What demographic factors are most likely to change Britain over the next 50 years?
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16 November
13:01
December
2016

We are already seeing the effects of longevity and an ageing population on British society at present with assets (like home ownership or savings) and job security concentrated in older age cohorts. Furthermore, older age cohorts are disproportionately likely to require the NHS and other forms of social care for longer than younger cohorts at a time when the government appears set on privatising these services. There's the additional factor, that we do not know its effect yet, that the government changed the law last year so that pensioners could withdraw the entirety of their pension if they wanted to thus undercutting the cash reserves of pension funds that would ordinarily be used for incoming cohorts of pensioners. On wealth inequality, education and social attitudes it appears that the UK is strikingly divided by age (as well as regions) with this being a strong predictor for how citizens will vote in parliamentary elections or in the recent Brexit referendum. The UK welfare system was designed in an era when average life expectancy was 70-years old with retirement being at around 60 to 65 years old, and this model has not been significantly altered in spite of declining mortality (and fertility). Death from old age had the social function of redistributing property and assets to surviving offspring. It seems that this mechanism has broken down in developed states where the healthy demographic triangle has been inverted thanks to the longevity of "baby boomers" and their historic low fertility rates. This, of course, is a problem throughout the developed world including in rapidly developing countries like China and India.

The other factor will probably be immigration, which has been used to ameliorate the effects of low fertility on the productivity and supply of the workforce. If immigration will lead to a more pluralistic society or not has yet to be seen and will be greatly influenced to the extent that older (and, statistically, more xenophobic) generations are able to translate their considerable political capital into policies that either help foster pluralism or one that is hostile to it. It is doubtful that the government can bring down immigration to the numbers that they are advertising following Brexit without causing significant damage to the entire economy, which therefore makes their claims seem much more like pandering to certain parts of the electorate than realistic or sound policy-making.

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27 January
15:45

Until recently, I would have been fairly confident about the demographic future of the UK. Having a relatively high fertility rate (for Europe) coupled with low mortality, the main source of population growth was fairly high levels of net migration.

Of course, under this scenario there were bound to be a number of major challenges. The first is that the population is ageing – though not as rapidly as other countries, especially in Southern and Eastern Europe – but the constant injection of large numbers of working-age migrants offset this to a degree. This offsetting was actioned both in terms of keeping ‘dependency rates’ relatively low through labour force activity (and tax receipts) but also in terms of working in the health and care sector.

Secondly, the regional distribution of both the population as a whole and growth rates is very unbalanced. Coupled with decades of under-investment in infrastructure, this means that certain parts of the country are likely to suffer from what might feel like overpopulation. This was a key theme in the Brexit referendum; but as I argue elsewhere this perceived squeeze on public services is as much about austerity and under-investment as it is about immigration.

However, after Brexit I am much more uncertain about the future demographic change we might see in the UK. Of course, migration is the most obvious change we might see. The direct and indirect effects of a much more constrained migration could be sever, both for the economy and the labour market. Possible unforeseen circumstance might transpire too. At the moment, for example, much EU migration is ‘temporary’ in the sense of working in the UK for a period of time before returning. If a shift in migration policy led to higher levels of lifetime migration this could serve to exacerbate the ageing issue. Repatriation (voluntary or otherwise) of older emigrants would only add to this.

If the bright economic future of the UK as a global trade centre does not prevail and darker economic times come about – linked to lower employment levels – we could see a fall in fertility rates. If the economy is especially badly hit we could also see higher levels of emigration – again worsening ageing.

Finally, we must not overlook the impact of other government policies which could impact on demographic change. Perhaps the most immediate is the crisis in the NHS and, more especially, social care funding. This has the potential to increase mortality rates – or at least slow down the improvements we have been seeing over recent decades. More broadly, though, if the government comes good on its threat to become an offshore tax haven and pursues a reckless ‘race to the bottom’ in terms of tax, it is likely that this could translate into less social support. This, in turn, could have profound future effects on fertility and mortality.

It was all going so well…

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