In the past few weeks each of the party leaders have said there needs to be a public debate on immigration. Well, we’ve got one, but it’s not been a balanced debate.

The emphasis has been almost exclusively on costs with little discussion of the benefits.

Where the positive aspects of migration have been raised, these have tended to emphasise the social and the cultural with much mention of the warm glow from the Olympics.

This is fine, but it is the economic dimension that is critical and where the balance has been most lacking.

According to the Office of Budget Responsibility (OBR), if net migration were ceased, the UK’s net public sector debt would rise from 74% of GDP today to 187% by the middle years of this century (2061/2)

This is higher than Greece’s current national debt (161% of GDP) and higher than at any time in the UK’s history, other than in the immediate aftermath of World War Two.

Based on the OBR’s forecasts for GDP, the value of the extra debt incurred, over and above the main OBR projection, is £4.8 trillion (at today’s prices).

To bring debt back to the level of the standard OBR projection in 2061/2 would cost every single person of working age alive at the time £137,000 each.

The reason debt becomes such a problem in the coming decades is demographic change. We’ve got more people getting older, living longer with proportionately fewer people of working age.
The old age dependency ratio describes the ratio of people 65 or over to the number of working age. An old age dependency ratio of 25% (which is the current UK figure) means there are three people of working age for every one person who is 65 or over.

By 2060, the UK’s old age dependency ratio is 44%. This means the UK will be in a position where there is almost 1 person of working age for every person who is 65 or over.

Migration alleviates upward pressure on debt for two reasons: migrants tend to be younger, contributing more in tax revenue than they consume in public services and the majority leave before they get older when they would become more reliant on public services.

A study by University College London in 2009 that looked at the fiscal impact of migration of recent eastern European migration found that migrants contributed 37% more in taxes than the cost of the public services they consumed.

In recent years, the largest single group of migrants coming to the UK from outside Europe has been international students. A BIS research report from 2011 estimated the value to the UK economy of international students at over £14bn per year.

According to research by the Home Office from 2011, out of those students who came to Britain in 2004, 79% had left the UK and only 11% were on a path to settlement.

Although a small proportion of migrants do settle permanently in the UK and will ultimately grow old, the impact on the dependency ratio will be delayed towards the end of the century, giving the UK time to address its structural demographic challenges.

The evidence from the OBR is clear: without migration, our national debt will begin to spiral out of control in the next parliament.

If net migration were ceased today, five years from now, in 2018/19 the public sector’s net debt would be £18bn greater than with net migration. This is the equivalent of a rise in the basic rate of income tax of 5p

Fifteen years from now, in 2028/9 the debt gap will have grown to £179bn. This is more than the combined budgets for education, defence and policing

And twenty years from now, in 2033/4, the debt gap will be £354bn. This is equivalent to over half the total expenditure of government.

In the absence of net migration, to avoid the fate of Greece, the UK would require a significant extension of taxes, combined with substantially deeper spending cuts

This is the inconvenient truth about migration: without it, Britain will be condemned to the best part of a century of austerity that is far harsher than anything we have experienced so far.

We need our political leaders to be straight with the British public about this. Otherwise, in a political debate dominated by calls for every tighter restriction on migration, we are in danger of sleep-walking into a debt disaster.