Enlargement “to ease UK pension problems”
UK – A new report backed by accounting firm Ernst & Young says inward migration to the UK as a result of the expansion of the European Union will help to ease pension problems.
The independent forecasting group ITEM Club, which is sponsored by Ernst & Young, said the accession on May 1 of 10 mostly eastern European countries to the EU “offers a number of potential benefits to the UK”.
Inward migration would help to reduce the age of the labour force – cutting companies’ labour costs and boosting profits. It would also “increase savings as the number of workers increases, lowering interest rates and stimulating investment”.
It would also “reduce the state pension burden, implying lower taxes or budget deficits”. Immigration would also “help both to alleviate labour shortages and ease the long-term problems with pensions and the public finances”.
Other potential benefits include export growth, cheaper imports and greater efficiency.
“The UK should also benefit from an increase in immigration of people of working age from the accession countries, which will help to alleviate the increasing labour shortages in much of the economy – especially since migrants from central Europe are generally well-educated by international standards,” the eight-page report stated.
It said claims of a major influx of migrants were “exaggerated” – pointing to the lack of a significant increase in migration from Spain and Portugal when they joined the bloc in 1986.