Migrants needed to pay for NHS spending or Britain will go broke, says OBR

Improve NHS efficiency drastically or face boom in national debt burden, Government forecaster warns

Economics Editor

Britain needs to continue to welcome hundreds of thousands of new migrant workers every year in order to keep the public finances stable over the next half century, the government’s official fiscal watchdog has said.

The Office for Budget Responsibility warned that if all immigration stopped from 2016 then growth would be lower – and the public debt burden could be expected to balloon to 174 per cent of GDP over the next 50 years.

Issuing its annual long-term analysis, the body tasked by the Government with checking the state of the country’s finances said that net immigration will be 140,000 per year. It expects migration at this rate will see the national debt increase to around 100 per cent of GDP by 2062-63, up from its present level of 75 per cent of GDP.

Contrary to the accusation that immigration puts more pressure on the country’s finances, the OBR added that if net immigration were to rise to 260,000 a year over the next five decades, the national debt would still be below 80 per cent in 50 years’ time.

“Overall migration has a positive impact on the sustainability of the public finances”, said the OBR. “Since migrants tend to be more concentrated in the working-age group relatively to the rest of the population immigration has a positive effect on the public sector’s debt dynamics”.

Despite these projections from the OBR, the Coalition has pledged to bring annual net immigration down to “the tens of thousands” by 2015. The most recent figures from the Office for National Statistics showed that there was net immigration of 153,000 to the UK in the year to September 2012. This was down from 242,000 in the year to September 2011.

The organisation also warned that the UK’s national debt burden could explode over the next half century unless the efficiency of the National Health Service improves drastically.

It said that an ageing population would impose considerable strain on the public purse over the coming decades by increasing demand for health spending. The OBR added that if productivity in the health sector did not rise in line with efficiency in the rest of the economy – and if more state resources had to be diverted to health as a result – the national debt could spiral to over 200 per cent of GDP by the 2060s.

The UK last had a debt burden above 200 per cent of GDP when it emerged from the Second World War. In the medium term the OBR expects the national debt to rise to 85.6 per cent of GDP 2016-17 before falling back until the 2030s.

Stripping out the uncertainty about health productivity, the OBR said that the state’s long-term structural fiscal position had actually improved since last year. The watchdog said that the improvement was a result of the extra fiscal consolidation that George Osborne has pencilled in to take place in the next Parliament.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Provisioning Specialist

Negotiable: Recruitment Genius: A Provisioning Specialist is required to join ...

Recruitment Genius: Sales Apprenticeships

£10000 per annum: Recruitment Genius: This is an outstanding opportunity for 1...

Recruitment Genius: Customer Support Engineer

Negotiable: Recruitment Genius: A Support Engineer is required to join a well-...

Recruitment Genius: Customer Services Administrator - Swedish Speaking

Negotiable: Recruitment Genius: This is an exciting opportunity to join an awa...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum