Island needs population growth

However, it is this attitude which may result in the gradual decline of Guernsey in the face of some very real and serious challenges in future years.

A trend of reduced population and, in particular, a reduced working population should be of grave concern, because if not dealt with now, it could escalate into a problem very difficult to reverse, and in the long term could very well result in a self-perpetuating demise of Guernsey, economically, socially and culturally.

Far from worrying about the pressure of a population increase of 10 or 15%, we should concern ourselves with the risk of a cycle of depopulation. Those people speaking out against the slightest beginnings of a debate on population fail to offer any form of alternative solution to address the issues Guernsey faces now and in the future – and any recognition of why such an idea might even be proposed. Of course the idea of a policy encouraging, or even tolerating, increasing the population is not a popular one, but we must consider the reasons why it might indeed be the best of some undesirable options.

First of all, we need to take our head out of the sand and acknowledge some home truths about Guernsey's position today and only then perhaps might there be some understanding and consensus that there are some serious issues that need to be addressed and that a change in the population policy and indeed the right-to-work system may help to solve these. These are some key points to acknowledge:

• Guernsey has now been running a deficit for seven years. This means the island’s government is spending more money than it is earning. This is simply not sustainable and sooner or later the money will run out.

• The total number of people employed in the island is falling. Since 2008, nearly 4,000 fewer people are in employment. This means less productivity, less tax revenue and more welfare costs for Guernsey.

• The working population has decreased two years running. This means the people who work and pay taxes, thereby usefully contributing to the States revenues, are leaving the island. Approximately 75% of the people who have left were working population individuals who would have contributed to the island’s tax take.

• Approximately 60% of the income the government generates is from individual income tax charges, meaning we are significantly reliant on working people to fund the running and maintenance of the island.

Those are the facts, and what is inevitable – as good as fact – is that the proportion of elderly will increase in forthcoming years, building the dependence ratio over the next 25 years from 53% to 80%. What this means is that for every 100 people on the island, 80% will either be below the age of 16 or over the age of 67 and what that means is that only around 12-14,000 of the 60-65,000 on the island will be working and therefore bringing in income tax revenue.

Bearing in mind income tax from individuals represents around 60% of all the revenue the States receives, we will see a drastic shortfall in funds to run the most basic of public services. The welfare and public health costs of a population with such a high proportion of pensioners will compound the issue. The economy will contract and this will likely result in further emigration.

While the effect of this process on the island will be gradual, ultimately it will be widespread and quite possibly devastating. Standards of living and the luxury of choice will almost certainly be much reduced.

Below are some essential elements affecting the quality of life in Guernsey, and an explanation of the effect of a declining working population and the repercussions:

• Public Services – owned and provided by government. The provision of these ultimately costs money and that money quite simply will not be available to us in the future with fewer working people paying tax.

• In health care, the choice and level of treatment would quite simply not be available. Maintenance of roads, sea defences, airport and the harbour will suffer because the States will simply not have the money to pay.

• Economy – The effect of these demographics will result in a contraction of the economy. We are already seeing a sluggish economy in Guernsey and a lack of confidence from businesses wanting to invest. While the demographic process is long term and gradual, it will be difficult if not impossible to mitigate the economic slowdown with a reduced working population. The result will be businesses downsizing, redundancies, increased welfare costs for the States, reduced consumer spending, further outward migration and so on as the downward cycle continues.

• Consumer choices – People will have less choice. Less choice in terms of goods and services (shopping, travel etc). The airline situation in Guernsey is one such example already struggling with commercial viability and as a result we are seeing high prices and reduced choice. Only one of all the airline routes to/from Guernsey (Gatwick) meets a level of capacity that would be acceptable to a low cost airline. With an aged and a reduced population, this position will worsen and other industries and business will also see reduced economies of scale and may simply cease their services.

• Environment – Even the environment will be worse off as a result of a decreased working population as the island’s essential needs – power, waste management and water – become less cost effective to run and harder to manage because of a lack of resources. A wealthy jurisdiction is better able to offer higher environmental standards than a poorer one.

This is not a speculative forecast of what the island will become in future decades but in the event of no change to our demographics, a very realistic prospect.

A considered and moderate, carefully managed population expansion strategy will mitigate these effects and rather than risk ruining Guernsey, will help to sustain the way of life as we enjoy it now and well into the future. The idea that the island is somehow splitting at the seams is simply not the case. People refer to Guernsey as one of the most densely populated places in the world. Bearing in mind 80% of the UK population live in urban areas, the US 81% and even France 78%, we do in fact enjoy far more open space than a large majority of people in the developed world.

Our so-called traffic problem is in fact really nothing compared to most towns in the UK. Our hospital is far from at capacity (in A&E you will never wait more than 30 minutes as opposed to often several hours in the UK).

Of course we need more housing and this is an area where decisive action will be needed but it is within our control to do that. It's a gradual exercise that can be addressed and managed over time. There is an abundance of brownfield sites and indeed a proportion of former greenhouse sites that lend themselves to the solution. Of course there will be an inevitable impact from increasing the built environment, but we can be smart in how we achieve this and as I say we are talking about the 'least worst' option here – compromise is necessary. There are in fact many services that would benefit from an increase in capacity and the additional demand will improve viability – examples are air and sea travel as well as other business that simply deem the population too small to justify the proposition.

In Deputy Queripel's letter arguing against increasing the population, he asks 'what jobs will they do?' The answer is that you manage the process, businesses apply for staff and the States approve them so that newcomers arrive employed, much as things work now (but with less red tape and more encouragement).

We need to continue to make Guernsey an attractive place for business so that we have the jobs and a strong healthy economy. The right-to-work process should target individuals and jobs placements that are required and provide the best overall benefits to the island.

The island's finances are at a critical point. We cannot sustain a continued deficit. We must look at opportunities to grow the economy in order to increase tax revenues.

The initiatives to reduce States spending must continue but this alone will not solve the problems.

We must look more at the revenue side and at growth opportunities. We need to concern ourselves more with a falling population than a rising one.

We need to stop making it so difficult for decent hard-working people who don't have local market status to live in the island and start to recognise the value these individuals bring. We need to start welcoming people who will make a decent contribution to the island instead of turning them away. We need to change our protectionist attitudes to the idea that reducing the proportion of local population to less than 50% is somehow bad – as suggested recently by the Guernsey Press editor with reference to Jersey ('Crowded message of the Muratti', editorial, 30 October).

We need to rise above these hang-ups and recognise we are part of a wider world. We have some stark choices ahead of us, which the younger generation will feel the brunt of, and which will quite possibly incur irrevocable damage to Guernsey. Adopting a policy for a modest increase in population of 10,000 – even 15,000 over a decade or longer – is a small compromise to make when you consider the alternatives of not doing so and one we should not only accept as necessary but also embrace as an opportunity.

We must start to adopt this policy sooner rather than later as the consequences of a decreased working population are affecting us already and if left too long, will be far harder to reverse.

We need to get over our instinctual reactions against population growth as this is a necessary course of action.

ALEX FULLER,

Fuller Group Ltd.