"The warning comes from the National Institute of Economic and Social Research (NIESR), which said a zero net migration policy would shrink the economy by 3.6 per cent by 2040 and reduce the workforce by around 2.5 million people compared with current forecasts. The result, it argues, would be a £37bn deterioration in the public finances unless offset by higher taxes or cuts to public spending."
"Preliminary estimates suggest net migration dropped to around 200,000 in 2025, the lowest level since 2012, excluding the pandemic period, following tighter visa rules for students and workers introduced by the previous Conservative government and further restrictions on overseas care workers under Labour. That fall has fuelled speculation among population experts that net migration could approach zero in the coming years."
"NIESR said that in a scenario where net migration falls to zero, incomes per person would rise by around 2 per cent over the long term, as fewer workers would mean greater access to capital and equipment, boosting individual productivity. However, those gains would not be sustainable without fiscal intervention. "The zero net migration scenario is fiscally unsustainable," the institute said, arguing that weaker growth would eventually force governments to raise taxes or cut spending to stabilise debt."
A zero net migration policy would shrink the economy by about 3.6% by 2040 and reduce the workforce by roughly 2.5 million compared with current forecasts. Public finances would deteriorate by an estimated £37bn unless higher taxes or spending cuts offset the impact. Net migration appears to have fallen to around 200,000 in 2025 after tighter visa rules and restrictions on care workers, raising the prospect it could approach zero. Incomes per person could rise around 2% long term due to higher capital per worker, but those gains are not sustainable without fiscal intervention and would risk weaker growth and higher debt.
Read at Business Matters
Unable to calculate read time
Collection
[
|
...
]