Immigrant levy 'a drop in the ocean'

A Home Office plan for a levy on immigrants to pay for extra public services will be "a drop in the ocean", MPs have said.

Home secretary Jacqui Smith plans to allow police forces and local authorities to bid for money from the levy on citizenship fees.

The cash is intended to help pay for local services struggling with immigration-related costs.

But the Commons communities and local government committee, in a report published on Wednesday, said: "The money that this fund will generate is very limited.

"Press reports suggest that the fund would raise only £15m.

"If this figure is correct, it is a drop in the ocean in comparison to the needs of local government - equating to only 0.001 per cent of total local government expenditure in 2005/06, and the fund is suggested to cover all local public services, including the police and the NHS, not just local government."

The MPs agreed with the principle of asking migrants to pay for local services, but noted that now all will be obliged to pay.

The report asked: "Why should international migrants alone pay to fund local services under pressure from all migrants?"

The committee said the government should instead set up a contingency fund to help public bodies cope.

Committee chairman Dr Phyllis Starkey said: "We found that public concerns about the effects of migration are not necessarily based on prejudice, but can arise from genuine anxieties about practical issues, such as the effect of migration on housing and other local services.

"The government needs to take action to respond to public concerns about the effects of migration."