A new report from the Social Market Foundation thinktank (SMF), suggests that net migration to the UK could fall by 58% next year.
The report, Net migration, unemployment and job vacancies, provides three forecasts of net migration levels between 2016 and 2020.
The third of the forecasts, based on early post-referendum figures on the impact of the ‘Leave’ vote on job vacancies, would mean the government would hit its target of net migration in the ‘tens of thousands’ by 2019, but at a large economic cost.
The report’s author, SMF researcher Ben Richards said:
“Two of our forecasts show that the Conservatives will meet their net migration target after all, even without any changes to immigration policy. This is the result of a deteriorating economic outlook, including a sharp reduction in job vacancies and increased unemployment.”
“These forecasts don’t take into account actual policy changes on migration – such as the possibility of stricter immigration rules in the event of leaving the EU – but instead just consider how migration tends to fall when unemployment rises, and so in this sense are cautious estimates. The next few years could demonstrate that the state of the economy is more important for net migration than EU membership.”
Summary of the report’s forecasts:
Forecast 1: our central forecast based on estimates of unemployment trends
- Net migration will be substantially lower than it would have been in the event of a Remain vote because of the UK’s negative economic outlook. Net migration will fall to 162,000 by 2018 and 131,000 in 2020.
- Note that these forecasts don’t take into account actual policy changes on migration – such as the possibility of stricter immigration rules in the event of leaving the EU. Instead they only consider how migration tends to fall when unemployment rises. If the Conservatives implement strict immigration policies these numbers could be much lower.
Forecast 2: based on a more pessimistic economic outlook where the UK leaves the Single Market entirely
- Under this forecast the falls in net migration are even greater, to 130,000 in 2018 and to 99,000 in 2020.
- Under this forecast the Conservatives would hit their net migration target in 2020.
- This would, however, come at a substantial economic cost.
Forecast 3: based on early post-referendum figures on the impact of the Leave vote on job vacancies
- Net migration could fall 58% by next year.
- The Conservatives would hit their net migration target even earlier, by 2019, but at a large economic cost.
Key points from the report:
- Immigration is a hugely salient issue politically. Evidence suggests it was a key driver of the Leave vote in the referendum.
- Net migration to the UK has been high by historical standards. David Cameron promised to reduce migration to the tens of thousands, a target the Conservatives consistently failed to meet. Some commentators have suggested this failure contributed toward the Leave vote in the referendum and ultimately Cameron’s resignation.
- Most economic projections suggest a difficult time for the UK in the wake of the Leave vote, leading to reduced economic output. This is likely to mean higher unemployment and lower job vacancies than would have been the case had the vote been to Remain.
- But unemployment and job vacancies are strongly correlated with net migration, and so this may also affect net migration levels.
- This means Theresa May could face an easier task in reducing net migration numbers than David Cameron did.
- We estimate net migration levels between 2016 and 2020 based on likely trends in unemployment and job vacancies.
-ENDS-
Notes to editors:
A copy of the report, ‘Net migration, unemployment and job vacancies: What will increasing unemployment and falling job vacancies mean for net migration by 2020?’, is available here.
The report is the first attempt to use the latest job vacancy figures and estimates of the effect of a ‘Leave’ vote on unemployment to predict the impact on migration.
The author of the report, SMF researcher Ben Richards, is available for interview. Please contact SMF director of communications David Mills – 020 7222 7060 / david@smf.co.uk
About the Social Market Foundation:
The Social Market Foundation (SMF) is a non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. We conduct research and run events looking at a wide range of economic and social policy areas, focusing on economic prosperity, public services and consumer markets.
