RACHEL REEVES could face pressure to raise taxes if a sharp fall in immigration reduces government revenues, economists and migration experts have warned.
Forecasts suggest net migration could fall to zero or turn negative by the end of the year, cutting the amount raised in taxes, The Times reported. Experts said the figures were likely to be lower than the Office for Budget Responsibility (OBR) forecast in November, and that the watchdog may need to revise its estimates.
Charlie McCurdy, an economist at the Resolution Foundation, told The Times: “If predictions that net migration to the UK turns negative by next Christmas — with more people leaving the country than arriving — there would be serious consequences for the public finances.”
Net migration stood at 204,000 in the year to June 2025, down from a peak of 944,000 in the year ending March 2023. In November, the OBR forecast net migration of 262,000 this year, but experts said it was likely to be substantially lower.
The decline has been linked to fewer work visas after rules were tightened by the previous government. Health and social care visas halved last year, while skilled worker visas fell by a third.
An increase in emigration could also weigh on the figures. Changes to indefinite leave to remain rules announced by home secretary Shabana Mahmood will require people on work visas to wait 15 years before qualifying. The OBR said in November it did not have sufficient detail to assess the impact of the changes.
James Bowes, a data analyst at the University of Warwick, estimated that 70,000 people could leave Britain because of the policy shift.
Stephen Millard, deputy director of the National Institute of Economic and Social Research, told The Times: “If you don’t have the migrants, you have fewer people working so your tax revenue goes down.”
