01 Nov ‘Are we sleepwalking in to a demographic disaster?’
That was the question posed by Bill Shimmins MHK who proposed the motion that ‘This house believes that due to the Island’s rapidly ageing population and historically low rate of unemployment, all restrictions on immigration and employment should immediately be lifted’ at the recent ILS World Panel Debate, the latest event delivered by the IOM Business Network.
He went on to outline that the Island has one of the worst dependency ratios in Europe, with the 2016 Census highlighting a marked decline in younger residents and yet an increase in older ones. In comparison, Jersey, a key offshore competitor, is growing its younger and economically active population at a staggering rate.
It’s his belief that the current Island demographic is unsustainable, with the best option being to grow the young demographic and secure sustainable growth by vastly improving the Island’s infrastructure with immediate action.
Mr Shimmins was supported in his proposal by Caren Pegg, Vice President of the IOM Chamber of Commerce and a Partner in the Dispute Resolution department at Appleby. Opposing the motion were Rob Callister, MHK for Onchan, and Michael Josem, an Island-based International PR and Marketing Consultant.
All four had the opportunity to put forward their arguments before taking part in a Q&A with delegates, summarising and then a vote from the room.
The lively debate provoked conversation around the Island’s image and a renewed need to re-examine Government policies for childcare and education, return to work schemes and incentives to create a compelling proposition for economically active families to consider the Isle of Man as a viable option.
In support of Mr Shimmins’ pointed argument to relax what proposers consider to be an overly rigid system, Caren Pegg shared powerful statistics and voiced the consensus of Isle of Man Chamber of Commerce, a shared opinion garnered from a members-only consultation conducted in November 2016.
Chamber consultation on work permits reported that over 50% of participating members felt the work permit system prevented Isle of Man businesses from effective recruitment. In addition:
- 30% felt the system actively forced businesses to consider alternatives such as expansion off island
- 75% of businesses experienced difficulty recruiting in the last 12 months due to a lack of applicants locally, and went as far as to say that we have a system which hinders economic growth.
Chamber’s feelings were later compounded by the 2016 Census results which confirmed their suspicion that the economically active proportion of our population is declining.
Since 2016, Government has acted on Chamber’s input and gone about reforming the system which, today, looks very different. However, the argument can be made that it still does not go far enough and further removal of restrictions can be made to help attract workers to the Isle of Man.
In February 2018, Government commissioned a discovery paper on meeting population challenges which forecasts population movement over the next 20 years based on net zero migration. If the current trend continues, the Isle of Man is set to decline from 84,000 residents in 2018 to 78,000 residents by 2026, with a significant increase in over 65s during the same period. Who is going to support the aging population?
Caren highlighted that this was not a trend particular to the Isle of Man; both immigration and unemployment are global concerns, further exacerbated by Brexit. Since June 2016, there has been a sharp decline in the number of migrant workers coming to the UK. As our nearest neighbour, the UK is the first port of call for recruiters but the talent pool is restricted and continues to contract, resulting in a hyper competitive labour market, wage inflation and the outsourcing of jobs to other countries.
She closed on the statement that Government needs to lead on bold, co-ordinated action across many policy fronts to curb this trend and introduced the notion of a temporary suspension of the current system as a trial to properly assess the effects of what the opposition referred to as a ‘free for all’.
Michael Josem, who referred to the proposer’s view as a ‘free for all’, tabled the concept of a merit-based system and argued that a controlled and measured way forward would benefit the Isle of Man economically, environmentally and socially, ensuring service continuity and the high living standards residents are accustomed to for healthcare, education, infrastructure, transport and amenities.
Migrants would be selected based on merit or humanitarian grounds, with tight controls on who comes into the country and the circumstances under which they relocate, thereby ensuring we maintain an economy based on high skills, staff and productivity, and maintain social equilibrium and a fair welfare system.
Looking inward, Michael highlighted Isle of Man birth rate statistics and reinforced the point we need to revisit child benefit, increasing support for education and growing the population domestically.
Somewhat startling figures on women’s propensity to have children, a view based on increasing pressure of economic challenges and compounded by a 3% fall in the median wage, highlighted the difficulties faced by married and cohabiting couples and the impact this has on starting a family, and that our focus as an Island should be on making the average Manx family richer rather than increasing the aggregate size. China’s economy is greater in size, but the average Chinese family is far worse off by comparison.
Supported by Michael, Rob Callister MHK reminded the room of the intended light-hearted nature of the debate, and that our powers as an independent Government to force change were limited by law.
The Isle of Man’s immigration policies take the same form as the UK under Section 3 of the Immigration Act 1971, which guarantees that Crown Dependencies apply the same treatment to legal citizens of the EU. Of course, this changed on 23 June 2016 when the UK voted to leave the European Union.
Whilst the UK renegotiates agreements, the Isle of Man could, in theory, repeal the Act which enforces us to uphold the current system. However, with no primary legislation in place the UK would simply extend its powers, citing the Isle of Man had become an easy gateway into the UK for criminals and terrorists, and for the financing of criminal activity which would have serious implications relating to the common travel area as well as a negative economic effect, countering our exemplary approach to financial services legislation under the EU.
Mr Callister applauded the changes to the application process, and commented that it was right to continue this approach provided officers did not compromise the level of scrutiny, and the benefits of having a flexible system that protects residents from incoming competition. However, he noted that this did not address the underlying issue which is quite simply that people do not move to the Isle of Man for need of a work permit; instead they’re sold on the ideal based on their awareness of opportunities, Island life and financial benefits, and our destination marketing and management needs to be on par with Jersey and Guernsey, as well as our other closest competitors, to be in the running in the recruitment race.
The panel voiced four passionate, well-constructed points of view but it was up to the audience to vote for or against the motion. Following an audience Q&A, the room voted with Mr Shimmins and Caren Pegg for the suspension of the current system in a bid to attract foreign nationals to the Isle of Man.
Chief executive, Chris Eaton said: “ILS supports formal debates on the Isle of Man to provide a forum for discussion on the issues facing the Island. As people who live and work here we know we need to increase our economically-active population to ensure there are enough people to fuel the development of our local businesses and our economy.
“Producing a strategy to retain and attract graduates, address the growing skills shortages, the decline in birth rates and catering for the growing numbers in retirement is very complex and these are not issues confined to the Isle of Man. The debate was informative and both sides made strong arguments.
“The questions and comments from the floor showed there were strong opinions on the Motion and we must find some common ground between these two opposing opinions to urgently produce some innovative policy that will realistically address these problems .”
Katie Nicholson, Chair of the IOMBN, added: ‘This is the fifth ILS Debate that we’ve held now and, as ever, this topic proved to be both contentious yet engaging with our delegates. It really is one of the most important issues facing our Island now and it was fantastic to see so many people openly discussing what’s best for our future economic growth and prosperity. It’ll be interesting to see if the debate sparks any future changes to our work permit system.’