Rishi Sunak delayed a crackdown on illegal migration after voicing fears that the budget watchdog would slash his headroom for tax cuts, The Telegraph can reveal.
The Prime Minister was considering announcing measures restricting the arrival of foreign workers in the autumn, soon after major announcements on scrapping HS2 and scaling back net zero targets.
But The Telegraph can reveal that part of the reason Mr Sunak held off until December was out of concern that the Office for Budget Responsibility (OBR) would significantly reduce the Government’s headroom – the leeway available to increase spending or cut taxes within its fiscal rules – ahead of November’s Autumn Statement.
The OBR, set up by George Osborne, provides official “scoring” on the impact of policy changes, which it then uses to calculate the overall headroom available to chancellors at financial statements.
A Conservative source said that, ahead of the Autumn Statement, “the Prime Minister was concerned about the OBR reducing headroom as a result of taking further action [to reduce migration].”
Jeremy Hunt, the Chancellor, cut National Insurance by 2p in November and faces pressure from within the Tory party to go further in the Spring Budget.
Conservative MPs have criticised the OBR for focusing its “scoring” of migration policies largely on the basis of the benefits the additional labour brings to the economy, meaning that lower levels of net migration will typically mean less headroom.
Suella Braverman, the former home secretary, has accused the OBR of largely “ignoring” the costs of higher migration from increased pressure on the NHS, schools and housing market.
Mr Sunak eventually announced a significant package of measures after official figures showed that net migration hit 745,000 in the year to last December – three times its pre-Brexit level – despite the Tories’ manifesto commitment to reduce overall levels of migration.
The changes included raising the minimum salary migrants must earn in a skilled job by a third. However, the Prime Minister is facing a row after watering down a measure to also raise thresholds for partners.
Robert Jenrick, the former immigration minister, is believed to be preparing to set out a plan on how to meet the Conservatives’ manifesto commitment, on the basis that he believes the Government’s current plans will fail to achieve that.
A Number 10 source said that by waiting until after the release of the new net migration figures in late November, the Government was able to put together “the best package” based on “the full picture” and “targeted to the right areas to have the most impact.”
The source added: “In the end we announced a plan that will deliver the biggest-ever cut to net migration.”
An OBR spokesman said: “These changes have been announced since the publication of [our] last forecast in November and so we have not yet undertaken any analysis of the implications of these measures.
“Our long-term projections do take account of migration and other population trends in estimating demand for public services.”
Meanwhile, Reform UK, the party campaigning for “net zero migration”, is preparing to field candidates in all constituencies in England, Scotland and Wales, The Sunday Times reported.
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2023-12-23 21:30:00Z
CBMiX2h0dHBzOi8vd3d3LnRlbGVncmFwaC5jby51ay9wb2xpdGljcy8yMDIzLzEyLzIzL3N1bmFrLWRlbGF5ZWQtbWlncmF0aW9uLWNyYWNrZG93bi1vYnItdGF4LWN1dHMv0gEA
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