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Immigration missing government target

Citizens from non-EU countries continue to be the largest group of migrants to the country.

Estimated total long-term immigration to the UK in the year to September 2011 was 589,000, compared to 600,000 for the same period in 2010 and mostly remains similar to that seen since 2004, according to the migration statistics quarterly report (MSQR) released by the Office for National Statistics (ONS) today. The lack of reduction means that the government is no closer to meeting its target of reducing net migration to less than 100,000 per year.

The UN definition of a long-term international migrant is someone who moves from their country of previous residence for a period of at least a year.

Estimated net long-term migration to the UK in the year to September 2011 was 252,000, which is the same as the final estimate of 252,000 in 2010. Net migration has remained broadly at similar levels since the year to September 2010, was estimated at 255,000.

As per the report, formal study is the first reason for migrating to the UK, while work remains the second reason.

Speaking on the release, Sarah Mulley of IPPR said:

The Government has so far made no progress towards meeting its target of reducing net migration to less than 100,000. It has also found that it is very difficult to reduce immigration to the UK without imposing significant costs on the economy. Recent changes to the student visa regime will deprive the UK education sector and wider economy of much needed income, but will have only limited impacts on long-term net migration because the vast majority of foreign students only remain in the UK temporarily. The Government should exclude students from migration figures and count them only if they stay in the UK for the long term.

An estimated 165,000 citizens from the EU (excluding British) migrated to the UK in the year to September 2011, not a statistically significant difference from the estimate of 182,000 in the year to September 2010. The estimated number of EU citizens (excluding British) emigrating from the UK was 91,000 in the year to September 2011, not a statistically significant difference from the estimate of 101,000 who emigrated in the year to September 2010.

Citizens from non-EU countries continue to be the largest group of migrants to the UK compared to British and the rest of the EU. An estimated 343,000 non-EU citizens arrived to live in the UK in the year to September 2011, which is 58 per cent of all immigrants. This is slightly higher than the estimate of 326,000 who arrived in the year to September 2010.

The estimated number of non-EU citizens emigrating from the UK in the year to September 2011 was 105,000, similar to the estimate of 108,000 in the year to September 2010.

In the year to March 2012 the overall number of entry clearance visas issued for work and study was 439,855, a decrease of 13 per cent (507,939) compared to same period last year.

A total of 148,498 work-related visas were issued in the year to March 2012, a decrease of 8 per cent (161,775) compared to same period last year. The number of visas issued for the purposes of study was 291,357 in the year to March 2012, a fall of 16 per cent (346,164) compared to same period last year

Some 671,000 national insurance numbers were allocated to non-UK nationals in the year to December 2011.

The estimated number of British citizens emigrating long-term from the UK in the year to September 2011 was 142,000 not a statistically significant difference from the estimate of 136,000 in the year to September 2010.

The MSQR series brings together statistics on migration that is published quarterly by the Home Office, the Department for Work and Pensions, the Office for National Statistics, and the National Records of Scotland.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.