Boris Johnson’s plan to end free movement and introduce new immigration controls after Brexit will cut economic growth and barely im in people’s standard of living, a key report has said.
The Migration Advisory Committee (MAC) was commissioned by the government to help inform its plans to introduce and Australian-style points-based immigration system after Brexit.
But the report rejected a full Australian-style system, instead recommending a mixture of the existing model of salary thresholds for immigrants with a job offer, and introducing a points-based system for skilled migrants without a job offer.
MAC also recommended the prime minister cuts the controversial minimum salary threshold for skilled immigrants from £30,000 to £25,600.
Ending free movement for EU citizens, imposing salary thresholds and introducing a points-based system would reduce immigration and the total population but also hit economic growth through lower gross domestic product (GDP), MAC said.
The report said it also expected such a system to “very slightly increase” standard of living through increased GDP per capita, while forecasting a small boost to productivity and an improvement in the public finances, “though these estimates are more uncertain”.
The changes will also reduce pressure on the NHS, schools and social housing, but increase pressure on social care, increase the ratio of dependent children and elderly people to workers, and “have larger impacts on some sectors and areas than others”.
Briefing reporters, professor Alan Manning said the new system would have essentially “zero” impact on employment opportunities and wages for British workers, and said GDP per capita would only rise because the mix of people in the economy was changing.
“It’s not saying that people’s living standards will go up,” he said.
“Immigration hasn’t really harmed people’s employment opportunities or their wages but equally it hasn’t really benefitted it very much either.”
MAC's headline recommendation was to call for a reduction in the amount a prospective immigrant must earn to come to the UK with a job offer by £4,400 - to £25,600.
It also called for higher salary thresholds based on a worker’s occupation, with higher paid jobs having higher thresholds.
Teachers, skilled NHS workers and other new entrants would continue to benefit from lower salary thresholds.
A points-based system should be introduced in the route for skilled workers without a job offer, MAC said.
Talented individuals would register their interest in coming to the UK with monthly invitations to apply drawn from the pool, in line with other points-based systems.
The MAC chair, professor Alan Manning, said: “Our recommendations are likely to reduce future growth of the UK population and economy compared to freedom of movement, by using skill and salary thresholds.
“We estimate very small increases in GDP per capita and productivity, slightly improved public finances, slightly reduced pressures on the NHS, schools and on social housing, through slightly increased pressure on social care.
“No perfect system exists and there are unavoidable, difficult trade-offs.
“The largest impacts will be in low-wage sectors and the government needs to be clear about its plans for lower-skilled work migration.
“The government should ensure that the mistakes of previous UK points-based systems are not repeated.”