Interim Population Policy: 2014 – 2015 (P.10/2014) – amendment.

STATES OF JERSEY

INTERIM POPULATION POLICY: 2014 – 2015 (P.10/2014) – AMENDMENT

Lodged au Greffe on 18th February 2014 by Deputy G.P. Southern of St. Helier

STATES GREFFE

2014   Price code: B  P.10 Amd.

INTERIM POPULATION POLICY: 2014 – 2015 (P.10/2014) – AMENDMENT PAGE 2 –

For the words "+150 households per year, which equates to +325 people per year" substitute the words "+100 households per year, which equates to +215 people per year" and delete the words "as outlined in the accompanying Report of the Council of Ministers dated 30th January 2014".

DEPUTY G.P. SOUTHERN OF ST. HELIER

REPORT

The main thrust of taking firm control of immigration through the Interim Population Policy (IPP), in order to reduce the runaway growth in population we have seen throughout the last decade, is a laudable aim. However, the report which underpins the policy, presented by the Council of Ministers (CoM) in some 39 pages, and which appears on the surface to be extensively researched, is far from comprehensive.

The extensive use of individual bits of data, culled from a variety of sources, might be taken by some as strong evidence for the proposal, but they do not form a coherent argument. Nor do they examine all the factors which need to be considered. For example –

• The central theme is that immigration at +325 is needed to maintain the workforce and thereby reduce the growth in the dependency ratio produced by our aging society. But there is no in-depth analysis of dependency ratios, apart from the graphs produced on pages 34 to 36. Analysis of the figures that underpin those graphs, presented here, reveals major weaknesses.
• There is almost no consideration of how the figure of +325 migrants increases the pressure on limited or fixed resources, such as health, housing and schools. This additional demand needs to be thoroughly examined before immigration targets are set. My report uses demand for housing (already a critical issue) to illustrate what impact immigration will have on resources.
• Even though the policy is presented as "interim" and therefore not significant in the medium (2035) to long term (2065), which are to be catered for in the yet  to  be  developed  "Preparing  for  our  Future"  planning  document,  the +325 policy has unpalatable short-term impacts which have not been properly considered.  There  are  also  considerable  practical  problems  with  ensuring delivery of the policy.

Dependency ratios

Throughout  this  report  I  use  projections  of  net  migration  of  +350,  which  is consistently used by the Statistics Unit in its calculations, as a proxy for the CoM figure of +325. Equally, I have used projections based on +200 as an approximation for +215. I am assured by the head of the Statistics Unit that these approximations do not introduce significant errors. The non-rounded figures are arrived at in converting heads of household (control of work) into overall population numbers.

As far as I know, we have not rescinded the aim of keeping the population below 100,000 as set out in the 2009 – 2014 Strategic Plan. The population in December 2012 was 99,000. Even under a net nil immigration policy, population would grow to 100,900 by 2020 and climb to 101,800 by 2030, before declining to 94,000 by 2065.

Spreadsheets for the population projections –

• net nil
• +200
• +350
• +500

which underpin the graphs on pages 34–36 of the IPP report are given in the attached Appendix.

These spreadsheets show clearly that relatively small changes in immigration numbers produce large increases in population over the medium and long term. Population increases in the short, (2015) medium, (2035) and long term (2065), as a result of changing immigration numbers, are summed up in Table 1.

Overall, Table 1 shows that both the net nil and +500 targets produce unacceptable population solutions. Net nil growth leads in the long term to decline in population. The +500 scenario, which merely continues the recent immigration figures, produces an immediate and significant increase in population which continues into the long term to end up with a population of over 130,000.

One then has to ask why the CoM has presented only one possible central target (+350) between 2 obviously unacceptable alternatives. This amendment presents a further option (+200) which reduces population growth by a significant margin.

Whilst in the short term, both +200 and +325 look similar, population growth under +200 peaks in the long term at around 108,000. On the other hand, the +325 target produces significantly greater population growth in the medium term, at 111,000, which continues to grow to almost 120,000 by 2065.

Table 1: Population growth

The target proposed by the Council of Ministers clearly breaks the previously agreed limit  to  population  of  100,000  by  2015.  If  continued,  it  would  produce  major population growth in the medium to long term. Why should we accept such growth? Are there significant benefits to be gained from such a policy? The IPP report suggests that  we  need  such  numbers  to  address  the  ageing  demographic.  In  the  opening paragraph, we are told that we are –

"  facing  new  challenges,  such  as  our  ageing  society.  Over  the  next 20 years:

• Jersey's over 65s population will nearly double

• Our over 85s population will nearly triple

• Our working age population will decline by 11% by 2035 if we have no net migration".

The marker that indicates the demands made on society by the ageing society is the dependency ratio, (over-65s and under-16s/16–65s). This currently stands at around 50%: that is, one dependent for every 2 earners. The question is whether an increase in net inward migration, to increase the numbers of earners, has a significant impact on the dependency ratio. The answer is that increases in immigration numbers have very little impact on the dependency ratio as is illustrated in Table 2.

The figures reveal that even large increases in population result in relatively small changes in dependency ratios. Once again one has to eliminate the 2 extreme options of net nil and +500, which lead to unacceptable solutions. It is evident that the cost of caring for the ageing population is not significantly reduced by increased inward migration. One has to conclude that a cost/benefit analysis of adopting the +325 target rather  than  +200  would  show  that  a  2%  reduction  in  dependency  ratio  is  not worthwhile.

Table 2: Dependency ratios

2015  2035  2065 Nil net  51%  72%  83% +200  50%  70%  77% +325  50%  68%  74% +500  50%  66%  71%

Here, one has to examine consultation responses on population and migration. On page 38 of the IPP report, the Council of Ministers quote findings from Imagine Jersey 2015' that –

"the least acceptable solution (to the problem of the ageing society) was allowing more people to live and work in Jersey".

Resource demands

The impact of rising population on demand for resources is one of the most crucial issues  that  needs  to  be  addressed,  and  yet  it  is  almost  entirely  absent  from  the IPP report. The acceptance of +350 policy, described as "the policy of stability" would result in growing the population through 111,000 in the medium term to 120,000 in the long term.

These new residents will make increased demands on every resource, especially public services. Demand for school places, hospital beds, housing, roads and sewers will all increase. This report uses demand for housing to illustrate what this means in terms of responding to the additional demand from net inward migration, based on the most recent work from the Statistics Unit, Jersey Household Projections, 2013 release. A summary of the projections in the short and medium term are presented in Table 3.

The starting point is that we have what many describe as a housing crisis, with over 700 on the waiting list for social rented housing. House prices, along with rents, have largely been maintained at unaffordable pre-recession levels, and are now showing signs  of  a  limited  recovery.  We  have  a  housing  transformation  plan  based  on  a business plan that pays no attention to the impact of inward migration. Even in the short term, which the IPP addresses, there is significant growth in demand for housing resulting from inward migration. The figures below present serious problems for the commitment of the current Council of Ministers to adequately house our community.

Table 3: Household projections

Net nil Migration

+200 Migration

+350 Migration

+500 Migration

To start with, even net nil migration, as members will know, does not mean zero population growth, and requires an additional 1,000 homes by 2016. Adoption of the +325 policy adds a further 600 units of accommodation to cater for new arrivals. The question that needs to be asked is whether these additional 600 units can be found or built, and, if so, where? What then will be the knock-on effect on housing demand and, in turn, on house-price inflation?

Furthermore, this policy needs to be examined in terms of the approach illustrated on page 22 of the IPP, concerning the deliberate change of profile of inward migration, whereby registered migrants are to be replaced by high-value licensed migrants.

Profile of migration 2010 – 2012

The point here is that whereas "registered" migrants do not have a great impact on the housing market, apart from the non-qualified sector, their replacement by high-value licensed migrants does have, not only an immediate impact on house purchases, but also on the qualified rental market.

Adopting a policy of +200 instead of +325 net migrants would reduce the additional housing required by over 200 units in the short term, and by over 1,600 if applied in the medium term, through to 2035.

Policy delivery

In the recent past, whether in times of economic growth or recession, inward migration levels have remained high, and attempts to curb or control this growth have not succeeded, as shown on page 12 of the IPP report and reproduced here.

Net Migration in the last decade

1,600 1,400 1,200 1,000 800 600 400 200 0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Here one can see that the rates of net migration in the recession (2009–2012) remained high after the extraordinary growth of the "boom" years (2005–2008) when compared to previous years. This graph illustrates the classic economic growth patterns of the Island when the economy grows, it is followed by growth of immigration (with a short lag) at the other end of the economic cycle, when the economy shrinks, so should inward  migration,  as  seen  after  2001.  This  appears  less  marked  recently  and immigration has remained stubbornly high.

Part of the problem with immigration has long been the needs of our primary, high- value industry, the finance sector. Quite simply, as a small Island economy, we cannot hope to fill the requirement for highly skilled and experienced specialist staff that the industry requires. When our prime industry starts to grow, and we are told that it has turned the corner and growth is imminent, then we can expect a surge in the numbers of high-skill employees once more.

The  repeated  failure  of  previous  population  policies  is  perfectly  illustrated  by Appendix 3 of the IPP report, reproduced here –

Appendix 3: Population Policies immediately prior to the 2012 Strategic Plan

These failures must in part be put down to a lack of political will to see them through. The inexorable growth of population can be seen in the creep of targets from 85,000 in 1995, through 89,000 contained in "Jersey into the Millennium" to the 100,000 in 2009, followed perhaps, if the figure of +325 is maintained, to reach 111,000 by 2035.

It is instructive to note that, back in 2002, the assumption was an annual net inward migration of 200 persons, which is reflected in this amendment. Note also that in 2004 we saw the intention to redirect the workforce from low to high wage employment.

The current policy is little different from those that have failed in immigration control in the past. The new "high economic value" policy is described on page 26 thus –

"Where a business has a high economic value permissions for staff would usually follow".

It states further on that conditions may be applied –

"There may also be a requirement for "entitled" staff to be recruited for other positions and/or an assurance that proper training programmes are in place".

These conditions have been in place throughout much of the past decade with little or no impact on the high rates of immigration which have prevailed.

In addition to the problems outlined above, there is a fundamental problem with the delivery  of  a  net  immigration  figure  which  makes  delivery  difficult.  "Net nil" migration, for example, requires that emigration and immigration are matched, that is for  everyone  who  leaves  the  Island,  a  new  person  arrives.  For  a  target  to  be successfully achieved, this requires that we can count those who leave. Even with our new names and address register, we have no way of doing this. We have no exit visa or check to count them.

The same argument applies to any figure, whether +325 or +200. Actually hitting any target will be based on estimates of those leaving and very difficult to achieve with any degree of accuracy. The introduction of an "interim" policy covering the briefest of intervals, a mere 2 years, does however give us the chance to show that we are serious about controlling population before turning our attention to a sustainable long- term future. In the words of the Strathclyde report which underpinned much of the thrust of "Jersey into the Millennium", which were extremely positive –

"early  outputs  from  the  Strathclyde  work  indicate  that  the  economic implications  of  population  control  on  GDP  are  relatively  minor.    For example it is estimated that even with nil net migration the productivity of the workforce would need to increase only by 0.5% to maintain our standard of living."

Financial and manpower implications

There are no additional financial or staffing costs arising from this amendment.

APPENDIX