UK net migration reduction: Less Future Population, Higher Costs and Challenging GDP

New data from the Office for National Statistics and the Home Office shows UK net migration reduction.  The dramatic UK net migration reduction, while a positive political achievement for anti-immigration groups such as the UK Reform Party, has serious long-term economic consequences.

The obvious downsides of this policy include slower economic growth, a smaller GDP and labour shortages in key sectors. Anti-immigration policies should not be at the expense of economic realism. The government needs to consider the economic impact of migrants.

UK Net Migration Reduction: Small Boat Crossings up

Double data drop shows net migration and asylum hotel use are down, but small boat crossings are up. Two sets of data on UK migration dropped. Both the Office for National Statistics and the Home Office shared releases covering different time periods.

Data revealed that net migration in the year to December 2025 was 171,000. It is lowest level since 2012, excluding the Covid pandemic period. Meanwhile, the number of asylum seekers living in hotels while waiting for their claims to be processed in the UK has fallen by a third in the 12 months to March 2026.

Government Claims Victory: Short-term Victory

Statistics show a rise in the number of small boat arrivals, up by 3% in the year to March. The government has been quick to claim victory. Prime Minister Keir Starmer is touting the data as evidence that the government is “delivering” on its pledge to introduce a “skills-based migration system”. Moreover, Home Secretary Shabana Mahmood stated that it was “restoring order and control to our borders”.

There was criticism from other quarters, including shadow home secretary Chris Philp. He said that British citizens were “leaving the UK on a massive scale, driven by Labour’s high taxes”. Moreover, the immigration from outside the EU was “far too high”. The Migration Observatory warned that the net migration fall is “likely to be temporary”. However, the government says there is still “more to do” in meeting its pledges on migration. Although small boat crossings were up slightly in the year to March 2026, this hides a recent trend seen in the English Channel.

Small Boat Crossings Statistics: More Passings

Small boat crossings are 40% so far in 2026 compared with the same period last year, according to the Home Office. Between 1 January and 20 May, 7,576 people arrived in the UK in small boats after crossing from France. That is lower than the equivalent period in 2025, 2024 and 2022, despite yearly totals increasing slightly in the year to March 2026. Several factors can affect the number of people arriving by small boats, including weather conditions.

Boats arriving in the UK between 20 May 2025 and 19 May 2026 carried an average of 65 people. That is more than double the average recorded in 2021. Overall, there were about 41,000 small boat arrivals in 2025. Home Office data showed 252,775 work visas were granted across all work categories in the year to March 2026. I is down 17% from the previous year and 59% lower than the peak reached in late 2023.

Economic Impact of Migrants and Burden for the State

The economic impact of migrants is also significant. In the year to December 2025, 110,000 British nationals arrived in the UK. It made the net difference between emigration and immigration 136,000. The economic impact of migrants also “depends more on who is – or is no longer – migrating”. It depends on how many people there are, Brindle says. He says migration of groups “that make positive or broadly neutral economic impacts” is “down”, whereas “asylum-related migration remains high”.

“Since refugees have lower employment rates and often need a lot of support from the state, this means that the composition of recent migration has probably become less favourable from an economic perspective,” Brindle explains. Therefore, the economic impact of migrants is crucial.

UK Net Migration Reduction: Not ‘good news’

The reduction in net migration may be due to an increase in emigration by British and EU nationals, combined with fewer individuals migrating or re-migrating. In other words, this fall in numbers cannot be blamed on any policy choices regarding immigration. This is due to the fact that fewer British and European citizens saw themselves moving to the UK.

The current state of reduced EU migration is an example of one of the key fallacies surrounding Brexit. The Vote Leave camp claimed that free movement of people meant that there was no way to control immigration into the UK from the EU. In fact, the majority of EU immigrants, just like the majority of non-EU immigrants and the majority of Brits, operate in middle-skill professions. But leaving the EU will not lower immigration levels since various industries in the UK will still require immigrant labour.

UK Net Migration Reduction: Difficult Time for Business

British business is probably even more powerless due to declines in immigration than trade barriers. Indications show that businesses have begun to recognize the threat, although somewhat late. As an illustration, the director-general of the Confederation of British Industry (CBI) has labeled “uncertainty over the future of the UK immigration system… complicated further by the government’s aim” as one of the major factors affecting investments.

It is bad news for both EU citizens living here, for their families and employers and for business in general. The government’s perverse attachment to the target means things are likely to get worse before they get better.

Less Migration, Higher Costs

The UK net migration cuts will have economic consequences. The fiscal cost of achieving the target, which the Office of Budget Responsibility estimates to cost approximately £6 billion yearly by 2012, is important. However, the Conservatives have not bothered to cost any of their policies. Therefore, it is perhaps no surprise they have simply ignored this.

Rather, more important are the effects on long-term growth prospects for the UK. While it is difficult to say exactly what those might be, they could be significant; my own work indicates that falling migration following Brexit could cut UK productivity and GDP per head by 1 to 3 percent by 2030.

UK Net Migration Reduction and the Economy

The UK economy would be 3.6% smaller by 2040. It happens if net migration falls to zero. It forces the government to raise taxes to combat a much bigger budget shortage. The National Institute of Economic and Social Research (NIESR) said falling birth rates in the UK, together with a sharp decrease in net migration last year, raised the question of what would be the result of this trend if it continued to the end of the decade. Jane Gratton said sectors such as hospitality and healthcare are influenced by the recent fall in net migration. Jane Gratton is the deputy director of public policy.

Dr Benjamin Caswell is a senior economist at NIESR. He said: “Net zero migration leaves the economy 3.6% smaller by 2040. Therefore, there will be a slower rate of employment growth and a smaller workforce.”  According to the institute, at the beginning, people’s incomes and savings would increase since companies are required to employ additional machinery. As a result, the GDP per capita will grow by 2%. Nevertheless, such growth is likely to affect economic development negatively since the shrinking population would mean fewer tax revenues collected by the government. This will create a gap between budget spending and revenues, leading to increased debt among governments.