Fewer Britons in work due to ageing population and emigration rather than migrants, says report
Alan Travis, home affairs editor
Wednesday January 9, 2008
Demographic changes including an ageing population and rising emigration from Britain lie behind the fall in the number of UK-born people in work, rather than the arrival of new migrants, according to research published yesterday.
The conclusion from a study of the economic impact of migration by the left-of-centre thinktank the Institute of Public Policy Research throws new light on the debate over Gordon Brown's promise to create “British jobs for British workers” and the introduction of a new points-based immigration system from April.
The IPPR study also estimates that if Britain adopted a tighter policy of zero net migration – with immigration capped to match those leaving the country the year before – as advocated by groups such as Migrationwatch, then income tax would have to rise by 1.4p in the pound by 2015 to make up for the missing contribution to the exchequer.
Dr Dhananjayan Sriskandarajah of the IPPR told the House of Lords economic affairs select committee yesterday that there had been a lot of talk recently about migrant workers taking British jobs but the evidence suggested that, due to an ageing population and high emigration, the British working-age population had shrunk over the past year.
Ministers recently stirred controversy after admitting that more than 1m new jobs had gone to migrants since Labour came to power in 1997.
Initial IPPR research suggests that the fall in the number of UK-born people in jobs is more than accounted for by a fall in the number of UK-born people of working age. “The UK-born working age population fell by 272,000 between April to June 2006 and April to June 2007,” says the IPPR study. “This fall is likely to be the result of a relatively large number of people reaching retirement age compared to those entering the working age population, and because of net emigration of UK-born working people. During the same period the total number of UK-born in employment dropped by 230,000.”
The IPPR said this suggested that demographic changes in the UK-born population rather than the arrival of immigrants was driving the reduction in the number of British-born people in jobs. This is confirmed by the fact that the proportion of the UK-born population in employment has remained at 75% over the last decade. Despite the higher number of migrants in the country this proportion has remained at the same level as 2001.
Sriskandarajah said that those who called for policies of zero net migration failed to spell out the tax implications as Britain's population falls and ages. The IPPR study estimates that with high migration there will be 473 retired people to every 1,000 people of working age by 2074 but with a policy of zero net migration this would rise to 587 retired people to every 1,000. It estimates that this is likely to result in significant tax increases in the range of 0.6p to 1.4p in the pound on income tax by 2015, rising to an extra 9p in the pound by 2036. “While there are heated discussions of whether this or that aspect of migration is good or bad, it is rare for anyone to ask what would have happened without migration,” said Sriskandarajah.
“Recent discussions about whether new Polish and other migrants are crowding out local workers or keeping wages down have completely ignored the question of what might have happened had UK employers not had access to such highly motivated and hard-working migrants.”