High net levels of immigration to the UK will be essential if the Government is to make a budget surplus by the next election, according to the Office for Budgetary Responsibility (OBR).
The need for overseas workers, whether they are from non-EU countries and in the UK on a Tier 2 visa or are EU migrants, was underlined in the organisation in its new economic and fiscal outlook.
It said that the UK needs a net migration level of around 265,000 people annually to ensure that the economy is able to add £4.5 billion to the surplus by 2019-20 and £6 billion by 2020-2021.
However, it found that net migration of below 100,000 by the end of the decade would lead to the surplus dropping to zero, The Guardian reported.
The OBR’s chairman, Robert Chote, said: “Higher inward net migration is generally positive for the public finances because inward migrants are more likely to be of working age than the native population.
“We estimate that the high migration variant would increase the budget surplus by about £4.5 billion by 2019-20, while the low migration variant would reduce it by the same amount.
“This is not to suggest that we recommend any particular level of migration or that the Government could not offset different outcomes with tax and benefit changes.”
The OBR’s report found that low migration numbers would result in lower economic output. It calculated that it could reduce the size of the UK economy by 0.8 per cent and result in a 1.3 per cent reduction in house prices.
The figures are at odds with the Home Office’s attempts to curb immigration and make it more difficult for overseas nationals to obtain UK visas to work or settle in Britain.