Thursday 23 February 2017 4:53 pm

Economists react: Immigration from eastern Europe falls as net migration dips below 300,000

Immigration to the UK from countries in central and eastern Europe fell significantly in the year to September, including the period after the EU referendum, while net migration dipped below 300,000, new figures show.

Emigration by nationals from the eight nations which joined the EU in 2004 tripled, according to the Office for National Statistics (ONS), while there was also an increase in people from outside Europe moving out of the UK.

The number of people moving to the UK fell from record highs to 596,000 in the year to September, although this was not statistically significant change, the ONS said. Net migration fell as well, to 273,000, still well above the government's target of 100,000.

Migration from the eight countries in central and eastern Europe which joined the EU in 2004 – labelled the “EU8” by the ONS – is politically contentious, with limiting immigration cited as the second most common reason for people to vote to leave the EU in one study.

	YE Sept 2015	YE Sept 2016	Difference
Net migration	+322,000	+273,000	-49,000
Immigration	619,000	596,000	-23,000
Emigration	297,000	323,000	+26,000

Net migration fell below 300,000 (Source: Office for National Statistics)

Former Prime Minister David Cameron promised to reduce net migration to the “tens of thousands”, a promise which current Prime Minister Theresa May has not yet attempted to change.

"Crazy" targets

However, David Davis, secretary of state for exiting the EU, said this week that Britain would not immediately limit the number of immigrants coming from Europe as the economy needs labour.

Jonathan Portes, a professor of economics at King’s College London, predicts a hit to GDP of 0.6 to 1.2 per cent lost growth over five years if EU migration alone is halved.

“Having a target is crazy,” he says. “It’s possible you might hit it by accident” but central government control of the labour market is unlikely to work.

That was echoed by Kate Andrews from the Institute of Economic Affairs. She says: “The arbitrary target completely discounts the changing economy that we live in.”

Immigrants on average pay more in taxes than they use the welfare state, according to a study by academics at the London School of Economics (LSE).

Government should therefore focus on offering businesses policy consistency, Andrews says: “Rather than focusing on quotas we need to focus on rules.”

Politics versus employers

That course of action seems "unlikely", says LSE economist Philippe Legrain: "As of now, the government's priority is tighter controls on immigration, for political reasons."

He added: "But tighter restrictions will have an economic cost, both directly – because migrants make the economy more dynamic, bring valuable skills and do jobs that not enough locals want to do – and indirectly, because controls on EU migration entail leaving the EU single market, which will further disrupt trade."

The option floated by David Davis of retaining migration for "years and years" after Brexit reflects the view of employers, particularly in the food production and hospitality sectors, says Heather Rolfe, associate research director at the National Institute of Economic and Social Research (Niesr).

Businesses are already "finding it more difficult to recruit", she says, with explanations referencing the fall in the value of the pound, which makes the UK less attractive to immigrants, and a more general "attitudinal issue" after a rancorous referendum debate.

Davis's comments will be "music to these employers' ears", Rolfe says – although she notes she is "not so sure" how well they will go down with some elements of the public.

The long term

The ONS described the fall in migration from the eastern European countries as “statistically significant”.

However, Nicola White, head of international migration statistics at ONS, cautioned it is too early to tell if the decrease is part of a long-term trend.

She said: “Although we have seen a fall in net migration of EU8 citizens there have been continued increases in immigration from Romania and Bulgaria, so it is too early to say what effect the referendum result has had on long-term international migration.”

There was also a statistically significant decrease in students from outside the EU moving to the UK to study, the ONS said.

Migration to the UK reached record levels in the year up to the EU referendum. A record number of EU migrants boosted total migration to the UK to 650,000, although the migration from countries outside of Europe still accounted for a greater proportion of people arriving in the UK.

After the global financial crisis the number of people moving to the UK dipped significantly below the 500,000 mark, but since reaching a trough in 2012 it has risen steadily since then to reach new highs.