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/

Yes, I agree with this. I wish the issue wasn't such a political football and so loaded with emotion. The UK should be looking at what we need as a country and go from there.

Yes I agree. And I was thinking as I was typing about black Brits. This affects them also. It even affects ethnic Brits/ immigrants. They aren’t being hired in these silos if they don’t match either. It’s not good for anyone.

And I don’t think it’s a choice bias. I think it’s natural because you hire people on instinct, who can you trust. You can easier trust people you can read. And it’s much easier for a Turk to read a Turk or an Indian to read an Indian. We do it here in Britain ourselves with class. We can place/ read our own class better so people preferably hire in that arena.

Basically there’s no solution. I don’t think they are being purposefully excluding/ racist. But adding more immigrants is 100% not the answer.

Yet, say for doctors, our medical schools/unis are grossly oversubscribed so youngsters who are perfectly capable of being trained up don't get the opportunity and end up in other careers/professions. Even those who qualify sometimes can't find jobs in the NHS. At the same time, we're bringing over immigrant doctors. It makes no sense. We should increase the number of training places so "home grown" students can train in the UK and work in the UK. I understand it's similar with nurses and other healthcare professionals.

I think a big problem in the UK is that university places/courses don't "match" the careers/jobs needed. It's a throw back from a few decades ago when students went to Uni because they had a love of the subject and wanted to study it. Now people go to Uni because they need a degree for most of the decent jobs/careers/professions, yet the Uni system hasn't adapted/changed to being "work" centred rather than academic for academia sake.

Yes, the ideology needs to change. We need to persuade the NHS that training and recruiting British young people as doctors and nurses isn't some rabidly racist right-wing agenda. The NHS seems to be very fixated on being an international workforce.

And the government needs to be more proactive in directing students to the areas of work that are needed.

The NHS needs the most highly skilled workforce it can get. That means hiring the best people regardless of race or nationality.

We should be mindful of the brain drain from developing countries that cannot afford the benefits and high wages that we can afford to pay doctors.

We should also remember that some countries train healthcare workers specifically specially for export. And those workers send money home. The Philippines and its nurses are an example.

Yep, India does the same.

So why doesn't the UK increase the number of training/Uni/medical school places? This has been a problem for decades, yet medical school places in the UK are still grossly over-subscribed and very hard to get.

"Are you willing to pay higher taxes to pay for the shortfall? Should we lift restrictions on immigration to keep taxes lower?"

This is a false dichotomy. The state should cease providing this service, people can buy it from private markets, and taxes can be lower. There's an obvious way to have your cake and eat it.

Oh I know how oversubscribed it is. My dd is a medical student at the moment and I know what it's like.

They have actually increased the numbers a bit recently but my understanding is that there simply isn't the capacity within the NHS to train more doctors at the moment. And of course, there are costs to consider as well.

Not sure about the situation with nurses - I had heard that applications were significantly down so not sure if they could fill additional places even if they offered them?

Not that many though. And the Philippines is a bad example as the care throughout the country as a whole is poor. The doctors would prefer to come here than go into rural poor areas.

It’s a very good example because it’s a deliberate political and economic strategy. If we didn’t employ those nurses the US, Canada and Australia certainly would.

My original point is that developing countries are sending doctors sorely needed by their own populations to us. Its all rather colonial really. Surprised you support it really, being of a lefty persuasion.

And my point is that they’d leave anyway. I’d rather we had them than another country.

But I thought the left had principles? This seems really quite a strange approach. What about all the poor people in the countries without health care? It's really terrible. On some African countries they have a single doctor to cover thousands of women for neo natal care for example.

We have plenty of kids wanting to train as doctors but I hear loads of stories of straight A* pupils being rejected from medical school.

It’s called pragmatism. Take it up with the Filipino government.

You're the one focusing on the Philippines though, when I was focusing on African countries. You can't say "pragmatism " to a brain drain of medics from some of the poorest countries on earth, surely?

I can when it’s nurses from a country which has a policy of training more nurses than it needs in order to export them. And who will migrate to other countries whether or not they came here.

Other countries don't do this. They prioritise their own workforce before recruiting from abroad. The proportion of foreign healthcare workers in comparible countries is much lower.

The NHS also doesn't prioritize recruiting British trained doctors into the NHS which is completely crazy.

Not if those trained elsewhere are better. I want the best regardless of where they were trained.

Agree. It's crazy that poorer countries are supposedly training a surplus of doctors and nurses so that they leave to go to work in richer countries.

Yet we don't train enough of our own because we don't have the capacity, ie we can't afford to. Makes no sense at all.

We should train up our own young people and recruit our own young people. Then the wages they earn, instead of being sent abroad, will be recirculated into our own economy.

How interesting that there simply isn't the capacity within the NHS to train more doctors at the moment ... when much poorer countries seem to be able to train a surplus of them, so that they leave to work in other (much richer) counties.

It's pragmatic to recruit nurses from abroad

Does this apply to doctors too? It's OK for the NHS to recruit doctors from countries where the ratio of doctors to patients is far lower? All fine and dandy.