UK Economy damaged by net migration
‘Net migration fall damages UK economy’
Mon, 23 Dec 2013 14:36:00 GMT
The British government’s plans to cut the number of migrants to the UK to tens of thousands will have “strong negative effects” on the country’s economy over the next five decades, a new study shows.
According to the analysis, conducted by the National Institute of Economic and Social Research (NIESR) and published on Monday, the coalition government’s pledge to reduce annual net migration to Britain to below 100,000 before the general election in 2015 could make the economy smaller by 2060.
“The level of both GDP (gross domestic product) and GDP per person fall during the simulation period by 11.0 percent and 2.7 percent respectively,” the study by the independent research institute said.
Meanwhile, it was found that the Tories’ net migration policy would erode the country’s public finances in the long-term, resulting in lower net wages by 3.3 percent in 2060.
NIESR researchers also calculated that income taxes would have to increase by 2.2 percent in the UK in order to balance the budget.
“The message for government is that if the Conservative party is successful in achieving its policy, then the result will be higher taxes and reduced living standards for the average person,” NIESR director Jonathan Portes told The Financial Times.
The UK’s Home Office plans for a cap on migration from the European Union (EU) countries, possibly at 75,000 a year.
British Deputy Prime Minister Nick Clegg, however, pledged on Sunday to block attempts by the coalition government to impose a cap on the number of migrants from the 28-member bloc.
The Liberal Democrat leader said he “draws the line” against the idea of limiting freedom of movement in the EU as it could damage the economy.
The remarks came amid a growing row over the Conservatives’ proposals to tighten up welfare rules for EU migrants and escalating concerns over an influx of Romanians and Bulgarians to Britain in the near future.
British Prime Minister David Cameron confirmed last week that the new rules on migrants were being laid before the UK Parliament to bring them in by January 2014, when EU working restrictions are lifted.