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Lower migration and the tax gap: raise taxes or ease restrictions?

260 replies

Mouldemort · 28/09/2026 12:50

James Cleverly introduced some serious restrictions on immigration, which Labour have upheld. Mahmood is going to introduce further restrictions. This has had the effect of reducing immigration substantially and forecast immigration (yes, even taking account the new method of counting.)

Immigrants, especially new immigrants, are disproportionate contributors to the UK's tax take, because they tend to be high earners and have no recourse to public funds. The low earners (who have mainly been blocked) are the bedrock of social care. The decrease in immigration has been more that the Chancellor planned for, so that leaves a substantial tax gap - at least £4bn and possibly £6.5bn annually.

Note this is from the Times, not a bastion of leftist thought.

So the question is, what do we do about this? Are you willing to pay higher taxes to pay for the shortfall? Should we lift restrictions on immigration to keep taxes lower?

Rejoining the single market or at least the customs union might help, but the same people who oppose higher taxes also oppose immigration and a closer connection the the EU

"Falling migration numbers could cost the chancellor as much as £7bn in fiscal headroom as he writes his first budget, The Times has been told. Government insiders believe that John Healey, who already faced an uphill battle to balance the books next month, is likely to have an even bigger challenge after immigration significantly undershot projections from the Office for Budget Responsibility (OBR). The Institute for Fiscal Studies think tank estimated last month that the success of Shabana Mahmood’s reforms, which have seen net migration cut to the low hundreds of thousands, could cost Healey some £4bn. Labour sources familiar with the budget process, however, said that the figure was now closer to £6.5bn. The OBR’s migration forecasts have been consistently higher than real numbers in recent years. Treasury officials, who have long expected Mahmood’s reforms to cause a hit to headroom, described the number as “pure speculation” but did not deny that Healey would have to contend with a larger funding gap than expected because of falling migration"

"At the same time, the OBR also observed that a ‘low migration’ scenario would – even after taking account of reduced pressures on public spending – push up borrowing by about £14 billion per year in 2028-29, considerably more than the cost of a 2p cut in National Insurance contributions, and raise the debt to GDP ratio – the government’s key fiscal target – by about 2.5%, or about £75 billion"

"In the short term, the biggest impact will be on social care, already struggling with workforce pressures and years of underfunding. Over the last two years, only a very large influx of migrant workers – 70,000 new starters in the last year – has saved the sector from an even deeper crisis. If the fall in visas issued is sustained, and there is not a large infusion of taxpayer funds, prospects are bleak."

https://www.thetimes.com/uk/politics/article/falling-migration-john-healey-headroom-zsw9rdcnr

https://ukandeu.ac.uk/immigration-is-falling-but-the-economic-cost-may-be-high/

Verifying Device

https://www.thetimes.com/uk/politics/article/falling-migration-john-healey-headroom-zsw9rdcnr

OP posts:
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5
moonraker0 · 28/09/2026 19:58

Pineneedlesincarpet · 28/09/2026 17:33

We all had to take low paying work when we were young and inexperienced.

You are missing the point completely. Someone will always have to do the minimum/low wage jobs. We know from lockdown that the bulk of essential workers were low paid such as care workers, retail staff, cleaners, bin men etc. Whoever works these jobs will always get wages topped up with UC because they are not valued enough until shit hits the fan and another pandemic occurs. It doesn’t matter if they are young or old the benefits system is going to be funding the people who work these jobs and we need them for society to function. You can’t cut the welfare bill when people are paid poorly, it’s not about “we’ve all had to take low paid work when we were young and inexperienced” because there’s constantly going to be someone in the position of not earning enough to solely survive without government support so the bill will never go down. Maybe you live under a rock and don’t realise how many people get wages topped up or you are just ignorant?

KatiePricesKnickers · 28/09/2026 19:52

@MrsBennetsPoorNervesAreBack ”Well, I understand that that's the theory.”

No. That’s the facts. You can see it today with Indian IT data analysts/engineers coming in on £42k a year, a salary that good IT analysts were getting 20 years ago. Therefore creating a ceiling on salaries.

I understand you will dismiss my post, as you have your blinkered opinion and you won’t be swayed from it.

EmeraldRoulette · 28/09/2026 19:38

@Mouldemort I find these arguments bizarre and frankly disingenuous

There’s not that many people suggesting that we cut immigration for staffing essential services or for those who are contributing a good amount in tax.

also, the OBR isn’t counting things like additional cost in infrastructure and social housing.

I’m not suggesting these people don’t exist, of course they do. But I genuinely think it’s a minority who are just saying “end immigration”.

People are talking about reductions. They are not saying that heart surgeons and care workers must be turned away on principle.

nearlylovemyusername · 28/09/2026 19:32

mumumental · 28/09/2026 18:55

We also still have a decent sized seasonal requirement for agricultural workers. I have spoken with people who have tried to recruit through job centres, and it’s well nigh impossible. Whereas some Eastern Europeans were happy live here to work but to spend the winter with their families at home. Brexit buggered that up.

This.

I cannot understand why we import fruit pickers and pay unemployment benefits at the same time.
Why 18yo is allowed to claim when we need low skilled foreigners to do certain jobs
AIBU to encourage my 18-year-old daughter to claim Universal Credit? | Mumsnet

Weeellokthen · 28/09/2026 19:13

RedTagAlan · 28/09/2026 18:01

They are trained.

I remember years ago, a workmate from the Philippines explained how it worked at the time. His wife was a qualified nurse, him an electrician. She got the job in a care home with visa.

Last I heard from him a few years back, their DD was doing well in the UK police.

Very much trained. The Filipino & Indian nurses I work with had to jump through hoops to come and work in our nhs. I always ask them why choose here out of all the countries in the world and they have said coming to the UK has always been their dream.
Thank goodness for them.

Badbadbunny · 28/09/2026 18:56

RedTagAlan · 28/09/2026 17:07

It was brought back into state control remember. Because of horrific crashes due to poor maintenance. The private companies would not spend.

There were plenty of serious fatal rail crashes before Railtrack was formed whilst the infrastructure was nationalised under BR.

MrsBennetsPoorNervesAreBack · 28/09/2026 18:56

Pineneedlesincarpet · 28/09/2026 18:32

Correction. 48% of social housing in London occupied by immigrants.. 2021 census so it will be interesting to see current figures.

Not such great boon to the economy. Or homelessness which as far as I know still exists for people from the UK.

Not quite.

The 48% figure is being misrepresented. It does not mean that immigrants make up 48% of the people living in London’s social housing.

The Census found that 47.6% of socially rented households had a household reference person who was born abroad. That classifies each household according to one adult, even if their partner and children were born in Britain.
When everyone living in London’s social housing is counted, only about 29% were born overseas: approximately 525,000 people, compared with more than 1.3 million UK-born residents. Many of those born overseas are also British citizens or have lived here for decades.

What the 2021 census shows is that, on a person-by-person basis, foreign-born Londoners were proportionately less likely to live in social housing than UK-born Londoners.

mumumental · 28/09/2026 18:55

We also still have a decent sized seasonal requirement for agricultural workers. I have spoken with people who have tried to recruit through job centres, and it’s well nigh impossible. Whereas some Eastern Europeans were happy live here to work but to spend the winter with their families at home. Brexit buggered that up.

MrsBennetsPoorNervesAreBack · 28/09/2026 18:40

Pineneedlesincarpet · 28/09/2026 18:13

I think the fact that Labour are watering down migration policies which will lead to a greater benefits bill at this particular moment in our history probably won't be hugely popular. But that's of course just my opinion.

Well, if that's how you choose to frame the question, then you would probably get the responses that you're looking for.

If, on the other hand, you frame it as amending the policy to ensure that adequate staffing in our social care sector is sustained, or ensuring that the system remains fair for those migrants who work incredibly hard to care for our elderly and disabled citizens, then you might find that you get rather different answers.

Time will tell whether it has an impact on the polling.

Pineneedlesincarpet · 28/09/2026 18:36

mumumental · 28/09/2026 18:33

OP, people really need to get to grips with this. Also, our population growth is extremely low. There is every opportunity for shooting ourselves in the foot. Some people are too politically blinkered to see this. It won’t go away.

Theres a balance to be had. Unfortunately it's too far one way at the moment.

mumumental · 28/09/2026 18:33

OP, people really need to get to grips with this. Also, our population growth is extremely low. There is every opportunity for shooting ourselves in the foot. Some people are too politically blinkered to see this. It won’t go away.

Pineneedlesincarpet · 28/09/2026 18:32

RedTagAlan · 28/09/2026 18:27

Quote "But figures such as the fact most council housing in london is given to immigrants"

Can you post these figures ?

Correction. 48% of social housing in London occupied by immigrants.. 2021 census so it will be interesting to see current figures.

Not such great boon to the economy. Or homelessness which as far as I know still exists for people from the UK.

dustabsorber · 28/09/2026 18:31

the Office for National Statistics (ONS) reports that 47.6% of social housing in the capital is occupied by foreign-born residents

RedTagAlan · 28/09/2026 18:27

Pineneedlesincarpet · 28/09/2026 18:15

I think jobs for the people here rather than importing more people is the way forward. We can all cite anecdotal evidence. But figures such as the fact most council housing in london is given to immigrants is not a good sign of the immigration wave being a great economic success per capita over all.

Quote "But figures such as the fact most council housing in london is given to immigrants"

Can you post these figures ?

MeetMeOnTheCorner · 28/09/2026 18:17

@Mouldemort Your question is rather black and white. As in most scenarios, there’s shades of grey. In this case, the country is already borrowing too
much and cannot make its fiscal obligations in the future without doing several things or choosing which one to do. Namely: raise taxes, cut the spending or borrow more. Most fiscal commentaries are now concerned about over taxation forcing down growth. It’s agreed by many in the centre to be too high and it’s stifling employment and growth.

Cutting spending. Yes, but we now need more £ billions on defence and there’s more pensioners coming on stream plus the welfare state expands by the minute. Who is brave enough to cut government spending? After all Burnham wants free care for the elderly. God knows how that will be afforded!?

Then there’s borrowing. It’s expensive because we are not an A star country. Tax is going in £billions on debt repayments. Again many moderate people think this must be reduced. I’m not entirely convinced reducing immigration is the big problem here. It’s overspending , not controlling the welfare state and not supporting employers to create the country’s wealth. We keep mortgaging our DCs futures and it’s got to stop. Short term politics doesn’t have the answers.

Pineneedlesincarpet · 28/09/2026 18:15

RedTagAlan · 28/09/2026 18:01

They are trained.

I remember years ago, a workmate from the Philippines explained how it worked at the time. His wife was a qualified nurse, him an electrician. She got the job in a care home with visa.

Last I heard from him a few years back, their DD was doing well in the UK police.

I think jobs for the people here rather than importing more people is the way forward. We can all cite anecdotal evidence. But figures such as the fact most council housing in london is given to immigrants is not a good sign of the immigration wave being a great economic success per capita over all.

Pineneedlesincarpet · 28/09/2026 18:13

MrsBennetsPoorNervesAreBack · 28/09/2026 17:56

Who said it was galloping ahead? It's a modest lead, but still a lead.

And given that you cited opinion polls as showing that the Labour Party is "out of touch with public opinion", I am merely pointing out that those same opinion polls show the Tories and Reform as being even more out of touch.

There is a question, of course, about the extent to which opinion polls are a reliable measure of how "in touch" or "out of touch" parties are with the general public, but as that's the evidence you chose to put forward, I'm just following your logic.

I think the fact that Labour are watering down migration policies which will lead to a greater benefits bill at this particular moment in our history probably won't be hugely popular. But that's of course just my opinion.

RedTagAlan · 28/09/2026 18:01

Pineneedlesincarpet · 28/09/2026 17:54

But imported care workers are low skilled. Or are there colleges training care workers all over the places the immigrants come from? In which case why aren't they caring for their own populations. We shouldn't be draining these countries of their skilled workers. Its all a bit colonial...

They are trained.

I remember years ago, a workmate from the Philippines explained how it worked at the time. His wife was a qualified nurse, him an electrician. She got the job in a care home with visa.

Last I heard from him a few years back, their DD was doing well in the UK police.

renovationchoas · 28/09/2026 17:56

(Even labour’s own immigration minister has said that exempting care workers from the requirement to do 10 years before getting ILR means they are likely to quit care for other jobs as soon as they are not tied to a visa and the whole circus of importing more people continues).

MrsBennetsPoorNervesAreBack · 28/09/2026 17:56

Pineneedlesincarpet · 28/09/2026 17:47

Its hardly galloping ahead. In fact if there was an election tomorrow Labour would go from a historic super majority to a hung Parliament. That's the effect of two years of lunatic policies. Which seem only to be getting worse.

Who said it was galloping ahead? It's a modest lead, but still a lead.

And given that you cited opinion polls as showing that the Labour Party is "out of touch with public opinion", I am merely pointing out that those same opinion polls show the Tories and Reform as being even more out of touch.

There is a question, of course, about the extent to which opinion polls are a reliable measure of how "in touch" or "out of touch" parties are with the general public, but as that's the evidence you chose to put forward, I'm just following your logic.

renovationchoas · 28/09/2026 17:55

Could pay it by charging more for citizenship on a sliding scale based on tax contribution - no one has to pay more in highest value jobs, more paid by those who are likely to be a burden on the state in later life. No citizenship, no benefits. Then immigration pays for itself!

Pineneedlesincarpet · 28/09/2026 17:54

MasterGland · 28/09/2026 17:52

Like this here. Equating care work with fruit picking.

But imported care workers are low skilled. Or are there colleges training care workers all over the places the immigrants come from? In which case why aren't they caring for their own populations. We shouldn't be draining these countries of their skilled workers. Its all a bit colonial...

MasterGland · 28/09/2026 17:52

dustabsorber · 28/09/2026 17:50

Force NEETS to work in care homes and pick fruit or whatever low-skilled migrants do.

Like this here. Equating care work with fruit picking.

Pineneedlesincarpet · 28/09/2026 17:52

RedTagAlan · 28/09/2026 17:50

Not a Python fan then ?

Don't worry...you don't need to explain your joke.

Pineneedlesincarpet · 28/09/2026 17:51

MrsBennetsPoorNervesAreBack · 28/09/2026 17:46

I don't disagree. Unfortunately, the electorate gets the quality of politicians that it deserves.

Thats true. The fact that not a single MP in the Labour party was able to replace Keir Starmer when they have hundreds in the H of C is truly revealing.

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