It’s not an expansion in the population that’s needed, but an increase in the work force – and some of that could be provided by our own school leavers, according to the island’s Chief Minister Allan Bell.
Mr Bell said an increase in the working population was essential to ensure National Insurance contributions kept pace with pensions.
Mr Bell was speaking to the Examiner in the wake of a lot of negative reaction to the suggestion of an increased population.
‘In my Tynwald speech I was referring to the work force,’ he said. ‘Keeping unemployment at a very low level, 1.8 per cent last month, is only a part of it.
‘There has been a major contraction in the size of the work force. In the last three years the number of people in employment has dropped by around 800, that’s almost two per cent of the work force.
‘If this is continued, in 10 years’ time we could have major problems funding pensions,’ he said.
The major problem, he said, was that the pensions system worked on what he called a ‘hand to mouth basis’, in other words what is being paid into the pension pot at the moment is what funds the current crop of pensioners in the island.
But over the next few years the number of people aged over 65 is set to increase to around 20 per cent of the island’s population, ‘so we have absolutely got to grow the size of the working population, not of the retirees,’ he said.
Historically over the past few years the island’s population has risen annually by somewhere between 500 and 1,000 people, but Mr Bell said this had slowed down dramatically in the past couple of years.
Certain changes had already been made in the form of changes to the work permit system and the proposed £50 million Enterprise fund to stimulate businesses and create jobs, and these, he said, would encourage more workers to the island.
He said he thought fears expressed by some about the ability of the island’s infrastructure to cope in terms of housing, health, education and other services, were being over stated.
‘A large amount of money has already gone into the modernisation of the island’s infrastructure in the past few years,’ he said, citing the power station in Douglas and improvements to the sewerage systems as examples.
‘There would be a need to expand some areas of the island’s infrastructure if the population were to grow, but if we do nothing, there will be a slow and steady decline and in the next 10 to 15 years we will be hit with a major problem funding pensions.
‘But there has been some nonsense spoken about this: the work permit system would still be there and permits would still be required. We would not be an open house.
‘Also, we have to create jobs in the first place for people to do. To create new jobs we first need to stimulate the economy with new investment.
‘If we can do that, then in due course we will be able attract the skills we need.’
He added it was not just about attracting new people to the island.
The important thing was to increase the working population. As the retirement age increases this may happen anyway, but he said if the economy were thriving and jobs were available, it also meant we have a better chance of retaining the island’s young people leaving school and university, who often end up working in the UK. ‘These extra people in the work force do not necessarily have to come from off-island,’ he said.
‘It can be internal, but we need to create jobs first or we won’t be able to do either.’
