But unless substantial savings are made in welfare, public services will pay a disproportionate penalty.

ECONOMIST: Britain's emergency budget

As well as economic changes, political change was also inevitable with Europe needing reform of labour markets, pensions, welfare, public services the role of the state, he said.

BBC: Tony Blair: UK may face 'interesting choice' over euro

The poor in rich countries often consume more than they earn, because they receive welfare benefits and use public services.

ECONOMIST: Brains bring ever larger rewards

Welfare and the big public services are also in Tory hands.

ECONOMIST: The new coalition government

"The report will help to shape this government's work to build an immigration system which works in the national interest - supporting the UK economy by continuing to attract the brightest and the best global talent at the same time as protecting our public services and ensuring our welfare system is not open to abuse, " he said.

BBC: Romanian and Bulgarian immigrant impact 'modest'

To ensure public services - education, healthcare, welfare - are there for all who need them.

BBC: Cameron's data speech in full

The more he could find in welfare, the less the squeeze would be for the public services.

ECONOMIST: Cutting back the state