Scotland’s ageing population will struggle to boost economic growth without the help of younger immigrants from other European countries, writes Michael Fry
The Scotland of the future will need more immigrants. This is going to be true regardless of its political fate, whether as an independent country or, at the least, as a country with greater economic and other autonomy than it enjoys at the moment.
The reason for the long upheaval through which Scotland is still going through surely lies in the status of stagnant backwater living off regional aid assigned to it by the UK in the late 20th century. Luckily, Scotland still had enough nationhood left in it to reject this depressing destiny.
But the key to any other destiny lies, at least in large part, in economic growth. For about half a century, the Scottish economy has grown, year by year, at a slower rate than the UK average. Inexorably a wide gap has opened up between the living standards here and those, most obviously, in the British economic powerhouse round London.
The worst of this dismal Scottish experience passed with the discovery of North Sea oil, which provided a new source of growth to replace the defunct heavy industries. Even so, a modest revival in the overall Scottish growth rate has never been enough to bring it up even to the level of the English growth rate, which itself is modest by the standards of Germany, let alone eastern Europe – and of Asia let us not even speak.
When the SNP government came to power at Holyrood in 2007, it set itself the goal of raising the Scottish growth rate to the level of the English growth rate. Self-evidently, it was a policy that could not be fulfilled from one year to the next, but only over some longer term – and anyway was immediately hobbled by the deepest recession of modern times. The fact remains that we have got nowhere with this basic aim of Scottish economic policy.
If we are going to alter such an uninspiring record we need to rethink at a basic level. Growth happens not in the abstract, and not because governments say it should happen, but through the effective redeployment of factors of production or the acquisition of fresh factors of production.
Capital is one factor of production, and among the possible Scotlands of the future is a model that has no shortage of capital in the shape of revenue from the North Sea ready to invest in different sectors. Technology is a second factor of production, and among other things we have sustained an excellent system of higher education which has proved, and is still proving, to be a rich source of scientific innovation. The third factor of production is labour, but here the picture is much less rosy.
The Scottish workforce first has a good deal of its talent constantly creamed off by emigration, but that is an old problem. More recently, amid the spread of new technologies, we find we have inherited a workforce which, at the lower levels and concentrated in certain regions, is poor in skills and motivation.
Above all, we have a workforce which is ageing. Before long, the need to pay for the ever growing numbers no longer working by the efforts of the shrunken proportion still working will become our biggest social problem of all. It will also be a drag on growth. A society which needs to pay out more and more on benefits cannot use the same money for investment.
What is to be done? One answer would be a greater rate of increase in the native population, though it is hard to see how the long-term trend towards smaller families can be halted. We might also somehow diminish emigration by Scots, though that again seems unlikely to happen unless a new phase of higher growth has set in first. An alternative would be to increase participation in economic activity by people of working age, such as young mums. The white paper on Scotland’s future proposed a scheme of childcare that could have this effect. It was presented as a social measure but I suspect that its real rationale was economic.
Still, with the best will in the world it is hard to see how these measures, even in combination, could have more than a minor effect on the age-profile of the population and so of the workforce. The only thing that can change that reasonably quickly is immigration.
We already see the proof before our eyes. At the turn of the 21st century the population of Scotland was stagnating in the way it had been for most of the 20th century. The total hovered just above five million, but threatened soon to plunge below that level and to carry on down. Only a few years later and we find not just that the population has kept above five million but also that it continues to rise and within a couple of decades is forecast to reach 5.7 million, the highest number that has ever lived in Scotland in the whole of its history.
Immigration is what has made the difference. If we needed to rely only on the natural rate of increase, that is, the excess of native births over native deaths, then the population would still be stagnating, if not falling. But, since the millennium, thousands of foreigners have come to Scotland to live their lives here, to find work, set up homes and have kids. Some have joined existing Asian communities, but many more are from Europe, Polish plumbers and Slovak slaters, who in my experience work a good deal more reliably and obligingly, above all cheaply, than their Scottish counterparts have ever done.
Now we face the prospect of the Romanians and Bulgarians joining the Lithuanians and Hungarians who came before them. Why England, in its present Ukip-induced xenophobia, should regard this prospect with such horror is beyond me. The prospective immigrants are after all Europeans, products of the same civilisation, ready to adapt to us and to fulfil their personal aims through hard work, while claiming none of the dubious privileges of multiculturalism. Fortunately, in Scotland it is hard to observe any of the same kind of knee-jerk reaction and long may this continue to be so.
The fact is that we have as much interest in the foreigners settling here as they have in coming. Their migration serves the aims of both sides. Without their contribution, we are most unlikely to succeed in making Scotland, under whatever political regime, a richer and a happier and a better nation. It is as simple as that.