Brexit Migration Drop Bad For Economy: Report

A post-Brexit migration drop would be bad for the economy and lead to tax rises, according to a top economic think-tank.

A reduction in net migration would have a "significant negative impact on the public finances", the National Institute of Economic and Social Research found.

Fewer migrants would lead to a lower GDP, which would trigger an increase in taxes for Britons to allow the government to balance its books.

Experts said wages would initially increase because there would be fewer people to fill vacancies but this would not translate to people's pockets because of the rise in taxes.

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They found that by 2065, taxes would need to have increased by £400 per person to make up the shortfall.

NIESR said the research, which they claimed was the most comprehensive analysis of the long-term effect of immigration on the UK economy, found the impact would take some time to materialise.

The research assumed that if the UK left the EU, net migration from the EU countries would decline by two thirds compared with Remain.

Net (LSE: 0LN0.L - news) migration in the UK currently stands at 323,000. David Cameron had vowed to reduce it to the tens of thousands but has missed his targets.

Study author Katerina Lisenkova said: "Our research shows that lower migration has an overall negative effect on the UK economy. In general EU immigrants benefit the UK economy for two main reasons - they are on average much younger and are more highly qualified than the general population."

While the study suggests EU migration is good for the UK, the authors admit they did not consider the cost of providing extra public services for migrants.

The report said: "While we take into account the direct impact of migration on population and hence on public expenditure, including capital spending, we do not capture the negative externalities resulting from, for instance, congestion.

"Finally, these simulations do not take into account the potential social impacts of higher immigration."