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/

You received many answers. You just don't like them and aren't prepared to try to understand.

There is no shortfall caused by continuing decline of immigration - current immigration, in particular 1.6m Boriswave getting settlements, will cause a huge spike in public spending and will require extra taxes / borrowing.

So if you tried to convince anyone that current immigration is good then you failed badly.
If you started a thread "How can we make UK attractive for highly skilled highly contributing immigrants" then the responses would be different.

This statement here you make. Quote-

"The government’s own immigration minister has admitted that lots of people will leave care once they get ILR."

I not saying you have to provide a link to that claim. I would be good, to check context and so on. But it would be good to know what immigration minister, when they said it etc. To give a starting point for where to fact check. Pedantic point I know, sorry.

Now the other bits of your post.

Quote " i don’t think our economy needs lots of people who work cash in hand in nail bars, or who work for 5 years in care, then get ILR and work in retail part time instead. "

Honest question. Do you have any idea of how difficult, and how expensive it is, for someone to get ILR ? I know people who have been through it. It is well into the thousands, My friend and his non UK DP... I think about 7k or something (anecdotal, depends on the process... lawyers or self. One couple done self, other couple used lawyers, the 7k is self)

The partners wages have a set minimum, the applicant has minimum wages, and all checked at a near forensic level.

These minimums were all set by May by the way (in the first instance), when she was home sec back in 2012 or so. Her argument was that she wanted to stop the "mail order partners". So someone (on benefits) could not head off to Thailand or Turkey, and come back with a spouse to live in a council house. What May done, in effect, is she made the entire concept of marrying a foreign national only available to the well off. So much for the concept of love eh ? Previous to May, spouse immigration was based on people being able to work in the world, fall in love and all that, and maybe settle in the UK at some point. She ended that for anyone but the rich.

People who come over on a visa and work in cash in hand jobs are not applying for LTR. They earn, contribute to the economy (in an illegal way) then head home.. with a bit of money. Because to get LTR, it is all checked.

NEAR EXACTLY THE SAME AS THE UK MIDDLE CLASS NOTION OF A GAP YEAR... SEE THE WORLD, WORK ON THE SIDE TO PAY FOR IT.

Not in every case of course, But what is the difference ?

To get ILR in the UK, the applicant needs to demonstrate they can contribute.

Anyway. When you say this " lots of people will leave care once they get ILR." Please think about what you are saying. Seems to me you are saying they should be stuck in a low wage job... instead of, you know.... earning more... and that means.... contributing more.

I am totally with @Mouldemort on this. Immigration is needed. For reasons Mouldemort explains. To change from that model needs higher taxes. And that is the proverbial blood from a stone it seems.

@DogsDinner you haven't answered the question. How do we pay for the shortfall in revenue?

I think Reform say "trickle down".

I think we need to wait for some nation and political party to get it to work, before reform put any effort into explaining it.

You are projecting.

I've had some answers - pay more tax and cut benefits.Those people at least understood the premise. Low wage channels have been cut down tremendously. If you want lower immigration, it's working.

I was not arguing anything about immigration levels, just asking people to answer the question.

Immigrants who get ILR are less expensive than UK citizens. See if you can figure out why.

Hi @RedTagAlan

the immigration minister was quoted as saying it at the Labour conference this weekend - that she had concerns that actually care workers would not remain in care work. Maybe she has withdrawn it, because I cannot find it on a quick google, but this is what she said. It’s borne out in the numbers - there’s little evidence that importing more workers has filled a skills gap in the long term. I would have no issue with a care worker getting a better, skilled job. I don’t think it’s cricket to work for 5 years, get ILR and then work cash in hand and claim benefits or go and do your 16 hours in Tesco and get topped up. This is what has been happening, unfortunately, because care is badly paid and that option exists for anyone. I don’t think this should continue to happen.

@renovationchoas the solution to this problem is higher taxes to pay for social care, and higher wages for care worker.

@Mouldemort “Change estate tax so that it's based on the recipients wealth and income, and not the size of the estate”

why? That’s a quick way to lose higher rate taxpayers.

is every idea you have about taxing people more? No ideas on saving money? We’re in such a ridiculous amount of debt.

Have I had an answer from you?

Yes, two I think.

will probably not be on here again for a bit… I get in a really good habit of not being on here and then it gets broken when I’m trying to distract myself from other stuff lol.

currently trying to hide from boring chores….

Fair enough. I should probably not post on these topics, but Reform seems to have infested these boards in the last few months.

I thought we were talking about taxes…

Oh, I’ve just looked back and saw that you replied to me last night sorry I missed that

why is it projection? The figures aren’t presented in any meaningful way in the terms that I mentioned. So I’m afraid I’m not convinced that there is a gap. Unless you are talking about stopping all immigration. Which is the political position of pretty much no one.

You might find these two sources useful

This has a graph that shows how things cancel out over time

https://migrationobservatory.ox.ac.uk/resources/briefings/the-fiscal-impact-of-immigration-in-the-uk/

this goes into a lot more detail, but it is ages since I skim read it!

https://ifs.org.uk/publications/migration-and-public-finance-forecast

I think the OBR themselves have admitted that they are not factoring in infrastructure and they are not factoring in what happens with dependents, or what happens with age and further entitlement to benefit for those who choose to stay here.

I have not heard it. So we can look together. Who is the UK immigration minister. I get Jo White MP.

Britain's PM Burnham names Jo White migration minister | Financial News (lse.co.uk)

It's Migration minister. Not immigration minister. Semantics sorry, please ignore.
Duties are

Minister of State (Minister for Immigration) - GOV.UK (www.gov.uk)

No results for Jo White news.

Can you remember where you saw this ? GB news, Telegraph, Facebook. I believe what you are saying. Just interested in where you saw it.

But this line., quote " that she had concerns that actually care workers would not remain in care work."

I do struggle to believe that. Because Labour do tend to be quite big on understanding the concept of bonded labour, and being against it, I mean don't they all have to know just a bit about Marx ? Could it be that she said " The data shows on the whole, that migrants move up the employment chain, contributing more to society "

That's the sort of thing a lefty would say.

Do you agree a lefty would say that ?

Hi @RedTagAlanit was reported in the Times in their thread on the Labour Party conference. It is Jo White, the Migration minister. I remember it, because it was a very unusual admission for a Labour MP…..

(Happens to be the truth though - economically, there is no benefit whatsoever to letting the Boriswave have ILR within 5 years and there probably isn’t for the care sector either, because it only helps people leave it. I personally don’t think it is bonded labour to require people to stay in the sector they got a visa for for more than 5 years, especially if they have brought dependents, or alternatively to say that these people who came to work in care as part of the Boriswave can have ILR but should have no recourse to public funds for longer because they will cost the exchequer more and have already had the very significant benefit of having a route to citizenship. Many countries have tied visas - people can go home instead. I don’t think it is acceptable for the government to sell off a route to citizenship and lifelong access to benefits for multiple people for the price of one person working in a care home. That is an unacceptable use of taxpayers’ money and I would rather use that money to train someone properly in care work and pay them properly.

How does a pyramid scheme stop being a pyramid scheme?

Thanks. Can't you quote it ? No matter if you can't.

And @RedTagAlan@Mouldemorti really don’t understand why you would be even trying to argue anything else from an economic point of view. Shabana Mahmood obviously isn’t a racist - her reforms are not about pacifying racists either. She is obviously doing things to reduce migration because it is obvious to her that the current system is a shit show and is costing the country money - it’s the only reason someone would do it in her position and from her background, because she believes it is the right thing for the country. If you disagree with her, that’s fine, but you do have to ask yourself why someone with all the data would take this “illiberal” (in your view) position as a woman from an ethnic minority background in the Labour Party if she did not genuinely believe it was the right thing to do for the country. It would be far easier for her to stand up and say what her party wants to hear. I tend to believe she has a stronger grasp of the realities than her colleagues, or many left supporters. It’s fine to disagree with her morally, but it is very odd to dispute the financial position!

@RedTagAlani can’t find it now - it might be because it was in a Live thread rather than an article so it’s not archived in the same way. You’d have to be a bit mad not to think about this issue though. Because if you reverse on the extension to ILR and lots of people leave the care sector in the next couple of years AND claim top ups and benefits, it will be an absolute gift to your opponents….

Cheers. I know what you mean re live feeds. I expect it will be on GB news soon enough.

Andy Burnham proposes national care service — as it happened

“I don't want us to get into that spiral where people move out of the care sector because they've got [indefinite] leave to remain. And this is what we hear from people coming from other countries, that they're here to work, but they then want to go on to other things.”

The Times reports that White was speaking at a Fabian Society fringe event and was discussing proposals that could increase the qualifying period for indefinite leave to remain from five years to 10 or 15 years. It says she warned that allowing around 600,000 social care workers and their dependants to obtain permanent residency could lead some workers to leave the sector.

As I said above - if you live in shitty conditions and want to move to UK it's not a prohibitively high price to pay to spend five year wiping bums, then get ILR and Bob's your uncle. Brits don't want to do hard and poorly paid care work because they have other options, incl life on benefits. The moment immigrant care workers receive ILR they technically become Brits in all entitlements, so they have the same options. Why would they continue wiping bums if they can work in Tesco or develop anxiety and depression and go on benefits? and bring large family here as well.

Importing cheap labour to bridge the gap is exactly the same as government borrowing - you don't fix the issue, you're creating more debt and it's getting more expensive to service.

Google finds it still in the Time and in the ipaper, but it’s behind a pay wall.

well done @nearlylovemyusernamethat’s the one! And well done @EmeraldRoulettefor finding it too - clearly some level of ineptitude on my part.

@RedTagAlani wasn’t imagining it - that is an acknowledgement by the Migration minister that care workers will likely leave if they get ILR at five years and that is an undesirable outcome.

yes @nearlylovemyusernamei totally agree with you, it’s an obvious path to a better life - I don’t dislike or blame the people who do this in any way at all, but it represents extremely poor value for the British taxpayer and keeps labour costs low in the care sector, which surely lefties should not actually want.