The illusion has finally been shattered... limitless migration will not solve Britain's problems - analysis by Olivia Utley

It’s true that as a rule, migration grows the overall size of the economy – but really, that doesn’t mean very much. Imagine the economy as a birthday cake, and the population as attendees of a birthday party. Buying a slightly larger cake is all very well, but if a lot more people arrive at the party, each individual attendee won’t get a bigger slice.

That’s common sense to most people, but until now, it seemed not to have registered with the OBR. In fact, at almost every previous Budget, the OBR was accused by Conservatives – both inside and outside the parliamentary party – of overestimating the economic benefits of migration.

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Last month, for example, The Centre for Migration Control (CMC) claimed that by failing to take account of restrictions on working hours for foreign students, the watchdog has attributed an extra 246 million man hours to migrants that “legally could not possibly have been worked”.

Now, however, the OBR has changed its tune. In a damning opening paragraph in its latest tax and spending forecast, the Watchdog said: “One of the biggest changes to our economic forecast is an increase in the size and growth of the UK population. But higher and rising levels of inactivity offset its impact on the overall size of the workforce.”

Jeremy Hunt was equally clear. Unlimited migration would not solve Britain’s problems, he said.

It’s a sensible change from the OBR and from the Government. And one that Conservatives should welcome. The problem is, concentrating on headline GDP rather than GDP per capita has so far managed to disguise just what a terrible state our economy is in.

According to headline GDP, Britain is now technically in a recession – but only just. If you focus on GDP per capita – which has flatlined since 2018 – the country is in a very sorry state indeed.

Stripping away the illusion that migration is not making us all exponentially richer is a good first step. But working out how to achieve real, sustainable, growth is a whole new challenge.