Highlights
- Economy could drop to £3.9tn under zero migration.
- GDP could drop 15 per cent by 2060
- Tax income falls faster than spending cut.
Oxford Economics worked out that GDP would shrink by 15 per cent if migration stayed at zero for the next three decades.
Right now, the research group expects net migration to stay around 169,000 over the next five years, then rise to 272,000 in the long term.
This would mean the economy would reach £4.6 trillion by 2060.
But if net migration stayed at zero, the economy would fall to £3.9 trillion over the same time. The gap between these two figures is £700 billion.
Andrew Goodwin is the chief UK economist at Oxford Economics. He explained what would happen to government money.
"In our zero net migration scenario, the current budget deficit widens progressively over time, exceeding 4 per cent of GDP by 2060. Lower economic growth hits tax revenue," he told The Telegraph.
What it means
Government spending would also drop because a smaller population needs fewer people educated and treated by the NHS.
But Goodwin pointed out that "the cuts in spending are much smaller than the fall in revenue".
The money problems would be bad enough to make more people call for ending the triple lock pension promise. The NHS might need to start charging patients, Goodwin added.
Fewer working-age people plus more money needed for defence would leave the government unable to keep services at current levels.
"There may need to be a rethink about whether some aspects of state provision, such as a National Health Service that is free to all at the point of use, can still be maintained," Goodwin said.
Experts warn that while more migration makes the overall economy bigger, it does not always improve GDP per head. This measure shows living standards better.
The UK saw record net migration after Covid, with England and Wales growing faster than any time in 75 years.
