European migrants working in UK 'significantly higher' than official data

The number of European Union migrants working in Britain may be under-counted by hundreds of thousands in official figures, new analysis suggests.

Figures from HMRC show 2.54 million European Economic Area nationals - those from other EU states plus Iceland, Liechtenstein and Norway - had a tax record in 2013/14.

Jonathan Portes, a former Cabinet Office chief economist, said labour market statistics show that over the course of 2013/14 the number of EU nationals in employment fluctuated between 1.45 million and 1.62 million.

Meanwhile, the 2013 annual population survey estimated the total number of EU-born residents of the UK aged 16-64, including those who were not in employment, was 2.15 million.

Although employment rates are high for this group, typically 75-80% - this also suggests a number in employment of about 1.6 to 1.7 million, Mr Portes said.

He added: "In other words, we are talking about a very large discrepancy."

The analysis pointed to some good reasons why the number of EU nationals who were in employment at any one time, as measured by the Labour Force Survey (LFS), would be expected to be lower than the number who come into contact with the tax authorities at any time in the course of a tax year.

One reason cited is that the LFS does not count people who are not resident - usually meaning they have been in the UK for six months or intend to stay that long - so it will miss short-term migrants.

Mr Portes, principal research fellow at the National Institute of Economic and Social Research, added that there will be some normal labour market "churn" as people move in and out of employment, so the LFS "snapshot" will miss some who have a job at some point.

In addition, the HMRC figure also includes people from EEA countries which are not in the EU, as well as Switzerland.

However, even allowing for these factors would still leave a gap of at least 300,000, Mr Portes said.

He wrote: "It seems implausible the LFS numbers are correct. I think there clearly are more recent EU migrants present and active in the UK labour market than suggested by the official statistics.

"And the same goes for the population statistics.

"The number of migrants born elsewhere in the EU resident in the UK may be significantly higher than we think.

"By how much, we don't know. Nor do we know precisely why. The ONS, and the government as a whole, need to look into this as a matter of urgency."

A spokesman for the Office for National Statistics (ONS) said: "HMRC figures look at the total number of people who have paid tax over a whole year.

"Many of these people may only have worked for a short period of time.

"The Labour Force Survey estimates the number of non-UK citizens working in the UK at a point in time. You would not expect the total number paying tax to equal the number in employment at any given point."

Earlier this year controversy erupted over differences between measures of long-term international migration and the number of National Insurance numbers given to EU nationals.

A report concluded that migrants coming to Britain for a short period were the main driver behind the gap.