2015 02 DEC
George Osborne came under fire from MPs on Tuesday for refusing to admit that he plans to rely on a strong rise in net immigration to achieve a budget surplus at the end of the parliament.
The chancellor said the increase in jobs over the next five years would be taken mainly by Britons, despite figures from the independent Office for Budget Responsibility (OBR) last week showing the government would need to almost double net immigration to hit its target of a £10bn surplus in 2020.
The Labour MP John Mann accused Osborne of failing to acknowledge that bringing down the annual deficit could only be achieved by increasing the number of new jobs and finding migrants to fill them.
He pointed to figures from the OBR showing that it expects the economy to generate more than 1.5m new jobs before 2020. The OBR forecasts for the chancellor’s autumn statement last week show it expects net immigration to increase by 925,000 over the same period, a near doubling in its forecast since it published estimates at the beginning of the year of a 525,000 increase.
Mann said: “It is simply not possible to find more than 1m jobs from the unemployed, school leavers and the economically inactive over the next five years. That is something the OBR recognises. So am I right in thinking that we will need net immigration of 1m in the cycle to achieve a budget surplus?”
Osborne replied: “People can enter the labour force for many reasons. They can be school leavers, graduates or people who are currently economic inactive and not currently in receipt of benefits. I’m not sure I follow the logic of the questions. But when it comes to migration, we are not trying to stop migration we are just trying to get it down to manageable levels.
“Because of the action we are taking to create the skills for our young people to gain employment means unemployment is very low and the employment rate is very high.”
Mann said Osborne had failed to recognise figures in the OBR forecasts that accompanied last week’s autumn statement showing that the public finances will benefit from higher tax revenues following higher than expected net immigration.
The OBR has raised its projections for inward migration twice this year. For the emergency budget in July, its projection went from 105,000 people a year to 165,000. The figure was revised again to 185,000 as part of the OBR’s economic and fiscal outlook published alongside Osborne’s spending review and autumn statement.