Living wage is not migration 'magnet,' says Sajid Javid

Sajid Javid says migrants are attracted by "in-work" benefits

Business Secretary Sajid Javid has hit back at claims the National Living Wage will act as a "magnet" for migrants.

He said other EU countries have higher minimum wages and most migrants claimed in-work benefits, which are being cut.

The National Living Wage, unveiled by George Osborne in his Budget, will start at £7.20 and rise to £9 by 2020.

The Office for Budget Responsibility said this will put the UK near the top of the global minimum wage league table, relative to median earnings.

Some commentators have suggested this will make it even harder for the government to achieve its aim of cutting net migration to the "tens of thousands".

'Migration decisions'

Writing in a blog post entitled "A Budget for Hard Working Poles", Jonathan Portes, director of the National Institute of Economic and Social Research, said most new arrivals from Eastern and Central Europe were not eligible for in-work benefits such as tax credits, as they tended to be single and childless.

"So, while wage rates - in particular the level of the minimum wage - almost certainly do impact migration decisions, there is little or no evidence to suggest that the availability of in-work benefits does so.

"It follows, therefore, that the impact of the changes described is likely to be to increase labour supply from EU migrants; and to reduce labour supply from low income natives with children."

Mr Portes also points out that the National Living Wage will only be available to over-25s, which may lead employers to employ more under-25s, who will get a lower rate, which may also "provide a boost to the relative employment prospects of EU migrants".

Asked at a press conference whether the National Living Wage would boost immigration, Sajid Javid said: "There are plenty of other countries in Europe which have a high minimum wage. The UK does not stand alone in that.

"Where there is evidence that migrants are attracted to Britain it is with in-work benefits. We made a key point in our Europe negotiations is that this has to chance.

"With the changes announced in the Budget, we no longer have the most generous in-work benefits in Europe, and they are no longer a magnet."

The Office of Budget Responsibility has produced figures showing how the National Living Wage would move the UK up the international minimum wage league table, assuming other countries do not increase their rates.