NIESR: David Cameron's Immigration Cuts Will Hurt UK Economy and Household Incomes

David Cameron's pledge to scythe immigration to the UK will damage the economy, public finances and drive down household incomes in the long term.

That is according to an academic paper published by the National Institute of Economic and Social Research (NIESR), a leading thinktank.

Britain's prime minister said he will reduce net migration to the UK to tens of thousands annually amid concern among voters that too many people are entering the country.

Because the UK is part of the European Union (EU), which allows free movement of labour across the 28 member states, Cameron can only do this by reducing non-EU migration.

Immigration is subject to fierce political debate in the UK. Many Britons want to see immigration reduced because they believe it causes unemployment and lower wages for people who were born in the country, as well as puts a strain on key public services such as schools and the NHS.

Katerina Lisenkova and Marcel Mérette of the NIESR, and Miguel Sánchez-Martínez of the University of Ottowa, studied the potential impact of reducing net migration along Cameron's migration promise in the years to 2060. They used Office for National Statistics (ONS) projections for the UK population.

If Cameron's target is achieved, by 2060 GDP per person will be 2.7% lower than otherwise, said the paper. Research suggests that migrats to the UK are net fiscal contributors, meaning they pay in more in tax than they take out in benefits and public services use.

And because of the UK's ageing population, public spending as a portion of GDP would rise by 1.4% without the tax contributions of working migrants.

This could mean higher taxes on earnings to pay for social care of the elderly. So household finances would suffer as net wages were 3.3% lower with the migration curbs than they would have been in 2060 because of the higher taxation, said the NIESR study.

Official figures show that Cameron is already struggling to meet his target because of the open borders with the EU.

The ONS said that there were 212,000 net long-term migrants entering the UK in 2013, a 35,000 leap on the year before. This was driven largely by EU immigration, particularly from France, Germany and Spain.