The financial stressed put on the welfare state by Britain's ageing population could be assuaged by higher levels of 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:
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Half of those born after 2007 can expect to live to over 100.
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Between 2010 and 2030 the number of people aged over 65 will increase by 51%.
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The number of people aged over 85 will double during the same period.
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.
29 Responses to “How best to support an ageing population? More immigration”
OldLb
free movement of labour and displacement of peoples is a right wing ideology.
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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.
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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.