Brexit Study: Curbing Immigration Will Make Britain Poorer!

Badges with a “Vote Leave” tagline on a union jack flag; is the feature of nationwide campaign in Britain advocating Britain’s exit from EU. With the June 23rd Referendum date nearing, poll reports suggest that the “Remain” camp is way ahead of the “Leave” camp. Immigration cuts due to Britain’s decision to leave the EU would make the country’s citizens poorer and its economy smaller says the recent study by the National Institute of Economic and Social Research - NIESR, which assessed the economic effects of migration. The study assessed the impact on reducing the immigration rate by two-thirds of the current rate; post Britain’s exit from the EU and found that the size of the economy would reduce by 9% by 2065 and also the rate of output per person by 0.8%. Given the rising healthcare and pension costs of an ageing population, taxes would have to increase by an average of £402 for every individual in today’s money value. Immigration is the key issue for the referendum campaign with an agenda to rein control of the country’s borders that is being put forth by the Brexit camp that has little understanding of the impact of reduced immigration on the economy. Katerina Lisenkova – author of the Brexit study stated that the numbers mentioned are illustrative, as the study evaluates the long term impact of reduced migration but it does conclusively state that lowering the rate of immigration would negatively affect Britain’s economy. If the latest figures for monetary contribution of immigrants coming from the EU and other regions like Iceland, Norway, Switzerland and Liechtenstein in recent times is considered; the immigrants pay more than £3bn towards taxes on their income and only claim close to £500m as benefits. Immigrant workers in the UK, who have migrated from the EU (Before the enlargement of EU zone in 2004) claim an average of £1,725 in benefits every year, whereas British citizens claim £2,059 every year in benefits. Immigrant workers from the post 2004 enlargement period, get an average of £2,168 per year compared to the £2,666 per year that is paid out to Non-EU immigrants. The study was based on an assumption that immigration from EU countries would come down from 59,000 to 20,000 immigrants per year, should UK exit the EU; and New EU immigration would fall from 82,000 a year to 27,000 a year. Immigration from Non-EU countries would remain stable at 114,000 per year. The Leave camp is yet to put forward the number of immigrants it would allow to enter Britain to sustain the economy should Britain opt out of the EU zone. The report to some extent supports Iain Duncan Smith – former Secretary for Tory work and pensions, that opting out of the EU is in the interest of the country’s social justice. Katerina Lisenkova stated that this could be true as wages might go up, especially for the low-skilled workers due to reduced competition for jobs. This will be offset by the higher rate of taxes needed to meet the higher public spending to make up for the lowered GDP arising from reduced migration. Should the rise in taxes apply to high income earners it could benefit the low wage workers. Jonathan Portes, NIESR, stated that this approach would contradict the government’s decision to bring down the borrowing rates; by cutting down the spends on benefits and public services than raising taxes levied on the high-income groups. Want to migrate to the UK? At Y-Axis, our consultants help you plan your visa processing and migration plans through free counseling.