The assumption that all migrant workers who relocate to the island make a positive contribution to public finances is ‘misconceived’, a report laid before Tynwald reveals.

Tynwald will this month be asked to approve the recommendations of a Council of Ministers update report on inward migration.

The report highlights the ‘crucial role’ inward migration plays in sustaining the island’s working age population and meeting labour market demands.

Central to the government’s economic strategy is a plan to create and fill an additional 5,000 jobs by 2032, generating a £10bn economy and providing the infrastructure to cater for a growth in population to 100,000 by the year 2037.

But an Isle of Man and UK immigration gap analysis report by law firm Bridson Halsall, attached as an appendix to the CoMin update, shows that migrant workers may cost taxpayers more than they contribute as many are employed in low-paid jobs.

Government data indicates that around 50% of all such migrants earn salaries between £20,800 and £30,000 and a significant proportion earn below the median salary.

While they are usually not eligible to receive public benefits for at least five years, their tax contributions may not offset the public services they use, the report notes.

It says: ‘The assumption that all migrants who relocate to the island via this route make positive contributions to public finances is misconceived.

‘A large number of migrants earn wages significantly below a level necessary to afford a decent standard of living for them and their families

‘Many worker migrants employed in lower-paid roles may, over time, impose a net fiscal burden due to their low tax contributions and eventual eligibility for public services and benefits upon settlement.’

The report adds: ‘Current migration trends do not indicate that the highly skilled, highly productive workforce envisioned in the Island Plan and economic strategy is being achieved.

‘Instead, low-wage migration may be suppressing innovation, discouraging investment in automation or upskilling, and potentially undercutting local wages.’

The minimum salary level for worker migrants, currently £20,800, has not been uprated since 2018. From October 1 it will increase to £25,447.50.

In contrast, the UK skilled worker route has a minimum threshold of £38,700 - rising to £41,700 later this month - and those on social care visas are now prevented from bringing their dependents due to widespread abuse.

Here, the seasonal migrant route had to be closed urgently in November 2023 after it was targeted by rogue employers and organised criminals, resulting in multiple cases of labour exploitation and modern slavery, the report notes.

Highlighting gaps in data, it says there are no figures for the number of people who have worked in the island under a worker migrant visa during any given period and there has been no assessment of the economic impact of the ‘200+ jobs connected to organised immigration criminality’.

The gap analysis also looked at business migrant route which opened in 2020 and has seen 115 granted visas together with 125 dependents. Only 49 of these visas are currently active, employing 67 jobs. Five were granted further leave remain.

This route generated a net revenue to the Treasury of just £37,189 - which the report says is a very small return in comparison to the per capita spend on public services by government for the 230-plus new residents.

The CoMin update report on inward migration agrees with the gap analysis that there should be greater alignment with the UK’s immigration system.

Complete alignment to the UK immigration system is ruled out in the Bridson Halsall report which concludes a flexible approach is needed to reflect the Isle of Man’s needs.

It argues that while full alignment could bring benefits including improved oversight and enforcement, it would also increase admin and other costs for employers, remove visa access to lower-skilled and salaried roles and require significant government investment to replicate UK immigration infrastructure.

Cabinet Office Minister David Ashford will seek Tynwald approval for the recommendations outlined in the CoMin report that the island should pursue appropriate inward migration measures, adapt in response to evolving risks and prioritise Isle of Man workers.

Treasury Minister Alex Allinson will also bring an order in council to the July Tynwald to extend the Immigration Health Charge to the Isle of Man with appropriate exceptions, adaptation and modifications.