Wading through the new Office for Budget Responsibility’s analysis of the state of the British economy, it’s obvious that the ageing population will be a significant factor when it comes to restoring growth (or not). The pre-budget forecast highlights real dangers of a slowdown caused by fewer people working and higher demands on pensions and health and social care. But ageing remains a variable factor in the recovery – because much will depend on how long older people continue to work and consume, on whether extended life is healthy or beset by chronic illness, and on the role that will be played by immigrants.
Immigration was the surprise hot topic of the general election. It came up in all three TV debates and provided the most explosive moment of the campaign when Gillian Duffy challenged Gordon Brown about immigration from Eastern Europe and he privately (and also publicly) referred to her afterwards as a bigot.
Immigration is also now threatening to spread its unease through the Labour leadership contest. Ed Miliband was the first of the four candidates to raise it; Ed Balls claimed in the Daily Mirror this week that: ‘Mrs Duffy captured our reality. Too many people believed we’d stopped talking their language.’ He had already written an article in the Observer headlined: ‘We were wrong to allow so many Eastern Europeans into Britain.’
It is clear from the OBR figures, however, that something is being done, willy-nilly. Immigration is in decline, which could have a significant impact on the ability of the UK economy to grow. The combination of the weak pound and the slowing economy is making the UK a less attractive destination – and this is likely to be even more the case at the end of 2011, when Germany, Austria and Belgium open their borders to migrants from the so-called A8 countries (the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia).
Migration is a complicated subject, because anyone from the rest of the EU isn’t technically a migrant. But from a high of 233,000 immigrants in 2007, we are down to a provisional figure of 142,000 in the year to September 2009. This reflects a consistent trend. In fact, the OBR anticipates that the deterioration in economic prospects could quickly bring down that figure very substantially by a further 50,000 a year.
So this troubling issue that everyone is getting so aerated about is not so troubling after all. It’s in decline of its own accord. And that may not be such a great thing, according to that august body, the Office for Budgetary Responsibility. Who is to work and pay the taxes for the healthcare and the pensions, if not immigrants? Who is to keep consuming?
Of course, there are cultural reasons why unlimited immigration may not be desirable. But they don’t get discussed. Immigration is worse than sex with schoolboys. It gets sniggered about behind the bike sheds, and then boasted about improbably by the showoffs (the politicians).
When serious people like demographers discuss ageing populations, they do so in hushed tones, largely unobserved as they look at immigration as a potential solution. So Sarah Harper, professor of gerontology at the University of Oxford, points out in a report published in March that ‘global ageing is emerging in the context of globalisation,’ and notes that ‘countries like the US and the UK, with a successful history of encouraging immigration, have freely used immigrants to compensate for their ageing populations.’
Economists (see the OBR) also consider immigration as a way of plugging gaps. Yet the British public never gets to join the debate. The root of Gordon Brown’s problem with Mrs Duffy was that he shied away (not just at that moment, but all the way through the campaign) from pointing out that immigration might have a legitimate role to play. He refused to take on the populist notion that for no good reason, we featherbed people from foreign countries who fancy a few of our jobs and benefits.
At some point, we will have to have this debate. There are a lot of things we don’t know and need to find out. As far as the ageing population is concerned, it is unclear whether longer life means longer healthy life, or years beset by chronic illnesses. If the former – roughly the same period of illness before death as in the past – we may be looking at health and social care bills lower than we have been anticipating. If the latter, if we are facing an epidemic of frailty, we may be in serious trouble without immigration. Nor do we know what older people feel about working longer, both to reduce the pension burden and to retain valuable skills and experience in an economy facing a global skills shortage. How popular is retirement in its current form? How strongly do voters care about it? More than about immigration?
There is a widespread hypothesis that we are facing a demographic burden. But quite a lot of what we face could be addressed by policy, given political and economic will. The first step must be to start facing up to our choices. Politicians aren’t stupid. They know that immigration is in decline. They also know that could be an economic problem for Britain. But they’re not prepared to say so. They don’t really want to get into the debate. They would rather stoke populist fears about an influx of foreigners, because it’s easier and because it leaves us, the public, without a clue what’s going on. It’s easy votes.