrants.
So picking up on, on that point about composition, Madeleine, I mean, obviously, we just talked about how composition has changed a lot, and one of the things we drew out was that, and I'm gonna paint with a broad brush here, but there used to be more migrants coming on routes related to coming here and working, and now there are more migrants on routes related to either humanitarian issues or, uh, student visas.
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