Scott Macnab: Migrants could save the Scottish economy

The NHS is struggling to attract key EU workers who are turning their back on the UK as the pound falls in value. Picture: contributed
The NHS is struggling to attract key EU workers who are turning their back on the UK as the pound falls in value. Picture: contributed
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Scotland doesn’t have enough young people to make up the required workforce in the years ahead, says Scott Macnab

The image of Scotland as an open, welcoming country lies at the heart of the civic nationalism which the SNP has sought to espouse during its rise to prominence in recent decades. This was on display last week as Nicola Sturgeon welcomed the 2000th Syrian refugee to the country, three years ahead of schedule and ensuring the First Minister honoured her pledge to accept one in ten of 20,000 Syrian refugees arriving the UK. The experience of those settling here has also been overwhelmingly positive, with a carefully managed dispersal programme around the country having offset the flashpoints of hostility experienced by a previous generation of Kurdish asylum seekers at the turn of the millennium.

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And this receptive approach to those from outwith these shores settling here increasingly appears to hold the key to all our future prosperity.

Scotland simply doesn’t have enough younger people who will make up the workforce in the decades ahead. That means generating the taxes needed to provide vital services like health and social care - not to mention funding the state pensions - for an increasingly ageing population.

The debate over tax rises may have dominated the recent budget, but many senior economists recoiled in horror at the stark estimates released by the newly established Scottish Fiscal Commission which predicted flatlining growth of less then 1 per cent over the next five years, with Scotland continuing to lag behind the rest of the UK.

This is ‘unprecedented in a generation’ and would mark the worst period of economic misery in sixty years. And it means a headache for the Government - and parties of all hues - seeking to plug a burgeoning black hole in the nations finances.

The tax rises being proposed in Scotland by the SNP for high and middle earners - albeit with a marginal cut for those making less than £26,000 - are not a long-term solution here.

We’ve already had warnings that even more tax hikes would be needed the year after next in 2019/20 to make up for a another looming £250 million budget black hole.

But the prospect of year-on-year income tax rises and a widening difference between levels in Scotland and England would be politically unpalatable.

SNP ministers are anxious just to see how the current hike in taxes will play out. So whether it comes from families seeking asylum or economic migrants, Scotland needs more people to make up that vital 16 to 64 age group who will get the economy motoring. And we’re in a different situation from the rest of the UK in this respect.

Concerns over burgeoning immigration levels were at the heart of the Brexit vote and the UK Government now appears determined to clamp down on this after the the country leaves the EU next year. It’s already happening with institutions like the NHS now struggling to attract key EU workers who are turning their back on the UK as the value of the pound - and their potential earnings - plummet.

But where does this leave Scotland, as it wrestles with a looming demographic timebomb?

Ms Sturgeon has used the Brexit vote to step up her demands for Scotland to be handed control over immigration in order to meet the country’s unique needs. Nationalists had believed that the Brexit vote changed everything as Scots voted overwhelmingly to remain in the EU, but found themselves dragged out by the weight of votes south of the border.

But the First Minister has already had her fingers burned on this issue as the Westminster election earlier this year resulted in a backlash against her desire for a quickfire second independence referendum on the back of the Brexit vote and saw the SNP lose more than 20 seats from the previous UK election just two years earlier.

It saw the indyref2 plans ditched and despite noisy protestations from the Scottish Government’s s Brexit minister Mike Russell, the SNP’s contribution to the whole Brexit debate has been little more than carping from the sidelines as the real issues are hammered out at London and Brussels. Even the prospect of Holyrood withholding legislative consent for the Brexit Bill would be little more than symbolic.

The fresh impetus on immigration has come not just with the recent forecasts of economic gloom, but a recent report by the IPPR think tank which suggested Scotland could be handed control in this area.

A devolved system of “sub-state” visas has been suggested which would hand more control to Holyrood. Overseas workers would be sponsored by an employer to come and work in Scotland. To change jobs, they re-apply to the Home Office which would allay concerns from the UK Government that people could simply move elsewhere in the country after securing entry. Visas would still be issued by the UK Government, but the numbers would be set out by ministers in Edinburgh.

The current system simply does not address the geographical imbalances in the UK which sees a disproportionate number of skilled immigrants settling in London. Higher wages in the UK capital makes it more difficult for areas facing population decline to attract people.

Handing new immigration powers to Holyrood would address this.

And perhaps crucially it would also give local people more of a say on how to manage it.

Nationalists like to proclaim a different attitude to immigration in Scotland from the concerns often expressed south of the border. In fact, consistent polling has shown there is little or no difference in the outlook of Scots on the issue. If greater control was handed to Holyrood, it could, in the longer term, even foster a more “constructive and practical conversation” about the benefits and costs of immigration, according to the IPPR report. This will be at the heart of any future immigration drive. The problems of the early 2000s, when Kurdish asylum seekers faced some unpleasant treatment in Glasgow’s Sighthill, shows Scotland is not immune to hostility among the local population, albeit that concerned asylum seekers not economic migrants.

German Chancellor Angela Merkel sought to make the country a beacon for refugees when she welcomed one million Syrians. But the decision was widely seen to have been a key factor in her recent woes at the ballot box which has seen her struggling to form a Government in her own country.

A regime which educates Scots of the benefits of immigration would seem essential before significantly raising levels.

This principle of integration and fairness would need to include the prospect of long-term naturalisation to ensure new arrivals buy into the long-term prospect. It could just provide a new generation for the future and rescue Scotland from the economic abyss.