Jersey is an island with a very dynamic and successful economy. That economy is very dependant (some would say over-dependant) upon one sector, that of financial services. That sector, in turn, is reliant on the presence of a highly skilled resident workforce in the population, only part of which can be met by the “native” population. In order to maintain and to grow the economy, the island must therefore import high-skilled migrants. Any increase in population through migration has inevitable resource implications. In addition, in common with the whole of the western world, Jersey has an ageing population, which has economic and resource demands.

 

Thus the “Imagine Jersey 2035” process is one which attempts to address the following three interlinked issues:

 

• Economic growth

• Population levels

• Ageing population

 

In addressing these issues, the ageing of the population predominates.

Population ageing, the end of population growth, and incipient population decline, arise from two irreversible and welcome changes in human society. Family size has fallen to about 2 children or (usually) less since the 1930s. Expectation of life has increased to about 78 years. Both now contribute to population ageing; an upwards shift in the average age of the population. The over 65s increase; the ‘support ratio’ of taxpayers to dependent aged falls

 

In written answers in the States on 29^th January 2008, the Chief Minister described “Imagine Jersey 2035” in these terms:

 

“The survey represented a valuable and constructive preliminary step in the development of conceptual understanding and the opening of a dialogue between policy-makers and Islanders. In this context, the results of the survey provide considerable, useful insight into the initial thoughts and perceptions of Island residents on the issues facing Jersey over the coming decades.”

 

Even if we accept that the aim of the Imagine Jersey 2035 exercise is only to provide an “insight into the initial thoughts of island residents”, then these insights

 

The approach to finding ways forward on these issues is contained in

Section 6 of the online survey:

 

 

The first and most basic flaw in this argument is that, whilst each of these options forms a plausible contribution to addressing the ageing of society, the final option of allowing greater immigration may actually make the problem worse in the long run.

  

 

False Premise

In proposing the immigration option, the Jersey government repeats the errors made by the UN Population Division in its report on “Replacement Migration” in 2000. In his response to that report, in 2001 Prof. David Coleman had the following to say:

 

“Will the ageing populations of the Western world need even more immigrants to avert imminent population decline and to support the unsustainable burden of the elderly? Or is migration on that scale just a simple-minded short-term solution which ignores domestic demographic reserves and which would rapidly transform, in unwelcome ways, the receiving countries into a radically different kind of society?”

 

He then goes on to criticise the “Replacement Migration” paper in the following terms, which are equally applicable to the Jersey debate today:

 

“What then is wrong with the UN report, which correctly analyses these points? By careless use of language, dubious premises become positive imperatives. Population decline must be avoided. Age-structures and support ratios must be maintained. These are all controversial matters, not axioms. The end of population growth does not threaten living standards, although rapid decline might.”

 

The “Imagine Jersey 2035” exercise attempts to increase immigration in order to maintain support ratios in an identical way to this earlier paper. However, the basic flaw in any attempt to “solve” the ageing population problem by immigration is summed up concisely in the following statement is ignored:

 

“The UN’s comprehensive new number-crunching in this area is without parallel. But the general findings are old hat. Demographic theory, and numerous simulations, have already shown that immigration cannot compensate for population ageing except with flows so large as to hugely increase population growth and rapidly replace the existing population with a foreign one – ‘replacement migration’ indeed. Immigration is impotent to stop ageing because the average age of immigrants is little lower than that of the natives, and while immigrants from the third world initially have higher birth rates, these are expected to decline. Instead, immigrants themselves age and ‘need’ more immigrants to replace them.”

 

In the Jersey scenarios the range of flows of migrants is indeed large. To maintain dependency rates at or around that which currently exists would require some 650 immigrant heads of households or 1400 persons in total. This level is obviously unsustainable.

 

Jersey also demonstrates the vicious circle whereby immigration leads to further immigration later. In addition to the impact of the post-war baby boomers, the fact is that large increases in immigration numbers in the 1970s and 1980s have also contributed to today’s problem. These immigrants are the pensioners of today and the coming decades. The problem cannot be solved by fresh immigration; that merely defers and worsens the problem.

 

Professor Coleman in his address to Concern, “Jersey’s Ageing Population: Salvation Through Immigration, in September 2002, concluded that:

 

“Mass migration (is) not an alternative to internal reform in the labour market and in productivity”.

 

The economic advisers to the government, OXERA, accept that the vicious circle of immigration is a problem. In section 3.1.3 of their paper “What is the economic impact of Jersey’s ageing population?” prepared in August 2007, OXERA makes the following statement on pensions:

 

“Under PAYG systems a simple increase in the number of people in work, and therefore making contributions, also has the effect of increasing the future liabilities of the scheme. As such, it may delay rather than cure the problem unless the workforce can be perpetually increased.” (Our emphasis)

 

“In addition to this fundamental flaw in the premises that underpin the approach adopted in Imagine Jersey 2035”, there are a number of basic errors made in the construction and delivery of the survey which significantly reduce the validity of the opinions expressed.

 

Technical

 

Section 6.The inclusion of non-exclusive options in a ranking exercise in section 6 of the survey and included as figure 9 (Question 15) in the interim report of the survey findings (January 2008) clearly produces anomalous answers.

 

Option 1, growing the economy, turned out to be the most acceptable, with a 60% approval rating.  However, historically economic growth has always  been achieved using option 4, allowing more people to live and work in Jersey. Unfortunately this proved to be the most unacceptable (50%).

 

This is a clear and unresolved dichotomy, caused by poor survey design.

 

Section 7. Here again we see poor survey design. The question starts with the presumption that more accommodation will have to be built, and  then gives two distinct reasons for the additional building:

 

a)     to house the elderly – this has been widely promoted recently and forms a part of ministerial policy

b)     to house people who move here to live and work (immigrants)

 

These two options have widely differing social acceptability and if presented separately are likely to have produced different responses. A few old folk in bungalows in a field near you is a vastly different prospect to a high-density development for immigrants.

 

The options presented also contained two variables – high density versus village development and in town or on green fields.

 

 

Who knows what combination of these elements respondents were reacting to? The results are given in table 11 are next to meaningless.

 

The authors of the preliminary report themselves express some reservations over the results to the housing questions:

 

 

 

 

January 19^th Event - Structure of questions

 

Here we see a snapshot of priorities from the participants at the IJ2035 Event on 19th January 2008. Note the again general nature of the question –“the” quality of life not “your” quality of life.

 

Top 3: healthy economy, protect environment, control population

 

Bottom 3: work/life balance, housing availability, keep tax low

 

The following question then went on to consider actions required to maintain quality of life:

 

 

Top 3: Work longer, slower economic growth, higher tax

 

Bottom 3: less green space, increase population, reduce services

 

Of particular interest here are the options concerning taxation. Keeping tax low is not seen as a priority. Paying more tax is acceptable. Growing the population is not acceptable. (Slower economic growth may be ok.)

 

Later the tax message is reinforced. Over half of the participants are in favour of increasing personal tax to pay for services.

 

 

The survey then cut to the chase. How much more in taxes would you be prepared to pay each year in taxes?

 

 

Here we must note a fundamental flaw in survey technique. One of the basic rules in conducting surveys is that in presenting alternative options for respondents to choose between, each must be presented in a similar manner. The form of words used should be identical if possible. Tone of voice, even, is important.

 

In this case, when questioned directly how this question should be interpreted. The presented suggested that this question was to be taken personally, and not in generically. How much extra money are you, personally, prepared to pay (from your pocket)?

 

The result is unsurprising. 76% of participants chose the lower end of the range of additional tax, with over one third opting for a mere £200, the first point on the scale.

 

As one participant pointed out, the audience would have a wide range of incomes; some would not be taxpayers; for some an additional £200 would double their tax; for others it would be relatively little.

 

The point is that all of the other options were either generic or presented as non-personal. The options to “make the economy more productive” and “diversify the economy” are neutral safe options which do not affect anyone personally, and consequently received overwhelming support.

 

Working longer was also presented in general and not personal terms: “what would be an acceptable average age of retirement by 2035”? Since almost 60% of the audience was over 50, this was clearly not going to affect them personally. Even the follow-up question “how do you feel about working longer” (75% support) was not personal. It was not “Are you prepared to be return to work for 5 years?”

 

To have any validity at all, choices must be made and preferences shown for options which are “weighted” equally. In many cases these options were not. This fault alone means that the results of the survey are not reliable indicators of considered judgements, and should not be used to justify any future strategic decisions.

 

Partial information – Informed consent

 

In order to make proper rational decisions about complex issues of the sort that were covered by the Imagine Jersey 2035 consultation, it is essential to the integrity of the exercise that participants are given, or have access to a complete range of the information required. This manifestly did not happen either at the 19th January meeting or in the preceding online consultation.

 

That this is the case is simply demonstrated by the briefest examination of the consultation document widely circulated during the consultation period, on which participants were expected to respond.

 

The coverage and information on Option 3 “The resident population pays more” there is one paragraph of comforting words which state that “the States has taken steps to safeguard the economy”

 

  

Options on addressing the demographic problem of the Ageing society amount to one line:

 

“increasing taxes further, reducing personal tax allowances”

 

or, effectively, privatising health services. The paragraph is reproduced here:

 

 

By contrast, Option 4 “Allowing more people to live in Jersey” occupies the subsequent 10 pages. If this was an attempt to produce a “Green paper” (as has been suggested by the Chief Officer) intended to encourage informed and well-grounded debate of a range of options for consideration, it is an abject failure.

 

Informed consent – 2

 

As mentioned earlier, and as accepted by OXERA, using population growth (via immigration) in respect of pensions only defers and worsens the problem of paying for the ageing population in terms of pensions in particular. In the online consultation document, this was summed up in the single line “alternatively increase tax/contributions to raise £50 million”. On 19^th January, this became “1% increase in contributions raises £10 million”

 

No mention in the whole of this debate was made of the known data available through HM Government actuary about the state of the Social security Fund and its Reserve fund which supports States pensions. Nor is there any discussion of potential changes to the fund, which could be put in place to cover the £140 million “gap” produced by the ageing population which forms the core of the presentation.