How best to support an ageing population? More immigration


Next month a Lords committee will reveal the results of its investigation into the growth of the number of people above retirement age in Britain.

Chair of the committee, Lord Filkin, has warned that society and the welfare state face dramatic changes as a result of Britain’s ageing population.

According to the Guardian, the committee has been told that:

  • Half of those born after 2007 can expect to live to over 100.

  • Between 2010 and 2030 the number of people aged over 65 will increase by 51%.

  • The number of people aged over 85 will double during the same period.

Ageing population

The concerns in the report mirror those expressed by the Deloitte Centre for Health Solutions, who warned last year that Britain’s ageing population risks endangering GP services in England as practices are overwhelmed by demand.

The Daily Mail also reported last year, based on the findings of the Office for Budget Responsibility (OBR), that:

‘Britain faces decades of painful austerity to defuse a financial timebomb created by the country’s ageing population, the Treasury watchdog declared yesterday.’

Reports like this should not be dismissed as scaremongering.

The rate at which the population is ageing means that, while there are now four people of working age supporting each pensioner, by 2035 it will be just two and a half, and by 2050 only two.

For the austerity hawks, an ageing population requires – you guessed it – cuts, cuts, and more cuts. The state must be stripped back to the bone; services must be minimalistic and cater only to the most needy.

It doesn’t have to be like this, however.

The OBR also pointed out in 2012 that higher levels of migration could spare taxpayers much of the financial pain associated with an ageing population.

The OBR statement read:

Higher net migration, close to levels that we have seen in recent years, would put downward pressure on borrowing and public sector net debt, as immigrants are more likely to be of working age than the population in general.’

The important point made by the OBR is that increased levels of UK Immigration would see a significant rise in the percentage of the UK population that are of working age.

A series of calculations were carried out by the OBR, using varying levels of UK Immigration.

Its central projection was that immigration would fall to around 140,000 per annum for the next 5 decades to 2062. If that were to happen, by 2062 the population would reach 77.2 million (it currently stands at 62.3 million).

44.5 million – 57.6% – of those people would be of working age. If immigration were to fall to zero, then the population in 2052 would be 64.1m, of whom only 35m, or 54.6%, would be of working age.

If immigration were to continue at its current level, the population would reach 85.8m and the working population would be 50.3m, or 58.6%, of the total by 2052.

The more people of working age, then, the more revenues the Treasury will have to fund its spending commitments.

Undoubtedly an ageing population represents a challenge for the welfare state, but that is no reason to buy into the notion that it requires a wholesale reduction in the size of the state.

Allowing more people of working age into the country would, ironically considering so much tabloid fearmongering, take some of the strain off the welfare state.

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  • http://twitter.com/citizen_colin Colin McCulloch

    Only if there are tax-paying jobs to fill – otherwise the crisis will get even worse.

  • LB

    Doesn’t work unless you get the right migrants.

    You need migrants who consume less government spending than they pay in tax.

    If you get the other sort of migrant in you just make it worse.

  • David Alex

    The author of this article is out of their mind we have 2.5 million unemployed. What we need is for British people to have more children not for unskilled scroungers who don;t speak english to flood us even more

    Sign this petition to restrict Bulgarian and Romanians from entering the UK:

    http://epetitions.direct.gov.uk/petitions/41492

  • Mick

    I’ve always said you DON’T pour in even more migrants to pay the pensions of people here, whatever their origin.

    One day the new lot will get old too, in even higher numbers. And then……

  • Ash

    Plenty of right-wing objections to this idea, of course. Here’s a possible left-wing objection: do we not risk simply exporting the problem to migrant workers’ countries of origin? If we import Bulgarian workers to support retired British people, who’s going to support retired Bulgarian people? There’s a whiff of the perpetual motion machine about the whole proposal.

  • jkhkjh

    importing large numbers of skilled people from poorer countries to help solve a perceived problem in a richer country is imperialistic to say the least.

    maybe we should solve our problems using our people rather than importing solutions (and exporting suffering).

    when are we going to apologise for mining the developed world for nurses?

  • Newsbot9

    Of course you have, Never mind that most of them go home when they get older.

  • Newsbot9

    Hahaa. We’re going to have over 100k shortfall in Nurses…

  • Gary

    Migrants come for a better life. They won’t be coming in 20 years time to pay high taxes in a collapsing economy.

  • gter

    you don’t need training to leave people lying in their own shit for days and having to phone the fire brigade for a glass of water.

  • george moresby

    before we outsourced our nursing to the third world, we didn’t have occurrences like Mid Staffs hospital that bizarrely managed to execute 1% of the population of Stafford in a 5 year orgy of violence.

    maybe getting us back for the empire?

  • george moresby

    have you ever been to some of the shitholes in London that they seem to want to live in? if that’s a better life, then fuck knows how bad Mirapur must be. except they’re probably just here to send the benefits back

  • Newsbot9

    Yes, I’m sure you will blame the Other for everything.
    Of course the death toll is far, far too low for you.

  • Newsbot9

    Ah yes, of course you think nursing is unskilled. And the reality is you need enough staff, with enough time to be able to look up from the paperwork – that is, back office support staff. Keep blaming everyone but the people behind this!

  • Drepf

    More immigration to pay for current pensions is just a Ponzi scheme. Unsustainable by definition.

  • john malpas

    stop abortions ?

  • supermink

    the left including the TUC are not doing themselves any favours rightly defending minorities but totally ignoring the fact that the free movement of labour and displacement of peoples is a right wing ideology.Michael Freidman etc.There needs to be a context of defending minorities but at the same time pointing out that the free movement of labour is designed to drive down wages as pat of its plan to externalise all costs from the markets.

  • LB

    But it’s not coupled with stopping people from taking other people’s money via welfare etc.

    Hence people are coming here and consuming other people’s money but paying less in tax than they consume.

  • supermink

    so far that may be the case for the majority but your answer that dramatically increasing the population year on year to pay for pensions is one of the most crazy solutions ive heard in a long time.I dont think capital is limitless and the digital tyranny dished out by the markets is exactly that-they are just numbers and bare no relationship to any humane world worth living in.

  • OldLb

    Well, what’s happening when you pull in people who consume more state resources than they pay in tax, is that money has to come from other people.

    What’s happening at the moment, is that the pensions debt is escalating at 734 bn a year, on top of the deficit. It’s never going to be bought under control, or even paid for by migrants working in Starbucks.

    So its inevitable. They will default on the pensions and screw people, badly.

    That’s the young, where they will extract the cash.

    That’s the old, where they won’t get the money. They won’t get the welfare either. Then the civil servants, we also have their pensions chopped.

    Then I see another thing happening. Desperate governments do desperate things. They will look around, and see money in pension funds and in bank accounts. They will steal it. Like Cyprus.

  • OldLb

    free movement of labour and displacement of peoples is a right wing ideology.

    =============

    It’s not. It’s been the policy of the Left in the UK. Pull in poor migrants because they will vote Labour.

    eg.

    Past errors in immigration policy contributed to voters in the south of England “losing trust” in Labour, Ed Miliband has acknowledged.

    You’ve also got the Eu and its policies, espoused by Labour and Lib dems less so by the Tories. That forces migration on the UK.

    The end result is as you say. Wages are forced down to the detriment of the poor.

    So I’m all for controlling migration. Simple test. Do you pay more tax than the average government spend per person. Yes – you are welcome. No – you can’t come and you have to leave if you are already here.

    Simple non-racist economic test that doesn’t rely on Civil servants.

  • supermink

    There seems to be a bit of confusion here? using official figures EU migrants are not consuming more state resources than they are paying in tax,if they are could you give a link to your source.

    Also you are wrong thinking the left are the Labour party,They are centre/centre right party-im sure tony blair will confirm.And if anyone one on here is a UKIP supporter than at least give your full solution to essential state services such as hospitals and GPs which is to franchise them out to companies and CHARITIES.

    Cancel the debt and changing the nature of money is the kind of solutions im interested in and not short termism,like displacing people from their land to compete with workers in a country with higher wages rather than fix all countries economies.

    As for a pension crisis etc etc either we look after old people or we use the numbers to say we cant.If the numbers are stopping someone being fed when theres enough food in the world then get rid of the numbers.

  • OldLb

    The UK government spends 722 bn a year. The population of the UK is 63 million. That’s 12K a year on average per person. To break even you need each migrant to be on 40K a year plus.

    Starbucks is paying 4.77 to 7.04p an hour.

    That’s about 2K a year in tax.

    Those working in Starbucks are just paying enough tax to fund their share of the NHS. They aren’t paying any money to pay any pensions of anyone, or are they paying for their share of the common goods. The state is getting into more debt as a result. They are accruing rights to pensions as well.

    Now there are migrants who we do want and need. Those paying lots of tax.

    http://www.ukpublicspending.co.uk/

    http://www.payscale.com/research/UK/Employer=Starbucks_Corporation/Hourly_Rate

    http://listentotaxman.com/

    That’s the reality.

    Now for the debts.

    1,200 bn for the borrowing.

    6,500 bn for the pensions.

    400 bn for PFI

    100 bn for nuclear decommissioning.

    Tax revenues, 600 bn.

    I don’t have to present any solutions to the mess. So when you say cancel the debt, its one solution. That means the following.

    1. All banks are bust, and you won’t get your money out. It’s debt to the state.

    2. All pensions won’t be paid. No welfare either. If they can’t pay the pensions they can’t pay welfare.

    http://www.ons.gov.uk/ons/dcp171766_263808.pdf

    That’s your starter on the pension debt.

  • supermink

    So it is impossible to find any way under the present system to pay for pensions in the future..i think we agree on that and we agree that immigration wont fill that hole.

    Most money in the world is debt money,no? who are we paying this debt to? the recent expose via hard drive data leaked from the likes of the british virgin islands – estimated £32 trillion of tax avoidance,thats the data from one hard drive.

    You say dont have to present any solutions to the mess which makes me wonder why your crying wolf in the first place.Debt cancelling already takes place but at present that is just to keep the system ticking over for the few and not by or for the mass of peoples round the world.

    Capitalism needs new markets,some suggest that there is a limit to this continual need for new markets and in 2030 the markets needed for 3% compound growth just wont be there.

    So its more than pensions that are in crisis,the whole system is breaking down under the weight of numbers.either you want to offer up humane solutions to these problems or by default you are condemning most of the world into an eternal age of darkness.

    have you ever seen the movie Logans Run

  • OldLb

    i think we agree on that and we agree that immigration wont fill that hole.

    ======

    My argument is more nuanced.

    Your treating migrants as one mass. I’m arguing is that we should discriminate between migrants.

    Contrary to the left / EU claims that migrants are good for the UK, we can resolve down to the individual migrant level.

    Namely one condition is that they pay more tax than the consume in state resources to be an economic benefit.

    There’s another condition. Do they have knock on effects on state spending? For example, that Starbucks migrant. Its’ a low skilled job. If they drive someone onto welfare or prevent them getting off, we need to factor in the cost of that person on welfare on the negative side of migration.

    So its pretty clear, low skilled low paid migration is a disaster, and those who are and will be screwed the most are the poor.

    High wage migration, I think is a benefit. More tax than the cost of spending. Now, we then have to ask about the other condition, do they adversely impact other people? Clearly there are some – housing, but the benefits of getting the skills for cheap, and the attractions for business coming here where you can find Paraguayan lawyers, etc, if you need them, is a positive thing.

    There’s a moral impact. You might argue pulling in Doctors from the third world a bad thing, and I would tend to agree. Pulling in skilled trained workers from the 3rd world is a bad thing for the 3rd world, not the case for the UK.

    There is only one solution, and it involves an element of default. However it won’t happen.

    https://docs.google.com/spreadsheet/ccc?key=0AvnR4AGFSHkocEh3N2FreUtzUnpJbkUtXzdNNDktRlE&usp=sharing

    This shows what a 26K a year worker would have received for investing their NI. 627K. State pension costs 152K and they can’t pay that.

    So here’s a plan.

    1. Stop accruing any more state pension, civil service pension debts.
    2. Divert NI into a fund in your name.
    3. On retirement go into draw down.
    4. If, and only if the money runs out, do the rest of us help. [Just in time bail out]

    Since the NI is highly likely to produce lots more money than the state pension, the end result is you are unlikely to to have to pay out. It’s a cheap guarantee that gets cheaper over time.

    Next, think investment. 90 bn in the first year going into investment. So long as you don’t pull in lots of low skilled migrants, jobs go up.

    What tweaks?

    1. 50% goes into the spouses fund, fund ignored on divorce.

    2. What happens when the fund isn’t exhausted on death?

    Here, put it into the heir’s fund. The reason is the poor die younger, so they will be more likely to pass on assets that the rich.

    However, that involves elements of default. It’s inevitable because the pension debts are rising at 734 bn a year on taxes of 600 bn.

    So why should I have to offer any solutions when I’m just pointing out the mess? Shouldn’t those responsible for the mess offer up the solution? e.g Giving up all assets and pleading guilty to fraud?

    Logan’s run is already here. Except its called the Liverpool care pathway.

  • supermink

    Putting aside that I believe that any of these type of solutions are built on a system which is prone to crisis (125 systemic banking crises around the world since 1970)

    Also its funny how you are one of the many who think that the EU is some kind of left wing organisation,The Tories fought and won to keep land subsidies in Brussels a couple of weeks ago- in essence state benefits for the rich.,Your description of the EU which is run by the IMF is too one dimensional for me.Its also worth pointing out that a lot of the eastern european migrant workers arent all working in starbucks they are tradesman.welders.postmen.rig workers,bus drivers,businessmen.They have quickly taken a myriad of jobs,yet the long term unemployed are left untouched while meantime council services and social housing are in crisis.

    There are certain industries like fish processing where the owners prefer to employ east Europeans because they will work longer for less and I dont think these business men would be happy to hear their cheap source of labour will be stopped and most of them vote Tory.

    So ok I go along with your plan and taking out a NI fund in your name would save the day.Not being a micro numbers man its not yet crystal clear how your sums add up but I do know that the NI fund is not completely ring fenced and government use that fund for some projects.So where would the government go for that project money in future?

    Also im presuming that all the things that were paid by the NI before like benefits etc will now come directly out of each persons NI fund?anything else youd like to disappear by sticking it onto a NI account?

    By the way Liverpool care pathway is to be axed.Im sure David Cameron is delighted that as a result more working class people with gold plated pensions will be living longer.

    .

  • OldLb

    Banking crisis is largely irrelevant to the state system. The banks aren’t involved.

    However, if you compare the profit the state has made out of the banks since the crisis – 250 bn profit, with the increase in the state pensions debt over the same time, 4 * 724 bn or 3 trillion, the banks are equally an irrelevance.

    On subsidies, I want them abolished – completely.

    Lots of migrants are doing different jobs. There is no doubt they are hard working, and plying worthwhile trades. I cannot fault most of them for their application.

    However that is irrelevant when you ask the question are they a net benefit to the UK. For that its back to the subsidy. Lots of people are subsidising them. ie. 12K a year per person government spend. That needs 40K a year salaries, per migrant (include another 40K for each child) to break even. That’s not the case.

    ========

    They have quickly taken a myriad of jobs,yet the long term unemployed are left untouched while meantime council services and social housing are in crisis.

    ========

    Yep, because they are competing against the unemployed. They are prepared to take lower wages, and with the other benefits out competing the unemployed. So the unemployed don’t get jobs, languish on benefits, and that’s yet another form of subsidy. Housing is in crisis because the official figure of 5 million migrants are living somewhere. Lots are in social housing, which is just more evidence that they are not an economic benefit to the UK.

    =======

    I dont think these business men would be happy to hear their cheap source of labour

    =======

    Tough, However given the reduction in the need for welfare, I suggest cutting employer’s NI for the low paid. A tax on jobs is like a tax on smoking. Bad for jobs.

    So what things are paid by NI?

    http://en.wikipedia.org/wiki/National_Insurance_(United_Kingdom) has the list.

    5% on civil servants. Value for money? Hmmm, perhaps I should set up a pension fund, get the state to force people to pay me money, and cream off 5% each year.

    Now look at the payouts for the rest.

    Retirement Pensions (including Christmas bonus) 79.321

    Widows/Berevement Pensions 0.571

    Incapacity 2.591

    Unemployment benefit & support 3.463

    Maternity & Guardians allowance 0.373

    Administrative costs & Transfers 4.693

    Total 91.012

    NI Receipts. 84.263

    Not the best formatting but check out wikipedia.

    So under 10% goes to non pension items.

    However, if a 26K a year worker had invested their NI, they would have had a fund of 627K. Instead the state pension, which is going to be cut more, costs 152K. That’s 475K out of 627K, that has gone on 10% of the payments, or money has been siphoned off for other things.

    You can look at it in allsorts of different ways.

    1. Lack of compound interest

    2. Money siphoned off.

    3. Cost of insurance for the items above.

    So on the insurance items, is 475K from a 26K a year worker good value for those items?

    Bereavement benefit? You would have to be a serial killer bumping off wives to gain any benefit.

    JSA? 6 months at 71.70 for six weeks, then you are locked out until you’ve worked for 3 months. Doesn’t add up to much does it?

    https://www.gov.uk/jobseekers-allowance/what-youll-get

    Incapacity. For some this is significant. Now I take that as a moral obligation to pay the extra costs of those that need it. However, ICB claimants went from 1 million to 2.5 million. It was all about hidding the unemployed. Or the NHS really has got it completely wrong.

    Maternity? Look at the numbers. Insignicant in the scheme of things.

    The other observation, they have a deficit. Less money coming in than payments out

  • OldLb

    And if you haven’t noticed, they still get their pensions, but pay no taxes in the UK. It’s a dire deal.

  • OldLb

    So why is Milliband saying Labour made mistakes over immigration?

    It means it was Labour policy. Everyone knows that.