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UK immigration targets under threat, but business relocations increase

The latest immigration figures from the Office for National Statistics revealed a surprising increase in the UK’s net migration, as we discussed in an earlier blog post.

Fall in emigration

Although there are a number of factors that could have contributed to this rise, including a drop in the levels of emigration from the UK, it has cast doubt over the Government’s ability to reduce net migration to the “tens of thousands” by the end of this Parliament.

The Migration Observatory at the University of Oxford highlights that the Government does not have as many options when it comes to controlling emigration levels as it does for influencing the levels of immigration, which may be partly why emigration from the UK has reached its lowest levels since 2001.

The rise in net migration has also been partly driven by increased immigration from within the European Union, which again can be difficult for the UK Government to control. According to the Migration Observatory, overall immigration to the UK has declined year on year, mainly because of a drop in the number of non-EU nationals coming to the UK. Over the same period, however, EU immigration rose by around 25,000.

Impact of policy changes already felt

As far back as 2011, the Migration Observatory apparently predicted that the Government would miss its 2015’s “tens of thousands” target by more than 65,000. The Government had thought that the policy changes it had implemented would be sufficient to reach this target, including changes designed to reduce non-EU work, family and student migration.

However, according to the Observatory, any expected effects on immigration from these policy changes have already taken place. Therefore, unless the policies are changed further, they are unlikely to have any future impact on immigration levels.

Dr Scott Blinder, Acting Director of the Migration Observatory at Oxford University said: “The level of net migration announced today, when considered in the context of improving economic forecasts for the UK, potentially increased EU migration from Romania and Bulgaria and the Government’s own assessments of the potential impacts of changes to policies to reduce non-EU immigration provides the Government with a significant hurdle to overcome if it is to reach the tens of thousands target by the end of this Parliament.”

Businesses flock to the UK

The ONS statistics also reveal that, for the first time since 2009, study has been over-taken by work as the main reason why migrants come to the UK.

This finding has been supported by a recent report from business consultancy EY, which reveals that it is currently aware of more than 60 multinational companies interested in relocating their regional or global headquarters to the UK over the next 18 months.

If these moves were all to go ahead, it could lead to an extra £1 billion in annual corporate tax revenue for the UK, says EY, and create around 5,000 new, high value jobs.

UK flies off the shelves

“The UK is flying off the shelves,” explained John Dixon, EY’s UK head of tax. ”Twelve months ago we were working with 40 multinational companies that were looking to undertake global and regional headquarter relocations into the UK, but the pipeline has been building rapidly. Over half of these transactions have already completed and we now expect over 60 companies to come to the UK’s shores in the next 18 months, creating jobs and boosting economic growth prospects.

“Confidence in the global economy is improving and has oiled the wheels of these transactions, but the acceleration is also the result of tax reform, both at home and abroad – a powerful tool to change corporate behaviour,” he added.

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