The cost of mass migration has been concealed from the public

Telegraph

17-07-2025

Every now and again, news stories collide in a way that casts new light on an old problem. This week, it was the release of data that showed 1.3m foreign nationals claiming Universal Credit, and a Reform councillor begging for more visas for low-skill, low-wage migrants to keep care homes in her constituency open.
British migration policy is covered with a veil of ignorance. If you try to find out what the costs of our approach actually are, you frequently find the data isn't collected, isn't analysed or isn't published. Yet the benefits are. They manifest in the Government facing lower pressure for wage rises in care homes, higher tax takes and higher aggregate growth.
One way of looking at this is as incompetence: the state is carrying out a huge social and economic experiment without tracking the results.
An alternative is to say that the Government doesn't want to know, because migration has become a way to push debts into the future without freaking out the bond markets.
Britain's citizens are entitled to state care from cradle to grave, with most of the costs at the late end. This means the Government needs to pay out pensions, provide social care through local authorities with very little money and staff schools and hospitals. And it needs to do so at a budget price in order to avoid unpopular tax increases.
There are only three ways it can do this.
The first is to be ruthlessly efficient, invest in capital equipment, restructure organisations, and squeeze every last drop of effort out of public sector workers. Obviously, this is a non-starter.
The second is to borrow money, rack up debts and push the cost into the future. This has been, and remains, a favoured option – with the Government running a deficit in all but 13 years since the end of the Second World War. But there are limits, and as Rachel Reeves has found, the bond markets are increasingly uneasy over the scale of UK spending.
Which brings us to migration. Look at the composition and scale of the inflow over the last few years, and the impression is that of a state which is trying to hold down borrowing today by piling up spending obligations in the future.
Migration is used to suppress the cost of services the Government pays for by circumventing demands for wage rises, and to ward off predictions of lower growth by pumping up workforce projections.
Office for Budget Responsibility (OBR) forecasts – and indeed the Government's fiscal rules – are based on short-term windows and targets, and in part on optimistic Treasury spending plans that might be politely described as works of creative fiction.
Even very low-wage migration can be fiscally positive over these periods, or a slightly longer term. Most newcomers will be unable to claim benefits for a period of at least five years – the length of a typical OBR forecast window – and will make limited use of the NHS. Over this period, migration can be used to boost flagging growth figures, or restock the supply of workers in fields where the Government is desperate to avoid additional outlays.
In the long run, the bills come due. Workers who stay in Britain become eligible for benefits. They have children who go to schools. They get old, they get sick and they retire. And the cost of providing their healthcare, pensions and social care begins to creep up.
OBR modelling suggests that a low-wage migrant arriving at 25 will pose a net cost to Britain of about £187,000 by the time they hit 65. Should they live to 85, that cost rises to £769,000, and by the age of 90 it exceeds £1m.
Even migrants earning average wages become less attractive – about a quarter of those aged 25 today will live to 95 or older, by which point their lifetime fiscal contribution has flipped to be heavily negative.
The core of the problem is that the British state is very large. Unadjusted for household size, it's not until the 70th percentile of the population – an income of about £62,000 per year – that households become net contributors to the public finances. Everyone else is taking out more than they're putting in. And as a result, a good chunk of migration ends up simply adding to the net extractors in the long run.
You can see this in action by looking at the history of the soon to be closed care worker visa.
As the Migration Advisory Committee (MAC) has helpfully noted, between 2021 and the first quarter of 2024 roughly 144,000 visas were issued to the social care sector, which from 2022 benefited from a special scheme with a minimum salary of £20,480 as part of the Conservatives' commitment to 'a high-skilled, high-wage economy'.
The long-term problem with this approach is obvious. The MAC itself has noted that workers on the health and care route – a figure including non-care workers – tended to be paid less than the UK average, and to bring large numbers of dependants. As a result, it estimated their household fiscal contributions at about £2,500 a year at present.
Applying the OBR figures for low wage migration to the care workers, the implication is that those 144,000 visas – assuming the holder is young, and lives to the UK average of 85 years – will cost about £111bn.
Then there are the dependants. The MAC analysis for all health and care workers used figures of roughly 0.5 adult dependants and 0.6 child dependants. If the adults also work in low-skilled professions, and the children live UK average lives, then they will probably cost another £64bn over their lifetimes.
Liz Truss's mini-Budget went down in flames over £45bn in tax cuts. Now consider, briefly, how the bond markets would have reacted had Boris Johnson stood up in 2022 and announced that he intended to borrow an additional £175bn to cover the operation of social care for a few short years.
Running these costs through migration rather than bonds keeps them off the books. It doesn't erase them entirely. And while healthcare and pension liabilities are less binding than debts that have crystallised, we've also seen just how hard it is to cut spending on these categories, and how rapidly spending is forecast to rise.
When push comes to shove, a future government might struggle to choose between honouring debts and honouring promises to its population.
A better way to resolve this would be to stop the future clash arising. The Government is already consulting on changes to Indefinite Leave to Remain. But there is no timetable for these changes in place, and this cohort of extremely expensive migrants will be eligible to start submitting claims in just two years from now.
Speeding up this policy shift – or introducing lifetime restrictions on the eligibility of future cohorts who receive residence to rely on the welfare state – is a priority. The migration-debt trade should be dropped before it finally blows up.