Skilled migrants would boost UK public finances by £115bn under current rules, analysis finds

New analysis has found skilled migrants and their dependants would boost the UK’s public finances by £115 billion under current settlement rules, as Shabana Mahmood prepares to unveil her controversial migration reforms.

The home secretary has faced backlash from within her own party over her proposals to double the qualifying period for settlement for most migrants from five to 10 years, and potentially triple it to 15 for care workers.

Ms Mahmood is reportedly expected to announce her final decision on plans - which could apply retrospectively to people already living and working in Britain - to parliament next week, following a public consultation that generated more than 200,000 responses.

The controversial reforms come as new analysis by the Institute for Public Policy Research (IPPR) reveals that skilled migrants and their adult dependants due to settle in the UK under current rules are expected to contribute £115bn more to UK public finances than they cost over their lifetimes.

The analysis uses the same methodology as the government's £10 billion lifetime cost estimate for care workers, highlighting the economic benefits of skilled migration through the taxes they pay.

The influential think tank welcomed signs that care workers could remain on the current five-year route, and proposed finding a “compromise” for other cohorts already in the UK, such as allowing them to stay on a five-year route or introducing an “interim status”.

Marley Morris, associate director for migration, trade and communities at IPPR, said: "Public debate has focused heavily on the costs of recent migration, but this is not the whole story. Our analysis suggests that over their lifetimes skilled migrants are estimated to make a net contribution of billions to the public finances.

“We welcome signs that the government is planning a compromise for its settlement reforms. Ministers should honour the rules people came here under or offer a fair compromise that gives them a secure pathway to settlement and freedom to change jobs after five years.”

Ministers have faced growing demands to curb high levels of migration and reduce pressure on public services, following record net migration figures under the previous Conservative administration.

But the prospect of applying the restrictions retrospectively has triggered internal conflict within the government, with ministers now reportedly poised to scale back the plans, according to the BBC.

There has been a backlash within Labour over the proposals, and tensions in the Cabinet surfaced when Housing Secretary Angela Rayner earlier this year publicly attacked the prospect of backdating the plans.

Last month, amid speculation the proposals could be watered down to avoid a Labour rebellion, prime minister Andy Burnham said he strongly supports that indefinite leave to remain is a “right to be earned”, but stopped short of committing to bringing in all of Home Secretary Shabana Mahmood’s reforms.

Asked if he would commit to sticking to the plans, the PM said: “We’re in a position where we’ve been consulting on those reforms, and we will come forward with our decisions soon.

“But I strongly support the Home Secretary when she says that settlement is a right to be earned through contribution, and that will be the principle that guides our reforms.”