Major cut in EU migrants risks long-term damage to UK economy – report

A major cut in immigration from the European Union to Britain after Brexit would produce a damaging long-term hit to future economic growth while yielding only a “modest boost” of under 1% to the wages of low-paid workers, new research has found.


The study by the National Institute of Economic and Social Research (NIESR) thinktank says a “middle range” Brexit where EU immigration falls by as much as 91,000 a year would cut the growth of gross domestic product per head by 3.4% lower than it would otherwise have been by 2030.


But in the more extreme scenario of a hard Brexit where EU immigration was cut by 150,000 a year – which may be needed to hit Theresa May’s 100,000 a year net migration target – the economists say this would hit annual GDP per head by 5.4%.


While the economy was taking such a long-term damaging hit the NIESR economists say the effect on wages of those in low-skilled jobs in the most directly affected industries such as construction, retail, hospitality and food processing would be, if at all, relatively modest.

The study’s “middle range” scenario says the pay of those in such low-skilled jobs would rise by up to 0.51% by 2030 while in the hard Brexit scenario they would increase by 0.82% a year.


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