Fewer immigrants could cost Treasury billions

Well, back in 2024 the Office for Budget Responsibility told the UK Treasury that fewer immigrants could cost it billions of pounds, which came as a surprise mostly to the people who had spent the election promising fewer immigrants and more money.

I don’t blame them. Every party in Britain has run on bringing the number down. Then the winner walks into the Treasury, opens the books, and finds that the number was holding up the ceiling.

Here is how it works, as near as a cowboy can figure. The OBR looks about five years down the road, and no further. A young fellow lands at Heathrow on a Tuesday to work in a care home, and by the end of the month he is paying income tax. He arrived already raised and schooled at some other country’s expense. Inside those five years he is nearly all income to the Exchequer. His pension, his bad knee and his children’s schooling come later, off the edge of the page.

So the forecast ain’t lying. It’s just short-sighted by design, like a rancher who counts the calves sold this spring and leaves the winter feed for next year’s ledger.

Now, the folks who want the number cut have a real argument, and it deserves better than a sneer. They say a newcomer grows old like anybody else, and a bigger economy is not the same as a richer household. They say that low-paid arrivals may take out more over a lifetime than they put in. Some of that is plain true.

But it answers a question the Chancellor is not being asked. The fiscal rules get marked against that same five-year forecast. A Chancellor passes or fails on the short book, and on the short book every arrival is a credit and every one turned away is a hole. The lifetime sum may be the honest one, but nobody at the dispatch box is graded on it.

That is the part I find restful. Both parties tell the voters the number is coming down, then hand the OBR a budget that only adds up if it doesn’t. It isn’t hypocrisy so much as two different audiences, and only one of them checks the arithmetic.

So the cut keeps getting promised and the billions keep getting counted. Somewhere in a care home, a man who has never heard of the Office for Budget Responsibility is lifting an old lady out of a chair and balancing the Budget while he does it.