Immigration boost to economy overestimated, claims think tank

THE Office for Budget Responsibility (OBR) has been accused of exaggerating the tax contribution of future migrants to the tune of £6 billion.

The Centre for Migration Control claimed that the watchdog had “vastly overstated” the tax take by overestimating how much skilled migrants earn. The OBR provides forecasts to accompany government fiscal events.

Its projections influence how much the Treasury has at its disposal for extra spending or tax cuts. Conservative MPs have accused it of giving excess weight to the economic benefit of liberal immigration policies, with net migration hitting a record of 745,000 in 2022.

In its forecast produced for the Budget at the start of this month, the OBR said that it has assumed that “new migrants have the same employment, consumption, and residential patterns as residents, and as such pay similar levels of wider taxation”.

However, the CMC disputes this. Using data from the Office for National Statistics, the think tank said that in 2023 the average salary for a resident skilled worker was £37,614, whereas for a skilled migrant worker it was £31,431.

It said this reflected the fact that a higher proportion of skilled worker migrants are in lower paid professions such as “care worker and home care”.

The CMC said the difference between the salaries of resident and skilled migrant workers meant that the OBR had overstated the average income tax and national insurance paid by migrants by £1,855. Projecting their analysis over the OBR’s forecast to 2028-29, the CMC estimated that the watchdog had overstated salaries for migrants on skilled work visas by £20.5 billion and their tax contribution by £6 billion.

Sir Jacob Rees-Mogg, the former business secretary, said: “If you look at the recent decline in GDP per capita it shows that the open-door project has failed to deliver anything but declining wages and living standards.”