Exaggerations versus Reality: The Economic Impact of Immigration in the UK

By: Muskan Agrawal

Migration, particularly illegal immigration, is a contentious issue in the UK. The debate is often framed by two opposing narratives: one that highlights the economic contributions of migrants and the other, pushed by far-right groups, that claims migrants are a burden on the welfare state, living off taxpayers' money while British citizens, particularly the working class, suffer.

As this topic becomes increasingly politicized, it is crucial to separate fact from fiction, especially when far-right rhetoric attempts to distort public understanding. One claim that frequently circulates online is that since 1997, millions of immigrants have entered the UK, with 80% dependent on welfare at an annual cost of £50,000 per person, adding up to an astounding £480 billion per year. However, upon closer scrutiny, this claim is clearly exaggerated.

To start, the real total spending by the UK’s Department for Work and Pensions (DWP) for benefits and pensions—covering both immigrants and native citizens—is approximately £276.8 billion annually. The claim that nearly £500 billion is spent solely on immigrants is impossible because this figure exceeds the entire DWP budget.

Further, the notion that 80% of immigrants are dependent on welfare is not supported by evidence. Immigrants do not automatically qualify for welfare upon arrival, and many have "no recourse to public funds" status. Even with legal residency, access to benefits is conditional, and not every migrant seeks or qualifies for welfare support.

A more realistic estimate based on available data suggests that only about 10% to 15% of immigrants may receive welfare, and even this support is far less than £50,000 per person per year. If we assume that 10% of immigrants (around 7,40,000 people) receive £10,000 per year in benefits—the total cost would be approximately £7.4 billion per year, which is about 65 times lower than the £480 billion claimed and also means the exaggerated figure is inflated by over 6,000%, indicating significant distortion in public discourse.

Alongside this, data from April 2022 to March 2024 shows a 59% uptick in illegal immigration. While this has undoubtedly placed pressure on public resources, it is misleading to attribute the nation's economic challenges solely to migrants. Far-right groups, often labeled as “thugs” in the media, capitalize on these exaggerated claims to stoke fears among the working class. The narrative they propagate—that immigrants are draining the welfare system at the expense of British citizens—oversimplifies a complex issue and fuels resentment toward migrants. However, focusing solely on the costs ignores the contributions immigrants make to the UK economy. Many migrants take on jobs in sectors facing labor shortages, contribute to tax revenues, and bolster public services like the NHS, where a significant proportion of staff are from overseas.

The argument that immigrants, particularly illegal immigrants, are responsible for economic decline and welfare state depletion is largely a product of misinformation. While there is an uptick in illegal immigration, the reality of welfare spending on migrants is far lower than some would have the public believe. As the far-right continues to leverage these distortions to gain traction, it is vital that public debate be informed by accurate data, acknowledging both the challenges and benefits of immigration.