Britain’s net migration could, in time, drift towards something close to zero – a level not seen since the early 1990s. The latest official estimate is 204,000 for the year, down by around two-thirds, as arrivals for work and study fall and emigration rises. In Westminster, that headline will be treated as a political weather vane: proof that “control” is being regained.
But the headline tells us little about what will matter in 2029: will Britain be richer or poorer as a result? History tells us that British voters reward economic performance and perceived competence – almost everything else is a distraction. Migration matters, but the economics matter more.
Over the past decade, Britain has grown largely by adding workers – not by making them more productive. Productivity growth has been weak; labour supply has done the work. Under that model, fewer people arriving means a smaller economy and lower headline GDP. But the impact on GDP per head – on actual living standards – depends entirely on who comes and goes.
A thousand extra working-age engineers is not the same as a thousand people who never enter the labour market. High labour force participation and strong skills can lift GDP per person and make the economy more dynamic and innovative. A larger and less productive population competing for the same housing stock, infrastructure, and capital cannot.
The risk now is that Britain gets the worst of both worlds. The recent fall reflects both reduced inflows and higher emigration. If the country is becoming less attractive to high-productivity workers (engineers, scientists, managers) while those not contributing remain, our underlying problems will worsen.
Migration’s impact on the government’s finances is determined by composition. A young, high-earning worker educated elsewhere will often be a strong net contributor. An older worker earning marginally above subsistence with many dependants will not, particularly once housing support, health costs, and later-life spending are taken into account.
Inflows of high-earning, working-age taxpayers can help pay for the NHS and create room for the kind of infrastructure spending Britain keeps postponing: housing, transport, energy networks, and capital stock that raises productivity. Done properly, migration can strengthen the fiscal base that makes public service renewal possible, rather than forcing every spending choice into a zero-sum fight.
But migration is not always the answer to public service renewal. In recent times, it has been used as a tool to keep public spending down, often in ways that disguise future costs and harm current worker welfare. The public sector bill has been suppressed by bringing workers from abroad on low wages. That looks cheap in a spending round: lower salaries today mean lower immediate outlays. But this is short-sighted. Those same workers will claim pensions, use the NHS and potentially need welfare. The government has not produced modelling that suggests suppressing wages in the short term is a good long-term deal.
Britain has been undervaluing skilled work. Take the NHS: we cap domestic training because clinical placements and supervision are under pressure, then fill the gaps by recruiting from abroad. If Britain wants fewer migrants in low-paid public services without creating labour shortages, it must bring the nine million economically inactive working-age people into employment, train them, pay them more and raise productivity so those higher wages buy better services.
Part of the problem is that the OBR treats all migration as good for the public purse, and their numbers determine whether the government can meet its fiscal rules. The OBR’s five-year “impact of migration” analysis treats the marginal migrant as an average UK adult taxpayer and adjusts for migrants skewing working-age: it assumes similar employment, consumption and housing patterns, so similar per-capita tax take. This means the Treasury will always be pressured to encourage migration without a view to composition to create headroom, even when the longrun impacts are uncertain.
Public opinion, for all its heat, is not irrational on this point. Voters distinguish between routes and roles. They are far more hostile to irregular arrivals and benefit claimants than to people who come legally to work in skilled jobs. The default demand is not “no migration” but “control” and “fairness”, with a stronger presumption of contribution. The risk is that a decreasing net figure creates complacency: a government can congratulate itself on the headline while the sources of resentment remain.
The answer is to stop treating net migration as a target and redesign the system explicitly around lifelong contribution. This is particularly important at a time when public services are overstretched. The guiding question should be: who will contribute more to Britain over their lifetime than they take out?
That means prioritising genuine skills, earnings capacity and lifetime contribution. It means recognising that not all jobs are equally valuable for growth or the fiscal position – and that age matters. A 25-year-old earning £45,000 would be expected to contribute over their lifetime. A 55-year-old earning the same amount likely will not. Salary thresholds are a crude tool, but they acknowledge a basic truth: in a high-cost welfare state, earnings do much of the heavy lifting. A system designed around contribution would be transparent about these trade-offs.
But contribution-based migration will only work if Britain also tackles the domestic failures it has been masking. If the government wants fewer low-wage migrants, it cannot simply tighten visa rules and hope – we tried that with Brexit, and it backfired. It must address why so many working-age Britons are outside the labour market, why productivity has stagnated and why public services have become reliant on suppressed wages.
The net migration number itself tells you nothing. What matters is the composition: are we keeping the workers who raise living standards and losing those who don’t, or the reverse? A net figure of zero could mean an economy that has become more selective, or a stagnant one that has become less attractive.
[Further reading: Will the British public accept troops in Ukraine?]
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