"There is clear evidence that, since migrants tend to be more concentrated in the working-age group relatively to the rest of the population, immigration has a positive effect on the public sector’s debt dynamics."  The OBR found that Britain's ageing population and strained healthcare system means that there will need to be an extra £19billion of spending cuts or tax rises after 2019.  The additional savings, which could be spread over the next 50 years, are on top of the £153billion of austerity measures the government is alraedy implementing.  If no action is taken, the burden of an ageing population in terms of pensions and healthcare will wipe out much of Chancellor George Osborne's spending cuts, leaving the UK with a £65 billion hole in its finances, according to the OBR.  In its annual fiscal sustainability report, it said: "It is clear that longer-term spending pressures, if unaddressed, would put the public finances on an unsustainable path."  "Public sector net debt would approach 100% of gross domestic product (GDP) and still be rising," it added.  The OBR said the move to a single-tier state pension had slightly eased the pressure on public sector debt, but added that spending on healthcare was the biggest spending pressure over the next 50 years.  The cost of the state pension was predicted to rise from 5.8% of GDP to 8.4% of GDP as the population ages, even with the introduction of the new flat rate payment system and increase in retirement age to 67 taken into account.  Healthcare spending is expected to increase from 7% of GDP to 8.8% of GDP, while long-term social care costs are set to rise from 1.3% of GDP to 2.4% of GDP.  The OBR also warned that declining North Sea oil reserves will take its toll, with oil and gas revenues expected to plunge from 0.4% of GDP now to almost negligible levels - at 0.03% of GDP by 2040.  But action taken so far by the Government, including an extra year of spending cuts to 2017-18 and the single tier state pension, is helping to offset some of the pressures, the report added.  Robert Chote, chairman of the OBR, said on presenting the report: "Since last year, the underlying deficit and debt path look less favourable.  "But this and the costs of long-term care reform are likely to be offset by the Government's announcement of additional spending cuts in 2017-18 and savings from the single tier pension.  "That said, there are huge uncertainties around the scale of the challenge and the UK is certainly not alone in confronting it."  He added that the extra £19 billion needed to get borrowing back on track could be spread over the next 50 years rather than action taken in one go.  In a written statement, Chief Secretary to the Treasury Danny Alexander said the OBR's report shows that without the steps taken over the past year, public borrowing would be around 50% of GDP higher in 50 years' time.  He added that the report identifies the extra spending cuts as "one of the key factors in containing the growth of spending over the long-term, demonstrating the importance of the Government's programme of fiscal consolidation for the long-term health of the public finances".  The OBR said Mr Osborne was shown a draft copy of the report in early July and had not revealed any further measures that should be taken into account.
Britain may need millions more immigrants over the next 50 years to reduce the "unsustainable"   pressure that the ageing population is putting on the economy, the official   forecaster has said.