OBR: More migrant workers could cut borrowing

17 Jul 2013 | Posted by Carl Thomas

The Office for Budget Responsibility (OBR) has released data suggesting the UK needs to increase immigration in order to cope with economic growth and an ageing population.

A report from the office predicted that spending on state pension, healthcare and social care will increase from 14 per cent of Britain's GDP to almost a fifth within 50 years time. The study found that even as soon as 2019 the country will need to find an extra £19 billion in spending cuts or tax rises to help with the country's ageing population and strained National Health Service.

But facilitating more UK visas and immigration could help handle the issue. By allowing around 6 million extra people into the country over the course of the half century – the equivalent of 140,000 people a year – the country could balance the overall number of people in work and improve public finances.

Migration was also cited as a possible solution to borrowing. The OBR analysis predicted that the UK's borrowing would increase to 99 per cent of its GDP by the end of the period if a steady flow of immigrants is maintained. But if this was to be altered and a complete ban was put in place, borrowing could rise by as much as 174 per cent of GDP.

A statement from the report read: "Our analysis shows that overall migration has a positive impact on the sustainability of the public finances over our 50 year horizon.

"There is clear evidence that, since migrants tend to be more concentrated in the working-age group relatively to the rest of the population, immigration has a positive effect on the public sector’s debt dynamics."