1.6% hit to Welsh economy from UK immigration plans says WCPP report

The UK Government’s post-Brexit immigration plans will act as a drag on economic growth and productivity in Wales, a major new report from the Wales Centre for Public Policy says.

Experts from King’s College, London and the University of Oxford have looked at the effects on Wales of immigration proposals in the recent Whitehall White Paper. They found that:

  • The proposals would reduce GDP in Wales by between 1.1% and 1.6% over 10 years, compared to a hit of between 1.4% and 1.9% to the UK as a whole;
  • A substantial reduction in low-paid EU migration to the UK is expected, with lesser reductions to middle- and higher-paid EU migration;
  • While the projected impact on the Welsh economy is less than for the whole UK, Wales will be more affected by the cut in the number of people migrating for work;
  • Lowering the proposed salary threshold to £20,000 would reduce the GDP impact to between -0.8% and -1.2% over 10 years;
  • The sectors most affected by the proposals include manufacturing, education, social care and health workers – broadly similar to the effects on the UK as a whole.

Nearly 50,000 full-time workers in Wales are estimated to be from other EU countries, with around 65% of those currently earning below the proposed £30,000 salary threshold.

Professor Jonathan Portes, co-author of the WCPP report, said:

“While the Welsh economy isn’t hit as dramatically by these proposals compared to the UK as a whole, the negative impact would still be very significant.

“Seeking a reduction in the salary threshold for EU migrants to £20,000 should be a priority, but this alone will not avoid a significant negative impact the Welsh economy.

“A speedy, efficient and affordable visa process is also important to help ensure that EU migrants can continue to come to Wales.”