June 15, 2010
Some press reports have implied that the Office for Budget Responsibility has come up with a revised estimate of net immigration. It has not. It has chosen to adopt an estimate over the next five years that is close to the low migration scenario of the ONS. This produces a conservative estimate of the increase in the labour force.
A reduction in immigration is always associated with a recession but, over the past three recessions it has bounced back in the medium term to its trend growth. In any case, it is not total GDP that matters but GDP per head, as the House of Lords Economic Committee pointed out in their ground breaking report of April 2008. As they put it, 'Overall GDP, which the government has persistently emphasised, is an irrelevant and misleading criterion for assessing the economic impacts of immigration on the UK'.
Nor should it be assumed that all immigrants add to the labour force. Most immigrants do not enter as labour migrants; a significant proportion will be dependants and others who are economically inactive.
Commenting, Sir Andrew Green, Chairman of Migrationwatch, said ‘If only life were so simple. In fact, the immigration lobby has been a little too quick to jump on this aspect of the report which is no more than a short term and conservative assumption that the OBR have chosen to make.’