News Archive - January 2016

Migration ‘necessary’ to help Govt hit economic targets

04 Jan 2016 | Posted by Carl Thomas

Rising migration numbers will be necessary if Chancellor George Osborne is to meet his target of a UK budget surplus by 2020, according to analysis by The Guardian.

The newspaper looked at data from the Office for Budget Responsibility (OBR), which carries out independent forecasting for the Government, and found that “Britain’s finances would not be forecast to hit a budget surplus by 2019-20 without recent upward revisions to net migration numbers”.

The additional jobs and income generated for the economy and tax of people working in Britain on UK visas or after migrating from EU states mean that the UK’s potential output has been revised upwards to 0.9 per cent by the OBR.

However, its forecasts show that without higher levels of net migration to the UK, there would be little increase in the output figure. This would have meant the budget surplus by 2020 would be zero and only higher taxes and further cuts in spending would help to achieve any increase.

The Guardian said: “Furthermore, based on OBR data and the evidence available, it is highly likely that the government’s intention of reducing net migration to the ‘tens of thousands’ is directly at odds with its fiscal target.”

The findings are at odds with the Prime Minister’s stated target of reducing net migration to the UK and the Home Office’s efforts to make obtaining a UK visa more difficult.

In its latest economic outlook report, published in the summer, the OBR said that the increase in employment is mainly due to upward revisions to the net migration figure. The higher growth forecasts for this year and 2017 are also mainly due to the growth of the population, fuelled by higher migration.

The report also found that the majority of migrants coming to the UK were of working age and were contributing to the UK economy.