Migrant Inflows Mask Lifetime Fiscal Drains

Rachel Reeves faces bond market jitters ahead of her Budget. Lenders question Britain’s long-term solvency as annual shortfalls persist. Labour eyes tax rises after backbenchers block spending cuts.

The Office for Budget Responsibility offers an escape hatch. Its models treat immigration as a growth booster. Incoming workers lift headline GDP and productivity figures.

This overlooks deeper costs. Low-skill migrants from sectors like care often arrive near retirement age or with dependents. They claim benefits without reaching the income threshold to offset lifetime fiscal contributions.

OBR projections span five years at most. They ignore pension liabilities and welfare draws that extend decades. Short-term wage suppression in state-funded sectors props up paper productivity.

Governments exploit this mechanic. Treasury pushes for higher net migration forecasts to ease borrowing constraints. Investors see solvency risks, but models hide them.

Credibility gaps cripple reform. Labour cannot challenge the OBR, a George Osborne creation to curb spending excesses. Starmer’s team lacks authority to declare its assumptions spurious.

Cross-Party Paralysis

Sunak’s government fell to similar market nerves. Neither party confronts low-skill inflows as long-term liabilities. Decades of orthodoxy brands such critique as bigotry.

Cutting these visas holds leverage. It signals fiscal discipline to investors and taxpayers. Public buy-in could follow for necessary austerity.

Yet ministers deflect. Reeves blames Tory austerity and external critics. Intellectual clarity on migration’s net costs remains absent.

Britain’s fiscal black hole widens. Record welfare commitments, referenced in recent OBR updates, demand ever-higher revenues. Migrant labour fills immediate gaps but accelerates insolvency.

Taxpayers bear the load. Compliant workers fund benefits for low-contributors, imported or native. Productivity stagnates as real output per head trails peers.

Institutional models perpetuate denial. OBR simplifications serve political expediency across administrations. No government breaks the cycle.

This Budget ritual exposes core rot. Leaders prioritise short-term optics over solvency math. Ordinary citizens face squeezed living standards amid mounting state debts.

Britain’s decline accelerates through fiscal illusion. Migration props up failing budgets today and burdens tomorrow’s ledgers. Governments of all stripes choose denial over arithmetic.