Scotland: Demography and Devolution

Steven Paterson Excerpts

Thursday 9th March 2017 Westminster Hall

[Pete Wishart (Perth and North Perthshire) (SNP)]

I beg to move,

That this House has considered the Second Report of the Scottish Affairs Committee, Demography of Scotland and the implications for devolution, HC 82, and the Government response, HC 938.

It is a pleasure to serve with you chairing this short debate, Mr McCabe.

Back in February 2016, the Select Committee on Scottish Affairs launched our inquiry into the demography of Scotland, to better understand the issues concerning our populations and the impact those trends will have on devolved services in Scotland. We had four sessions here in Westminster and one in Edinburgh, and we were delighted to visit the Isle of Skye, where we visited the Gaelic college Sabhal Mòr Ostaig and held an evidence session there. As always, we are grateful to all those who contributed to the inquiry.

May I start with the good news? It is very good news. Scotland’s population is stable and growing. We say in the report that that is good news. Something that differentiates us in Scotland so much from the rest of the United Kingdom is that we welcome population growth in our nation. When we get news of population growth, Ministers put out press releases saying that it is a good thing; when they get similar news down here in the UK, it could not make Ministers more miserable. That says everything about the respective attitudes in Scotland and the United Kingdom.

Only 15 years ago, Scotland was suffering what can only be called structural depopulation, and there was real concern that the population might actually dip below the iconic 5 million mark. Scotland’s population has been turned round and is now at its highest ever level, standing at 5.37 million people resident in Scotland. That population growth—not dramatic, but steady and good—is owed to increased fertility among the indigenous population and, more than anything else, immigration, particularly immigration from the European Union following the accession of nations in the early 2000s. After a century of sluggish population growth punctuated by periods of decline, and following centuries of emigration, Scotland’s population is now stable, and that is good news.

I mentioned our history because we as a nation are probably more familiar with historical issues of emigration than we are with immigration. That flavours and shapes Scotland’s response to the current debate about immigration that is raging throughout the United Kingdom—a debate that probably hijacked the whole conversation about exiting the European Union. There are concerns about immigration in Scotland—we find that in social attitude surveys and opinion polls—but it is absolutely clear to me and other members of the Scottish Affairs Committee that there does not seem to be the same heat in that debate in Scotland as there is in the rest of the United Kingdom. There is a healthy understanding of our immigration requirements as a nation and our need to sustain a healthy population and demography.

That is the good news, and it is welcome. The not so good news is that our population increase is lagging way behind that of the United Kingdom as a whole. That is a critical part of this equation and a critical relationship. The UK’s population is projected to increase to 70 million in 2027 and reach 74.3 million by 2039. That is an increase of 15% over a 25-year period. I know that we are ending free movement, that there are going to be new immigration policies in place and that the UK Government are confident that there will be some sort of Brexitised Canute to stand against this tide of an ever-increasing movement of people throughout the world. That is their ambition and what they intend to do, but according to current figures the population growth of the UK is expected to be 15% over 25 years. In the same period, Scotland’s population is expected to grow by 6%.

That population growth gap will have a huge implication for Scotland’s economy and our ability to support and sustain an increasingly elderly population. That is because Scotland is predominantly funded on the basis of its population in the form of a block grant that we receive and is calculated on the percentage-based Barnett formula. Increasingly, the distribution of resources throughout the United Kingdom will be on a per capita basis. The main concern, therefore, is that Scotland’s revenues will not keep pace with those in the rest of the United Kingdom. That could be increasingly acute as we come to renegotiate the fiscal framework in 2020, where population concerns will once again be factored in, possibly to Scotland’s deficit.

The other issue the Committee found is that population growth is variable across Scotland as a whole. That is why the Committee visited the Isle of Skye to try to better understand the regional variations and the issues in Scotland’s rural areas, in particular the highlands and islands. We found pockets of success, particularly in the highlands, but an otherwise ongoing story of decline in Scotland’s rural areas. For example, most of the new population growth happens in Scotland’s cities and conurbations close to them. In my constituency, in Perth and Kinross, we have solid population growth of around 15%; in Edinburgh, where my hon. Friend the Member for Edinburgh North and Leith (Deidre Brock) is resident, it is in the region of 20%; and in Midlothian it is 26%. That contrasts with areas of the highlands and islands that have experienced net population decline, the worst example being the Western Isles, which is expecting a population decline of some 14%.

Scotland has one of the lowest population densities in the whole of Europe. During the inquiry we heard that Sutherland in north-east Scotland has lower population density than Mali in northern Africa—a nation that is entirely covered by Sahara desert. More than anything, that suggests that Scotland is not full up and that we can accommodate many more immigrants to help us to address some of the issues in our economy.

Lurking underneath the statistics are demographic issues that really need to be tackled. The age profile of Scotland’s population is rising at a faster rate than that of the UK as a whole. Several witnesses we spoke to in the course of the inquiry identified the combination of Scotland’s lower population growth, ageing population and lower life expectancy as one of the key challenges it will face in the delivery of public services in the coming years and decades. Over the next 25 years, Scotland’s population will have a lower proportion of working-age people than it does now, and they will be expected to support an even bigger number of dependants. That is referred to as the “dependency ratio”—several groups took exception to that phrase when we visited Edinburgh, as my colleagues will remember. In the next 25 years, the dependency ratio will increase from 58 dependants to every 100 working-age people to 67 dependants to every 100 working-age people. That has serious implications for the delivery of public services.

The Committee found two particular areas where the dependency ratio might have an impact. The first is the size of the tax base and the ability to service through that tax base an ageing population. Secondly, it will be much more difficult to fill some vacancies in a number of sectors, including health and social care. An ageing population will increase demand for those services without there being a commensurate increase in the pool of working-age people available to fill those vacancies. That will have to be factored in to the planning and developing of Scotland’s public services over the coming years and decades.

Another thing the Committee found during our inquiry is that life expectancy and healthy life expectancy, especially for men, are lower in Scotland than in other parts of the UK. A new report, which we did not have the opportunity to take into account, has emerged in the past few weeks. That report, produced by the University of Glasgow, suggests that for the first time in 150 years life expectancy is not increasing in Scotland. It found a spike of more deaths in 2014 than at any time in Scotland since the second world war. We are not in a position to assess that, but it would be particularly worrying if that was a trend that is beginning in Scotland and was a reflection of some of the social policies that have been carried out not only in the name of this Government, but across both Governments in the United Kingdom. That is something we very much want to keep an eye on over the next few years.

The health inequalities are what concern the Committee more than anything else, and again we saw a disparity not only in the United Kingdom but in Scotland. The most revealing example was given by Professor David Bell, who talked about the train journey from Jordanhill in Glasgow to Bridgeton in Glasgow and how life expectancy declines by 15 years in the course of it. Professor Bell also told us that Jordanhill’s people have the same life expectancy as those of Canning Town here in London. Canning Town is a tube journey away from Westminster, where life expectancy is seven years higher. The disparity across the United Kingdom is 21 years, which surely should set off all sorts of alarm bells when we are planning services and considering how to reduce health inequalities.

The Committee considered what would be required to resolve some of the difficulties that we identified in our inquiry. First, we note the Scottish Government’s target of matching population growth with the EU15, which was set in 2007 to be completed by 2017. The Scottish Government have been relatively successful in ensuring that we have achieved the EU25 mean. Some witnesses praised the Scottish Government for setting the population target, saying that it was in the interests of the nation to aspire to be population healthy and demographically healthy. However, some—primarily those in the UK Government, who did not see much value in it at all—felt that there was no need for a population target and questioned the whole idea.

None of our witnesses could tell us the optimum population size for Scotland, although a few gave valid examples of their efforts to do so. Professor Jim Hunter, emeritus professor of history at the University of the Highlands and Islands, told us that it is difficult to establish Scotland’s optimum population. When we were on Skye, he told us about some of the reasons given for the clearances, including that the population in the particular area was unable to sustain itself, but he also said to the Committee, revealingly, that

“the population of London exceeded the capacity of the London area to grow potatoes and turnips a heck of a long time ago, so it depends entirely what sort of economy you are looking to create here.”

I thought that those were particularly wise words.

We found, unsurprisingly, that what is required to keep a healthy demography and a stable and competitive rate of population growth is an obvious equation between emigration and immigration. We must retain more people in Scotland and do more to attract working-age migrants to Scotland, but that will be a lot harder to achieve with the end of free movement of people from the European Union.

To give an example of the sort of figures that we are talking about, in 2014-15, net inward migration to Scotland was 27,968, while net migration to England was 298,882. That is a huge disparity in our ability to attract immigrants. We must do more to attract migrants to Scotland, but it is particularly difficult to achieve when the legislative levers remain in the gift of a UK Government resistant to immigration and concerned to the point of obsession with immigrant numbers. The UK Government, in their response to the report, defiantly refused to give the Scottish Government responsibility and opportunities to address their immigration concerns, and they have ended schemes such as the Fresh Talent initiative, which allowed us, at least in relation to the student population, to try to increase our population by giving incentives to stay in Scotland.

I mention that because something important and alarming came out in the statistics given to us by National Records of Scotland. There has been a positive spike in Scotland’s immigration figures: the number of people coming to Scotland in the critical 19-to-23 age bracket has risen. That suggests that people are coming to Scotland attracted by the offer from our excellent, world-class universities. However, there is an almost commensurate spike in emigration among those aged 23 to 27. That suggests to me that people are leaving Scotland once they have been educated, because they do not have the opportunity to stay there.

[Steven Paterson (Stirling) (SNP)]

As my hon. Friend might be aware, in 2015-16, Stirling University had 930 EU students and 1,350 overseas students; 20% of the student population came from overseas. It clarifies how important immigration is to solving the problem not just of the skills base, which he correctly identified, but to the universities’ health in the future. What are his views on that?

[Pete Wishart]

That is exactly what we found in the course of our inquiry. One of the report’s recommendations was that the Government reconsider their approach and attitude to the post-study work scheme offer. That would address the issues that my hon. Friend raises, but to me the problem is much more fundamental. It is beyond absurd that we attract all those talented young people to Scotland with the quality of our world-class universities and train and educate them to a high standard simply to watch them sail away, when we need those people to help grow and contribute to our community.

--- Later in debate ---

[Chris Law (Dundee West) (SNP)]

It is a pleasure to serve under your chairmanship, Mr McCabe, and to follow two wonderful and detailed speeches.

I said in this Chamber only three months ago that

“the Government’s current immigration policy is completely failing Scotland.”—[Official Report, 8 December 2016; Vol. 618, c. 164WH.]

The Scottish Affairs Committee is now leading another debate based on a report that has concluded, yet again, that a different immigration system is needed for Scotland, rather than a one-size-fits-all UK policy. Hon. Members may ask why. Well, our report examined the different population trends in Scotland and why the challenges presented by those trends should be reflected in the UK Government’s policy making. One of the key challenges we found was that over the next 25 years, the average age of the Scottish population will increase dramatically, resulting in far fewer people paying taxes and fewer people being available to work in health and social care to support an ageing population.

The good news is that after years of decline, the population of Scotland is now gradually increasing, mainly due to the decrease in outward migration. However, if a hard Tory Brexit has a negative economic impact on Scotland, it is highly likely that outward migration will increase again. Over the next 25 years, the population of Scotland is predicted to increase by 7%, but London’s population is predicted to increase by more than triple that rate, meaning that the economy of the UK will be even more dominated by the needs of London and the south-east of England.

[Steven Paterson]

It strikes me that we have had debates in the House of Commons recently on boundary changes, during which the Government argued that those changes had to be based upon population. Based on the point that my hon. Friend has just made, does it not signal the failure of the current policy that according to the Government, Scotland’s number of MPs relative to England will be decreased again and again and again, as it has been over the last 20 or 230 years?

[Chris Law]

My hon. Friend makes a valuable point. In fact, if the number of MPs in one area, the north-west of Scotland highlands, is reduced, the area covered by one MP will be larger than Belgium. That is completely unacceptable, particularly in the face of Brexit and the amount of work that will result from it, which is likely to be a burden for all MPs.

Scotland’s recent population increase is partly due to inward migration. However, UK Government policies will undoubtedly have a negative impact on Scotland’s population growth. Those policies include barriers to immigration resulting from Brexit, which I have already mentioned; the scrapping of post-study work visas, which is already causing considerable damage; and the continuing uncertainty about whether EU citizens will be allowed to remain in the UK.

Our Committee’s report also found that population is a key issue in rural areas in Scotland that already have extremely low levels of population density and a pattern of younger people leaving to look for work elsewhere. On a Committee visit to Dumfries quite recently, we heard that in rural areas it is already hard to fill posts in social and health care, and it is predicted that that situation will get worse.

While Scotland’s land reform and rural broadband schemes are intended to boost economic activity in rural areas, which can only be a good thing, achieving that aim will not be possible if there are not enough people living in those areas to develop the economy. Again, the situation will become even worse if our exit from the EU reduces immigration and leads to more young people leaving Scotland to find work elsewhere.

I will give a more detailed example from my own constituency in Dundee. There are many issues in the demography report that have particularly serious implications for my city. To put things into perspective, Dundee has the highest proportion of students in higher education of anywhere in Scotland. The university sector is vital to the economic health of our city. Indeed, a quarter of University of Dundee students come from outside the UK and, as was set out in a report last week, more than 175 jobs in Dundee are fully or partially funded by EU grants. If Brexit leads to a reduction in the number of international students and a loss of EU nationals working in our universities, without doubt that will have a significant negative effect on the economic wellbeing of my city.

As many Members will know, Dundee is currently undergoing a £1 billion regeneration of its waterfront, at the heart of which is the new V&A Museum of Design. Immigration and population growth have the effect of enhancing economic activity and creating jobs. Therefore, any threat to immigration will hinder the positive transformation that Dundee is currently undertaking.

I will focus on one sector for a moment, because Abertay University was the world’s first university to have a degree in designing video games. I chair the all-party group on video games, so I will touch on that sector briefly. My constituency is a cluster for game designers. To give people a flavour of the kind of games that come out of Dundee, one of them—“Grand Theft Auto”—has already broken six Guinness world records. Within the video games industry, talent is the No. 1 priority for businesses, and it is vital that the industry is able to recruit highly skilled international talent without there being immigration barriers to their working here.

A UK-wide survey by the video games industry body UK Interactive Entertainment, which was published just yesterday, showed that more than 98% of respondents—we might as well say 100%, as we are just about there—believe that EU nationals with skills needed in the games industry should have a blanket right to live and work in the UK.

I turn to a sector that is important in my neighbouring constituencies, in particular that of my hon. Friend the Member for Perth and North Perthshire (Pete Wishart). Each year, large numbers of temporary migrants from the EU come to work in the fruit picking industry in the constituency next to mine. If that flow of workers is cut off by Brexit, that will have a hugely negative impact on this vital part of our local economy.

--- Later in debate ---

[Brendan O'Hara]

I will come on to that point in just a moment, because it is a vital question, and I will answer it. As I was saying, those are the genuine concerns of real people, and I have to ask: what kind of Government know they are causing such fear and alarm, yet refuse to act on it? I raised many of those cases at Home Office questions on Monday, and I was told by the Home Secretary that it was up to me to reassure them of how valued they are. I have done that; I have written to every single EU national in my constituency telling them how valued they are, but it is not in my gift to make the problem go away. The only people who can give that cast-iron guarantee and reassurance are the Government, and sadly they have refused to do it—they have chosen not to do it.

[Steven Paterson]

My hon. Friend is making a powerful case on one of the most important points. I have many similar stories. For example, in Tyndrum—it is just next to his constituency and on the edge of my constituency—I met with the staff of the Real Food Café, most of whom are workers who have come from the European Union. They were extremely distressed about what the future held for them and what the rules were. My frustration was that I could not give them any real answers to most of the questions that came up because the Government have not given us any real answers. Does he agree that the Government need to get their skates on and give us some idea of how this is supposed to look, so that we can reassure these people about their futures?

[Brendan O'Hara]

Sadly, it is a familiar tale. People are genuinely worried about the future, and the Government have to do something. They have to say to these folk that their future is guaranteed, come what may. It is not too late for the Government to do the right thing. Indeed, I implore them to do the right thing. I have heard the Government make the argument many times that only when other countries guarantee the position of UK citizens living in the European Union will they do the same. In direct response to the Minister’s question, I do not think that is good enough. I do not think that is doing the right thing. It is playing politics with people’s lives.

Doing the right thing is saying unequivocally—regardless of what others do—to those EU citizens living, working and contributing economically and socially to the wellbeing of this country, “We guarantee your status will not change with Brexit and you are welcome here.” If the Government choose not to guarantee European nationals the right to remain, history will judge it a national disgrace. I am proud and delighted that history will show that my colleagues and I had no part in that and opposed it every step of the way. So far as we are concerned, every single EU national living in Scotland is very welcome, and we thank them all for the positive contribution they have made, making our country a better place for all of us.

Finally, in my maiden speech in May 2015, I said that the Government had to recognise that the four constituent parts of this United Kingdom had, for the first time ever, voted four different ways and that as a result there could be no more one-size-fits-all policies covering everyone and everything from Truro to Thurso. That includes immigration. Our needs are not necessarily the rest of the country’s needs. If the Government are genuine about the respect agenda, they have to respect that and guarantee that our country can grow economically, culturally and politically into something different, if it chooses so to do, and that is with our EU nationals. I urge the Government to act accordingly and change their policy immediately.