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

[Mouldemort]

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/

Unfortunately, politics in this country is now trying to find out what policies are most popular with the public and then promising to do that thing to get elected. It's just endless focus groups.
Of course, public mood shifts erratically and can be easily manipulated in the internet age. We keep electing governments with massive majorities and then demanding another election when they're out of favour 6 months later.
It's a sorry state of affairs.

Exactly. Such as the Gaza obsession of Labour.

According to the latest polls, Reform has fallen back and the Labour Party are back in the lead. For now, at least. So I guess Reform and the Tories are even more out of touch with public opinion, if that's how you're judging it?

If the economy "goes bankrupt", that may be partly because of government spending, but it will also be in large part because of the damage done to the economy by Brexit. Our spending is only "too high" now because the economy is smaller than it would have been.

Aye.

"Well of course, we had it tough. We used to
have to get up out of the shoebox at twelve o'clock at
night, and LICK the road clean with our tongues. We had
half two bits of cold gravel, worked twenty-four hours
a day at the mill for sixpence every four years, and
when we got home, our Dad would slice us in two with a
bread knife."

Apologies to Monty Python.

FOUR YORKSHIREMEN Lyrics - MONTY PYTHON | eLyrics.net

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

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.

Not sure where you were working as a teenager!

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

Not a Python fan then ?

FWIW, I think there needs to be a concerted effort to raise the perceived status of care workers. I find the constant references to bum wiping absolutely infuriating. If this is how we talk about our elderly and vulnerable then it's no wonder we're in the doldrums.

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.

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

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...

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!

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.

(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).

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 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.

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.

@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.

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

Can you post these figures ?

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

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.

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.