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Britain's got people

Douglas Fraser | 07:41 UK time, Thursday, 22 October 2009

With everyone looking for green shoots of growth, one of them has come unexpectedly from the demographers. And it should mean more to the economy than the cost of building more maternity wards.

Population experts like to take recent trends and project them forward, which may make them the only people in Britain not to realise how much things have changed with recession.

One effect of subdued growth will likely be that Britain becomes a less attractive place for people to migrate to, so the main driver of recent immigration growth is at least shifted down from fifth gear. Recession can also lead to an increase in out-migration.

But let's suppose they're even partly right when they say population increase is on track for rapid growth over the next 20 years, up by around 10 million to 70 million. By that same reckoning, Scotland's population would stop hovering above 5 million, and add another quarter million.

That raises significant challenges - in housing, for instance, and transport, skills, employment, and areas of social policy around immigration.

Heat map

This is already a busy island, and lopsided to its south-east, in both population and economic terms. And news of the supposed population surge comes along with evidence that the economic map of Britain spreads the benefits of growth unevenly, and does the same with recession.

Experian has compiled a 'heat map', showing the ways recession, and the consequent public spending squeeze, is going to impact differently across Britain's council areas.

It probably won't surprise the people of Blaenau Gwent, Kingston-upon-Hull, Glasgow and Inverclyde to find they are the ones who will experience the worst of the financial stress on households. That includes unemployment, income, debt and savings.

Looking at council finances, Experian forecasts services in the south of England would be least affected by the looming squeeze, the north of England would take the worst of the impact, while Scotland would be somewhere in between.

And looking at prospects of recovery, Experian makes it look good for London, Edinburgh and Leeds. But the list of those with the slowest recovery prospects looks odd, at least from a Scottish perspective, in that it includes East Dunbartonshire, Argyll, and Dumfries and Galloway - either prosperous or benefiting from in-migration.

Hit harder

Add to that a further piece of research, this time from the Institute of Public Policy Research North, based on Tyneside. It has found that recession has hit poorer northern English towns and cities hard because unemployment, already relatively higher, has become disproportionately worse.

It argues that necessary regeneration is stalled because of the slump in housing. And just as Experian finds, those communities most dependent on public sector spend are going to be the communities worst affected by a squeeze.

There's a connection between these forecasts, and it probably matters more to the north of England than it does to Scotland.

If population growth suggests the need to "concrete over" the remaining verdant bits of south-east England, and if this recession is worsening the impact of past ones in exacerbating a north-south divide, then isn't it time to think again about the neglected subject of what Whitehall likes to call "regional policy"?

That could mean proactive means to push both economic opportunity and population growth out of the south-east. It could be done with spending programmes and with tax incentives - even with devolved tax powers.

It's doubtful, however, that the gigantic spend on the Olympics in east London is such a clever place to fire the starting gun.

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