A sharp decline in EU migration after Brexit could dent Britain’s gross domestic product by 1.1 per cent, or £22bn, in 2030, according to an analysis published on Tuesday by PwC, the consultancy.
The report, part of PwC’s latest Economic Outlook, said that while a severe slowdown in migration would have a relatively muted effect on Britain’s economy as a whole — GDP per capita under its scenario would fall by just 0.2 per cent by 2030 — certain sectors and parts of the country, including London, would be harder hit.
John Hawksworth, PwC’s chief economist, said there could be “potential benefits” from lower EU migration through reduced pressure on transport systems, housing and public services, such as health and education.
But he added: “These could be more than offset by the loss of skilled EU workers in these sectors if the post-Brexit policy regime is not calibrated correctly.”
PwC considered what would happen if net migration from the EU halved from 2023, compared with the Office for National Statistics’ current central projection of long-term net migration, which was published last month.
Such a fall would cut the long-term average of EU net migration to about 117,000 a year, against a central projection of between 165,000 and 185,000, according to PwC.
Overall net migration to the UK was 246,000 in the year to March, down from 327,000 in the same period a year before.
Mr Hawksworth said PwC was not able to predict UK immigration policy but had used the hypothetical scenario to understand what impact such a change might have on the economy.
The study found that particular sectors would be especially vulnerable to a sharp drop in immigration from the EU. In food manufacturing, 30 per cent of staff are from other EEA countries, compared with 18 per cent in the accommodation industry and 17 per cent in warehousing.
Separately, the British Academy, which advocates for the humanities and social sciences, published a study on Tuesday warning that the uncertainty facing staff from the EU posed a threat to the UK’s position as a world leader in higher education. The British Academy cited Higher Education Statistics Agency figures showing that 36 per cent of economics teachers in UK higher education were citizens of other EU countries, as were 35 per cent of those teaching modern languages.
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