Cameron's plan to cut migration to under 100,000 would add £300BILLION to national debt, economic watchdog warns

David Cameron wants to reduce net migration to the 'tens of thousands'

Office for Budget Responsibility says foreign workers needed to raise tax

Over 50 years cap on immigration would increase public debt by 20%



David Cameron’s plan to cut immigration could cost Britain £300billion, the official economic watchdog warned today.

The Office for Budget Responsibility warned the loss of taxes paid by migrants would far outweigh the costs providing extra benefits or school and hospital places.

The Tory plan to reduce net migration to below 100,000 would, over a 50-year period, increase national debt by 20 per cent or £300billion in today’s prices, the OBR claimed.

Robert Chote, chairman of the Office for Budget Responsibility, insisted migrants provide more in tax than they cost in public services

Mr Cameron has pledged to reduce net migration to the ‘tens of thousands’ but last year it emerged net migration – the difference between people arriving and those leaving - had risen for the first time in two years to 182,000.

The OBR has repeatedly put itself at odds with government policy on immigration, claiming in July that the UK would need 7million extra immigrations over 50 years to meet the costs of caring for the elderly.

Today OBR chairman Robert Chote told the House of Commons Treasury Committee that immigration boosts national income.

He argued that migrants are more likely than native Britons to be of working age and less likely to make use of benefits, pensions and healthcare - even after taking into account additional spending on schools, GP surgeries and hospitals to cater for incomers.

Prime Minster David Cameron wants to cut net migration to under 100,000 but in the latest figures it rose to 182,000

Mr Chote told MPs: ‘Essentially speaking, inward migrants are more likely to be of working age than the population in general.

‘They arrive after some other country has picked up the expense of educating them and in some cases - though not all cases - they leave the country again before you get to the point at which they are most expensive, in terms of pensions, healthcare and long-term care.

‘In terms of the fiscal position, that is what drives the fact that higher net inward migration over this time horizon does tend to produce a more beneficial picture.’

The OBR argues that allowing 140,000 immigrants of working age into Britain each year – totalling 7million over 50 years – would fill jobs and raise taxes for Treasury coffers.

The coalition is split on the issue of immigration, with Lib Dem Business Secretary Vince Cable dismissing the Tory target as unworkable and risking the economy.

He was backed by Mr Chote, he warned that with fewer inward migrants, ‘the fiscal position would be somewhat worse’.

The OBR's Fiscal Sustainability Report, produced last year, predicts that public sector net debt will stand at just under 100 per cent of GDP by 2063 if net migration continues at 140,000 a year.

But it will reach as much as 140 per cent of GDP if it is reduced to zero.

A half-way point, to model the impact of cutting net migration to the tens of thousands, would lead to a rise in debt as a proportion of GDP of around 20 per cent, the committee was told.

Open door policy: Without high levels of migration to Britain, public debt will balloon to become larger than the entire economy, the Office for Budget Responsibility said

Conservative committee member David Ruffley asked whether the OBR had taken into account additional spending on services like nursery and school places for migrants' children and the extra demands they make on GP surgeries and hospitals.

Mr Chote stressed that future governments have the power to alter the fiscal outcome of a shift in migration levels by changing policies in other areas:

‘Clearly if you made a choice on migration, or an assumption on migration, that made the fiscal position look better or worse, then you could adjust other policies to compensate for that.