UK Immigration, Economics and Pensions

By Vexen Crabtree 2011 May 31

The 2011 Census1

The UK requires increased immigration in order to continue to function. Our industries, services, pensions and economy need more young workers imported from abroad. We opened our borders fully to new EU countries such as Poland, Romania and Bulgaria. Along with Ireland and Sweden who also didn't restrict immigration from these new countries, we have benefited most economically4, along with the new countries themselves. Old, stable nations will benefit from attracting skilled workers from such countries, whilst the new countries experience freer trade and commerce, which boosts their own long-term stability.


1. The Benefits of Open Immigration and Free Labour Markets

2. The Demographics Crises

2.1. The Ageing Population of Britain

In the last 35 years:

This type of demographic shift makes some sociologists and many economists edgy. The problem is not only with the UK: all developing countries are facing similar futures. It may be that the entire European continent and countries such as Japan will en masse enter into a new era of human history, with ageing (and then declining) populations, which will necessitate a whole new type of economy.

Take the old-age dependency ratio. This is the ratio of old-age people to working-age people. At present, it is approaching 1 in 4 (25%). It has never been this high before and has put tremendous strain on pensions and welfare systems, as it is difficult to adequately care for the old without enough workers. At our present level of medical and technological know-how, we shouldn't like to see the old-age dependency ratio rise much above 25%. But, the ratio continues to worsen. According to Eurostat:

As Europe's value rises higher than the UK's, workers will increasingly find more work elsewhere (and better paid work, according to the economics of supply and demand).

The demographics crises is a worldwide issue, affecting all developed countries. For more on this and on world overpopulation, see:

2.2. The Future of UK Pension Schemes Require Immigrant Workers

Due to the ageing populations of many Western countries9, the immigration of young adult workers will become essential if pensions schemes are going to last in to the future. My text The Overpopulation of the Earth and the Demographics Crises: The Impact on Pensions and Immigration (2013) discusses this issue:

In many Western countries and countries such as Japan, a post-industrial slow in the population growth has occurred. Populations are ageing. This means that over coming decades, the numbers of old people will continue to rise whilst the numbers of the young continue to decline. It is the first time in Human history that the age distribution of nations has threatened to become long-term top-heavy. What this means is a change in the entire way that society is structured. The young will have an excess of elders, rather than the old having an excess of youth. [...] Many companies and governments are feeling the increasing pressure of having larger numbers of pensioners. More and more people are drawing pensions, and fewer and fewer will be paying into pension schemes. Economists have long predicted that in modern countries, all pension schemes will collapse. It is not possible for one worker to pay for the pensions of three, or hardly even two, retired elders. Governments such as Britain's have implemented a gradual increase of the age of retirement to try and curb the collapse of pension schemes and to try to dam the exodus of workers from employment to retirement.

"The Overpopulation of the Earth and the Demographics Crises: The Impact on Pensions and Immigration" by Vexen Crabtree (2013)

Firms big and small are threatened by a fundamental demographic shift that most have yet to adjust to. Britain's pensioners are proving a hardier bunch than expected. On August 1st the actuaries' trade body adopted a new set of mortality tables drawing on data collected between 1999 and 2002. It forecasts yet another increase in life expectancy. In 1999 actuaries assumed that a British man retiring at 60 would on average live to the ripe old age of 84. They then raised their estimate in 2002 to 87. Now they figure he will live about six months longer. What is good news for ageing folk is bad news for those who support them. Each increase in life expectancy of one year adds about £12 billion to the aggregate pension liabilities of FTSE 100 companies, says Peter Thompkins of Pricewaterhouse-Coopers, an accounting firm. [...]

Firms as a group are underestimating life expectancy. [...] Updating that estimate could well add more than £25 billion to the FTSE 100 deficit [...]. So it is not surprising that many companies are trying to reduce the risks of providing pensions by closing their final-salary schemes to new members (which three-quarters of FTSE 100 firms have already done) and, increasingly, to existing members.

The Economist (2006)11

2.3. Some Industries Rely on Immigrant Workforces, More Will in the Future

The UK depends, now, on immigrants to supply a workforce in multiple industries. For example "over the past five years, nearly half the new doctors and nurses employed by Britain's National Health Service qualified abroad"12. This trend will continue and without increasing amounts of immigrants entire industries in the UK would collapse permanently. For now, new entrants into the European Union such as Poland offer healthy workforces to 'old' Europe. Europe's open borders allow the post-explosion countries to easily import workers. But, as the whole of Europe gradually enters the post-population-explosion era, more and more workers will have to come from Asia, South America and Africa. As yet, the increases are quite small and most immigrants come from within Europe, but in the future, Europe as a whole will be a hungry gobbler of young adults seeking work, from all over the developing world.

The UK is "the only big European country so far to welcome workers from the EU's eight new members"13, and so far we have benefited greatly from them. The Highlands that surround Inverness in Scotland have witnessed renewed hope for local economies as a result of the badly needed influx of workers, as decade after decade large numbers of working-age young Scots have left the highlands, leaving a demographic hole in the population.

[The Poles] have flocked to the Highlands since May 2004 to do the low-paid jobs Scots have turned their noses up at for years, in tourism, construction and food processing. At Strathaird Salmon alone, more than one-third of the 400-strong workforce is Polish. [...] In a sparsely populated region that has been haemorrhaging young Scots since the 19th century, the eastern Europeans are welcome.

The Economist (2006)13

3. The Negative Attitude of Many British Towards Immigration

3.1. Xenophobia and the Misinformed Masses

The UK is a notable exception to the generally multicultural style of Europe. Despite being a very mixed country (London is the most diverse city on Earth) the central popularist culture of the UK is very intolerant of foreign-looking things. Different styles of dress, customs, religions and accents are all cruelly stereotyped especially by some 'trashy' and very popular news outlets. Over the last few decades such over racism has mostly made itself absent, and things are getting better. Focal points of expressions of xenophobia are pubs and football matches, the two greatest shrines of trash culture.

Opinion polls consistently show that Britons are concerned about immigration, which they think is running out of control. [...] Television images of Afghans pouring into the Channel Tunnel particularly offended the island mentality. For the last three years, fewer would-be refugees have made it to Britain, thanks to better border security [...]. The number of asylum-seekers is now the lowest it has been for more than a decade. Oddly, though, public disquiet is as strong as ever.

The Economist (2006)14

An Ipsos Mori poll in the summer of 2013 found that across multiple areas of popular opinion, including such hot topics as crime, benefit fraud and immigration, public opinion was in sync with the sensationalist headlines of cheap newspapers, rather than in sync with reality. People think that recent immigrants make up an astounding one third of the population (in reality, it is 13%). Non-whites are thought to make up 30% of the population. The reality is that only 11% of the British population is Asian or black. A few popularist media outlets - and pseudo-documentaries - have concentrated on the "waves" of immigrants who come to the UK in order to claim benefits, even though the vast majority come here to work, and go home when they're done (just as us Brits do when we work abroad). "The public think that £24 of every £100 of benefits is fraudulently claimed. Official estimates are that just 70 pence in every £100 is fraudulent". Across the board, people blame 'foreigners' for financial and social woes in a way that is often not actually racist, but is certainly very uninformed - and misinformed. They think that foreign aid is one of the top 3 three things the government spends money on - after a long series of misleading articles by the Daily Mail newspaper - and several anti-foreigner parties have campaigned with the policy that this has to end. But in reality, foreign aid makes up 1.1% of the budget, and lots of that goes to countries where we have a national interest in fostering stability anyway. These things really ought to be no issue at all, but numbers get inflated along with people's concerns and biases.

Countries such as Denmark, Finland and Sweden all accept a higher rate of asylum seekers than the UK and yet these countries do not have the problems that many in the UK complain about. Denmark's rate of 74% makes our 43% look positively timid. Although papers such as the Daily Mail make it seem otherwise, the influx of Asylum Seekers is very low compared with skilled and employed immigrants. Some single-issue parties make themselves popular purely on an anti-immigration and anti-foreigner stance.

The National Front (NF), the British National Party (BNP), and the UK Independence Party (UKIP) are three well-known anti-immigration and anti-foreigner parties in the UK. They sit alongside the English Defence League and horrible thugs such as Combat 18, and, leadership and membership swap between all these organisations relatively freely, with most of them being offshoots of one-another. They all have anti-EU policies. These, and parties like them, are dangerously shallow and single-minded. They appeal to nationalists of the most hateful and simple kind. Diatribes against "foreigners" in general result in promises of laws against immigration (including a complete ban on all immigration), laws to expel immigrants (illegal, and legal) who live here, and laws against benefits for immigrants, plus very strange ideas about "native" Britons (or "indigenous Britons", to use BNP's confused phrase). The NF campaigns on repatriating ('sending home') all non-white people and their dependents, although critics describe them as a "drinking club" of drunkards, with little interest in serious politics amongst its own members.

"Single Issue Parties are Dangerous: Against BNP, UKIP, Green Parties and Ethnic Parties: 4. National Front, BNP, UKIP (Anti-immigration, anti-foreigner)" by Vexen Crabtree (2006)

Single issue parties are not complex or developed enough to be able to govern a country, it would be an economic disaster should one gain real power. Two of factors are discussed below: The pensions crises and the demographic shift; both caused by an ageing population, and both remedied by increasing the amounts of young immigrants.

3.2. Some Newspapers' Bias on Immigration

The facts of economics and demographics take a hefty battering from the repeated sensationalist xenophobia of some of the UK's most popular newspapers.

Some very popular papers report on immigration in entirely skewed and negative terms. The formula is that everything bad can be tied to immigration and foreigners; that both those groups are equated with fraudulent asylum seekers and illegal immigration. It is impossible to reach a sensible view of the truth by relying on the hot-blooded, xenophobic and misleading diatribes of some popular newspapers such as The Daily Mail, the Sunday Times and The Sun. How can the populace ever vote in elections wisely, when their understanding of migration is tainted with this type of horrible bias? The emotional response (even if followed up with more careful news reports seen elsewhere) is hard to replace with balanced tolerance. There is nothing to stop the papers endlessly peddling this type of trash: it sells because it panders to fear and ignorance, and in being sold, the papers increase those two wretched traits.

For my extended and wider criticism of the negative role the mass media plays in the modern world, read:

4. The Hypocrisy of Those Who Complain About Immigration

4.1. The History of an Island Nation That Endorsed the Slave Trade

It is a truism that without immigration, island nations such as the UK simply wouldn't exist. Not only does denying the value of legal immigration deny our own history as an island, but, long after we were established as a people, we engaged ourselves fully in the slave trade, forcibly bringing thousands of foreigners into our midst15, many of whom were forced into poverty-stricken areas with poor employment where there were few prospects to emancipate themselves and make their ways home. We are not morally justified in now chastising the descendents of those that we forced to come here, any more than we be angry with our own ancestors for coming here to this island, as immigrants themselves. If an islander wants to remove immigrants, (s)he should probably start with removing hirself!

4.2. Hypocrisy, as Plenty of Brits Live and Work Abroad (9% of us)

Some British complain (loudly) that there are too many foreigners taking jobs in Britain, therefore depriving locals of jobs. This is hardly, however, where the analysis should end.

If you argue that there should be fewer foriegners, then, you are also making that argument that we shouldn't be free to live and work abroad. This logical conclusion is nowhere argued for by anti-foreigner plebs, underlining the fact that their opinions are a result of emotional, and not moral, factual or logical considerations.

5. Negative Effects of Immigration

It is in schools, public housing and doctors' surgeries that natives come face to face with migrants [and where] hostility to migrants seems strongest. Local councils in Britain complain that clinics and schools are overloaded and central government is slow to dish out help, and local police in areas with many immigrants blame foreigners for a rise in crime. [...] Crowding, although likely to cause resentment, results from the unexpected arrival of those migrants, with bureaucracies taking time to allocate resources to the right places. In itself, it does not prove that migrants are a drag on public services as a whole. Indeed, migrants often make a large contribution to the public purse.

Adam Roberts (2008)3

The main problem is that the impact of migration is uneven. It is only natural that people with common interests choose to associate with one another and even to move to areas where they know their kinsfolk already live. But this creates infamous areas of cities which are much hated by natives, and slows down integration into wider society. Migrants often find that certain aspects of their lives become important to them, such as their religion. Adam Roberts warns us that those that "develop for the first time, perhaps as second-generation immigrants - a strong religious sense that cuts across any national loyalty may be the hardest of all to assimilate in broadly secular Western societies". These two factors have made the integration of Muslims a particular problem. As of yet, there are no particularly wise or liberal ways that seem likely to solve these types of problems.

Links:

6. Curbing Immigration and Nation-Building: New Laws on Citizenship, 2008-2010

Several new measures have been introduced as the UK government is now trying to bring people together under agreement to a common set of British values. "The shift in opinion away from open borders has been matched by a move away from Britain's traditionally hands-off approach to identity. [... Even advocates of multiculturalism] concede the need for newcomers to learn to speak English and, to a degree, for values and institutions to bind together a diverse population. Much of this is happening: language tests, exams on life in Britain, citizenship ceremonies and a nascent idea of civic service for young people may, slowly, build a richer idea of citizenship. "Britain is engaged in a mild form of nation-building," says Mr Goodhart"2.

7. Conclusion

Book Recommendation

"Immigrants: Your Country Needs Them" by Philippe Legrain (2007)

Firstly, the values of freedom and fairness dictate that we should allow a wide flow of immigrants into Britain. Nine percent of Britons live or work abroad, so we can hardly argue against free migration. We are ourselves poor at foreign languages, so it is also unfair if we were to hypocritically criticize foreigners for living here without being good at our language. Finally, the UK embraced the slave trade and forced many foreigners into poverty-stricken areas, from which they could not gain enough freedom or finances to return home. We have no moral ground on which to chastise their descendents for being here.

Secondly, the free migration of open labour markets benefits entire economic regions. The opposite, the nationalist raising of labour barriers against foreigners, has the same effect as trade tariffs: to distort the market, reduce wage efficiency and balance and to harm the economy as a whole. Ironically, attempting to secure local jobs for local residents has the effect of shrinking the economy, therefore reducing the long-term number of overall jobs. Strongly reducing immigration and stopping foreign workers is not worth the economic instability and the loss of freedom and would be hypocritical, given the numbers of Brits that migrate. Nationalist sloganeering may please some of the masses but is not in the UK's long-term interest.

Thirdly, demographic realities play a part. The UK is ageing, and we need more working-age people to fill the emptying hole in our demographic make-up. Otherwise, multiple industries and all pensions are at severe risk. Already, some industries and local economies depend on immigrants. We have serious shortages in some skilled trades, for example, nearly half the new doctors and nurses employed in the National Health Service have qualified abroad. We already have shortages of medical staff. Imagine the world without half the staff of the NHS, cheap labourers working in industries that our ageing population avoids, no pensions for increasing numbers of the elderly, and you imagine a UK without immigration. The Government reports that immigrants in total pay more in taxes than they take as benefits4. Countries in the EU - Britain, Sweden and Eire, that have opened their borders fully to EU's new members such as Poland, Bulgaria and Romania, have benefited from it more than others. Despite this, some extremist, simpleton and short-sighted parties (such as the BNP and NF) campaign for a complete stop to immigration, and even promise to send home nationalized foreigners. With a population that is ageing, the UK finds itself with more and more pensioners and fewer and fewer workers - only immigration of working-age peoples from elsewhere can help our future economy.

Read / Write Comments

By Vexen Crabtree 2011 May 31
Originally published 2007 Jan 11
Last Updated: 2012 Dec 13
http://www.vexen.co.uk/UK/immigration.html
Parent page: United Kingdom: National Successes and Social Failures

References: (What's this?)

Book Cover

The Economist. Published by The Economist Group, Ltd. A weekly newspaper in magazine format, famed for its accuracy, wide scope and intelligent content. See vexen.co.uk/references.html#Economist for some commentary on this source.

Anderson, M S
The Ascendancy of Europe 1815-1914 (1985). Second edition. Published by Pearson Education Limited, Essex, UK. Anderson is Professor Emeritus of International History in the University of London and a fellow of the Royal Historical Society.

Crabtree, Vexen
"UK Trash Culture" (2004). Accessed 2014 Jan 13.
"Single Issue Parties are Dangerous: Against BNP, UKIP, Green Parties and Ethnic Parties" (2006). Accessed 2014 Jan 13.
"The Worst of the Modern Mass Media" (2009). Accessed 2014 Jan 13.
"The Overpopulation of the Earth and the Demographics Crises: The Impact on Pensions and Immigration" (2013). Accessed 2014 Jan 13.

Davies, Nick
Flat Earth News (2008). Hardback. Published by Chatto & Windus, Random House, London, UK.

Eurostat. The Statistical Office of the European Community, Luxembourg. http://ec.europa.eu/eurostat.

Hughes, Gordon & Fergusson, Ross
Ordering Lives: Family, work and welfare (2004, Eds.). 2nd edition. Published by Routledge. Originally written and published by The Open University, 2000, UK.

Ipsos Mori
(2013) Survey conducted for the Royal Statistical Society and King's College London, by Ipsos Mori. A phone survey of 1,1015 people. Reported in The Independent article "British public wrong about nearly everything, survey shows" on 2013 Jul 09

UKBA (United Kingdom Border Agency)
Guide on "Settling in the UK" on ukba.homeoffice.gov.uk accessed 2011 May 31.

Footnotes

  1. 2011 Census summaries reported by The Guardian newspaper, on guardian.co.uk/...one-in-eight-born-abroad accessed 2012 Dec 13.^
  2. The Economist (2010 May 01) p36 reported that "Some 5.5m of [Britains] now live abroad, many in Europe, according to the Institute for Public Policy Research". In an article on UK immigration, citizenship tests, and the like.^^
  3. Adam Roberts in The Economist (2008 Jan 05) Special Report on Immigration.^^
  4. The Economist (2007 Feb 03) insert "Special Report on Britain", p12.^^
  5. The Economist (2008 Mar 29) article "Trade and migration: How to smite Smoot" p98.^
  6. The Economist (2006 Mar 11) p29-39 article "Pick and Mix".
  7. Davies (2008) p322, 375-6.^
  8. Office for National Statistics Social Trends 2007 on www.statistics.gov.uk.^
  9. Eurostat (2009) on eurostat.ec.europa.eu. Accessed 2009 May 16. Added to this page on 2009 May 16. I discuss these stats a little more on a blog entry on Xanga on UK working-age population.^^
  10. Hughes & Fergusson (2004) p122.
  11. The Economist (2006 Aug 05) p30 article "Company Pensions: Running to stand still".^
  12. The Economist (2006 Jun 03) p45 article "Talking of Immigrants".^
  13. The Economist (2006 Dec 16) p35 article "Poles in the Highlands".^
  14. The Economist (2006 May 11) Vol.378 No.8468, article "Pick and Mix" p29-30. Added to this page on 2006 May 28.^
  15. Anderson (1985).^
  16. UKBA ukba.homeoffice.gov.uk/sitecontent/newsfragments/26-english-language-partners accessed 2011 May 31.^
  17. Quote from National Secular Society Newsline (2008 Nov 14). Also see UKBA page on "Husbands, wives and civil partners" accessed 2011 May 31.^

© 2013 Vexen Crabtree. All rights reserved.

Google Advertisements: