The pilot of the government’s settled status scheme for EU nationals is going to plan, immigration minister Caroline Stokes reassured MPs yesterday, adding that nearly all applicants for the first stage of testing have had their submissions processed.

Her comments were followed by government forecasts, released today, that suggested the UK economy could contract by between around 2 and 5 per cent over the course of a decade under the terms of the withdrawal agreement proposed with the EU, compared to staying in the EU. This loss stemmed in large part from falls in productivity and a drop in migration.

Under what economists considered the most likely scenario for post-Brexit trade and migration, the UK economy would be 3.9 per cent smaller after 15 years. The most likely scenario for future migration would see a 1.2 per cent decrease in the number of available workers arriving in the UK from the EU over the course of the period to 2035. This would account for a 0.6 per cent reduction in GDP, according to the report.

If rules are tightened to the point where there is zero net migration from EU countries, GDP would be 1.8 per cent lower in 2035/36.

The document also confirms that during the implementation period – currently scheduled to end in 2010 – UK nationals working in the EU will enjoy the same rights to work as they currently do. Those who are EU residents by the end of the implementation period will be able to continue working in their country of residence “broadly as present”.

Speaking during a Westminster Hall debate yesterday, Stokes told MPs that the first round of beta testing of the settled status scheme – designed to ensure eligible EU nationals currently resident in the UK receive leave to remain in the country – received 1,053 applications, of which decisions had been granted in 1,046 cases.

The average time taken to reach a decision was less than nine calendar days, all applicants successfully proved their identity and 94 per cent who provided feedback found the application process “easy to complete”, she added.

“At no point throughout this process have we underestimated the challenge of granting immigration status to over three million people, but we have made a strong start and have everything in place to make this whole process a success,” said Stokes.

Karendeep Kaur, immigration analyst at Migrate UK, told People Management registration for permanent residence under the current rules did appear to be running smoothly, but added that did not mean vulnerable people or those without access to online tools would not be negatively affected.

“In this beta phase, we don’t know what range of people they were. If these were just straightforward, had the five years [residence], had the P60s to hand, absolutely they were considered within nine calendar days. However, what you need to look at is the people that perhaps have criminal convictions.

“The rules that are going to apply to them will be different and getting a decision to them within nine calendar days is not going to happen.”

A separate report published yesterday by CEP, a research group that includes LSE, King’s College London and the Institute for Fiscal Studies, forecast GDP per capita in the UK will fall by up to 5 per cent under the terms of the recently agreed withdrawal deal. This would fall further to 8.7 per cent under a no-deal scenario.

The report said the expected migration changes could lead to a reduction of 75 per cent in the number of EU workers earning less than £30,000 who arrived to work in the UK.

Professor Jonathan Portes, one of the report’s authors, said the deal would leave the UK “a long way from frictionless trade”.

“The additional trade barriers, combined with reductions in both skilled and unskilled migration from the ending of free movement, would leave the UK significantly smaller than it would otherwise have been over the medium to long term.” he added.